NOTES TO THE ACCOUNTS 1 LIFE-BOATS The cost of replacing the existing fleet is approximately £13,000,000 (1970 £12,000,000). The committee has at present resolved to replace certain life-boats, the cost of which is estimated at £1,016,500 (1970 £1,120,000) part of which will be met by special gifts and legacies. In addition to this the current programme of capital work includes £470,000 (1970 £420,000) for the construction and adaptation of life-boat houses and other shoreworks and improvements to the existing fleet and facilities. In support of the fleet the Institution maintains at the Boreham Wood depot a stock of spares which, at cost, amounted to £336,000 and machinery and equipment which, stated at cost less depreciation, amounted to £11,854 at 31st December, 1971.

2 BASIS OF ACCOUNTING During the year the Institution has changed its basis of accounting to record income received and expenditure incurred by the Head Office and Depot and not amounts received and paid which was the previous practice. Also only those gifts and legacies received for special purposes which, under the terms of the donation, could be utilised by the Institution during the year, have been included in the income and not the total amounts received as was the previous practice. The effect of this change is to reduce the surplus of total receipts over expenditure for the year of £57,074 (1970 £246,338) to a deficit of £54,871 (1970 surplus £119,081). No amount is included in the balance sheet either for the cost of Life-boats in service or for the spares and machinery necessarily held to maintain the fleet in service (Note 1). In accordance with previous practice amounts relating to branches are brought into the income and expenditure account on the basis of a financial year ending on 30th September.

3 INVESTMENTS (OTHER FUNDS) 1971 £ Quoted Government securities with fixed redemption dates .. .. .. .. .. 539,109 Other government securities . . . . . . . . . . . . . . . . 3,945 Local government and corporation stocks . . . . . . . . . . . . 11,000 Debenture and loan stocks . . . . . . . . . . . . . . . . 187,517 Preference shares . . . . . . . . . . . . . . . . . . 2,562 Ordinary shares . . . . . . . . . . . . . . . . . . . . 1,476,471 Foreign securities. . . . . . . . . . . . . . . . . . . . 200,695 2,421,299 Unquoted 9,576 £2,430,875 4 MOVEMENT IN ENDOWMENT FUNDS 1971 £ Balance at 1st January .. .. .. .. .. .. .. .. .. 289,296 Add: Appreciation on revaluation of investments .. .. .. .. .. 24,272 313,568 Less: Redemption of accumulation units transferred to Reserve for Capital Expenditure 27,382 £286,186 5 MOVEMENT IN RESTRICTED FUNDS 1971 £ Balance at 1st January .. .. .. .. .. .. .. .. .. 704,822 Add: Income during the year retained. . . . . . . . . . . . . . 111,945 Amount transferred from Reserve for Capital Expenditure . . . . . . 6,676 £823,443 1970 £ 359,oat; 3,413 112,741 188,841 3,150 831,4(i7 1118,(ill) 1,687,288 8,961 £1,696,249 1970 £ 289,296 289,296 £289,296 1970 £ 517,942 127,287 59,623 £704,822 1971 £ 1,633,911 2,036 27,382 (54,871) 134,819 639,682 10,657 2,393,616 6,676 £2,386,940 1970 £ 1,588,877 — — 119,081 (18,307) — 3.883 1,693,534 59,623 £1,633,911 6 MOVEMENT IN RESERVE FOR CAPITAL EXPENDITURE Balance at 1st January Add: Adjustments for change in basis of accounting (Note 2 ) . .

Transferred from Endowment Funds Excess of expenditure over income for the year (1970 income over expenditure) Profit (1970 Loss) on sale of investments Appreciation on quinquennial revaluation of investments Profit on sale of house property Less: Amount transferred to Restricted Funds 7 MANUAL WORKERS' PENSION SCHEME The actual liability arising on the establishment of the proposed Manual Workers Pension Scheme is to be ascertained in 1972; the Scheme replaces other pension arrangements formerly not funded.

(Signed) F. R. H. SWANN, Chairman of the Committee of Management.

(Signed) N. DIXON, Secretary.

AUDITORS' REPORT TO THE COMMITTEE OF MANAGEMENT OF THE ROYAL NATIONAL LIFE-BOAT INSTITUTION In our opinion the above Balance Sheet, Income and Expenditure Account and Notes give a true and fair view of the recorded income and expenditure of the Institution on the basis set out in Note 2, for the year ended 31st December, 1971, including its branches for the year ended 30th September, 1971, and of the disposition of funds held on those dates.

3 Frederick's Place, (Signed) PRICE WATERHOUSE & CO., Old Jewry, Chartered Accountants London, EC2R 8DB.

26th April, 1972.

LIFE-BOATMEN'S BENEVOLENT FUND STATEMENT OF ENDOWMENT FUND FOR THE YEAR ENDED 31st DECEMBER, 1971 Balance at 1st January Subscriptions and donations received and invested . .

Legacies received and invested . .

Investment income Appreciation on quinquennial revaluation of investments Less: Grants to beneficiaries Balance at 31st December Represented by: £8,704 Conversion 5J% Stock, 1974, at Market Value on 31st December, 1971 (1970 at Market Value on 31st December, 1966, with subsequent additions at cost) £8,747 (Market Value 1970 £5,620) Bank balance . . . . . . . . . . . . . . .. 167 (Signed) F. R. H. SWANN, Chairman of the Committee of Management.

(Signed) N. NIXON, Secretary.

1971 5,513 89 2,578 380 581 9,141 227 £8,914 1970 £ 4,481 36 987 281 5,785 272 £5,413 5,500 13 £5,513 AUDITORS' REPORT TO THE COMMITTEE OF MANAGEMENT OF THE ROYAL NATIONAL LIFE-BOAT INSTITUTION In our opinion the above account of the Life-boatmen's Benevolent Fund gives a true and fair view of the disposition of the Fund at 31st December, 1971, and the recorded receipts and payments for the year ended on that date.

3 Frederick's Place, (Signed) PRICE WATERHOUSE & CO., Old Jewry, Chartered Accountants London, EC2R 8DB.

26th April, 1972..