The trustees present their annual report and financial statements for the year ended 31 March 2025.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the Society's governing document, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019).
The objectives of the Society during the year ending 31 March 2025 were as follows:
to feed, clothe, educate or otherwise provide support by way of grant to Dependents of Seafarers who are or may be in the position of need either through disadvantage or through the death or incapacity of one or both of their parents, and
To provide support to disadvantaged young people within Seafaring Communities in Scotland through undertaking, or providing funds to undertake, community educational, recreational, health or welfare projects for the benefit of young people.
We are particularly grateful for the support from the Fishermen's Mission and Merchant Navy Welfare Board in supplying Almoner's services as required.
The trustees have paid due regard to guidance issued by the Office of the Scottish Charity Regulator (OSCR) in deciding what activities the Society should undertake.
RECORD OF THE SOCIETY DURING ITS 136th YEAR
Since 1889, when the Society was founded, 8,341 children have received assistance.
There was 1 new beneficiary arising during the year (2024 – 2), and there were 6 beneficiaries (2024 - 5) who were deemed to require no further assistance from the Society as they have moved, either to take up employment, or their family circumstances changed.
At the year-end there were 25 (2024 – 30) children, who received grants up to a maximum annual equivalent of £1,730 during the year being reported on and which are paid to the parent or guardian monthly. During 2025 the monthly grant was £110 with a £130 bonus paid in June and November. At the Directors’ annual financial review, it was decided that the grant would remain at this level.
HOW TO APPLY FOR A GRANT
If you think you may be eligible for a grant or know of someone who might be, applications should be made directly to the Society addressed to M. Davies, c/o J. & J. Denholm Ltd, 18 Woodside Crescent, Glasgow, G3 7UL, or visit our website at www.sailorsorphansociety.co.uk.
The charity reports a net decrease in funds for the year of £65,507 (2024 - net increase of £35,819) arising owing to a decrease in the receipt of donations and legacies in the year of £Nil (2024: £5,000) along with a loss on investments of £62,771 (2024: gain of £44,254) (see below under investment policy) and has accumulated reserves of £1,633,489 (2024 - £1,698,996) at the balance sheet date.
It is the policy of the Society to maintain unrestricted funds, which are the free reserves of the charity, at a level to earn investment income and therefore provide sufficient funds to cover management, administration, and support costs. To ensure that running costs are minimised no director receives any remuneration for services. At the year-end, unrestricted reserves of £1,633,489 (2024 - £1,698,996) were held. The Directors consider that the level of reserves held are sufficient to allow settlement of grants awarded.
The charity will generally aim to maintain a cash balance at a level that is between 3-6 months of beneficiary payments.
Investment Policy
The Directors have the power to invest in such stocks, shares, investments, and property in the UK as they see fit. To that end the Directors have engaged Rathbones Investment management (Rathbones) as investment managers. In this role Rathbones operate on a discretionary basis, i.e., they will make investment decisions on behalf of the charity, in accordance with an investment objective set by the Directors. The objective is to achieve a balance between income and capital growth by adopting a medium/high risk investment strategy. At 31 March 2025, the value of investments held was £1,568,988 (2024 -£1,617,018) as detailed at note 13.
The Society is a company limited by guarantee, not having any share capital and is a registered charity governed by its Memorandum and Articles of Association.
The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
Directors are drawn from the shipping, fishing and insurance industries and from other seafaring charites in order to ensure that a wide net is thrown to identify all eligible beneficiaries.
New members of the Society are appointed by the Directors.
Day-to-day management
Directors delegate day-to-day management of the charity to J. & J. Denholm Limited.
None of the directors has any beneficial interest in the company. All the directors are members of the company and guarantee to contribute £1 in the event of a winding up.
Grants are paid each month to children whose parents have served at sea and are in a position of need through disadvantage or death or incapacity of one or both of their parents; to children of seafarers in full time education and to disadvantaged young people who require support within the Seafaring Communities in Scotland.
The trustees' report was approved by the Board of Trustees.
I report on the financial statements of the Society for the year ended 31 March 2025, which are set out on pages 5 to 20.
The Society’s trustees, who are also the directors of The Sailors' Orphan Society of Scotland for the purposes of company law, are responsible for the preparation of the financial statements in accordance with the terms of the Charities and Trustee Investments (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. The trustees consider that the audit requirement of Regulation 10(1)(a) to (c) of the 2006 Accounts Regulations does not apply. It is my responsibility to examine the financial statements as required under section 44(1)(c) of the Act and to state whether particular matters have come to my attention.
My examination is carried out in accordance with Regulation 11 of the Charities Accounts (Scotland) Regulations 2006. An examination includes a review of the accounting records kept by the charity and a comparison of the financial statements presented with those records. It also includes consideration of any unusual items or disclosures in the financial statements, and seeking explanations from the trustees concerning any such matters. The procedures undertaken do not provide all the evidence that would be required in an audit, and consequently I do not express an audit opinion on the view given by the financial statements.
In connection with my examination, no matter has come to my attention:
to keep accounting records in accordance with section 44(1) (a) of the 2005 Act and Regulation 4 of the 2006 Accounts Regulations; and
to prepare financial statements which accord with the accounting records and comply with Regulation 8 of the 2006 Accounts Regulations;
to which, in my opinion, attention should be drawn in order to enable a proper understanding of the financial statements to be reached.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
The Sailors' Orphan Society of Scotland is a private company limited by guarantee incorporated in Scotland. The registered office is J. & J. Denholm Limited, 18 Woodside Crescent, Glasgow, G3 7UL.
The financial statements have been prepared in accordance with the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended), FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019). The Society is a Public Benefit Entity as defined by FRS 102.
The Society has taken advantage of the provisions in the SORP for charities not to prepare a Statement of Cash Flows. The disclosure requirements of Section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the Society. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include financial investments at fair value. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the trustees have a reasonable expectation that the Society has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
All incoming resources are recognised in full in the Statement of Financial Activities in the period in which the charity is legally entitled to receive them, it is probable that the income will be received, and the amount can be measured reliably. Income from investments is included in the year in which it is receivable.
Cash donations are recognised on receipt. Other donations are recognised once the Society has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably.
Grants payable are charged in the year when the offer is conveyed to the recipient.
Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.
Fixed asset investments are stated at fair value at the financial year end. Unrealised gains and losses represent the difference between the fair value at the beginning and end of the financial year or, if purchased in the year, the difference between cost and fair value at the end of the year. Realised gains and losses represent the difference between the proceeds on disposal and the the market value at the start of the year or cost if purchased in the year.
In accordance with the Charities SORP (FRS 102), all investment gains and losses are reflected in the Statement of Financial Activities as part of net income/(expenditure) for the year.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The Society has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Society's balance sheet when the Society becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors, are measured at transaction price including transaction costs.
Financial assets, other than those held at fair value through income and expenditure, are assessed for indicators of impairment at each reporting end date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in net income/(expenditure) for the year.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, head the impairment not previously been recognised. The impairment reversal is recognised in net income/(expenditure) for the year.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the Society transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the charity's contractual obligations expire or are discharged or cancelled.
Financial liabilities are derecognised when the Society’s contractual obligations expire or are discharged or cancelled.
Accumulated funds
Unrestricted funds, which have not been designated for other purposes, are available for use at the discretion of the Directors in furtherance of the general objectives of the charity.
In the application of the Society’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The directors consider that there are no estimates and underlying assumptions which have significant risk of causing a material adjustment to the carrying amount of assets and liabilities.
Grant-making
25 grants are paid over 12 monthly payments to the guardians of the beneficiaries, (2024 - 30) all of whom are individuals. These cover costs associated with the support of the beneficiaries.
The average monthly number of employees during the year was:
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
Current asset investments of £22,072 (2024: £48,304) represents cash balances held within the investment portfolio.
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.
Donations received from Trustees in the year, without conditions, amounted to £Nil (2024 - £5,000).
During the year J&J Denholm Limited, a company related through common directors, paid the Maintenance of Orphans grant support amounting to £42,020 (2024 - £52,710). This was then repaid by the charity.