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2021-03-31-accounts

The Royal Collection Trust

( L i m i t e d b y g u a r a n t e e )

Trustees’ Report and Consolidated Financial Statements

3 1 M a r c h 2 0 2 1

C o m p a n y N u m b e r 2 7 1 3 5 3 6

Royal Collection Trust

TRUSTEES’ REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

Contents

Trustees’ Report 1-22
Independent Auditor’s Report to the members of The Royal Collection Trust 23-27
Consolidated Statement of Financial Activities 28
Statement of Financial Activities 29
Consolidated and Trust Balance Sheet 30
Consolidated Statement of Cash Flows 31
Notes 32-60

Royal Collection Trust

TRUSTEES’ REPORT 2020/21

The Trustees present their annual report and the audited consolidated financial statements of The Royal Collection Trust (“The Trust”) and its trading subsidiary Royal Collection Enterprises Limited (together “Royal Collection Trust”), for the year ended 31 March 2021.

Reference and Administrative Information

Charity Registration Number: 1016972
Scottish Charity Number: SC039772
Company Number: 2713536
Principal and Registered Office: York House,StJames's Palace,London SW1A 1BQ

Patron

HRH The Prince of Wales (with effect from 10 March 2021)

Trustees

HRH The Prince of Wales (resigned as Chairman and Trustee on 10 March 2021) The Hon. Sir James Leigh-Pemberton (appointed Chairman on 10 March 2021) The Rt Hon. The Earl Peel (resigned as Deputy Chairman and Trustee on 31 March 2021 ) Mr Marc Bolland (appointed Deputy Chairman on 1 April 2021)

The Duke of Buccleuch and Queensberry (resigned 31 December 2020) Vice Admiral Sir Tony Johnstone-Burt

Sir Brian Ivory (appointed 1 January 2021)

Dr Anna Keay

The Rt Hon. The Lord Parker of Minsmere (appointed on 1 April 2021) Sir Michael Stevens The Rt. Hon. Sir Edward Young

Management Board

Mr Tim Knox Director of the Royal Collection Mr Keith Harrison Finance Director Mrs Michelle Lockhart Commercial Director

Additional members of Management Board 1 April 2020 - 31 December 2020

Mr Rufus Bird Surveyor of The Queen’s Works of Art Miss Frances Dunkels Director of Communications and Business Development Mr Ian Grant Acting Retail Director Dr Stella Panayotova Librarian and Assistant Keeper of the Royal Archives Ms Jemima Rellie Director, Content and Audiences & Acting Visitor Experience Director Mr Desmond Shawe-Taylor Surveyor of The Queen’s Pictures

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Company Number 2713536

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TRUSTEES’ REPORT 2020/21

Auditor KPMG LLP
15 Canada Square,
London E14 5GL
Bankers Coutts & Co
440 Strand,
London WC2R 0QS
Lloyds Bank PLC
25 Gresham Street,
London EC2V 7HN
Barclays Bank PLC
1 Churchill Place,
Canary Wharf,
London E14 5HP
Close Brothers Group PLC
10 Crown Place,
London EC2A 4FT
Solicitor Farrer & Co
66 Lincoln’s Inn Fields,
London WC2A 3LH

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Structure, Governance and Management

Governing Document

The Trust is a company limited by guarantee, incorporated on 29 January 1993 and registered as a charity in England and Wales on 2 February 1993. The Office of the Scottish Charity Regulator approved The Trust’s application to be registered as a charity in Scotland on 5 August 2008.

The company was established under a Memorandum of Association which established the objects and powers of The Trust and is governed under its Articles of Association. There are currently three members of The Trust, each of whom is required to contribute an amount not exceeding £1 in the event of it winding up.

Appointment of Trustees

Trustees include the holders of Relevant Offices within the Royal Household, defined as The Lord Chamberlain, The Private Secretary to The Sovereign and The Keeper of the Privy Purse. During the year, the Articles of Association were amended by Special Resolution to allow that the Chairman of the Trustees may be elected by the Trustee Board from among their number (previously the Chairman was The Prince of Wales during his lifetime).

The appointment of a Trustee is approved by The Sovereign prior to appointment by the Board of Trustees. In appointing Trustees other than holders of the Relevant Offices, consideration is given to ensuring that the Board of Trustees has the requisite mix of skills and experience.

All Trustees give their time voluntarily and receive no remuneration for their services to The Trust. Details of any expenses reimbursed by The Trust are set out in note 8 to the financial statements. New Trustees receive an information pack which includes the current strategic plan, minutes of recent Trustee Board meetings and details of organisational structure. In addition, new Trustees undertake an induction programme comprising meetings with senior managers and visits to the official residences and workshops.

Organisational Structure

The Board of Trustees, which can have a minimum of five and up to a maximum of twelve Trustees, manages the Charity and meets at least three times a year. The Board of Trustees also has three sub-committees.

The Audit and Risk Assurance Committee has three members: Sir James Leigh-Pemberton (until 10 March 2021, formerly Chairman), Sir Brian Ivory (Chairman from 11 March 2021), Sir Michael Stevens, all of whom are Trustees, and Mr Steve Maslin. The Committee meets and reports formally to the Board at least three times a year. It has overall responsibility for monitoring the

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Organisational Structure (continued)

effectiveness of The Trust's corporate governance and system of internal control. In undertaking its responsibilities, the Committee receives reports from the internal and external auditors and from management.

The Strategic Development Committee comprises the Trustees and members of the Management Board. This Committee meets at least three times annually, and its Chairman is Mr Marc Bolland. Its role is to scrutinise the Management Board's development and implementation of strategic priorities and to review key plans, strategies and proposals before they are presented formally to the Board of Trustees.

The Investment Committee comprises Sir Michael Stevens (Chairman), Sir James LeighPemberton and Mr Keith Harrison. This Committee's role is to review and advise on policy in relation to investment of reserve funds, negotiations on bank borrowing facilities and compliance with bank covenants.

Following the completion of Future Programme during the year, the Future Programme Board was disbanded in September 2020. Until this time, the Board’s role was to oversee all aspects of the major programmes of improvement underway at Windsor Castle and the Palace of Holyroodhouse. The members of the Future Programme Board were Mr Peter Troughton (Chairman), The Duke of Buccleuch and Queensberry, Vice Admiral Sir Tony Johnstone-Burt and Sir Michael Stevens.

The Board of Trustees has delegated the powers set out in The Trust’s governing document to the Director and members of the Management Board who manage the day-to-day operations of the Charity. The Management Board was restructured during the year to include the Director of the Royal Collection, the Finance Director and the Commercial Director. Further details around the restructure are given on page 10.

The Board of Trustees monitors the way in which its delegated powers are exercised by the Management Board through:

The Director of the Royal Collection is a Head of Department of the Royal Household and is appointed by The Sovereign.

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Organisational Structure (continued)

The Management Board is responsible for preparation of strategic plans and annual budgets, and for overseeing the efficient and effective operation of Royal Collection Trust. Together with the Operations Board of senior managers, the Management Board is responsible for the day-to-day monitoring of performance, maintaining adequate systems for internal financial control and risk management, ensuring value for money and operational efficiency and providing organisation-wide leadership and effective internal communications.

Subsidiary Undertaking

The Trust’s wholly-owned subsidiary, Royal Collection Enterprises Limited, has a paid up share capital of £2, and is incorporated in the UK. The principal activities of the company are the management of public access to the official residences of The Queen and the official residence of The Prince of Wales and the sale of retail merchandise. Taxable profits are donated in accordance with a deed of covenant to the holding company, The Royal Collection Trust.

Related Parties

The activities of Royal Collection Trust require the co-operation and support of the other departments of the Royal Household. These departments are represented on the Board of Trustees through the holders of the Relevant Offices. The Relevant Offices are The Lord Chamberlain, The Private Secretary to The Queen and The Keeper of the Privy Purse.

Details of material transactions during the year with other entities controlled by officials or Trustees on behalf of The Queen are set out in note 23 to the financial statements.

Objectives and Activities

The works of art that comprise the Royal Collection are held by The Queen in right of the Crown and are held in trust for her Successors and for the Nation. The Collection is exhibited primarily within areas of the official residences of The Queen and The Prince of Wales, and in the unoccupied residences maintained by Historic Royal Palaces, which are open to the public. Where works of art are not on public view, these items are made available to the public through exhibitions at The Queen’s Galleries in London and Edinburgh, through loans to other museums and galleries both within the UK and overseas (including travelling exhibitions), and via publications and online access.

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Charitable Objects and Public Benefit

The objects of The Trust are, for the benefit of the Nation:

The Trustees, having regard to the Charity Commission's public benefit guidance, seek to fulfil these objects by pursuing a series of charitable aims. They are as follows:

The Trustees consider that public benefit is delivered as a result of pursuit of these aims. That benefit can be summarised as follows.

Access to the Royal Collection is provided in various ways, including:

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Charitable Objects and Public Benefit (continued)

Many different groups use and benefit from Royal Collection Trust’s work, including:

Royal Collection Trust helps to enhance visitors’ understanding and appreciation of the works of art by providing interpretation based on scholarly research, up-to-date Collections information and historical resources from the Royal Archives. Interpretation is provided via:

Charges are made to visit the official residences of The Queen and The Prince of Wales and exhibitions in The Queen’s Galleries. Value-for-money ratings at each of the official residences are closely monitored. There are various measures in place to ensure that the charges do not unduly restrict access to the Royal Collection as follows:

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Charitable Objects and Public Benefit (continued)

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Review of the Year

Pandemic Impact

All of Royal Collection Trust’s operations throughout the year were hugely impacted by the COVID-19 pandemic. As a consequence, financial performance was significantly impaired, and the organisation has had to take a number of important steps to enable its recovery.

The financial statements set out on pages 28 to 60 cover the activities of The Royal Collection Trust (“The Trust”) and its trading subsidiary Royal Collection Enterprises Limited (together “Royal Collection Trust”). The Consolidated Statement of Financial Activities shows the gross income from all sources and the split of activity between restricted and unrestricted funds.

The pandemic started to impact on visitor numbers in February 2020, initially with the decrease in international tourism and escalating to closure of all sites by the end of March 2020. National lockdowns and tier restrictions in England and Scotland meant that there were only limited times (mainly in the period from late July until early November) when it was possible to welcome visitors to the sites, while retail outlets were also severely constrained. The 2020 summer opening of Buckingham Palace was cancelled. When sites were open, the absence of overseas tourists, limitations on travel and social distancing requirements reduced demand and capacity. As a consequence, overall visitor numbers for 2020/21 were significantly reduced, as follows:

Windsor Castle
Frogmore House
Buckingham Palace
The Queen’s Gallery, Buckingham Palace
The Royal Mews
Palace of Holyroodhouse
The Queen’s Gallery, Palace of Holyroodhouse		 2020-21
2019-20
000s
000s
104
1,587
-
5
-
578
9
266
5
237
31
496
6
116
155
3,285

Note: 3,000 learning visitors are included in these numbers (2019/20: 110,000). Buckingham Palace and Frogmore House were closed during the year. Clarence House was closed in 2019/20 due to building work, and remained closed during 2020/21.

The significant reduction in visitor numbers and trading activity resulted in a reduction in visitor admissions and retail income compared with prior year of £64 million (91%). Income was bolstered by the success of the online shop managed by Royal Collection Enterprises Limited which saw sales more than triple to £2.9 million (2019/20: £0.9 million).

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Review of the Year (continued)

In response to the severe reduction in income, spend was reduced in all areas. A recruitment and pay freeze was introduced in April 2020, and this together with significant reductions in all other areas of spend resulted in a fall in operating costs.

Recovery Plan

The loss of income in 2020/21 due to the pandemic was over £70 million compared with budget, with further significant reduction of income anticipated in 2021/22 compared with pre-pandemic plans. Trustees and management had to respond swiftly to challenges presented as a result. A financial recovery plan was developed during the year to ensure that the Charity could survive, while also protecting the wellbeing of visitors and staff and acting fairly and responsibly towards suppliers.

Together with the recruitment and pay freeze measures referred to above, all discretionary spend and non-essential capital works were suspended in April. The exhibition programme was revised and contracted out conservation work was reduced. In May 2020, The Trust agreed a five-year term loan facility of £22 million with its bankers, drawn in July 2020. The Trust also received short term financial assistance from the Royal Household, which permitted the deferral of the payment of facilities fees relating to 2019/20, from the due date of July 2020 to March 2021.

As a consequence of the national lockdown, most employees had to work from home, if possible, throughout the year. However, a large number of staff were unable to work from home, given the nature of their roles. The Trust could have used the Government’s Job Retention Scheme (JRS) to claim public funding for furloughed staff. However, to support Royal Collection Trust’s survival and recovery the Royal Household agreed to waive the full amount of the facilities management fee due for 2020/21 (£3.8 million) and to credit part of the fee for 2019/20 (£0.2 million), thus matching the level of JRS income that could have been claimed for March 2020 and for the 2020/21 financial year.

Despite this support and the measures outlined above, it was necessary for The Trust to take further significant cost saving measures. A major staffing restructure was undertaken in autumn 2020. As part of this process, a voluntary severance scheme was made available to all employees. Following consultation, the new structure was confirmed in November, and implementation was completed in early 2021. As a consequence, 124 staff left on voluntary redundancy terms and 6 left on compulsory terms. The ending of fixed term contracts, including intern and apprenticeship schemes, meant that in total 165 staff left the organisation.

As part of the restructuring exercise the Management Board was reduced to three members and a new Operations Board was created. The Management Board is responsible for delivery of the strategic direction, as agreed with the Trustee Board. The Operations Board is a senior leadership

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Review of the Year (continued)

team responsible for managing the day-to-day operations of Royal Collection Trust. The new structure, including these management changes, came into formal effect on 1 January 2021.

As a further essential cost saving, following a period of consultation, the employer contribution rate to the defined contribution pension scheme was reduced in January 2021. The scheme remains non-contributory for employees. In addition, the Royal Household Group Pension Scheme, a defined benefit scheme in which The Trust is a participating employer, was closed to future accrual on 31 March 2021.

In the final quarter of 2020/21, The Trust secured an additional borrowing facility from its bankers. This is a revolving credit facility of £30 million, reducing over the seven-year period of borrowing. The terms of the facility mean that The Trust has flexibility to align its borrowing with seasonal variations in cash flow, and to repay the facility early should circumstances permit.

In March 2021, The Trust made a £7 million loan to its trading subsidiary, Royal Collection Enterprises Limited (RCEL). The loan was agreed with due regard for Charity Commission and HMRC guidance for such arrangements. The Trust has obtained fixed and floating security over the assets of RCEL. The loan was needed to ensure working capital was available to RCEL, particularly in the light of continued lockdown restrictions on visitor attractions and non-essential retail from January through to May 2021 and the decision to cancel Buckingham Palace Summer Opening in 2021. The loan term is three years with the option of early repayment and interest is charged at 2.5%. Details of the loan are given in note 14.

Looking ahead

Restrictions on opening non-essential retail and visitor attractions lifted in April and May 2021. Royal Collection Trust is optimistic that sites will be able to welcome visitors throughout 2021/22, while recognising that numbers will be much reduced compared to the levels seen prior to the pandemic. It is anticipated that inbound tourism figures will increase as international travel resumes from 2022 onwards.

Management teams have developed creative solutions to support income during this time, including new visitor access to the Buckingham Palace Garden and new product offerings both instore and online.

The Trust expects to incur a further significant operating loss in 2021/22. The borrowing facilities that have been arranged will allow it to manage liquidity during this period. A return to operating surplus is projected in 2022/23. Management have prepared ‘most likely’ and severe plausible downside scenario forecasts for the next five years. The plans currently in place will allow the organisation to continue as a going concern, even under the severe plausible downside scenario. Progress will be monitored carefully to ensure the organisation responds quickly to new challenges that may arise as the

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Review of the Year (continued)

world seeks to bring the pandemic under control. The seven-year term of the revolving credit facility will ensure resources are available as needed in the meantime.

Financial Results

Despite the significant cost saving measures put in place, the loss of over 90% of anticipated revenue resulted in a net deficit of £36.5 million for the year. Costs included £2.2 million in redundancy payments, and £0.4 million in loan charges and interest. The last funding valuation of the Royal Household Group Pension Scheme was carried out by a qualified actuary as at 31 December 2017. As a consequence of an updated actuarial assessment of the pension scheme as at 31 March 2021 there is a notional funding surplus of £1.7 million (31 March 2020: £1.8 million surplus) included in unrestricted funds.

Reserves and going concern

Prior to the pandemic, The Trust’s policy has been to target a free reserves level of £10 million. The significant loss incurred in 2020/21 has meant that reserves have been fully expended, and at 31 March 2021 free reserves show a deficit position of £21.4 million.

The level of bank borrowing put in place is based on a severe plausible downside scenario projection. This borrowing facility will be available until March 2028 (with planned reductions from the total facility of £52 million taking place from 2023/24 onward). Details of the loan are given in note 19. Assessment of the severe plausible downside scenario shows that the organisation will continue as a going concern. The forecasts are based on low visitor numbers in 2021/22, acknowledging the continued uncertainty around COVID-19 restrictions and severely limited international tourism. The Trustees anticipate that visitor numbers will recover, particularly supported by the Platinum Jubilee celebrations in 2022, but has allowed several years for visitor numbers to reach pre-pandemic levels. As admissions grow, the forecasts show a gradual return to operating surplus and cash generation which will allow the organisation to manage working capital and ensure repayment of the facilities in line with the borrowing agreements.

The Trust expects to suffer a deficit in 2021/22, but as described above, management continues to carefully manage costs and expect visitor levels to eventually recover, returning the organisation to a surplus position and allowing the rebuilding of reserves. This will take several years, but the liquidity secured with the borrowing facilities ensures that the organisation can continue to trade responsibly even with a deficit balance on negative reserves. As the trading position improves, the aim is to rebuild free reserve levels to an appropriate level. This level will be reviewed by Trustees as the recovery develops.

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Review of the Year (continued)

Funds and Reserves

The reserves held at 31 March 2021 were as follows:

2020-21 2019-20
£‘000s £‘000s
Restricted funds 1,044 1,455
Unrestricted funds
Designated funds
Future Programme 2,125 8,216
General funds
Fixed Asset Reserve 54,255 54,329
Free Reserve (21,417)
8,422
Pension Reserve 1,700 1,800
Total Unrestricted Funds 36,663 72,767
Total Charity Funds 37,707 74,222

Details of the movements in fund balances are set out in note 20 on page 49.

Restricted funds

These are funds subject to specific restrictions imposed by donors that are still within the wider objects of the Charity.

Restricted funds include £609,000 donated in support of Future Programme. This fund is in addition to the designated fund that the Trustees have put aside for Future Programme.

Unrestricted funds

These are funds that are expendable at the discretion of the Trustees in furtherance of the Charity’s objects. The Trustees have designated a fund for Future Programme, covering the two major programmes of improvement at Windsor Castle and the Palace of Holyroodhouse. The aims of Future Programme include transformation of the visitor experience and making the Royal Collection physically and intellectually accessible to everyone. Future Programme works were completed in autumn 2020. The designated fund balance of £2.1 million is sufficient to cover the full final cost of the works.

The funded status of the pension reserve has reduced by £0.1 million, leading to a total asset of £1.7 million. This arises as a consequence of an updated actuarial report based on market changes and assumptions applicable as at 31 March 2021 . The Trustees do not treat the pension reserve as available funds to be utilised as it is subject to market fluctuations and not realised in liquid funds. Consequently, the pension reserve is excluded from free reserves.

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Review of the Year (continued)

The fixed asset reserve represents the net book value of the group’s tangible and intangible assets. It is excluded from free reserves, as the Charity could not dispose of all or the majority of these assets and continue its operations as a going concern.

Section 172 statement

In accordance with section 172 of the Companies Act 2006, the Board considers in its decision making how to promote the success of Royal Collection Trust as a whole, with due consideration to the impact of decisions on other stakeholders. The Board considers the impact of its decisions on beneficiaries of the work of The Trust, employees, suppliers, local communities and the environment.

The strategic focus on visitor experience and broadening access to the Collection ensures attention is given to the beneficiaries of The Trust’s activities. Pages 6 to 8 give examples. Feedback is invited from visitors to inform the Board’s understanding of their needs. Details of employee policies and practices, ensuring that the needs of employees are taken into account, are set out in the section below on Employment Policies.

The Board seeks to act responsibly with regards to the environment, and further information is provide in the Environmental Sustainability section of this report. The Trust seeks to deal fairly with suppliers when agreeing contractual terms and settling accounts promptly, with over 85% of invoices settled within 30 days. The Trust seeks to act responsibly towards its local communities, making special provision for local access, providing workshops for local community groups and using local suppliers where appropriate.

The Board is satisfied that the examples above and the information contained elsewhere in this report demonstrates its commitment to good governance under section 172.

Fundraising

The majority of The Royal Collection Trust’s income is raised by ticket sales from visitors to our sites. However, The Trust employs a small Development Team to raise remaining funds from Corporate, Trust & Foundations and Philanthropic individuals via a number of diverse fundraising activities. The Trust does not conduct mail-outs or practice 'cold calling' and only solicits gifts from supporters with whom it has an existing relationship.

The Development Team subscribes to the Code of Fundraising Practice operated by the Fundraising Regulator, which includes guidance on fundraising with vulnerable people, as well as HMRC best practise for donor benefits. Subscription to the Fundraising Regulator also provides training and support for fundraisers, if needed.

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Fundraising (continued)

The Trust has clear, established and robust systems including: due-diligence reporting for solicitations in excess of £5,000, a gift-acceptance policy and a GDPR-compliant statement in place for approaching both existing and new prospects and the way in which we store personal data. There have been no failures by The Trust to comply with these fundraising standards and the Trust has received no complaints about its fundraising activities.

Principal Risks and Uncertainties

The primary risk now facing Royal Collection Trust is the impact of the pandemic on the opening of sites and shops to the public, on the international tourism market and on the readiness of the public to attend visitor attractions as restrictions are eased. Deterioration or loss of items in the Royal Collection remains a standing risk that is central to The Trust’s core purpose. Secondary risks, as visitor numbers recover, are the failure to engage with the public or develop new audiences and decline in commercial appeal of retail merchandise.

In addition, Royal Collection Trust manages key generic risks relating to the General Data Protection Regulations (GDPR), fraud, physical and cyber security, potential failure of IT systems, the need to ensure appropriate and robust safeguarding measures for visitors and staff and the operational risks associated with managing large numbers of visitors.

COVID-19 has generated a range of additional risks which Royal Collection Trust is actively managing. Principal among these are the health and well-being of staff and visitors, enhanced operating risk associated with managing visitors to The Trust’s sites in compliance with Government regulation and best practice, relationships with The Trust’s key suppliers and operating risks arising from widespread working at home, including custody of the Collection and the uninterrupted operation of procedures, systems and controls. The Trust’s risk register, which is reviewed regularly by the Audit and Risk Assurance Committee, has been much expanded and revised this year to reflect this changed landscape.

In addition to managing the response to the pandemic, management continues to monitor and manage ongoing risks relating to areas such as the achievement of charitable objectives, and the protection of The Trust’s assets.

Regular inventory checks ensure that the works of art within the Royal Collection are subject to proper custodial control. In addition, the checks confirm the condition of items in the Royal Collection and help to establish conservation priorities. Environmental monitoring of conditions throughout the official residences and at other locations where the Royal Collection is on display ensures that the deterioration of works of art is minimised. Whilst capital budgets have been significantly reduced to secure the future of The Trust, essential work to care for the Collection will continue.

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Principal Risks and Uncertainties (continued)

A structured programme of training and compliance work has been put in place to address information risks. This includes mandatory staff training in cyber security and awareness with phishing campaigns and activities to achieve the key requirements of the General Data Protection Regulation. Additional training has been provided to address risks arising from a large proportion of staff working from home during the lockdown period.

The Operations Board of Royal Collection Trust in conjunction with senior management in the Royal Household is responsible for the management of the risk process. Departmental Heads and senior managers are responsible for identifying, assessing and managing risk in their areas of responsibility and all staff are encouraged to identify operational risks in the performance of their duties. Risk management is designed to manage performance and control risk to a reasonable level, rather than to eliminate all risk of failure to achieve policies, aims and objectives.

The Operations Board assesses risks and opportunities in the preparation of longer-term plans. Specialist risk managers in the Royal Household include the Head of Information Assurance, the Director of Property Section, the Head of Risk and Compliance - Property Section, the Director of Security Liaison, the Head of IT and Telecoms and the Chief Information Security Officer. These specialists provide advice on the management of the risks falling within their areas of responsibility.

The Audit and Risk Assurance Committee is responsible for assessing the scope and effectiveness of the systems established by management to identify, assess, manage and monitor financial and non-financial risks and is supported in this role by the internal audit function. The Chairman of the Committee reports to the Board of Trustees at each meeting of the Trustees on the Committee’s activities and responsibilities.

The Committee ordinarily meets three times annually and reviews the risk register twice a year. This follows a detailed review and discussion by the Operations Board. The internal audit function takes a risk-based approach to audits and operates to a plan of work agreed by the Audit and Risk Assurance Committee that is aligned to the risk register and the company’s objectives. Evaluation of Royal Collection Trust’s exposure to risk includes consideration of governance, operational and information systems, the integrity of financial and operational information, the effectiveness and efficiency of operations, the safeguarding of assets and compliance with laws, regulations and contracts. The findings of reviews are reported to the Committee.

The Committee monitors management’s progress with the implementation of agreed internal audit recommendations. Assurance on specialist areas such as IT controls, data protection, property maintenance, health and safety and security is provided by suitably qualified senior managers in the Royal Household and where appropriate, external professionals. New activities and changes to existing processes are routinely reviewed to ensure that controls are in place.

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Principal Risks and Uncertainties (continued)

Ongoing budgetary control is monitored by the production of regular and timely financial management reports.

Employment policies

The Royal Household’s employment policies and practices underpin the Household’s aims to create an engaged and adaptable workforce drawn from a wide cross-section of society and an outstanding workplace, where there is pride in work, a sense of teamwork, trust and collaboration, and a focus on progressive change and continuous improvement. The Royal Household benchmarks and seeks validation for its employment policies and practices. In recognition of its commitment to employee health and wellbeing, the Royal Household holds the Investors in People Gold Award and the Health and Wellbeing Best Practice Award.

Diversity, in all its forms, is central to our success as an organisation, ensuring a diversity of experience, thought and decision making. The Royal Household actively seeks applications from a wide range of backgrounds. These include disabled applicants, and the organisation would seek to re-train or re-deploy any employee who develops a disability while in the Royal Household’s employ. All staff receive an annual appraisal to assess performance and to identify career development opportunities and training requirements. Regular meetings are held with staff to keep employees informed of the activities and objectives of Royal Collection Trust and to discuss other matters of interest or concern.

Disclosure and Concern at Work policies clarify the protection offered to ‘whistle-blowers’ under the Public Interest Disclosures Act, and an Employee Assistance Programme provides an additional, third-party route for staff to seek advice on these matters. Policies and procedures, including those relating to procurement, are kept under review to identify, prevent and mitigate any risks of modern slavery or human trafficking.

Royal Collection Trust is supportive of employees who undertake volunteering and charitable activities, recognising the benefit to the individual involved and of forging links with the wider community. Employees can take up to five days paid volunteering leave a year for this purpose. Royal Collection Trust is fully committed to proactively supporting the Safeguarding of its employees, workers, visitors, and contractors, and has a clear Safeguarding Policy and set of procedures that are available both to staff (though training, their managers and via an Intranet) and members of the public (via the Royal Collection Trust website).

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Employment policies (continued)

During the year, the Royal Household changed the defined contribution pension scheme provided for employees from a Stakeholder scheme to a Worksave Mastertrust, known as the Royal Household Worksave Pension Scheme. The new scheme offers greater flexibility for individuals in how they access their funds on retirement, more robust oversight of the scheme via a group of independent external trustees, and access to a wider range of environmental and sustainable investment funds.

Environmental Sustainability

Royal Collection Trust is committed to reducing the impact of its operations on the environment. To support this aim, the Trust has adopted an Environmental Action Plan outlining five key focus areas for 2020-2022. These are:

Activity was much impacted during the year by the pandemic. Nevertheless, some notable actions during the year were:

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Streamlined Energy and Carbon Reporting 2020/21

Royal Collection Trust is required to report on energy use and carbon emissions under the Streamlined Energy and Carbon Reporting regulations. The tables below provide the disclosure required in respect of The Royal Collection Trust and Royal Collection Enterprises Limited.

This SECR report covers:

Scope 1 – Natural Gas and Owned/leased vehicles.

Scope 2 – Electricity National Grid

Scope 3 – Travel in privately owned vehicles for business purposes

Greenhouse Gas Emissions

Greenhouse Gas Emissions
2021 (tCO2e) 2020 (tCO2e)
Location Market Location Market
based** based* based** based*
Emissions Scope 1 461 461 518 518
Emissions Scope 2 705 151 833 134
Total Scope 1 & 2 1,166 612 1,351 652
Emissions Scope 3 3 3 11 11
Total GHG emissions(1-3) 1,169 615 1,362 663

GHG emissions for reporting purposes are deemed to be Market-based.

** GHG emissions for grid electricity calculated using UK grid-average (Location-based) emissions factor.

All emissions have been calculated using the relevant carbon conversion factors from DEFRA

Energy Use

Energy Consumption 2021 2020
KWh(m) KWh(m)
Scope 1 2.49 2.80
Scope 2 2.38 3.57
Scope 3 0.01 0.05
Total kWh 4.88 6.42

Data has been sourced from accounting software using utility invoices, business mileage claims and fuel card invoices.

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TRUSTEES’ REPORT 2020/21

Streamlined Energy and Carbon Reporting 2020/21 (continued)

Royal Collection Trust has adopted Net Internal Area (NIA) as an intensity measure. The NIA of buildings within The Royal Collection Trust and its subsidiary during the 2020/21 financial year was 24,272.5 m2. The Royal Collection Trust emitted 0.048 tonnes of CO2e per m2 of NIA when using grid average conversions. The Royal Collection Trust emitted 0.025 tonnes of CO2e per m2 of NIA when allowing for REGOs.

Energy consumption used to calculate emissions Gas: 2,453,917 kWh
Company owned vehicles: 39,340 kWh
Electricity: 3,025,593 kWh (of which 2,376,496
kWh is REGO backed renewable)
Employee owned vehicles: 11,481 kWh
Emissions from combustion ofgas tCO2e(scope 1) 451 tonnes
Emissions from business travel in companyowned vehicles 9.4 tonnes
Emissions from purchased electricity (scope 2, location 705.4 tonnes (using grid average)
based) 151.3
tonnes
(allowing
for		 REGO
backed
renewablegeneration)
Emissions from business travel in rental cars or employee 2.8 tonnes
owned vehicles where company is responsible for
purchasingthe fuel
1,168.9 tonnes (using grid average)
Total gross CO2e based on the above 614.8 tonnes (allowing for REGO back renewable
generation)

20 Company Number 2713536

Royal Collection Trust

TRUSTEES’ REPORT 2020/21

Statement of Trustees responsibilities in respect of the Trustees’ Annual Report and the financial statements

The Trustees are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and regulations.

Company and charity law requires the Trustees to prepare financial statements for each financial year. Under that law they are required to prepare the group and parent charitable company financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland .

Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and parent charitable company and of the group’s income and expenditure for that period. In preparing each of the group and parent charitable company financial statements, the Trustees are required to:

The Trustees are responsible for keeping adequate and proper accounting records that are sufficient to show and explain the parent charitable company’s transactions and disclose with reasonable accuracy at any time the financial position of the parent charitable company and enable them to ensure that its financial statements comply with the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005, and regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended). They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.

The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the UK governing the

21 Company Number 2713536

Royal Collection Trust

TRUSTEES’ REPORT 2020/21

preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Disclosure of information to auditor

The Trustees who held office at the date of approval of this Trustees’ Report confirm that, so far as they are each aware, there is no relevant audit information of which the company’s auditor is unaware; and each Trustee has taken all the steps that they ought to have taken as a Trustee to make themselves aware of any relevant audit information and to establish that the company’s auditor is aware of that information.

Auditors

Pursuant to Section 487 of the Companies Act 2006, the auditors will be deemed to be reappointed and KPMG LLP will therefore continue in office.

By order of the Trustees

The Hon. Sir James Leigh-Pemberton Trustee

Sir Brian Ivory Trustee

York House St James’s Palace London SW1A 1BQ

1 July 2021

22 Company Number 2713536

INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEES AND MEMBERS OF THE ROYAL COLLECTION TRUST

Opinion

We have audited the financial statements of The Royal Collection Trust (“the charitable company”) for the year ended 31 March 2021 which comprise the Consolidated and Trust Statement of Financial Activities, The Statement of Financial Activities, Consolidated and Trust Balance Sheet, Consolidated Statement of Cash Flows and related notes, including the accounting policies in note 1.

In our opinion the financial statements:

Basis for opinion

We have been appointed as auditor under section 44 (1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and report in accordance with regulations made under those Acts.

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the group in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.

Going concern

The Trustees have prepared the financial statements on the going concern basis as they do not intend to liquidate the group or the charitable company or to cease their operations, and as they have concluded that the group and the charitable company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).

In our evaluation of the Trustees’ conclusions, we considered the inherent risks to the group’s business model and analysed how those risks might affect the group and charitable company’s financial resources or ability to continue operations over the going concern period.

Our conclusions based on this work:

23

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ROYAL COLLECTION TRUST

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the group or the charitable company will continue in operation.

Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement due to fraud

To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.

As required by auditing standards, and taking into account our overall knowledge of the control environment, we perform procedures to address the risk of management override of controls, in particular the risk that Group management may be in a position to make inappropriate accounting entries. On this audit we do not believe there is a fraud risk related to revenue recognition because the Group’s revenue primarily arises from non-complex, individually low value admissions transactions. In addition, due to Covid-19 restrictions, no material revenue was generated around year end, limiting the opportunity to process fictitious sales.

We did not identify any additional fraud risks.

We performed procedures including:

Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards),

24

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ROYAL COLLECTION TRUST

and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations.

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies and charities legislation), distributable profits legislation, and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: health and safety, employment law, recognising the nature of the Group’s activities. Auditing standards limit the required audit procedures to identify noncompliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or breaches of law or regulation

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. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect noncompliance with all laws and regulations.

Other information

The Trustees are responsible for the other information, which comprises the Trustees' Annual Report. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:

25

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ROYAL COLLECTION TRUST

Matters on which we are required to report by exception

Under the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 (as amended) we are required to report to you if, in our opinion:

We have nothing to report in these respects.

Trustees’ responsibilities

As explained more fully in their statement set out on page 21 the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the group’s and the charitable 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 they either intend to liquidate the group or the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities

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 our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.

26

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ROYAL COLLECTION TRUST

The purpose of our audit work and to whom we owe our responsibilities

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006, and to the charitable company's trustees, as a body, in accordance with section 44 (1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the charitable company's members and the charitable company's trustees those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company, its members, as a body and its trustees, as a body, for our audit work, for this report or for the opinions we have formed.

Lynton Richmond (Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants

KPMG LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

15 Canada Square

London E14 5GL

5th July 2021

27

Royal Collection Trust

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES

(incorporating the consolidated income and expenditure account) For the year ended 31 March 2021

Note
Income
Donations and legacies
4,20
Charitable Activities
Access
Presentation and interpretation
Other Trading Activities
Retail, catering, photographic services
Licences, commissions and fees
2
Sponsorship
Investments
Investment income
6
Other income
Total income
Expenditure
Raising Funds
Fundraising
7
Retail, catering, photographic services
7
Charitable Activities
Access
7
Presentation and interpretation
7,20
Exhibitions and displays
7,20
Conservation
7,20
Custodial control
7
Other
Donations payable
5
Interest payable
6
Total expenditure
Net (deficit)/income
Other recognised gains
Actuarial (loss)/gain on pension scheme
22
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Total funds carried forward		 Income Funds
Unrestricted
Restricted
£’000
£’000
1
(254)

2,533
-
168
-

4,012
-
29
-
-
-

109
-
25
-
6,877
(254)



129
-
8,444
-
8,573
-

18,911
-
9,633
95
1,730
13
2,716
49
812
-
33,802
157

44
-
362
-

42,781
157

(35,904)
(411)

(200)
-
(36,104)
(411)


72,767
1,455
36,663
1,044		 2021
Total
£’000

(253)

2,533
168

4,012
29
-

109
25
6,623



129
8,444
8,573

18,911
9,728
1,743
2,765
812
33,959

44
362

42,938

(36,315)
(200)
(36,515)


74,222
37,707		 Income Funds
Unrestricted
Restricted
£’000
£’000
25
70
49,483
-
647
-
20,547
-
130
-
250
-
296
-
78
-
71,456
70

124
-
17,606
-
17,730
-
30,165
-
9,606
408
3,631
13
4,408
73
1,124
-
48,934
494
770
-
-
-
67,434
494
4,022
(424)
1,200
-
5,222
(424)
67,545
1,879
72,767
1,455		 2020
Total
£’000
95
49,483
647
20,547
130
250
296
78
71,526
124
17,606
17,730
30,165
10,014
3,644
4,481
1,124
49,428
770
-
67,928
3,598
1,200
4,798
69,424
74,222

The results shown above relate to continuing activities. There are no recognised gains or losses other than those included above. The incoming resources and resources expended for the year are measured under the historical cost convention. The notes on pages 32 to 60 form part of these financial statements.

28 Company Number 2713536

Royal Collection Trust

THE ROYAL COLLECTION TRUST STATEMENT OF FINANCIAL ACTIVITIES

For the year ended 31 March 2021

Note
Income
Donations and legacies
Received from subsidiary
24
Other donations
Charitable Activities
Access
Presentation and interpretation
Investments
Investment income
6
Other
Total
Expenditure
Raising Funds
Charitable Activities
Access
Presentation and interpretation
Exhibitions and displays
Conservation
Custodial control
Other expenditure
Interest payable
6
Total expenditure
Net (deficit)/income
Other recognised gains:
Actuarial (loss)/gains on pension scheme
22
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Total funds carried forward		 Income Funds
Unrestricted
Restricted
£’000
£’000
244
-
-
(254)
2,533
-
2
-
104
-
25
-
2,908
(254)
129
-
129
-
26,827
-
6,617
95
1,017
13
2,717
49
814
-
37,992
157
329
-
362
-
38,812
157
(35,904)
(411)
(200)
-
(36,104)
(411)
72,022
1,455
35,918
1,044		 2021
Total
£’000
244
(254)
2,533
2
104
25
2,654
129
129
26,827
6,712
1,030
2,766
814
38,149
329
362
38,969
(36,315)
(200)
(36,515)
73,477
36,962		 Income Funds
Unrestricted
Restricted
£’000
£’000
7,533
-
20
70
49,483
-
376
-
278
-
586
-
58,276
70
124
-
124
-
39,198
-
5,861
408
3,631
13
4,408
73
1,124
-
54,222
494
190
-
-
-
54,536
494
3,740
(424)
1,200
-
4,940
(424)
67,082
1,879
72,022
1,455		 2020
Total
£’000
7,533
90
49,483
376
278
586
58,346
124
124
39,198
6,269
3,644
4,481
1,124
54,716
190
-
55,030
3,316
1,200
4,516
68,961
73,477

The notes on pages 32 to 60 form part of these financial statements.

29 Company Number 2713536

Royal Collection Trust

CONSOLIDATED AND TRUST BALANCE SHEET

As at 31 March 2021

Non-current assets
Note
Intangible assets
11
Tangible assets
12
Loan to subsidiary
14
Total non-current assets
Current assets
Stock and work in progress
15
Debtors
16
Bank deposits
Cash at bank and in hand
Total current assets
Liabilities
Creditors: amounts due within one year
18
Net current assets
Creditors: amounts due in more than one year
19
Net assets excluding pension asset
Defined benefit pension scheme asset
22
Total net assets
Funds
20
Restricted funds
Fixed assets
Cash & Debtors
Total restricted funds
Unrestricted funds
Designated funds
Future Programme
General funds:
Fixed assets
Free reserve
Pension reserve
22
Total unrestricted funds
Total charity funds		 2021
Group
Trust
£’000
£’000
4,529
4,333
50,029
49,191
-
7,000
54,558
60,524
4,022
-
2,125
1,605
13,651
11,438
324
10
20,122
13,053
(4,173)
(3,815)
15,949
9,238
(34,500)
(34,500)
36,007
35,262
1,700
1,700
37,707
36,962
303
303
741
741
1,044
1,044
2,125
2,125
54,255
53,221
(21,417)
(21,128)
1,700
1,700
36,663
35,918
37,707
36,962		 2020
Group
Trust
£’000
£’000
4,696
4,584
49,949
48,852
-
-
54,645
53,436
4,062
-
2,604
9,444
24,729
21,912
514
4
31,909
31,360
(14,132 ) (13,119)
17,777
18,241
-
-
72,422
71,677
1,800
1,800
74,222
73,477
316
316
1,139
1,139
1,455
1,455
8,216
8,216
54,329
53,120
8,422
8,886
1,800
1,800
72,767
72,022
74,222
73,477

The notes on pages 32 to 60 form part of these financial statements. These financial statements were approved by the Trustees on 1 July 2021 and were signed on their behalf by:

The Hon. Sir James Leigh-Pemberton Sir Brian Ivory Trustee Trustee

30 Company Number 2713536

Royal Collection Trust

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 March 2021

Reconciliation of net (deficit)/income to net cash flow from operating activities

Net (deficit)/income for the year
Adjustments for:
Excess of pension scheme loss/(gain) over contributions
Amortisation
Depreciation
Loss on disposal of fixed assets
Decrease in stock
Decrease in debtors
(Decrease)/increase in creditors
Interest receivable
Interest payable
Net cash (used)/provided by operating activities
Statement of cash flows
Net cash (used)/provided by operating activities
Cash flows from investing activities:
Interest income
Purchase of intangible fixed assets
Purchase of tangible fixed assets
Net cash used in investing activities
Cash flows from financing activities
Receipt of loan
Payment of loan interest
Net cash provided by financing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Analysis of cash and cash equivalents
Cash at bank and in hand
Bank deposits
Total cash and cash equivalents		 2021
£’000
(36,515)
100
252
3,499
2,108
40
479
(9,959)
(109)
362
(39,743)
(39,743)
109
(123)
(5,649)
(5,663)
34,500
(362)
34,138
(11,268)
25,243
13,975
324
13,651
13,975		 2020
£’000
4,798
(1,200)
226
1,876
882
233
1,307
1,404
(296)
-
9,230
9,230
296
(112)
(20,690)
(20,506)
-
-
-
(11,276)
36,519
25,243
514
24,729
25,243

The notes on pages 32 to 60 form part of these financial statements.

31 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

1 Accounting policies

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the group’s financial statements.

Status of company

The Royal Collection Trust (“The Trust”) is a company limited by guarantee, incorporated on 29 January 1993 and registered as a charity in England and Wales on 2 February 1993. The Charity is a public benefit entity. The Office of the Scottish Charity Regulator approved The Trust’s application to be registered as a charity in Scotland on 5 August 2008. The company was established under a Memorandum of Association which established the objects and powers of The Trust and is governed under its Articles of Association.

Basis of preparation

The financial statements have been prepared in accordance with 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 2015) - (Charities SORP 2019 (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006. The company is exempt from the requirement to disclose the details of related party transactions with its subsidiary undertaking.

The subsidiary’s principal activities include: management of the admission of visitors to the official residences of The Queen and the official residence of The Prince of Wales to view the Royal Collection, the publication of books on the Royal Collection, the granting of rights for the use of images from the Royal Collection in books and other media and the sale of merchandise designed with reference to items in the Royal Collection.

The financial statements have been prepared on a going concern basis which the Trustees consider to be appropriate.

The Trustees have reviewed income, expenditure and cash flow forecasts for a period of at least 12 months from the date of approval of these financial statements based on a ‘most likely’ scenario and for a severe plausible downside scenario. The scenarios take account of the impact of COVID-19 restrictions on operations and financial performance, and the requirements to service and repay the loans taken out during the period. The forecasts reflect a realistic operating cost base (accounting for the savings delivered in 2020/21).

The Trust has secured financing for the sum of £52 million. This consists of two facilities, a term loan and a revolving credit facility. At the end year, £34.5 million of the total facility has been drawn. The facility is repayable in instalments starting in 2023. No security was required for the facility. The company has complied with the loan covenant since the loan was drawn and expects to remain compliant for the full term of the loan.

The forecasts show that, the Group and Charity will have sufficient funds to meet their liabilities as they fall due for that period and will be able to settle all debts as they fall due throughout this period .

On this basis, the Trustees have concluded that the Group and Charity will continue in operation for a period of at least 12 months from the approval of the financial statements. It is appropriate to prepare the financial statements on a going concern basis.

32 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

Basis of consolidation

The group (collectively referred to as Royal Collection Trust or RCT) accounts consolidate The Royal Collection Trust and its subsidiary undertaking, Royal Collection Enterprises Limited on a line-by-line basis. These accounts are made up to 31 March 2021.

Income

Income represents:

In general, income is accounted for on a receivable basis, but is deferred when it is received in respect of events or transactions occurring after the year end. Entitlement to a donation arises immediately on receipt, pledges and promises of donations are only recognised as income when the receipt is probable and the amount of the promised gift can be measured reliably.

Resources expended

All outgoing resources are included in the Statement of Financial Activities inclusive of any irrecoverable VAT.

Donations are included in the Statement of Financial Activities when payable. Other charitable expenditure is recognised on an accruals basis, with liabilities valued at their settlement amount.

Expenditure incurred within The Trust is allocated between that incurred directly on admitting the public to the official residences, the conservation and maintenance of items in the Royal Collection, and that incurred on the management and administration of The Trust, details of which are disclosed in note 7. The allocation of management and administration costs between The Trust and its trading subsidiary and the subsequent apportionment to individual activities is based on the proportion of time spent on those activities.

Governance costs

These costs include the costs of governance arrangements which relate to the general running of The Trust as opposed to the direct management functions inherent in day-to-day operations. This includes such items as internal and external audit, legal advice for Trustees and costs associated with regulatory and statutory requirements.

Support costs

Support costs represent the staffing and associated costs of marketing, finance, human resources, IT and general administration in supporting the operational programmes for which The Trust is responsible. These are allocated to the relevant cost area and are explained in more detail in the notes to the accounts.

Exhibition costs

The cost of mounting exhibitions are written off as they are incurred.

33 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

1 Accounting policies (continued)

Publishing

The cost of producing each Royal Collection Trust book is carried forward as work in progress until publication. Where, however, it is envisaged that a book will make a loss, the loss is recognised immediately. Publication titles are included in stock at the lower of cost or net realisable value. Publishing royalties are recognised when earned.

Fixed assets and depreciation

The buildings comprising Windsor Castle, Buckingham Palace (including The Queen’s Gallery and the Royal Mews) and the Palace of Holyroodhouse (including The Queen’s Gallery) are owned by The Queen as Sovereign and maintained by the Royal Household Property Section and Historic Environment Scotland. However, where improvements or major redevelopments are made to these buildings by The Royal Collection Trust or its subsidiary, in order to increase revenues or to fulfil The Trust’s charitable duties, the expenditure (including irrecoverable VAT) is capitalised and depreciation is charged over the estimated useful lives of the assets.

The Royal Collection consists of works of art of all kinds which are held by The Queen in right of the Crown and are held in trust for her Successors and the Nation. These are assets of historical and artistic importance that are held to advance the preservation, conservation and educational objectives of The Trust. Assets held in right of the Crown are not recognised as Heritage Assets by Royal Collection Trust, as they do not meet the recognition criteria of an asset under FRS 102 and are therefore not capitalised in these financial statements. Royal Collection Trust cannot control the benefits that arise from these assets as its role with respect to the Royal Collection as defined by its charitable objects is to administer , conserve, renovate, repair, maintain, improve and advise on the Royal Collection, the Royal Archives and the Photograph Collection which pass in right of the Crown.

All fixed assets are included in the financial statements at historical cost. No depreciation or amortisation is charged on assets in the course of construction until the assets have been successfully commissioned and are available for use. Finance costs incurred in connection with the construction of tangible assets are not capitalised and are charged to the income and expenditure account as incurred.

Depreciation and amortisation is provided by Royal Collection Trust to write off the cost or valuation less estimated residual value of tangible fixed assets by equal instalments over their estimated useful economic lives which are determined on an individual asset basis as follows:

Building redevelopments Building redevelopments - 40 years
Property improvements:
− Refurbishments - 10 to 20 years
− Finishes - 5 to 20 years
Plant and machinery:
− Lighting and power - 10 to 20 years
− Ventilation and air conditioning - 5 to 20 years
− Building management systems - 10 years
− Machinery - 3 to 10 years
Furniture, fittings and equipment - 2 to 10 years
Software development - 3 to 10 years

Individual assets costing less than £5,000 are not capitalised.

If an asset is available for use but the cost cannot be reliably measured by the year end date (e.g. for construction projects where the final valuation of works is yet to be certified), the estimated cost of the asset is included in Assets in the Course of Construction and an accrual

34 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

Fixed assets and depreciation (continued)

for estimated depreciation is charged against income and held in accruals until the final valuation is known and recorded in the fixed asset register.

Foreign currencies

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the contracted rate of exchange ruling at the balance sheet date and the gains and losses on translation are included in the income and expenditure account.

Stock and work in progress

Stock and work in progress is stated at the lower of cost and net realisable value. Work in progress relates to the component cost of publishing stock and china products. In determining the cost of goods purchased for resale, the weighted average purchase price is used.

Estimates and judgements

Provision is made against stock and work in progress where there are specific risks identified against the recoverability of carrying value. Further detail is given in note 15.

Financial instruments

The Charity holds basic financial instruments. These are initially measured at the amount receivable or payable and subsequently at the amount expected to be received or paid. The financial instruments that the Charity commonly holds are

No financial instruments are held at fair value through profit or loss. Financial instruments are held at amortised cost if the effect of discounting is material to the financial statements.

Pensions

Royal Collection Trust participates in two pension schemes providing benefits based on final pensionable pay, The Royal Household Pension Scheme and The Royal Households Group Pension Scheme, and also a defined contribution scheme. The assets of the schemes are held separately from those of Royal Collection Trust. Contributions to the schemes are charged to the Statement of Financial Activities to reflect the cost of benefits accruing to members so as to spread pension costs over employees’ working lives with Royal Collection Trust.

35 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

1 Accounting policies (continued)

Pensions (continued)

One of these pension schemes, The Royal Household Pension Scheme, is managed by the Government and the benefits of the scheme are broadly analogous to the benefits of the Principal Civil Service Scheme (PCSPS). It is an unfunded scheme and the Consolidated Fund pays as a Standing Service the pension benefits of those Royal Collection Trust employees who entered employment before 1 April 2001.

The liabilities for this scheme are included within the resource accounts of the Consolidated Fund Account. Royal Collection Trust is unable to identify the share of the underlying assets and liabilities of the scheme attributable to its employees on a consistent and reasonable basis and therefore as permitted by FRS 102 this scheme is treated as a defined contribution scheme by Royal Collection Trust and the full cost of contributions made in the year is reflected in the Statement of Financial Activities.

The other scheme, The Royal Households Group Pension Scheme, is accounted for in accordance with FRS102 with current service cost and net interest cost recognised in profit or loss and remeasurement of the net defined benefit asset or liability recognised in other comprehensive income. This scheme was closed to future service accrual from 1 April 2021. From this date, members in-service deferred of the defined benefit scheme and are enrolled in the defined contribution scheme, unless they choose to opt-out.

The assets of the defined contribution scheme are held separately from those of the company in an independently administered fund. The amount charged to the income and expenditure account represents the contributions payable to the scheme in respect of the accounting period. During the year the defined contribution scheme was changed from a Stakeholder plan to a Worksave Mastertrust Scheme. There is no difference in the accounting treatment for the two schemes.

Further details of the pension schemes are provided in note 22.

Taxation

The Royal Collection Trust is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the Charity is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. In addition because the subsidiary is bound by deed of covenant to transfer all its taxable profit to The Trust, it incurs no liability to tax. Consequently Royal Collection Trust has no liability to tax and no deferred tax.

Restricted Funds

Restricted Funds include those receipts which are subject to specific restrictions, including donations towards specific projects for conservation and publishing.

Unrestricted Funds

Unrestricted Funds include donations and other income received without restriction, including the profits of the subsidiary, which are expendable at the discretion of the Trustees.

Operating Leases

Operating lease rentals are charged to the Statement of Financial Activities on a straight-line basis over the period of the lease.

36 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

1 Accounting policies (continued)

Donated Goods, Facilities and Services

Donated goods, facilities and services are recognised when it has been established that The Trust has an entitlement to them, their receipt is probable and that their value can be measured reliably. Donated goods are measured at their fair value, while donated facilities and services are measured on the basis of their value to The Trust.

2 Licences, commissions and fees

Licences
Commissions and fees		 2021
£’000
-
29
29		 2020
£’000
1
129
130

3 Net (deficit)/income is stated after charging:

Net (deficit)/income is stated after charging:
2021 2020
£’000 £’000
Auditor's remuneration:
Audit of these financial statements 42 30
Audit of subsidiary undertakings 20 15
Depreciation, amortisation and impairment
Owned assets 3,751 2,102
Operating lease charges 306 163

Auditors remuneration in 2021 includes £6,000 (these financial statements) and £3,000 (audit of subsidiary undertakings) paid in respect of additional fees for the 2020 audit agreed after the approval of the financial statements.

4 Donations and legacies

Donations and legacies
Grants
Donations
Pledges de-recognised in the year		 2021
£’000
-
53
(306)
(253)		 2020
£’000
42
53
-
95

Following the closure of The Queen’s Bindery Apprentice Scheme during the year, and reduced activity in other projects, pledges that had previously been recognised in restricted funds as donation income have now been reversed.

37 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

5 Donations payable

Donations made in the year were as follows:

Donations payable
Donations made in the year were as follows:		 Donations payable
Donations made in the year were as follows:
Group
2021
£’000
Privy Purse Charitable Trust
44
Prince Andrew Charitable Trust
-
Sussex Royal, The Foundation of the Duke and Duchess
of Sussex
-
Royal Household Staff Wellbeing Fund
-
44		 Group
2020
£’000
695
15
50
10		 Trust
2021
£’000
-
-
-
-		 Trust
2020
£’000
-
-
-
10
44 770 - 10

The Group continues to contribute to the Royal Household Staff Wellbeing Fund but will no longer present this as a ‘donation’. Details of the contribution to the Staff Wellbeing Fund continue to be given in note 23.

6 Investment income and interest payable

Group Group Trust Trust
2021 2020 2021 2020
£’000 £’000 £’000 £’000
Investment income on cash deposits 109 296 104 278
Group Group Trust Trust
2021 2020 2021 2020
£’000 £’000 £’000 £’000
Interest and charges payable on bank loans 362 - 362 -

Interest and charges payable represent interest charged on the term loan and revolving credit facility and amortisation of arrangement fees which are spread over the life of the respective facilities. Further details of the borrowing facilities are given in note 19.

38 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

7 Resources expended

Raising funds:
Fundraising
Retail, catering, photographic
Charitable activities:
Access
Presentation & interpretation
Exhibition & displays
Conservation
Custodial control
TOTAL
Raising funds:
Fundraising
Retail, catering, photographic
Charitable activities:
Access
Presentation & interpretation
Exhibition & displays
Conservation
Custodial control
TOTAL		 Direct
costs
£’000
129
7,276
17,641
8,796
1,474
2,698
677
38,691
Direct
costs
£’000
124
16,499
28,723
8,655
3,201
4,370
901
62,473		 Central
& HR
£’000
-
556
580
536
165
41
82
1,960
Central
& HR
£’000
-
506
767
981
347
87
174
2,862		 IT
£’000
-
218
243
129
32
8
16
646
IT
£’000
-
212
236
126
31
8
16
629		 Finance
£’000
-
321
356
190
47
12
25
951
Finance
£’000
-
329
366
195
49
12
24
975		 Govern-
ance
£’000
-
73
91
77
25
6
12
284
Govern-
ance
£’000
-
60
73
57
16
4
9
219		 2021
Total
£’000
129
8,444
18,911
9,728
1,743
2,765
812
42,532
2020
Total
£’000
124
17,606
30,165
10,014
3,644
4,481
1,124
67,158

Non-direct costs are allocated on the basis of estimated usage. For detail on governance costs, see note 9.

8 Analysis of the cost of key management personnel, staff numbers and costs

The key management personnel of the group comprise the Trustees and the Management Board.

Trustees

None of the Trustees received any remuneration during the year in connection with their role as a Trustee of The Royal Collection Trust. The Trust paid liability insurance in respect of each Trustee at a cost of £319 per Trustee (2019-20: £635). None of the Trustees received reimbursed expenses (2019-20: nil). Retirement gifts worth a total of £270 were given to two Trustees who left the Board during the year (2019-20: £nil).

39 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

Management Board

The organisation restructure implemented from 1 January 2021 reduced the Management Board to three members, being the Director of the Royal Collection, the Finance Director and the Commercial Director. In the period 1 April 2020 – 31 December 2020, an additional six people participated in the Management Board.

The total payments to the Management Board during these periods were as follows:

New structure (Jan – Mar 2021)
Old structure (to 31 Dec 2020)
Total		 2021
Total
benefits
£’000
105
826
931		 2021
Pension
contribution
(included in
total benefits)
£’000
9
113
122		 2020
Total
benefits
£’000
-
1,014
1,014		 2020
Pension
contribution
(included in
total benefits)
£’000
-
144
144

Five of the members of the Management Board, received reimbursed expenses totalling £2,300 (2019-20: nine - £7,880).

Four employees who participated in Management Board under the old structure left the organisation in April 2021 and received voluntary severance payments on the same terms as all other employees.

The total remuneration of the Director of the Royal Collection was as follows:

Total remuneration Salary Pension
2021 2020 2021 2020 2021 2020
£’000 £’000 £’000 £’000 £’000 £’000
Tim Knox 152 154 134 134 18 20

Pay and remuneration for key management personnel is determined on the same basis as that applied in relation to all roles, i.e. a system of job evaluation and market intelligence relating to comparable external roles.

40 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

8 Analysis of the cost of key management personnel, staff numbers and costs (continued)

The average monthly head count was 759 staff (2020: 995 staff) and the average number of full-time equivalent (FTE) staff employed by the group or on permanent secondment from the Royal Household, analysed by category, was as follows:

Retail, catering and photographic services
Custodial control
Conservation
Exhibitions and displays
Presentation and interpretation
Access
Fundraising
Finance, administration and IT
Royal Household Staff supporting Royal Collection Trust		 Number of employees
2021
2020
98
145
11
13
42
51
4
5
75
91
292
398
3
3
20
19
63
58
608
783		 Number of employees
2021
2020
98
145
11
13
42
51
4
5
75
91
292
398
3
3
20
19
63
58
608
783
783

Employee numbers reduced significantly during the year following the restructuring programme and reduced seasonal employees. The average payroll cost per FTE increased due to the significant reduction in temporary summer staffing levels as a result of the closure of sites.

The increase in Royal Household staff supporting Royal Collection Trust reflects a change in charging mechanism during the year, with more services being paid for directly through payroll instead of being recharged via invoice.

The aggregate payroll costs of these persons were as follows:

Wages and salaries
Redundancy pay
Social security costs
Other pension costs		 2021
£’000
17,092
2,159
1,693
2,682
23,626		 2020
£’000
20,688
29
1,820
2,880
25,417

Redundancy and severance payments are recognised as an expense when incurred or when there is a legal or constructive obligation to make the payment. The redundancy payments in 2021 reflect the restructuring programme undertaken during the year and include £317,000 of payments accrued at the year-end (2020: £11,000).

41 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

The Charities SORP requires that the number of employees whose total employee benefits exceed £60,000 is disclosed in bands of £10,000.

The following table shows the number of employees whose benefits (including paid and accrued redundancy but excluding contributions made to a pension scheme) were in excess of £60,000. These include staff employed by Royal Collection Trust or on permanent secondment from the Royal Household (including the directors of Royal Collection Enterprises Limited).

£60,001 - £70,000
£70,001 - £80,000
£80,001 - £90,000
£90,001 - £100,000
£100,001 - £110,000
£110,001 - £120,000
£130,001 - £140,000
£160,001 - £170,000
£190,001 - £200,000
£230,001 - £240,000		 2021
All staff
Management
Board*
9
-
3
2
1
-
1
-
3
-
1
1
4
3
1
1
1
1
1
1
25
9		 2020
All staff
Management
Board*
10
1
1
1
-
-
3
3
2
2
-
-
2
2
-
-
-
-
-
-
18
9

*Management Board includes all employees who have served on Management Board at any point during the year. Contributions to provide defined benefit pensions were made in respect of five of the above individuals amounting to £80,000 (2019-20: three, £69,000).

For 2020/21, the benefits received were high due to the inclusion of redundancy payments and accruals. For comparability, the table below presents the banding excluding redundancy payments:

£60,001 - £70,000
£70,001 - £80,000
£90,001 - £100,000
£100,001 - £110,000
£110,001 - £120,000
£130,001 - £140,000		 2021
All staff
Management
Board*
6
-
2
2
1
1
3
3
1
1
2
2
15
9		 2020
All staff
Management
Board*
10
1
1
1
3
3
2
2
-
-
2
2
18
9

Contributions to provide defined benefit pensions were made in respect of two of the above individuals amounting to £54,000 (2019-20: three, £69,000).

42 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

9 Governance costs

External audit
Internal audit
Allocated internal costs
Trustee expenses (see note 8)		 Group
2021
£’000
62
86
133
3
Group

2020

£’000

45

75

93

6

219		 Trust
2021
£’000
42
21
57
3		 Trust
2020
£’000
30
19
31
6
284 123 86

10 Deferred Income

Income is deferred where it is received in respect of events or transactions occurring in the future, including advance admission-ticket sales.

At 1 April
Income brought forward released during year
Income deferred during year
At 31 March		 2021
£’000
541
(541)
5
5		 2020
£’000
1,129

(1,129)
541
541

43 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

11 Intangible fixed assets

Group
Cost
At 1 April 2020
Additions
Transfers
Disposals /write-off
At 31 March 2021
Amortisation
At 1 April 2020
Charge for the year
Disposals /write-off
At 31 March 2021
Net book value
At 31 March 2021
At 31 March 2020
Trust
Cost
At 1 April 2020
Disposals /write-off
At 31 March 2021
Amortisation
At 1 April 2020
Charge for the year
Disposals /write-off
At 31 March 2021
Net book value
At 31 March 2021
At 31 March 2020		 Software
development
£’000
1,556
123
101
(382)
1,398
1,518
55
(382)
1,191
207
38
863
-
863
825
31
(4)
852
11
39		 Pug Yard Access
£’000
4,903
-
-
-
4,903
384
197
-
581
4,322
4,519
4,903
-
4,903
384
197
-
581
4,322
4,519		 Assets in
course of
construction
£’000
139
-
(101)
(38)
-
-
-
-
-
-
139
27
(27)
-
-
-
-
-
-
27		 Total
£’000
6,598
123

-
(420)
6,301
1,902
252
(382)
1,772
4,529
4,696
5,793
(27)
5,766
1,209
228
(4)
1,433
4,333
4,584

The intangible assets balance includes £4.3 million (2020: £4.5 million) in respect of a licence to use Pug Yard at Windsor Castle to construct a Learning Centre. The licence was granted to the Trust in return for funding the construction of Frogmore Workshops and was initially valued at the cost of construction. The licence is being amortised over the life of the new Learning Centre as the best estimate of the useful life of the licence, and at 31 March 2021 it has 22 years of amortisation remaining.

44 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

12 Tangible fixed assets

Building
developments
£’000
Group
Cost
At 1 April 2020
23,498
Additions
2,150
Transfers
14,875
Disposals /write-off
-
At 31 March 2021
40,523
Depreciation
At 1 April 2020
7,436
Charge for the year
995
Disposals /write-off
-
At 31 March 2021
8,431
Net book value
At 31 March 2021
32,092
At 31 March 2020
16,062
Trust
Cost
At 1 April 2020
23,498
Additions
2,150
Transfers
14,875
Disposals /write-off
-
At 31 March 2021
40,523
Depreciation
At 1 April 2020
7,436
Charge for the year
995
Disposals /write-off
-
At 31 March 2021
8,431
Net book value
At 31 March 2021
32,092
At 31 March 2020
16,062		 Building
developments
£’000
Group
Cost
At 1 April 2020
23,498
Additions
2,150
Transfers
14,875
Disposals /write-off
-
At 31 March 2021
40,523
Depreciation
At 1 April 2020
7,436
Charge for the year
995
Disposals /write-off
-
At 31 March 2021
8,431
Net book value
At 31 March 2021
32,092
At 31 March 2020
16,062
Trust
Cost
At 1 April 2020
23,498
Additions
2,150
Transfers
14,875
Disposals /write-off
-
At 31 March 2021
40,523
Depreciation
At 1 April 2020
7,436
Charge for the year
995
Disposals /write-off
-
At 31 March 2021
8,431
Net book value
At 31 March 2021
32,092
At 31 March 2020
16,062

Property
Improvements
£’000
10,276
172
1,591
(29)
12,010
4,816
929
(27)
5,718
6,292
5,460
9,784
166
1,590
(12)
11,528
4,623
881
(12)
5,492
6,036
5,161		 Plant and
machinery
Furniture,
fittings and
equipment
Assets in
course of
construction
£’000
£’000
£’000
7,881
6,769
24,935
7
459
2,861
100
2,524
(19,090)
(29)
(434)
(2,065)
7,959
9,318
6,641
6,133
5,025
-
325
1,250
-
(29)
(431)
-
6,429
5,844
-
1,530
3,474
6,641
1,748
1,744
24,935
7,463
4,526
24,930
-
452
2,861
102
2,523
(19,090)
(18)
(310)
(2,060)
7,547
7,191
6,641
5,925
3,365
-
295
1,055
-
(18)
(306)
-
6,202
4,114
-
1,345
3,077
6,641
1,538
1,161
24,930		 Plant and
machinery
Furniture,
fittings and
equipment
Assets in
course of
construction
£’000
£’000
£’000
7,881
6,769
24,935
7
459
2,861
100
2,524
(19,090)
(29)
(434)
(2,065)
7,959
9,318
6,641
6,133
5,025
-
325
1,250
-
(29)
(431)
-
6,429
5,844
-
1,530
3,474
6,641
1,748
1,744
24,935
7,463
4,526
24,930
-
452
2,861
102
2,523
(19,090)
(18)
(310)
(2,060)
7,547
7,191
6,641
5,925
3,365
-
295
1,055
-
(18)
(306)
-
6,202
4,114
-
1,345
3,077
6,641
1,538
1,161
24,930		 Total
£’000
73,359
5,649
-
(2,557)
76,451
23,410
3,499
(487)
26,422
50,029
49,949
70,201
5,629
-
(2,400)
73,430
21,349
3,226
(336)
24,239
49,191
48,852
40,523
7,436
995
-
8,431
32,092
16,062
23,498
2,150
14,875
-
40,523
7,436
995
-
8,431 6,202
4,114
32,092 1,345
3,077
16,062 1,538
1,161

Assets in the course of construction primarily relates to Future Programme projects at the Palace of Holyroodhouse and Windsor Castle. These assets were largely complete and ready for use at 31 March 2021. Due to outstanding snagging work and final certifications, the assets cannot be sufficiently reliably measured to allocate them to the appropriate asset class as at the year-end. An accrual of £218,000 (2019/20: nil) has been recognised in current liabilities as an estimate of the depreciation that would have been charged if this analysis was available. This is not included in the depreciation charge shown above and will be reflected in the asset table at 31 March 2022. The depreciation charge for 2020/21 above includes £183,000 that would have been charged in previous years had it been possible to allocate assets in the course of construction to the appropriate asset category.

The net book value of intangible and tangible assets held at 31 March 2021 amounted to £54,558,000 of which £49,624,000 was held for charitable activities and £4,934,000 was held for other trading activities.

45 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

13 Fixed asset investments

On 31 March 1993 The Trust acquired all of the issued shares of Royal Collection Enterprises Limited for no consideration; the investment is shown in the balance sheet at market value, which in the opinion of the Trustees is nil as the undertakings of Royal Collection Enterprises Limited cannot be transferred to third parties. Furthermore, in the event of Royal Collection Enterprises Limited ceasing to trade, the Trustees estimate that the realisable value of that company’s net assets would be nil.

Details of subsidiary undertaking:

company’s net assets would be nil.
Details of subsidiary undertaking:
Country of Principal Class and
registration or activity percentage
incorporation of shares held
Royal Collection Enterprises Limited England Management Ordinary
York House and Wales of public access shares 100%
St James’s Palace to Occupied
London, SW1A 1BQ Royal Palaces

14 Loan to Royal Collection Enterprises Limited

In March 2021 The Trust advanced a loan of £7 million to Royal Collection Enterprises Limited. The loan term is 3 years (although early repayment is permitted) and the interest rate is 2.5%. The loan is secured on the assets of Royal Collection Enterprises Limited.

15 Stock and work in progress

Finished goods
Works in progress		 Group
2021
£000
3,134
888
4,022		 Group
2020
£000
3,102
960
4,062		 Trust
2021
£000
-
-
-		 Trust
2020
£000
-
-
-

Stock is stated net of a provision of £473,000 (2020: £561,000). The provision has been reduced from the prior year reflecting increased activity for the online shop and the improved outlook for retail sales in 2021 compared with prior year. It includes specific provision against lines that may not sell in full in the event of future restrictions on trade.

46 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

16 Debtors

Trade debtors
Amounts due from subsidiary
Other debtors
Prepayments and accrued income		 Group
2021
£000
279
-
633
1,213
2,125		 Group
2020
£000
515
-
123
1,966
2,604		 Trust
2021
£000
11
458
-
1,136
1,605		 Trust
2020
£000
201
7,561
-
1,682
9,444

Amounts included within prepayments and accrued income and recoverable more than one year after the reporting date include accrued fundraising pledges of £0.5 million (2019-20: £0.9 million).

17 Movement in cash and net debt

Cash deposits and in hand
Bank loans > 1 year
Net cash / (debt)		 31 March
2020
Cash from
operating and
investing
activities
Cost of
borrowings
New
loans
31 March
2021
£’000
£’000
£’000
£’000
£’000
25,243
(45,406)
(362)
34,500
13,975
-
-
-
(34,500)
(34,500)
24,243
(45,406)
(362)
-
(20,525)

47 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

18 Creditors: amounts falling due within one year

Trade creditors
Amounts due to subsidiary
Other creditors including taxation
Accruals and deferred income		 Group
2021
£’000
888
-
9
3,276
4,173		 Group
2020

£’000

3,147

-

60

10,925

14,132		 Trust
2021
£’000
333
1,807
-
1,675
3,815		 Trust
2020
£’000
2,451
9,746
-
922
13,119

In the prior year it was reported that payment of the £7.3 million facilities management charges owed to the Royal Household would be deferred until 2021/22. This amount was settled during 2020/21, and following the waiver of the equivalent fees for the current year no further accrual has been made. See page 10 for further details.

19 Creditors due in more than one year

Loan
Undrawn facility		 Group
2021
£’000
34,500
17,500		 Group
2020
£’000
-
-		 Trust
2021
£’000
34,500
17,500		 Trust
2020
£’000
-
-

The Trust has entered into two facilities with Coutts and Co. The agreements are as follows:

1. Loan 1

This is a £22 million facility agreed in June 2020 and drawn down in two tranches in July and December 2020. The capital is repayable in two instalments in 2023 (£5.5 million) and 2025 (£16.5 million). Interest is payable quarterly at an annual rate of 2.4% plus the bank’s base rate (interest rate during FY2020/21: 2.5%). The covenants previously associated with this loan have been withdrawn and replaced by the covenant explained below.

2. Revolving Credit Facility

. This is a £30 million facility agreed in March 2021. £12.5 million had been drawn by the year end. Amounts drawn under the agreement are charged at an annual rate of 2.8% plus the bank’s base rate (interest rate during FY2020/21: 2.9%). Undrawn amounts incur a 1.4% per annum non-utilisation fee. The remaining facility can be drawn at any time by request from The Trust. Drawn funds can be returned to the bank without cancelling the facility. The amount available on the facility will reduce in stages from 2026 and will be settled in full in 2028.

Both of the facilities have the option of early repayment and are subject to a covenant that tests liquidity at specified points. There have been no breaches of covenant during the year or subsequently.

48 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

20 Income Funds

Income Funds
Group
At 1 April 2020
Incoming/(outgoing) resources
Resources expended
Transfers
Gains and (losses)
At 31 March 2021
Group
At 1 April 2019
Incoming resources
Resources expended
Transfers
Gains and (losses)
At 31 March 2020
Trust
At 1 April 2020
Incoming/(outgoing) resources
Resources expended
Transfers
Gains and (losses)
At 31 March 2021
Trust
At 1 April 2019
Incoming resources
Resources expended
Transfers
Gains and losses
At 31 March 2020

Restricted
funds
Designated
funds
£’000
£’000
1,455
8,216
(254)
-
(157)
(6,067 )
-
(24 )
-
-
1,044
2,125
Restricted
funds
Designated
funds
£’000
£’000
1,879
16,895
70
-
(494)
(16,564 )
-
7,885
-
-
1,455
8,216
Restricted
funds
Designated
funds
£’000
£’000
1,455
8,216
(254)
-
(157)
(6,067
-
(24
-
-
1,044
2,125
Restricted
funds
Designated
funds
£’000
£’000
1,879
16,895
70
-
(494)
(16,564 )
-
7,885
-
-
1,455
8,216		 Designated
funds
£’000
8,216
-
(6,067 )
(24 )
-
2,125
Designated
funds
£’000
16,895
-
(16,564 )
7,885
-
8,216
Designated
funds
£’000
8,216

-

(6,067
(24
-		 Pension
reserve
£’000
1,800
-

100

-
(200)
1,700
Pension
reserve
£’000
600
-
-
-
1,200
1,800


Pension
reserve

£’000

1,800

-
)
100
)
-

(200)

1,700
Pension
reserve
£’000
600
-
-
-
1,200
1,800		 General
funds
£’000
62,751
6,877
(36,814)
24
-
32,838
General
funds
£’000
50,050
71,456
(50,870 )
(7,885 )
-
62,751
General
funds
£’000
62,006
2,908
(32,845)
24
-
32,093
General
funds
£’000
49,587
58,276
(37,972)
(7,885)
-
62,006
Total
£’000
74,222
6,623
(42,938)
-
(200)
37,707
Total
£’000
69,424
71,526
(67,928)
-
1,200
74,222
Total
£’000
73,477
2,654

(38,969)
-
(200)
36,962
Total
£’000
68,961
58,346
(55,030)
-
1,200
73,477

2,125
General
funds
£’000
49,587
58,276
(37,972)
(7,885)
-
62,006

The Designated Funds represent the planned reserves to be used for completion of Future Programme.

49

Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

20 Income Funds (continued)

Restricted funds:
Presentation and interpretation:
Shahnama Publication
Getty Fund
Pilkington Fund
Publishing Supporters Fund
Future Programme Learning Fund
Learning Supporters Fund
Intern Supporters Fund
Digitisation Fund
Prince Albert Digitisation Fund
Art of Japan
Acquisitions
Exhibitions:
The Queen's Gallery, London
The Queen's Gallery, Edinburgh
Conservation:
The Queen's Bindery Apprentice Scheme
Total restricted funds		 Opening
Funds
£’000
9
3
1
111
609
1
44
8
70
-
-
856
232
84
316
283
283
1,455		 Income
£’000
-
-
-
(46 )
-
49
(24)
-
-
1
2
(18)
-
-
-
(236 )
(236)
(254)		 Expenditure
£’000
-
-
-
(11)
-
-
(20)
-
(64)
-
(2)
(97)
(10)
(3)
(13)
(47)
(47)
(157)		 Closing
Funds
£’000
9
3
1

54
609
50

-
8

6
1

-

741

222

81

303

-

-

1,044

The Queens Bindery Apprentice Scheme was closed during the year, leading to de-recognition of £236,000 in pledges previously recognised in income. Reduced activity in other areas has also meant pledges previously recognised as income have been reversed in the year.

50 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

20 Income Funds (continued)

Assets representing funds:

Assets representing funds:
Group
Intangible fixed assets
Tangible fixed assets
Current assets
Creditors due in < 1 year
Creditors due in > 1 year
Pension asset
At 31 March 2021
Group
Intangible fixed assets
Tangible fixed assets
Current assets
Creditors: due in < 1 year
Pension asset
At 31 March 2020
Trust
Intangible fixed assets
Tangible fixed assets
Loan to subsidiary
Current assets
Creditors due in < 1 year
Creditors due in > 1 year
Pension asset
At 31 March 2021
Trust
Intangible fixed assets
Tangible fixed assets
Current assets
Creditors due < 1 year
Pension asset
At 31 March 2020		 Restricted
funds
Designated
funds
£’000
£’000
-
-
303
-
741
2,125
-
-
-
-
-
-
1,044
2,125
Restricted
funds
Designated
funds
£’000
£’000
-
-
316
-
1,139
8,216
-
-
-
-
1,455
8,216
Restricted
funds
Designated
funds
£’000
£’000
-
-
303
-
-
-
741
2,125
-
-
-
-
-
-
1,044
2,125
Restricted
funds
Designated
funds
£’000
£’000
-
-
316
-
1,139
8,216
-
-
-
-
1,455
8,216		 Designated
funds
£’000
-
-
2,125
-
-
-

















Pension
reserve
£’000
-
-
-
-
-
1,700






General
funds
£’000
4,529
49,726
17,256
(4,173)
(34,500)
-
32,838
General
funds
£’000
4,696
49,633
22,554
(14,132)
-
62,751
General
funds
£’000
4,333
48,888
7,000
10,187
(3,815 )
(34,500 )
-
32,093
General
funds
£’000
4,584
48,536
22,005
(13,119 )
-
62,006

Total
2021
£’000
4,529
50,029
20,122
(4,173 )
(34,500 )
1,700
37,707
Total
2020
£’000
4,696
49,949
31,909
(14,132 )
1,800
74,222
Total
2021
£’000
4,333
49,191
7,000
13,053
(3,815)
(34,500)
1,700
36,962
Total
2020
£’000
4,584
48,852
31,360
(13,119)
1,800
73,477
2,125 1,700
Designated
funds
£’000
-
-
8,216
-
-		 Pension
reserve
£’000
-
-
-
-
1,800
8,216 1,800
Pension
reserve
£’000
-
-
-
-
-
-
1,700
1,700
Pension
reserve
£’000
-
-
-
-
1,800
1,800





51 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

21 Commitments

Capital commitments at 31 March 2021 for which no provision has been made were as follows:

Contracted
Authorised but not contracted		 Group
2021
£’000
1,110
-
Group

2020

£’000

1,538

3,924

5,462		 Trust
2021
£’000
1,110
-
1,100		 Trust
2020
£’000
1,270
3,288
1,110 4,558

The decrease in value of capital commitments compared to the prior year is due to the completion of the Future Programme.

Operating Lease Commitments

Total of future minimum lease payments at the end of the reporting period, for each of the following periods:

following periods:
- within one year
- in the second to fifth year
- later than five years		 Group
2021
£’000
295
689
139
Group

2020

£’000

154

391

231

776		 Trust
2021
£’000
12
1
-
13		 Trust
2020
£’000
52
21
-
1,123 73

22 Pension schemes

The group participates in three pension schemes as follows:

Scheme 1 The Royal Households Group Pension Scheme Scheme 2 The Royal Household Pension Scheme Scheme 3 The Royal Household Defined Contribution (Stakeholder) Scheme (until 31 July 2020) and The Royal Household Worksave (Mastertrust) Pension Scheme (from 1 August 2020)

Schemes 1 and 2 are closed to new members. Employees joining the group after 1 April 2002 are entitled to be members of the Royal Household Worksave (Mastertrust) Pension Scheme. Details of the schemes are set out below.

Scheme 1 provides benefits based on final pensionable pay and is non-contributory for employees. The contributions for this scheme are determined by a qualified actuary, on the basis of triennial valuations. The most recent approved valuation of the scheme was carried out as at 31 December 2017.

It is the stated policy of the Trustees that assets and liabilities of Scheme 1 are to be recognised in the financial statements of The Royal Collection Trust.

52 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

22 Pension schemes (continued)

Scheme 2 is managed by the Government and has terms by-analogy to the Principal Civil Service Pension Scheme. Eligible employees are those who were previously paid from the Civil List and are now paid by The Royal Collection Trust and who joined the Royal Household prior to 1 April 2001.

The scheme is an unfunded multi-employer defined benefit scheme in which Royal Collection Trust is unable to identify the share of the underlying assets and liabilities attributable to its employees and as permitted by FRS 102 this scheme will continue to be accounted for as if it were a defined contribution scheme.

The scheme actuary (Government Actuary’s Department) valued the scheme as at 31 March 2017 and updates that valuation for International Accounting Standard 19: Employee Benefits (IAS19) annually. The total liabilities of the scheme of £122.1 million (2020: £118.7 million) are included in the resource accounts of the Consolidated Fund Account. Royal Collection Trust funds all or part of the employment costs of 8 of the 42 active members of the scheme as at 31 March 2021 (2020: 17 of 58 active members). Pension contributions are paid directly to the Consolidated Fund and, in turn, pension benefits are paid directly from the Consolidated Fund as a Standing Service on a defined benefit basis. The contribution rate during the year was 21.1% of pensionable pay, reflecting a valuation by the Government Actuary’s Department. The contribution rates reflect the cost of pension benefits as they are earned by employees.

Employees make additional contributions as a percentage of actual Pensionable Pay. The contribution rate payable is determined by the tier that an employees' Full Time Equivalent annual Pensionable Pay would fall into per the following table:

Equivalent Annual Pensionable Pay Member contributions
Up to £15,000 1.50%
£15,001 to £21,636 3.00%
£21,637 to £30,000 4.48%
£30,001 to £50,000 5.27%
£50,001 to £60,000 6.06%
Above £60,000 6.85%

Scheme 3 is administered by Legal and General and is non-contributory for employees. Benefits are based on contribution levels linked to investment returns over the period to retirement. A stakeholder plan was provided until July 2020, when it was replaced with the Royal Household Worksave (Mastertrust) Scheme. Employees can make additional contributions up to the HM Revenue & Customs’ limits.

The pension charge for the year was £2,682,000 (2019-20: £2,880,000).

Royal Collection Trust accounts for pension costs in accordance with FRS 102 which requires the following disclosures in respect of Royal Collection Trust’s pension schemes:

Scheme 1

Royal Collection Trust participates in a funded defined benefit pension plan, the Royal Households Group Pension Scheme – Royal Collection ('the Scheme').

53 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

22 Pension schemes (continued)

Scheme 1 (continued)

The level of benefits provided by the Scheme depends on a member’s length of service and their salary at their date of leaving the Scheme. Under the plan, employees are entitled to annual pensions on retirement at age 60 of 1/60 of final pensionable salary for each year of service up to 31 March 2007, then 1/70 for service up to 31 March 2019, then 1/90 for service from 1 April 2019. The scheme closed to future accrual with effect from 1 April 2021, however former active members still retain their link to salary increases. From 1 April 2021 members are enrolled in the Royal Household Defined Contribution Worksave (Mastertrust) Pension Scheme, unless they choose to opt out.

The last funding valuation of the Scheme was carried out by a qualified actuary as at 31 December 2017 and no regular contributions are expected to be paid by Royal Collection Trust to the Scheme during the year to 31 March 2022 (year to 31 March 2021: £0.2 million).

The results of the latest funding valuation at 31 December 2017 have been adjusted to the balance sheet date taking account of experience over the period since that date, changes in market conditions and differences in the financial and demographic assumptions and an allowance has been made for additional benefits due to GMP equalisation. The present value of the defined benefit obligation was measured using the Projected Unit Credit Method.

The principal assumptions used to calculate the liabilities under FRS 102 are as follows:

Financial assumptions

31 March 2021 31 March 2020
% per annum % per annum
RPI inflation 3.2 2.6
CPI inflation 2.5 1.8
Rate of general long term increase in salaries 4.0 3.3
Pension increase (LRP15) 3.1 2.5
Discount rate for scheme liabilities 2.1 2.3

The Trust has updated the corporate bond yield curve used to derive the discount rate from the Aon GBP Select AA (Corporates) Curve to the Aon GBP Single Agency AA (Corporates) Curve. This reflects growing market practice, and results in a more robust curve fitting approach. At the accounting date, both the previous approach and the updated approach would derive the same discount rate and therefore result in the same DBO.

Demographic assumptions

31 March 2021 31 March 2020
Years Years
Life expectancy for male currently aged 65 21.5 21.6
Life expectancy for a female currently aged 65 23.5 23.5
Life expectancy at 65 for male currently aged 45 22.8 22.9
Life expectancy at 65 for a female currently aged 45 25.1 25.1
Cash commutation Members assumed to take their cash lump

The Trust considered the impact of COVID-19 on future mortality improvements and decided to make no adjustments to the mortality assumptions. There are a number of uncertain factors that could result in either higher or lower future longevity (e.g. effectiveness of vaccines, government support to health and welfare etc.). This together with the relatively early data from COVID-19 mortality led the Trust to the decision at this reporting date. This will be revisited in future years.

54 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

22 Pension schemes (continued)

Scheme assets

Pension schemes_(continued)_
Scheme assets
UK equities
Overseas equities
Fixed interest gilts
Index-linked gilts
Property
Cash		 31 March 2021
£m
%
3.0
9
13.9
43
2.4
7
8.7
27
2.7
8
1.9
6
32.6
100		 31 March 2020
£m
%
2.7
9
10.3
35
3.3
11
10.0
34
2.8
9
0.5
2
29.6
100

None of the Scheme assets are invested in Royal Collection Trust's financial instruments or in property occupied by, or other assets used by, Royal Collection Trust.

Reconciliation of funded status to balance sheet

Fair value of assets
Present value of funded defined benefit obligations
Funded status
Unrecognised asset
Asset recognised on the balance sheet		 31 March 2021
£m
32.6
(30.9)
1.7
-
1.7		 31 March 2020
£m
29.6
(27.8)
1.8
-
1.8

When determining the asset recognised on the balance sheet, it has been assumed that Royal Collection Trust would be able to recover the surplus through a refund from the Scheme in the future. This reflects the provisions of the Scheme's documentation.

Amounts recognised in profit and loss

Amounts recognised in profit and loss
Operating costs
Current service cost
Administration costs
Expense recognised in profit and loss		 31 March 2021
£m
0.2
0.1
0.3		 31 March 2020
£m

0.3
0.1
0.4

55 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

22 Pension schemes (continued)

Amounts recognised in other comprehensive income

Re-measurements in other comprehensive income
Gains/(losses) on scheme assets during the year
(Losses)/gains on scheme liabilities during the year
Amounts recognised in other comprehensive income		 31 March
2021
£m
4.0
(4.2)
(0.2)		 31 March
2020
£m

(1.5)
2.7
1.2

Changes to the valuation of the defined benefit obligation during the year

31 March
2021
£m
Obligation at the start of the year
27.8
Current service cost
0.2
Interest cost on defined benefit obligations
0.6
Actuarial losses / (gains) on scheme liabilities
4.2
Net benefits paid out
(1.9)
Obligation at the end of the year
30.9
Changes to the fair value of scheme assets during the year
31 March 2021
£m
Fair value at the start of the year
29.6
Interest income on scheme assets
0.6
Gains / (losses) on scheme assets
4.0
Contributions by the employer
0.4
Administration costs incurred
(0.1)
Net benefits paid out
(1.9)
Fair value at the end of the year
32.6		 31 March
2020
£m
31.3
0.3
0.7
(2.7)
(1.8)
27.8
31 March 2020
£m
31.9
0.7
(1.5)
0.4
(0.1)
(1.8)
29.6

56 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

22 Pension schemes (continued)

Estimated profit and loss charge for the next year

Using the assumption for the discount rate set out above, we estimate that the charge to the profit and loss account for the next financial year will be:

£m
Current service cost -
Administration 0.1
0.1

The actual amount to be charged to the profit and loss account for the next financial year might be different to that estimated above.

Sensitivity of the results to the key assumptions

The key assumptions used for FRS 102 are: discount rate, inflation and mortality. If different assumptions were used, this could have a material effect on the results disclosed. The sensitivity of the results to these assumptions is as follows.

Plan assets DBO Surplus/(deficit)
Following a 0.25% decrease in Change 0.0 1.7 (1.7)
the discount rate
New value 32.6 (32.6) 0
Following a 0.25% increase in Change 0.0 1.0 (1.0)
the inflation assumption
(excluding salary increases) New value 32.6 (31.9) 0.7
Following a 1-year increase in Change 0.0 1.3 (1.3)
life expectancies
New value 32.6 (32.2) 0.4

Scheme 2

Scheme 2 is a multi-employer scheme. Royal Collection Trust is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and as permitted by FRS 102 the scheme has been accounted for by Royal Collection Trust as if the scheme was a defined contribution scheme.

57 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

23 Related Party Transactions

Set out below are details of transactions during the year with related parties and with other entities which, whilst not related parties, it is deemed appropriate to disclose. The figures in italics represent the amounts due (to) or from related parties at the balance sheet date.

Related Party 2021 2020
Details of Transaction
£000 £000
Royal Household 3,363 16,901
 Charges to Royal Collection Trust (RCT) for various services
(1,026) (11,581) including personnel, payroll, pensions administration, internal audit,
records management, property maintenance services and IT services
Royal Household 50 55
 Recovery of costs incurred on behalf of the Royal Household.
2 5
Privy Purse 44 695
 Donation to the PPCT in lieu of its right to charge for admission to
Charitable - - Queen Mary’s Dolls’ House, Windsor Castle.
Trust (PPCT)
St George’s 206 2,063
 Payment in respect of admissions to St George’s Chapel, Windsor
Chapel 2 2 Castle collected by Royal Collection Enterprises Limited (RCEL) as
agent and compensation for the loss of retail income.
Privy Purse (including 11 65
 Sales of products for resale and recharge of costs incurred on behalf
Windsor Farm Shop and 4 7 of the Privy Purse.
Royal farms)
Privy Purse (including 11 339
 Payment to PP in respect of costs incurred on behalf of RCEL and
Windsor Farm Shop and (2) 16 RCT, royalties payable to Royal Farms for milk used in RCT ice
Royal farms) cream, contributions to shared funds and payments relating to
publications.
A G Carrick (Highgrove) 258 108
 Purchase of RCEL goods for resale and commission on sales of
2 - admission tickets for the gardens at Highgrove House.
Office of HRH The 3 5
 Recovery of costs incurred on behalf of HRH The Prince of Wales
Prince of Wales 2 - and thepurchase of RCEL stock
Historic Royal Palaces 28 96
 Recovery of costs from HRP for maintenance, services and goods
(HRP) 9 15 from resale purchased from RCEL.
Balmoral Estate 3 17
 Purchase of RCEL goods for resale.
- 1
Balmoral Estate - 3
 Purchase of Balmoral of goods for resale.
- -
Sandringham Estate - 24
 Purchase of RCEL goods for resale.
- -
Royal Household Staff 12 10
 Contribution
Wellbeing Fund - -
Royal Households Group 96 100
 Administration costs for the defined benefit pension scheme.
Pension Scheme 16 29

Transactions are settled in cash. Transactions with key management personnel are disclosed in Note 8. None of the Trustees, directors or other related parties except as referred to above or as otherwise disclosed in the financial statements has undertaken any transactions with The Royal Collection Trust or Royal Collection Enterprises Limited during the year.

58 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

24 Royal Collection Enterprises Limited

The Trust’s wholly-owned subsidiary, Royal Collection Enterprises Limited (company number 2778486), has a paid up share capital of £2, and is incorporated in the UK. Audited accounts are filed with the Registrar of Companies and a summary of its trading results is shown below.

Principal activities

The principal activities of the company are the management of public access to the official residences of The Queen and the official residence of The Prince of Wales and the sale of merchandise. Taxable profits are Gift Aided in full under deed of covenant to the holding company, The Royal Collection Trust, a company limited by guarantee and registered as a charity.

Business review

The purpose of the company is to generate income for The Royal Collection Trust for the presentation, maintenance and conservation of the Royal Collection.

Income is raised from fees for the management of public access and shop sales at the following locations:

The official residences of The Queen

Windsor Castle

Frogmore House, Windsor Home Park (not opened in 2020/21)

Buckingham Palace State Rooms (not opened in 2020/21)

The Queen’s Gallery, Buckingham Palace

The Royal Mews, Buckingham Palace

Palace of Holyroodhouse

The Queen’s Gallery, Palace of Holyroodhouse

The official residence of The Prince of Wales

Clarence House (not opened in 2019/20 or 2020/21)

In addition to the above, income is raised through off-site retail activities, catering operations at the Palace of Holyroodhouse, Windsor Castle and Buckingham Palace Summer Opening, and fees for reproducing images of items in the Royal Collection.

The Royal Collection Trust has responsibility for admitting visitors to the official residences of The Queen and the official residence of The Prince of Wales and the company acts as an agent of The Trust in managing the admission of visitors to the official residences.

59 Company Number 2713536

Royal Collection Trust NOTES (forming part of the Financial Statements)

24 Royal Collection Enterprises Limited (continued)

Profit and Loss Account

for the year ended 31 March 2021

Turnover
Direct costs, including cost of sales
Gross profit
Administrative expenses
Donations payable
Other operating income
Operating profit
Interest payable
Interest receivable
Profit for the financial year
Balance Sheet
as at 31 March 2021
Fixed and current assets
Current and non-current liabilities
Net assets and shareholder’s funds
Reserves
At the beginning of the year
Retained profit for the year
At the end of the financial year		 2021
£’000
28,692
(25,846)
2,846
(2,590)
(44)
29
241
(1)
5
245
2021
£’000
10,366
(9,620)
746
745
1
746		 2020
£’000
57,913
(47,327)
10,586
(2,460)
(760)
431
7,797
-
18
7,815
2020
£’000
19,063
(18,318)
745
463
282
745

60 Company Number 2713536