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SVR AGM Booklet-27543


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Severn Valley Railway (Holdings) Public Limited Company

Even after a difficult period, the SVR started to operate when safely possible. Great Western Railway 0-6-0 pannier tank 7714 is seen at Hampton Loade with a northbound passenger train on 22nd August 2020. Photo by John Titlow.

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR PERIOD ENDED 3 JANUARY 2022 (Registered No. 01046274)

SEVERN VALLEY RAILWAY (HOLDINGS) PLC NOTICE OF ANNUAL GENERAL MEETING Notice Is hereby given that the fiftieth Annual General Meeting of the above named Company will be held at St George’s Hall, Load Street, Bewdley DY12 2EQ on Saturday 11th June 2022. Registration for the meeting commences at 2.00pm, when refreshments will be available, with the meeting starting at 2.30pm to transact the following business:

1. To approve the Minutes of the 2020 Annual General Meeting and to consider any matters arising therefrom. 2. To re-elect C G Thomas, G Bunker-James and P R Pearson as Directors of the Company who retire by rotation in accordance with article 103 of the articles of association of the Company. 3. To receive and adopt the Company's Financial Statements and the Report of the Directors and Auditors for the year ended 3rd January 2022. 4. To re-appoint Crowe UK LLP as Auditors of the Company to hold office from the conclusion of the meeting until the conclusion of the next general meeting at which the accounts are laid down before the Company and to authorise the Directors to fix their remuneration. Special Business 5

That in substitution for all existing authorities, the Directors of the Company are generally and unconditionally authorised pursuant to section 551 of the Companies Act 2006 (the "2006 Act") to exercise all powers of the Company to allot relevant securities provided that the authority hereby granted shall be limited to retaining the value of the authorised share capital of the Company at £14,000,000. This is for a period expiring (unless previously renewed or revoked by the Company in a general meeting) at the conclusion of the next annual general meeting of the Company following the date of passing of this resolution, but so that the Company may before such expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the directors of the Company may allot relevant securities in pursuance of that offer or agreement notwithstanding that the authority conferred hereby has expired.

L J Whitehouse

Severn Valley Railway (Holdings) plc

Company Secretary By order of the Board 11th May 2022 Registered Office Number One, Comberton Place, Kidderminster, DY10 1QR Registered in England and Wales under number 01046274 Note 1. If you are a member of the Company, you are entitled to appoint the chairman of the meeting as a proxy to exercise all or any of your rights to attend, speak and vote at the meeting and you should have received a proxy form with this notice of meeting. You can only appoint a proxy using the procedures set out in these notes and the notes to the proxy form.

IMPORTANT INFORMATION FOR SHAREHOLDERS Change of Shareholder Details Would all shareholders please note that changes of address should be advised in writing direct to our registrars at the following address: Denise Pearce, Neville Registrars, Neville House, Steelpark Road, Halesowen B62 8HD Tel: 0121 585 1131 Email: [email protected] After each shareholder mailing we always receive a number of returned envelopes marked “Gone Away”, which of course incurs postage costs and means that the shareholder may not receive the necessary communication at the appropriate time, It would therefore be most helpful if any changes could be addressed to Nevilles as soon as possible. Nevilles can also assist with share transfers and matters of probate. It is much more cost effective if we can send the annual accounts information (and the annual shareholders newsletter) to shareholders by email rather than by post. We would be grateful therefore, if you agree, to receive your email address in order to do this. This will also enable us to keep you up to date with current activities on the Railway. Please note that your email address is confidential and will not be used for non-SVR activities. Simply go to www.svrlive.com and follow the link “SVR Shareholder Registration”, where you can then enter your details.

Registered number: 01046274

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

CONTENTS

Page Company Information

1

Chairman's Statement

2-7

Directors' Report

8 - 10

Strategic Report

11 - 12

Independent Auditor's Report

13 - 16

Statement of Comprehensive Income

17

Balance Sheet

18

Statement of Changes in Equity

19

Statement of Cash Flows

20

Analysis of Net Debt

21

Notes to the Financial Statements

22 - 38

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

COMPANY INFORMATION

DIRECTORS

M E Ball A C Barr MBE A G Bending M Bevon (appointed 16 November 2021) G Bunker-James A Davies (resigned 16 November 2021) J A Dunster D E Malyon N C Paul CBE P R P Pearson H L Smith P W Swallow (appointed 16 February 2021) C G Thomas C W Walton M R York (resigned 16 February 2021)

COMPANY SECRETARY

L J Whitehouse

REGISTERED NUMBER

01046274

REGISTERED OFFICE

Number One Comberton Place Kidderminster DY10 1QR

STATUTORY AUDITOR

Crowe U.K. LLP Black Country House Rounds Green Road Oldbury West Midlands B69 2DG

BANKERS

HSBC Bank plc 31 Church Street Kidderminster Worcestershire DY10 2AY

SOLICITORS

Higgs & Sons 3 Waterfront Business Park Brierley Hill DY5 1LX

REGISTRAR

Neville Registrars Ltd Steelpark Road Halesowen B62 8HD

Page 1

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

CHAIRMAN'S STATEMENT FOR THE PERIOD ENDED 3 JANUARY 2022

The chairman presents his statement for the period. Dear Shareholders, Throughout 2021 the Severn Valley Railway has continued its efforts to recover from the effects of the Covid 19 pandemic and the associated restrictions that were put in place by the Government. Without exception, it has been one of the most challenging periods in our history. Whilst planning the budget for 2021, the end of the pandemic seemed to be in sight, but this was not to be the case. The country was put into another lockdown at the beginning of 2021 and the railway was unable to operate until after the Easter holiday. Passenger capacity during the year was somewhat restricted as we operated with compartment stock, with prebooked ticketing and social distancing in place for the protection of our passengers and staff. It is a great credit to everyone involved that the railway was able to start services in April and the response from our volunteers was outstanding and demonstrated the huge level of support and commitment that exists towards the on-going success of the railway. Turnover in 2021 was £4,994,984, a 65% increase on turnover achieved in 2020. The cash position on 3 January 2022 was £1,298,956. Turnover for 2021 was down 39% from 2019 despite a 49% drop in footfall. This reflects well on the efforts the railway has made to mitigate its losses during this period. It is calculated that 122,001 passengers visited in 2021, an increase of 103% from 2020 but when measured against the last full operating year of 2019, it is still a decrease of 49% against what we might describe as ‘normal’. During the second quarter of 2021 Nick Paul informed the Board that, for personal reasons he wished to step down as Chairman of the Company. Together with Mike Ball, Deputy Chairman, this bought to and end the partnership that had led the Railway for more than 10 years. At the September Board meeting, Mike Ball, who agreed to carry out the role of Chairman, was duly elected. The contribution made by Nick as Chairman has been significant and his leadership has provided the basis for the development of the Company to its place as one of the top Heritage Railways in the country. Safety The railway’s safety performance reporting system shows a recorded a total of 149 accidents/incidents in 2021 compared with 182 in 2019, a reduction of 33. 37 of the incidents involved injury to members of Staff and 24 incidents involved members of the public. 2021 saw a total of 4 RIDDOR reportable incidents. Safety continues to be the primary focus for the railway. It is the number one objective and commitment in the railway’s new five-year strategy. The Safety committee Chair Andy Barr has published a plan covering the railway’s strategy for continuous improvement of safety over the next five years. It is central to all activities and must remain the priority to achieve the improvements needed. The ORR have recognised that heritage railways are experiencing more incidents and accidents per mile of service than the mainline: in 2020 25% of all improvement notices issued were to heritage railways; three prohibition notices were issued in 2020, two were to heritage lines. The ORR are now focussing on improving safety standards across the heritage movement. CBILS Loan The repayments for the CBILS loan commenced in October 2021 at the monthly rate of £25,000 plus interest. This is fully reflected in the cash flow forecast for 2022.

Page 2

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

CHAIRMAN'S STATEMENT FOR THE PERIOD ENDED 3 JANUARY 2022

Fundraising The 2021 year-end cash position has been improved by the funding received during the year. 2021

2020

Cultural Recovery Fund

£959,450

£453,000

Coronavirus Job Retention Scheme

£155,131

£555,484

£46,013

£15,338

£133,714

£50,000

CBILS notional interest Wyre Forest Council

Cultural Recovery Round 2 During the year the Government released another round of funding (CRF2) to support and assist organisations like the railway. The SVR was unsuccessful in this application. Cultural Recovery Round 3 In October 2021 the SVR once again applied for a grant from the third round of funding (CRF3). We were delighted that the SVR was awarded £1,012,900. The cash has been received during 2022. The amount of detailed financial forecasting and projections required to make these applications is considerable. The dedicated efforts from our management and finance team and the support from people within the SVR Charitable Trust need to be recognised for the tremendous amount of work done to make these applications successful. It really has made a significant difference to another extraordinarily difficult year. Donations received from SVRCT Project Heritage Training Academy – Apprenticeship scheme

£100,000

26921 LMS Brake Van

£7,500

BR 993898 (Shark)

£4,041

Wheelchair access at Bewdley

£7,133

Wheelchair accessible toilet at Bridgnorth

£6,063

Diesel Depot Pump

£1,680

Guttering around the station building at Bridgnorth

£7,822

Emergency infrastructure grant

£65,079 £199,318

The total donations received from the SVRCT by the Company in 2021 were £199,318. During 2021 the SVRCT worked on the fundraising campaign for the Roof and Crane project at ESMP Bridgnorth and supported the plc by leading on the applications for CRF2 and 3.

Page 3

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

CHAIRMAN'S STATEMENT FOR THE PERIOD ENDED 3 JANUARY 2022

Engineering Engineering in both Carriage & Wagon and the Locomotive Works continued as normal throughout 2021. Following the significant disruption experienced in 2020 it was decided that the engineering teams needed to return in order to catch up with some of the lost months of 2020. The operational emphasis continued to be offering prebooked compartment stock, therefore the carriage works, and carriage shed at Kidderminster continued to ensure that the fleet of corridor coaches could be operated to the maximum extent. Three rakes of corridor coaches were maintained throughout the operational periods in 2021. Recognition must be given again to the carriage cleaners who have worked tirelessly to ensure the railway complied to the covid sanitisation procedures throughout the year. The Trip Advisor feedback from the visitors is a testament to how well the social distancing and cleaning procedures were delivered by the teams across the railway. Once again, we were obliged to capitalise Hagley Hall overhaul costs of £196,413 incurred in 2021 compared with £77,512 in 2020. These costs will be written off over life of the locomotive boiler ticket. Roof and Crane Project The Home & Dry Appeal was launched in 2021 to raise funds for the locomotive works at Bridgnorth which suffers from holes in the roof and is leaking badly. The lighting is also poor and there is a desperate need for an overhead crane to improve working conditions. It is a priority project for the Railway, and hence, the Charitable Trust trustees agreed this needed to be the next capital appeal to raise funds to support the SVR. With no more than 18 months of life left for the building, and with it being vital to work carried out on locomotives used right across the Railway, urgent support was needed. I am delighted to share that the full project costs of £475,000 was raised, thanks to the generosity of our visitors and supporters. Work is planned to start place April 2022 and is scheduled to last five months. Loco Running Figures 2021 saw an increase from the National Lockdown Summer of 2020 steaming figure of 346 up to the level of 557 steaming days. This returned an annual steam mileage on the SVR of 30,531 miles including the 3 visiting locos: 2999 ‘Lady of Legend’, 4953 ‘Pitchford Hall’ & 9466. 813 and 71516 ‘Welsh Guardsman’ covered a further 82 days and 3493 miles combined from off (SVR) railway hire. The average SVR mileage per day was 54.8 miles. Top mileage loco for 2021 was 1501 with 5801 miles over 104 steaming days, with 43106 and 7714 closely behind on 5382 and 5132 miles respectively. 1051.12 tons of Coal was purchased at a total cost of £192,457. This was an increase of 387.12 tons of coal from 2020 and a £111,092 increase in cost from 2020. The cost of Coal also increased steeply throughout 2021 and this is continuing to rise further in early 2022. Commercial Activity Government closures and restrictions due to the pandemic have severely affected the railway’s ability to operate profitably once again in 2021. The year began with a closure period which was not expected and therefore not budgeted for. Prebooked services continued to operate through until the end of August with the freedom of local train services only returning from September 2021.

Page 4

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

CHAIRMAN'S STATEMENT FOR THE PERIOD ENDED 3 JANUARY 2022

External Contracts The railway continued to develop relationships with commercial partners to supplement our revenue streams. During 2021 we were able to provide facilities for GB Rail Freight to commission and test their new Class 69 Locomotive, to provide facilities for Bayer to commission and test their new Smart Weedkilling Train for Network Rail and to provide storage facilities to Colas for five HST power cars at short notice’. The total income received from these and other activities achieved £300K. The Board are fully supportive and are convinced that this type of revenue stream is exactly what we should be doing during our quieter periods to bring in additional profits. The Board would like to pass on their thanks to the operations teams who worked long hours into the night to bring this much needed income to the railway. Events Despite the challenges at the beginning of the year the railway managed to host several events in 2021 welcoming 48,419 passengers just to our events. This means that our events represented 41% of our footfall for 2021. The year began with the Spring Steam Up closely followed by the Diesel Bash, the 1940’s event, and both the Autumn Steam and Diesel Galas. Then Ghost Trains, Scream Trains, Santa Trains and Steam in Lights went ahead as planned and we introduced a new event for Christmas called ‘The Enchanted Express’. It is worth noting that Christmas continues to be a key time for the railway with almost £1.1m of the total event revenue of £1.4m coming from the seasonal events. The spend per head on event tickets in 2021 was £29.86 per person compared to £25.49 in 2020 which is an increase of 17%. The Directors wish to express their grateful thanks once again to all our event organisers and teams who through their experience and skills provide such important and enjoyable events for our passengers. Visitor Derived Income Food and Beverage income across the railway was £1.1m with a profit of £94,663. Giftware achieved an income of £329,992 with a profit of £74,420. Capital Expenditure Capital expenditure in 2021 totalled £313,681. Share Offer monies of £29,811 was spent on the continued improvements to the Bridgnorth Station building including the installation of a wheelchair access toilet, repairs to the guttering, upgrading the electrical supply. The works to improve the station building are planned to continue through 2022 in preparation for the refurbishment of the Station Building in early 2023. The remainder of £283,870 was funded by operating cashflow supporting a number of projects, the most significant of which were the CCTV Project £70,953, Hagley Hall overhaul £32,463 and track relay work £27,810. Key Staff Michael Dunn, Head of Visitor Experience Michael Dunn joined us in July 2021 as the new Head of Visitor Experience. He is a railway enthusiast with a fantastic background in visitor attractions such as Buckingham Palace, Windsor Castle, The Shard and Dulwich Picture Gallery. Michael is keen to improve the visitor experience by creating a more immersive and high-quality experience. He has been working hard with all the commercial teams to improve the events, food, beverage, and retail across the railway as the costs of all of these activities have increased significantly this year. He is welcoming back On Train Dining and Bar services in 2022 and Education products towards the end of the year.

Page 5

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

CHAIRMAN'S STATEMENT FOR THE PERIOD ENDED 3 JANUARY 2022

Coal The most significant risk to the SVR at the time of writing this report is the availability and price of coal. The conflict in Ukraine has caused the supply of Russian coal to be stopped due to the international sanctions imposed on Russia and as a result the global market is in turmoil. Costs are spiralling and supplies are scarce. The SVR is testing alternative materials both available on the market and being developed to suit steam locomotives, however it must be noted that all roads being researched lead to additional costs. It is estimated that the railway will have to double its budgeted expenditure on coal in 2022 and beyond. Economic Impacts of a Post Pandemic World It is not just coal that is an issue for the Railway. The post pandemic/Brexit world and the conflict in the Ukraine are all biting in a number of ways: • Staff costs are rising brought on by the minimum wage rises – this has caused an overall rise in salaries of 3% across the organisation. This is not in line with the cost of living increase in the UK of 6% in the last year. •

Staff are reacting to the cost-of- living crisis by considering their earning capacity and searching for new opportunities. Staff turnover has risen as a result.



All costs are rising. Energy bills, fuel, food, packaging, retail goods, materials such as wood and metal costs

are all going up in price. •

Shortages in staff across the hospitality and transport industry which has been caused by the pandemic and

exacerbated by Brexit are making recruitment extremely challenging. •

Shortages in supply chains, suppliers going out of business due to the challenges we are facing as a country are causing issues with keeping all commercial outlets fully stocked.

Future The Severn Valley Railway has just been awarded the Resilience and Innovation award from Visit Worcestershire. We are recovering from the financial challenges of the pandemic and will now have to adapt to a changing world where coal supplies could continue be an issue. However, the railway is full of enthusiastic and entrepreneurial people who are working together to deliver its five-year strategy that will put the future of the SVR at the heart of its development. The Managing Director has led 12 strategy workshops with 30+ volunteers, staff and Directors attending each one. The aim of the session is to communicate the strategy and connect with the people who are going to be key to delivering it. The strategy has three main themes: 1. Safety 2. People 3. Heritage Safety is central to everything that happens at the railway. The SVR want to be recognised as the best Heritage Railway in the UK for people to volunteer, work and visit. The SVR strives to be the best Heritage Railway in the UK and is recognised for excellence in preserving and sharing its heritage. In order to achieve this ambitious strategy the Management team have improved the use of ‘Management Advisory Groups’. Each senior manager has a group of volunteers to advise them on the day-to-day decisions of running the railway. This ensures that the best decisions are made for the future of the SVR.

Page 6

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

CHAIRMAN'S STATEMENT FOR THE PERIOD ENDED 3 JANUARY 2022

However big or small your contribution in making this organisation work either now or in the future, it is definitely needed and much appreciated. The Board wishes to thank all shareholders, the SVRCT Trustees, SVRG Directors and Rolling Stock Owners and Supporters for their continued excellent support in 2020 which is essential to the Railway’s future protection and growth. Your board and I are looking forward to meeting with you at the AGM which is to be held at St Georges Hall, Load Street, Bewdley at 2.30pm on Saturday 11th June 2022. Full details will be posted to all shareholders in due course and will be available on www.svrlive.co.uk/agm 2022.

Name

M E Ball Chairman

Date

26 April 2022

Page 7

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

DIRECTORS' REPORT FOR THE PERIOD ENDED 3 JANUARY 2022

The Directors present their report and the financial statements for the period ended 3 January 2022. DIRECTORS' RESPONSIBILITIES STATEMENT

The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:



select suitable accounting policies for the Company's financial statements and then apply them consistently;



make judgments and accounting estimates that are reasonable and prudent;



state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;



prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

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

The loss for the period, after taxation, amounted to £407,453 (2021 - loss £460,559). In accordance with the special resolutions passed at the Extraordinary General Meeting of the Company on 19 December 1997, the Memorandum and Articles of Association of the Company does not permit either the payment of dividends or the participation of members in the distribution of any residual property or assets upon the winding up or dissolution of the Company.

Page 8

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

DIRECTORS' REPORT (CONTINUED) FOR THE PERIOD ENDED 3 JANUARY 2022

DIRECTORS

The Directors who served during the period and their interests in the Company's issued share capital were: Ordinary shares of £1 each M E Ball A C Barr MBE A G Bending M Bevon (appointed 16 November 2021) G Bunker-James A Davies (resigned 16 November 2021) J A Dunster D E Malyon N C Paul CBE P R P Pearson H L Smith P W Swallow (appointed 16 February 2021) C G Thomas C W Walton M R York (resigned 16 February 2021)

3/1/22

3/1/21

3,000 3,800 6,100 1,200 250 750 987 7,451 3,130 250 437,524 11,822 3,748 -

3,000 3,800 6,100 250 500 750 987 7,451 3,130 250 11,822 3,748 1,500

FUTURE DEVELOPMENTS

Post pandemic the Severn Valley Railway will have to adapt to a changing society, it is possibly too soon to know if consumer behaviour and confidence has changed forever, or if things will get back to ‘normal’. The Directors will continue to react quickly and appropriately to safeguard both staff welfare and the financial security of the company. The Directors have considered that despite the impact the Company is still a Going Concern and summary of their assessment is in note 2.2. For details of future developments please refer to the Chairman's Statement. QUALIFYING THIRD PARTY INDEMNITY PROVISIONS

During the year, an indemnity from the Company was available to the directors against liabilities that might be incurred by them in defending proceedings against them in respect of the affairs of the Company. The indemnity is subject to the provisions of the Companies Act and is set out in the Articles of Association. DISCLOSURE OF INFORMATION TO AUDITOR Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:



so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware, and



the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Page 9

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

DIRECTORS' REPORT (CONTINUED) FOR THE PERIOD ENDED 3 JANUARY 2022

AUDITOR

The auditor, Crowe U.K. LLP, will be proposed for reappointment in accordance with section 489 of the Companies Act 2006. This report was approved by the board on 26 April 2022 and signed on its behalf.

M E Ball Director

Page 10

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

STRATEGIC REPORT FOR THE PERIOD ENDED 3 JANUARY 2022

INTRODUCTION

The principal activity of the Company is to operate the Severn Valley Railway between Bridgnorth in Shropshire and Kidderminster in Worcestershire and the financial statements are drawn up to the accounting reference period 3 January 2022 (prior period - 3 January 2021) to correspond with the end of the Company's 'festive season' running schedule. BUSINESS REVIEW

The Directors report a loss for the year of £(407,453) compared to £(460,559) loss in 2020. A comparison of 2020 to 2021 accounts shows that turnover has increased by £1,985,129. It is estimated that 122,001 people visited the railway in 2021, compared to 59,950 in 2020. This estimate is based on the recorded number of passengers purchasing tickets to travel. The Company's Net Current Asset position at 3 January 2022 decreased by £311,231 in the year. The cash position decreased by £814,059 as a result of operational losses whilst the railway was closed. PRINCIPAL RISKS AND UNCERTAINTIES

The Directors consider the following issues to be the Company’s main risks and uncertainties: • The impact of living in a post pandemic world and uncertainty of the conflict in Ukraine cause uncertainty around the availability and cost of key resources, such as coal, fuels, materials and staff. • Continue to operate within the company's safety management system • The current economic situation and its impact on disposable income and spending patterns • Weather and its impact on the number of passengers and on the infrastructure • Availability and cost of coal, oil and other necessary resources • Age of working volunteers and their continuing support of the Railway • Risk of not finding funding for ongoing repairs, improvements and future projects • Availability and recruitment of skilled staff (both volunteer and paid) • Ongoing changes to legislation • Environmental issues • Compliance with Health & Safety • Third party relationships • Availability of cash • Key management team remaining in post In order to mitigate these risks and uncertainties, the Directors approve detailed business plans and monitor progress against these.

Page 11

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

STRATEGIC REPORT (CONTINUED) FOR THE PERIOD ENDED 3 JANUARY 2022 FINANCIAL KEY PERFORMANCE INDICATORS

The following are some of the most significant key performance indicators identified by the Directors: • • • • • •

Cashflow Turnover Expenditure Passenger numbers and yield per passenger Operating profit Performance compared to the Strategic Plan

The Board monitors the Company’s performance against strategic objectives and the financial performance on a regular basis. Performance is assessed against the budgets using financial and non-financial measures. The performance against these key performance indicators are described in detail in the Chairman's statement along with other non-financial key performance indicators. This report was approved by the board on 26 April 2022 and signed on its behalf.

M E Ball Director

Page 12

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEVERN VALLEY RAILWAY (HOLDINGS) PLC

OPINION We have audited the financial statements of Severn Valley Railway (Holdings) plc (the 'Company') for the period ended 3 January 2022, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:   

give a true and fair view of the state of the Company's affairs as at 3 January 2022 and of its loss for the period 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.

BASIS FOR OPINION We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. CONCLUSIONS RELATING TO GOING CONCERN

In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Page 13

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEVERN VALLEY RAILWAY (HOLDINGS) PLC (CONTINUED)

OTHER INFORMATION

The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's Report thereon. The Directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006

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

the information given in the Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

   

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of Directors' remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit.

RESPONSIBILITIES OF DIRECTORS

As explained more fully in the Directors' Responsibilities Statement set out on page 8, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Page 14

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEVERN VALLEY RAILWAY (HOLDINGS) PLC (CONTINUED)

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: We obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006 and Taxation legislation. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the company’s ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the company for fraud. The laws and regulations we considered in this context for the UK operations were were General Data Protection Regulation (GDPR); Anti-fraud, bribery and corruption legislation; Environmental protection legislation; Health and safety legislation; Reporting of Injuries Diseases and Dangerous Occurrences Regulations; Taxation legislation; Employment legislation and the Companies Act 2006. We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be: the override of controls by management, income recognition and destinction between capital and revenue expenditure. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals and reviewing accounting estimates for biases. In addition to this we have also conducted sample testing to review conditions of grants, completed cut off testing around year end to ensure income has been recognised in the correct period, and reviewed additions to ensure that the expenditure is correct to be capitalised. Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.

Page 15

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEVERN VALLEY RAILWAY (HOLDINGS) PLC (CONTINUED)

USE OF OUR REPORT

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Dave Darlaston (Senior Statutory Auditor) for and on behalf of Crowe U.K. LLP Statutory Auditor Black Country House Rounds Green Road Oldbury West Midlands B69 2DG 9 May 2022

Page 16

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 3 JANUARY 2022

Note Turnover

4

Cost of sales Gross loss Administrative expenses

2022 £

2021 £

4,994,984

3,009,855

(5,598,558)

(5,100,875)

(603,574)

(2,091,020)

(1,276,561)

(1,057,572)

1,552,184

2,725,572

Other operating income

5

Operating loss

6

(327,951)

10

(79,656)

(38,081)

(407,453)

(460,559)

Interest receivable and similar income

154

Interest payable and similar expenses Loss before tax Tax on loss

11

Loss for the financial period

-

(423,020) 542

-

(407,453)

(460,559)

(407,453)

(460,559)

Other comprehensive income for the period

Total comprehensive income for the period The notes on pages 22 to 38 form part of these financial statements.

Page 17

SEVERN VALLEY RAILWAY (HOLDINGS) PLC REGISTERED NUMBER: 01046274 BALANCE SHEET AS AT 3 JANUARY 2022 3 January 2022 £

Note

3 January 2021 £

Fixed assets Intangible assets

12

32,357

38,209

Tangible assets

13

16,213,367

16,414,605

16,245,724

16,452,814

Current assets Stocks

14

462,522

Debtors: amounts falling due within one year

15

1,121,964

421,177

Cash at bank and in hand

16

1,298,956

2,113,015

2,883,442

2,998,198

(2,029,186)

(1,832,711)

Creditors: amounts falling due within one year

17

Net current assets Total assets less current liabilities Creditors: amounts falling due after more than one year

18

464,006

854,256

1,165,487

17,099,980

17,618,301

(5,343,498)

(5,761,026)

Provisions for liabilities Other provisions

21

(238,085)

(220,729) (238,085)

Net assets

(220,729)

11,518,397

11,636,546

Capital and reserves Called up share capital

23

10,737,452

10,448,148

Profit and loss account

22

780,945

1,188,398

11,518,397

11,636,546

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 26 April 2022.

M E Ball Director

J A Dunster Director

The notes on pages 22 to 39 form part of these financial statements.

Page 18

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 3 JANUARY 2022 Called up Profit and share capital loss account

At 7 January 2020 Loss for the period

£

£

10,040,726

1,648,957

11,689,683

-

Shares issued during the period

407,422

At 3 January 2021

10,448,148

Loss for the period

-

Shares issued during the period

289,304

At 3 January 2022

10,737,452

The notes on pages 22 to 38 form part of these financial statements.

Page 19

Total equity

£

(460,559) 1,188,398 (407,453) -

780,945

(460,559) 407,422 11,636,546 (407,453) 289,304

11,518,397

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 3 JANUARY 2022 2022 £

2021 £

(407,453)

(460,559)

CASH FLOWS FROM OPERATING ACTIVITIES (Loss) for the financial year ADJUSTMENTS FOR: Amortisation of intangible assets Depreciation of tangible assets Interest paid Interest received

5,852

5,769

728,718

695,820

79,656

38,081

(154)

Decrease in stocks

1,484

(542) 169,664

(Increase) in debtors

(700,787)

(130,778)

(Decrease)/increase in creditors

(117,547)

401,898

Increase in provisions NET CASH GENERATED FROM OPERATING ACTIVITIES

17,356

24,172

(392,875)

743,525

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of tangible fixed assets

(527,480)

Interest received

154 (527,326)

NET CASH FROM INVESTING ACTIVITIES

(1,560,053) 542 (1,559,511)

CASH FLOWS FROM FINANCING ACTIVITIES Issue of ordinary shares

289,304

New secured loans

-

Repayment of loans

(103,506)

Repayment of other loans

-

407,422 1,500,000 (31,023) (5,975)

Interest paid

(79,656)

NET CASH USED IN FINANCING ACTIVITIES

106,142

1,832,343

(814,059)

1,016,357

(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS

(38,081)

Cash and cash equivalents at beginning of period

2,113,015

1,096,658

CASH AND CASH EQUIVALENTS AT THE END OF PERIOD

1,298,956

2,113,015

CASH AND CASH EQUIVALENTS AT THE END OF PERIOD COMPRISE: Cash at bank and in hand

The notes on pages 22 to 38 form part of these financial statements.

Page 20

1,298,956

2,113,015

1,298,956

2,113,015

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

ANALYSIS OF NET DEBT FOR THE PERIOD ENDED 3 JANUARY 2022

Cash at bank and in hand Debt due after 1 year Debt due within 1 year

At 4 January 2021 £

Cash flows £

2,113,015

(814,059)

(1,816,502)

-

(111,335)

103,506

185,178

(710,553)

The notes on pages 22 to 38 form part of these financial statements.

Page 21

Other noncash changes £ 335,144 (335,144)

-

At 3 January 2022 £ 1,298,956 (1,481,358) (342,973)

(525,375)

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022 1.

GENERAL INFORMATION

Severn Valley Railway (Holdings) plc (the Company) operates a heritage railway between Bridgnorth in Shropshire and Kidderminster in Worcestershire. The Company is an unlisted public limited company (registered number 01046274), which is incorporated in England and Wales. The address of the registered office and principal place of business is Number One, Comberton Place, Kidderminster, DY10 1QR. 2.

ACCOUNTING POLICIES 2.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Financial Statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. The preparation of Financial Statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3). The following principal accounting policies have been applied: 2.2 GOING CONCERN

Despite the current circumstances, and having assessed the potential impact of various uncertainties, the Directors believe that the company’s financial resources and contingency planning is sufficient to ensure the ability of the company to continue as a going concern for the foreseeable future, being at least twelve months from the date of approval of these financial statements and therefore have prepared the financial statements on a going concern basis. 2.3 REVENUE

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria is used to determine when revenue is recognised: Giftware, Bars, Catering and Other Revenue is recognised when the significant risks and rewards of ownership have transferred to the customer. This is usually at the point when the goods or service are received by the customer. Traffic Revenue is recognised when the significant risks and rewards of ownership have transferred to the customer. This is usually at the time when travel takes place. Where travel tickets are purchased in advance of the date that travel takes place, the income is recognised at the date of the transaction as tickets are sold on a non-refundable basis. Contract Engineering Revenue is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied: the amount of revenue can be measured reliably; it is probable that the Company will receive the consideration due under Page 22

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022

2.

ACCOUNTING POLICIES (CONTINUED)

the contract; the stage of completion of the contract at the end of the reporting period can be measured reliably, and; the costs incurred and the costs to complete the contract can be measured reliably. Rental income Rental income is recognised on an accruals basis. Donations and legacies Donations are recognised when receivable. Donations received for specific items of expenditure which are included in cost of sales are recognised within turnover. All other general donations are recognised in other operating income. Legacies are recognised when the company is entitled to the income and the amount can be quantified with reasonable accuracy. Entitlement is the earlier of the company being notified of an impending distribution or the legacy being received. Grants (incluing government grants) Grants, including government grants, are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to the Income Statement at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income. Grants, including government grants, of a revenue nature are recognised in the Income Statement in the same period as the related expenditure. Revenue grants made to give immediate financial support or to reimburse costs already incurred are recognised in the profit and loss account in the period in which they become receivable. Interest income Interest income is recognised in the Income Statement using the effective interest method. 2.4 INTANGIBLE ASSETS

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years. Amortisation is provided on the following bases: Software

-

10 % on cost

Page 23

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022

2.

ACCOUNTING POLICIES (CONTINUED) 2.5 TANGIBLE FIXED ASSETS

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is provided on the following basis:

Freehold buildings and permanent way Locomotives and rolling stock Office and computer equipment Motor vehicles Commercial fixtures, fittings and equipment

2% - 20% on cost 5% 10% 20% 4%

- 10% on cost - 25% on cost - 25% on cost - 20% on cost

2.6 FINANCIAL INSTRUMENTS

The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and rolling stock provisions. 2.7 STOCKS

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss. 2.8 DEBTORS

Short term debtors are measured at cost, less any impairment.

Page 24

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022

2.

ACCOUNTING POLICIES (CONTINUED) 2.9 CASH

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. In the Statement of Cash Flows, cash is shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management. 2.10 CREDITORS

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method. 2.11 PROVISIONS FOR LIABILITIES

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation. Provisions are charged as an expense to the Income Statement in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position. Where the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value using an appropriate pre tax discount rate. The unwinding of the discount is recognised as a finance charge in the Income Statement in the period it arises.

2.12 LOCOMOTIVES AND ROLLING STOCK

In addition to locomotives and rolling stock owned by the Company, the Company has entered into agreements with various third parties to operate and maintain a range of other locomotives and rolling stock for use on the line. In the opinion of the Directors, these arrangements are in the nature of operating leases and the costs of repairs and maintenance over and above those in the terms of the agreement are charged to the Income Statement as incurred. 3.

JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Preparation of the financial statements may require management to make significant judgements and estimates. There are no items in the financial statements where significant judgements and estimates have been made.

Page 25

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022 4.

TURNOVER

Traffic

2021 £

2020 £

2,694,094

1,223,989

Catering

415,732

235,998

Bars

572,772

382,052

Giftware

358,958

230,622

Contract Engineering

384,967

305,004

Other (including specific purpose donations)

291,740

389,561

Release of grants

276,721

242,629

4,994,984

3,009,855

2021 £

2020 (Restated) £

All turnover arose within the United Kingdom. 5.

OTHER OPERATING INCOME

Other operating income Government grants receivable Donations received Sundry income Other grant income (Heritage Lottery Fund)

15,449

17,966

1,295,753

1,073,822

197,201

1,275,199

43,781

108,585

-

1,552,184

250,000

2,725,572

Included in government grants receivable is £959,450 (2020 - £453,000) of Cultural Recovery Fund; £155,131 (2020 - £555,484) of Coronavirus Job Retention Scheme income; £111,000 (2020 - £50,000) from the Wyre Forest District Council, and £46,013 (2020 - £15,338) for notional interest applied to the CBILS Loan.

Page 26

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022 6.

OPERATING LOSS The operating loss is stated after charging:

Depreciation of tangible fixed assets Amortisation of intangible fixed assets

728,718

695,280 5,769

11,503

11,774

2021 £

2020 £

16,950

16,950

2021 £

2020 £

Wages and salaries

2,507,147

2,368,793

Social security costs

179,575

173,433

Cost of defined contribution scheme

107,206

178,436

2,793,928

2,720,662

2021 No.

2020 No.

Full time

87

95

Part time

21

23

Casual

22

61

130

179

AUDITOR'S REMUNERATION

Fees payable to the Company's auditor and its associates for the audit of the Company's annual accounts

8.

2020 £

5,852

Other operating lease rentals

7.

2021 £

EMPLOYEES

Staff costs, including Directors' remuneration, were as follows:

The average monthly number of employees during the period was as follows:

Page 27

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022 9.

DIRECTORS' REMUNERATION 2021 £

2020 (Restated) £

89,397

22,126

4,460

2,073

93,857

24,199

2021 £

2020 £

78,300

29,909

1,356

8,172

79,656

38,081

2022 £

2021 £

-

-

TOTAL DEFERRED TAX

-

-

TAXATION ON PROFIT ON ORDINARY ACTIVITIES

-

-

Directors' emoluments Company contributions to defined contribution pension schemes

10.

INTEREST PAYABLE AND SIMILAR EXPENSES

Bank interest payable Finance charge

11.

TAXATION

TOTAL CURRENT TAX DEFERRED TAX

Page 28

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022

11.

TAXATION (CONTINUED)

FACTORS AFFECTING TAX CHARGE FOR THE PERIOD

The tax assessed for the period is lower than (2021 - lower than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:

Loss on ordinary activities before tax Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)

2022 £

2021 £

(407,453)

(460,559)

(77,416)

(87,506)

EFFECTS OF: Short-term timing difference leading to an increase (decrease) in taxation

62,660

84,493

Non-taxable income

(90,700)

(127,690)

Other differences leading to an increase (decrease) in the tax charge

105,456

130,703

TOTAL TAX CHARGE FOR THE PERIOD

-

-

FACTORS THAT MAY AFFECT FUTURE TAX CHARGES

The Company has a potential deferred tax asset of £1,396,557 (2020 - £872,969) relating to tax losses carried forward and a potential deferred tax asset of £492,019 (2020 - £605,903) relating to fixed asset timing differences. These assets assume future tax rates of 25%. The potential deferred tax assets have not been provided for, as the Directors cannot be sure that there will be sufficient taxable profits against which these assets can reverse in the foreseeable future. The standard rate of corporation tax will increase from 19% to 25% from April 2023.

Page 29

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022 12.

INTANGIBLE ASSETS Software £ COST At 4 January 2021

62,674

At 3 January 2022

62,674

AMORTISATION At 4 January 2021

24,465

Charge for the period on owned assets

5,852 30,317

At 3 January 2022 NET BOOK VALUE

At 3 January 2022

32,357

At 3 January 2021

38,209

Page 30

13.

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

279,182

2,472,037

(198,265)

284,941

1,163,020

Freehold Office Commercial land and Locos and equipment & fixtures, fittings Capital work buildings rolling stock motor vehicles & equipment in progress £ £ £ £ £

527,480

25,893,774

Total £

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022

1,085,335

6,087

120,931

TANGIBLE FIXED ASSETS

20,894,200

3,544

COST OR VALUATION 16,767

At 4 January 2021

101,297

2,599,055

-

-

1,249,696

728,718

9,479,169

-

192,178

282,726

142,834

1,207,802

-

Additions

1,102,102

4,227

247,331

26,421,254

21,187,675

15,617

-

16,213,367

787,533

1,350,636

1,249,696

16,414,605

566,040

251,558

1,248,419

1,163,020

7,236,503

-

Transfers between classes At 3 January 2022 DEPRECIATION At 4 January 2021

803,150

31,168

1,264,235

Charge for the period on owned assets

7,802,543

298,952

31,851

10,207,887

13,385,132

297,802

At 3 January 2022

At 3 January 2022

13,657,697

NET BOOK VALUE

At 3 January 2021

All tangible fixed assets are held as security for the bank loans detailed in Note 19.

Page 31

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022 14.

STOCKS 3 January 2022 £

3 January 2021 £

Work in progress (goods to be sold)

283,087

266,652

Finished goods and goods for resale

179,435

197,354

462,522

464,006

The carrying value of stocks are stated net of impairment losses totalling £105,264 (2021 - £98,171) . Impairment losses totalling £7,093 (2021 - £8,169) were recognised in profit and loss. 15.

DEBTORS 3 January 2022 £

3 January 2021 £

Trade debtors

175,028

91,414

Other debtors

106,253

137,144

Prepayments and accrued income

840,683

192,619

1,121,964

421,177

An impairment loss of £12,408 (2021 - £17,869) was recognised as an expense against debtors during the year. Increase in prepayments & accrued income is due to income of £504,450 (2021 - £nil) due from the Cultural Recovery Fund. 16.

CASH AND CASH EQUIVALENTS

Bank current accounts Cash balances

Page 32

3 January 2022 £

3 January 2021 £

1,292,300

2,108,285

6,656

4,730

1,298,956

2,113,015

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022 17.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Bank loans (note 19) Other loans Trade creditors Other taxation and social security

3 January 2022 £

3 January 2021 £

328,142

96,504

14,831

14,831

754,276

865,455

50,826

47,806

Other creditors

468,837

464,433

Accruals and deferred income

412,274

343,682

2,029,186

1,832,711

Other creditors includes deposits totalling £445,898 (2021 - £367,653) held for events which were postponed due to the pandemic. Deferred income includes grants and public donations received towards Kidderminster carriage shed, Kidderminster station building improvements, Highley Engine House and Bridgnorth locomotive shed roof refurbishment. 18.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR 3 January 2022 £

3 January 2021 £

Bank loans

1,481,358

1,816,502

Accruals and deferred income

3,862,140

3,944,524

5,343,498

5,761,026

Deferred income includes grants and public donations received towards Kidderminster carriage shed, Kidderminster station building improvements, Highley Engine House and Bridgnorth locomotive shed roof refurbishment.

Page 33

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022 19.

LOANS

Analysis of the maturity of loans is given below: 3 January 2022 £

3 January 2021 £

Bank loans

328,142

96,504

Other loans

14,831

14,831

342,973

111,335

1,247,294

1,310,909

AMOUNTS FALLING DUE WITHIN ONE YEAR

AMOUNTS FALLING DUE 2-5 YEARS Bank loans AMOUNTS FALLING DUE AFTER MORE THAN 5 YEARS Bank loans

234,064

505,593

1,824,331

1,927,837

Loan 1 - Land Adjacent to Bridgnorth Station The loan limit is capped at £172,500 and is repayable over a term of fifteen years. The total amount drawn down was £172,500 and repayment commenced on 26 October 2015 in monthly installments of £1,229 (including interest). At 3 January 2022 £9,128 is repayable within one year, £39,672 is repayable in 2 to 5 years and £69,199 is repayable in over 5 years. Interest is charged at 2.95% over the Bank of England base rate. Loan 2 - Diesel Depot The full loan amount of £372,000 was drawn down in October 2015 using a temporary, interest only, loan repayable on demand. This was converted to a fixed term loan on 11 March 2016. The loan limit is capped at £372,000 and is repayable over a term of fifteen years. Monthly repayment commenced on 11 April 2016 at a rate of £2,651 (including interest). At 3 January 2022 £19,014 is repayable within one year, £82,622 is repayable in 2 to 5 years and and £164,865 is repayable in over 5 years. Interest is charged at 2.95% per annum over the Bank of England base rate. All bank borrowings are secured by means of a fixed charge over all book debts and freehold properties and a floating charge over certain assets, goodwill, undertakings and uncalled capital, both present and future. Loan 3 - Coronavirus Business Loan The loan limit is capped at £1,500,000 and is repayable over a term of six years, with an initial 12 month period where no repayments are made. The total amount drawn down was £1,500,000 and monthly repayment commences in October 2021 at a rate of £25,000 plus interest. At 3 January 2022 £300,000 is repayable within one year and £1,125,000 is repayable in 2 to 5 years. Interest is charged at 3.99% over HSBC base rate. Page 34

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022 20.

FINANCIAL INSTRUMENTS 3 January 2022 £

3 January 2021 £

229,826

107,529

FINANCIAL ASSETS

Financial assets measured at amortised cost

FINANCIAL LIABILITIES

Other financial liabilities measured at amortised cost

(3,047,444)

(3,189,996)

Financial assets measured at amortised cost comprise trade debtors, other debtors and accrued income. Financial liabilities measured at amortised cost comprise bank loans, other loans, trade creditors and other creditors. 21.

PROVISIONS Locomotive and rolling stock provision £ At 4 January 2021

220,729

Charged to profit or loss

17,356

AT 3 JANUARY 2022

238,085

Provisions relate to contractual repairs and maintenance costs and are calculated in accordance with the locomotive and rolling stock agreements. The timing of the outflow is dependent on the repairs and maintenance needs of the individual locomotive to which it relates. The gross provision before discounting is £264,000 (2021 - £248,000). 22.

RESERVES Profit & loss account

Profit and loss account - includes all current and prior period retained profits and losses.

Page 35

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022 23.

SHARE CAPITAL 3 January 2022 £

3 January 2021 £

14,000,000

14,000,000

10,737,452

10,448,148

AUTHORISED

14,000,000 (2021 - 14,000,000) Ordinary shares of £1.00 each ALLOTTED, CALLED UP AND FULLY PAID

10,948,649 (2021 - 10,659,345) Ordinary shares of £1.00 each

During the period the Company issued 289,304 (2021 - 407,423) Ordinary shares at par. The consideration received was £289,304 (2021 - £407,423). Share capital is shown net of direct share offer costs as follows: 2020 £

24.

2019 £

2012 share offer costs

89,950

89,950

2016 share offer costs

121,247

121,247

211,197

211,197

3 January 2022 £

3 January 2021 £

CAPITAL COMMITMENTS

At 3 January 2022 the Company had capital commitments as follows:

Contracted for but not provided in these financial statements

25.

133,690

-

133,690

-

PENSION COMMITMENTS

The Company operates a defined benefit contribution scheme. The assets of the scheme are held in the name of employees in an independently administered fund. Contributions totalling £18,074 (2020: £15,321) were payable to the fund at the balance sheet date and are included in creditors.

Page 36

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022 26.

COMMITMENTS UNDER OPERATING LEASES

At 3 January 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years

3 January 2022 £

3 January 2021 £

84,176

52,373

101,702

66,161

-

185,878

Page 37

817

119,351

SEVERN VALLEY RAILWAY (HOLDINGS) PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 3 JANUARY 2022 27.

RELATED PARTY TRANSACTIONS

Severn Valley Railway Company Limited Severn Valley Railway Company Limited is a company limited by guarantee, supported by its membership, which provides the volunteer workforce without which the operation of the Railway would not be possible. During the period, the following transactions were undertaken with Severn Valley Railway Company Limited who own 1,883,182 (2020 - 1,838,272) (17%) of the Company's shares.

Recharges to SVR Co Limited

2021 £

2020 £

62,670

12,584

Severn Valley Railway Charitable Trust Limited

Severn Valley Railway Charitable Trust is a registered charity with the following objectives: (1 ) to advance education for the benefit of the public by the acquisition, restoration, preservation and operation of heritage railway locomotives, carriages, wagons, station buildings, track and other associated infrastructure; (2)

establishing buildings to house and preserve the Charity’s rolling stock collection;

(3)

the provision of educational and interpretive displays for the travelling public; and

(4) the provision of education and skills training used in the restoration, repair and operation of historic railways to ensure their long term survival. Donations were received from Severn Valley Railway Charitable Trust Limited in the period amounting to £199,318 (2020 - £1,127,666). £- (2020 - £-) is held in deferred income in relation to future projects. Key Management Personnel Compensation

All directors and certain employees who have authority and responsibility for planning, directing and controlling the activities of the Company are considered to be key management personnel. As disclosed in note 8, 1 Director directly received salary payments (including benefits in kind), and pension contributions. Total remuneration in respect of the other individuals was met by Severn Valley Railway (Holdings) plc and totalled £491,504 (2020 - £428,893). 28.

POST BALANCE SHEET EVENTS

Upon successful applications post year end, a further £506,450 of grant income was received through the Cultural Recovery Fund. Funds were received in a further two installments during January and February 2022.

Page 38

This scene at Bewdley South signal box shows the authentic railway atmosphere of the SVR. London Midland and Scottish Railway Ivatt-designed Class 4 2-6-0 43106 heads a Bridgnorth to Kidderminster train on 18th September 2019. Photo by Alan Corfield.

Severn Valley Railway (Holdings) Plc

Number One, Comberton Place, Kidderminster DY10 1QR Telephone: 01562 757900

www.svr.co.uk