2022-03-31-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 2

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	1-21
Independent Auditor’s Report to the members of The Royal Collection Trust	22-26
Consolidated Statement of Financial Activities	27
Statement of Financial Activities	28
Consolidated and Trust Balance Sheet	29
Consolidated Statement of Cash Flows	30
Notes	31-60

Royal Collection Trust

TRUSTEES’ REPORT 2021/22

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” or “the Group”), for the year ended 31 March 2022.

Reference and Administrative Information

Charity Registration Number:	1016972
Scottish Charity Number:	SC039772
Company Number:	2713536
Principal and Registered Office:	York House, St James'sPalace,LondonSW1A 1BQ

Patron

HRH The Prince of Wales

Trustees

The Hon. Sir James Leigh-Pemberton Mr Marc Bolland Sir Brian Ivory Vice Admiral Sir Tony Johnstone-Burt Dr Anna Keay

The Rt Hon. The Lord Parker of Minsmere

Dr Tonya Nelson (appointed 1 April 2022) Ms Monisha Shah (appointed 1 April 2022)

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

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Auditor KPMG LLP 15 Canada Square, London E14 5GL Bankers Coutts & Co 440 Strand, London WC2R 0QS 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.

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. During the year, the Board of Trustees had three sub-committees.

The Audit and Risk Assurance Committee has three members: Sir Brian Ivory (Chairman) and Sir Michael Stevens, who 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 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.

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The Strategic Development Committee comprised the Trustees and members of the Management Board. This Committee met three times under the Chairmanship of Mr Marc Bolland. Its role during the year was to scrutinise the Management Board's development and implementation of strategic priorities and to review key plans, strategies and proposals before they were presented formally to the Board of Trustees.

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

The Trustee Board agreed in March 2022 to change its committee structure. This change will see the Strategic Development Committee focus on The Trust’s financial position and commercial operations. Strategic Development Committee will also take on the responsibilities previously covered by the Investment Committee.

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 members of Management Board are the Director of the Royal Collection, the Finance Director and the Commercial Director.

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

• Receipt of regular reports on Royal Collection Trust’s activities;

• Review and approval of budgets and strategic plans;

• The work of the Strategic Development Committee;

• Reports from the Chairman of the Audit and Risk Assurance Committee; and

• Review of management accounts and the Annual Report and Financial Statements.

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

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-today 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.

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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 sale of retail merchandise. Taxable profits are donated in accordance with a deed of covenant to the parent 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 and the Master of the Household.

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 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.

Charitable Objects and Public Benefit

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

• to administer, conserve, renovate, repair, maintain, improve and advise on the Royal Collection, the Royal Archives and the Royal Photograph Collection which pass in right of the Crown; and

• to educate and inform the Public about such Collections and Archives by exhibition, preparation of catalogues and inventories, research, publication, educational activities, and by such other means as appropriate.

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 Royal Collection is subject to proper custodial control in the service of HM The Queen and the Nation;

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• the Royal Collection is maintained and conserved to the highest possible standards to ensure that visitors can view the Collection in the best possible condition;

• as much of the Royal Collection as possible can be seen by members of the public;

• the Royal Collection is presented and interpreted so as to enhance public appreciation and understanding;

• appropriate acquisitions are made when resources become available to enhance the Collection and displays of exhibits for the public; and

• access to the Royal Collection is broadened in person, in print and online, and increased to ensure that as many people as possible are able to enjoy the Collection.

The Trustees consider that public benefit is delivered as a result of pursuit of the following activities:

Providing access to the Royal Collection, and presenting and interpreting The Collection to the public

• direct access by visits to the official residences of The Queen in Windsor, London and Edinburgh, and to The Queen’s Galleries in London and Edinburgh, with extensive audio tours included in the cost of admission;

• loaning items from the Collection to other organisations who will then exhibit them to the public, widening geographical access for those who may not be able to visit main Royal Collection sites;

• the continued digitisation of information about and images of items in the Collection, available to access via the Royal Collection Trust website, microsites and the Collection Online function;

• regular digital access through resources shared on social media networks, email and YouTube

• sharing our digital assets to be used on partner sites and in collaboration on research projects

• increasing access via learning programming both on site and through online events;

• sessions for schools and community groups tailored to the Palaces and exhibitions, and a range of family events and activities, particularly enhanced by the ‘Future Programme’ investment in learning spaces in Windsor and Edinburgh;

• lectures, panel discussions, performances, concerts and creative courses for adults at all sites; and

• publishing guidebooks, catalogues and other publications physically and online.

Royal Collection Trust aims to make the Collection accessible to those with specific requirements, for example:

• support for those who are blind or partially sighted is provided through verbal description audio tours as well as descriptive talks at our sites and online; those who are deaf or have hearing loss can use hand-held British Sign Language (BSL) video tours, attend captioned talks on site, and attend BSL talks;

• in terms of physical mobility, most Royal Collection sites are fully accessible, except for limited areas at the Palace of Holyroodhouse and Frogmore House where mobility is

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restricted due to the nature of the building. Accessible toilets are available at all sites, with Changing Places toilets at Windsor Castle and the Royal Mews;

• access companions are granted free admission; and

• autistic visitors can download a guide on what to expect when they visit our sites, and can contact our Access & Inclusion Manager if they wish to discuss their visit further.

Pricing and access

Charges are made to visit the official residences of The Queen and exhibitions in The Queen’s Galleries, however there are various measures in place to ensure that the charges do not unduly restrict access to the Royal Collection as follows:

• flexible pricing of products to ensure wider access to the Collection via ticket discounts for schools and young people, the introduction in 2022 of an enhanced Young Person’s discount, complimentary passes and use of the 1 Year Pass scheme;

• taught sessions and workshops are offered to schools as part of their reduced admission fee, and teachers can take advantage of free 'pre-visit' tickets, to help them prepare for their school's visit. Regular free teachers' evenings are programmed. Where fees are a barrier to visiting, schools can apply for free entrance;

• sessions for community groups and societies working with under-represented, disadvantaged or disabled audiences are provided free of charge. Registered charities working with underrepresented, disadvantaged or disabled people can apply for free entrance to the Palaces and Galleries and individuals and organisations supporting Children in Care can apply for free entry to all sites;

• The Trust schedules live events about the Collection for free, or at a low price point, and extensive free learning resources are available on the www.rct.uk website;

• Windsor Castle participates in a scheme that gives free admission to local residents;

• serving members of the armed forces and their families are granted free admission via the Defence Discount Service; and

• complimentary family tickets to the official residences and The Queen’s Galleries are provided to charities and Parent Teacher Associations each year.

Measuring public benefit

The Trust measures public benefit by use of feedback surveys, review sites such as Trip Advisor, direct customer feedback, impressions and engagements on social media posts, and analytical evaluation of website and Collection Online content.

The Trust is reviewing ways to increase public benefit through audience development and enhanced and increased digital offerings.

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Review of the Year

The financial statements set out on pages 27 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 Group”). The Consolidated Statement of Financial Activities shows the gross income from all sources and the split of activity between restricted and unrestricted funds.

During 2020/21 Royal Collection Trust’s activities were significantly curtailed and the group suffered a consolidated loss (before actuarial losses) of £36.3 million. In response the organisation underwent a significant organisational restructure, reduction in operating costs, review of core activities and the arrangement of £52 million of borrowing facilities to ensure The Trust’s survival. Although 2021/22 has also incurred a significant loss, Royal Collection Trust has now begun its financial recovery.

In April 2021, operations were still heavily restricted with sites and shops closed to visitors. There followed a gradual reopening of most sites over the following months in line with the lifting of Government restrictions. Social distancing requirements limited the number of visitors on site and restrictions on international travel continued to affect visitor numbers. It was not practical for Buckingham Palace Summer Opening to take place in its usual format. In addition, throughout the year, Royal Collection Trust offered online access via live talks and tours by curators and wardens, and schools were offered virtual workshops for classes and school assemblies.

Visitor numbers increased compared with 2020/21 but remained significantly below prepandemic levels.

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	2021/22 000 426 - 121 49 - 129 12 737	2020/21 000 104 - - 9 5 31 6 155	2019/20 000 1,587 5 578 266 237 496 116
			3,285

Note: 19,000 learning visitors are included in these numbers (2020/21: 3,000, 2019/20: 110,000). Frogmore House was closed during the year.

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Given the link to visitor numbers, retail sales remained low compared with pre-pandemic levels. However, spend per visitor rates improved noticeably. Online sales continued to grow, with sales of £4.3 million during the year (2020/21: £2.9 million). Towards the end of 2021/22, sales via all channels were boosted by Platinum Jubilee products. Overall retail and publishing sales for the year totalled £10.7 million.

Tight cost control across the organisation, supported by the new organisation structure, meant that total expenditure was reduced from £42.9 million to £39.1 million, despite much increased activity.

As a consequence of all of these developments and measures, the net deficit (before actuarial gains) of £15.0 million was an improvement of £21.3 million on 2020/21. As part of the recovery plan, the Trustees had reviewed both a ‘most likely’ and ‘plausible downside’ scenario for the finances in 2021/22. The final outcome was better than the most likely scenario projection.

Loan facilities

In June 2020 and March 2021 The Trust entered into loan agreements with Coutts & Co. These secured total borrowing facilities of £52 million, which will reduce from July 2023. The loans are at variable rate and permit early repayment. Plans for coming years take account of reasonable expectation of increases in the interest rate. Of the total facility, £30 million allows flexible draw down and repayment. At 31 March 2022, £33.5 million of the total facility had been drawn down. The loan is subject to a covenant agreement. All covenant requirements have been met throughout the year and are expected to be met in the future. Details of the loan are given in note 19.

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 term is three years with the option of early repayment and interest is charged at variable rate. The loan outstanding at 31 March 2022 was £7 million. Both entities fully expect the loan to be repaid on or before the maturity date. Details of the loan are given in note 14.

Additional measures

As was the case in 2020/21, Royal Collection Trust received support from the Royal Household in the form of a reduction in facilities management fees. The fees were reduced by the amount that could have been claimed under the Government’s Job Retention Scheme, amounting to a credit of £0.2 million in 2021/22 (2020/21: £4.0 million).

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Looking ahead

The Queen’s Platinum Jubilee will be a key occasion for Royal Collection Trust in 2022/23. Special publications and merchandise have been produced for the occasion, and it is anticipated that this event will generate interest in the Royal Collection and visits to the Royal Palaces. The Trust is optimistic that sites will be able to welcome visitors throughout the year. Buckingham Palace Summer Opening will take place from July to September and the Royal Mews reopened to visitors in May 2022. It is anticipated that visitor numbers will still be some way below prepandemic levels. Most sites will continue to open on a five days per week basis to maximise efficient allocation of resources.

Royal Collection Trust expects to generate an operating surplus in 2022/23. An updated longerterm projection has been prepared, together with an estimate of sensitivity to key risks which might impact on visitor numbers and financial performance. This projection shows that the organisation will continue as a going concern for a period of at least 12 months from the approval of the financial statements.

Financial Results

The final result for the year is a net deficit before actuarial gains of £15.0 million. This result was better than planned, largely as a result of strong retail sales and tight cost control.

The last funding valuation of the Royal Household Group Pension Scheme was carried out by a qualified actuary as at 31 December 2020. As a consequence of an updated actuarial assessment of the pension scheme as at 31 March 2022 there is a notional funding surplus of £4.7 million (31 March 2021: £1.7 million surplus) included in unrestricted funds.

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Reserves and going concern

Prior to the pandemic, The Trust’s policy had 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 showed a deficit position of £21.4 million. The loss for the year to 31 March 2022 has further increased this deficit to £30.2 million.

The level of bank borrowing put in place was based on a severe plausible downside scenario projection and was sufficient to secure Royal Collection Trust’s future as a going concern based on that scenario. In fact, the actual result delivered in 2021/22 was stronger than both this scenario, and the more optimistic ‘most likely’ scenario. The borrowing is in place until March 2028 (with scheduled reductions from the total facility of £52 million taking place from 2023/24 onwards, with the option of early repayments). The projections of the most likely scenario have been updated in the light of experience in 2021/22, and sensitivity analysis has been prepared to reflect a severe plausible downside scenario. In addition, performance is regularly measured against the original scenario prepared to secure the bank borrowings.

The latest projections reflect the opportunity presented by the Platinum Jubilee celebrations in 2022 whilst acknowledging uncertainty around current economic and political conditions that could impact visitor numbers. As admissions grow, the forecasts show a return to operating surplus from 2022/23 onwards and cash generation which will allow the organisation to manage working capital and ensure repayment of the facilities in line with the borrowing agreements.

As outlined previously, the recovery 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 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.

On the basis of the projections prepared, The Trustees have concluded that the Group and Charity will be able to meet its liabilities as they fall due and therefore continue as a going concern for a period of at least 12 months from the approval of these financial statements.

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Funds and Reserves

The reserves held at 31 March 2022 were as follows:

	2021/22	2020/21
	£000	£000
Restricted funds Unrestricted funds Designated funds Future Programme General funds Fixed Asset Reserve Free Reserve Pension Reserve Total Unrestricted Funds	715 - 50,531 (30,248) 4,700 24,983	1,044 2,125 54,255 (21,417 ) 1,700 36,663
Total Charity Funds	25,698	37,707

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.

Unrestricted funds

These are funds that are expendable at the discretion of the Trustees in furtherance of the Charity’s objects.

The funded status of the pension reserve has increased by £3.0 million, leading to a total asset of £4.7 million. This arises as a consequence of an updated actuarial report based on market changes and assumptions applicable as at 31 March 2022 . 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.

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.

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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 5 to 7 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, paying invoices within 25 days on average. 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 great majority of The Royal Collection Trust’s income is raised from admissions income from visitors to our sites and from retail sales. However, The Trust employs a small Development Team to raise additional funds from Corporate, Trusts and 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.

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.

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Risk Management

The Operations Board of Royal Collection Trust, in conjunction with senior management in the Royal Household, is responsible for the management of the risk management 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 optimise performance and manage 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 operating plans. Specialist risk managers in the Royal Household include the Chief Information Officer, the Director of Property and the Director of Security Liaison. 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 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 the Company’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 all internal audit 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 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 appropriate controls are in place. Ongoing budgetary control is supported by the production of regular and timely financial management reports.

The pandemic had a significant impact on Royal Collection Trust’s financial position. As normal operations are able to resume and visitor numbers recover, delivering financial recovery and paying back bank borrowings in full is the overriding priority for the Charity. The main risks that arose as a direct consequence of the pandemic have now receded to a degree and

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international tourism is slowly recovering. However, short notice closure of the Palaces to visitors for any reasons remains a key risk. Inflationary pressures, particularly with regard to utility prices, are an emerging risk both in terms of impact on Royal Collection Trust’s cost base and on general levels of disposable income which in turn could impact on the visitor recovery and retail sales.

Current market conditions have increased risks relating to the ability to recruit and retain staff. The reduction in the operating cost base completed in 2020/21, which has included a notable reduction in staffing levels and pension costs, has helped to mitigate risks arising from the significant loss of income and drop in visitor number projections.

The risk register has been amended and reviewed regularly to reflect the changing risk profile outlined above.

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 data protection, 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. During the year, internal audit reviews identified some areas for improvement in the framework of governance and risk management related to Royal Household IT services. In response, a new Digital Services function has been created and a remediation plan has been developed as part of a programme of work led by the Chief Information Officer. Management also 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.

Employment policies and employee engagement

As a department of the Royal Household, Royal Collection Trust follows the Royal Household’s employment policies and practices. These underpin the aim of creating an engaged, diverse and adaptable workforce, fostering a sense of teamwork, trust and collaboration, and a focus on

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progressive change and continuous improvement. The Royal Household benchmarks and seeks validation for its employment policies and practices.

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.

As part of The Royal Household, 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.

The 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 and members of the public.

Ensuring employees are engaged in the activities and performance of The Trust is a priority. Employees have been invited to take part in Pulse Surveys to help assess how they have been feeling during a period of extensive change. Following the results of these surveys a Staff Morale action plan was designed by the Operations Board, and many of the actions have now been absorbed into the ‘business as usual’ approach taken in local teams. Internal communication initiatives have meant employees have been regularly informed by Directors of the organisation’s financial situation and strategic plans.

Environmental Sustainability

As one of the five departments of The Royal Household, Royal Collection Trust fully supports the Household’s key objective of operating in a sustainable way and minimising its impact on the environment. The Royal Household aims to set the highest possible benchmark for environmental sustainability in historic environments through careful management and monitoring of existing systems; placing sustainability at the forefront of future developments and improvements; working with partners and suppliers in a holistic manner; and employing innovative, technological approaches wherever possible. Above all else, the Royal Household aims for cultural change by improving the sustainability literacy and achievements of the wider community which includes staff, contractors and suppliers such that efforts to protect the natural environment are inherent and pervasive across the wider organisation and its supply chain. The development within the Household of a roadmap to net zero is a key goal.

Royal Collection Trust is taking the following steps in line with the Household’s Strategic Aims for environmental sustainability.

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• The introduction of calculating and recording all carbon emissions associated with the transportation of items of the Collection when on loan. This data will be used as a benchmark when assessing future loan requests and help to inform future carbon saving opportunities.

• Avoiding wastage of materials in exhibitions through the reuse of furniture from past exhibitions, such as display cabinets, and the sourcing of recyclable labels and panels.

• The introduction of a new ‘Sustainable Shopping’ section on the Royal Collection Shop website which promotes our commitment to reducing our impact on the environment whilst highlighting our wide range of environmentally friendly and sustainable products.

• The introduction and the use of video conferencing technology will build on the reduction in carbon emissions business travel achieved during the Covid-19 pandemic.

• The inclusion of biodiversity content within the 2021 Buckingham Palace Summer Opening Garden Tours, to inform visitors of ways in which the Royal Household promotes and protects species and eco-systems within Buckingham Palace Garden and raise awareness of how this can be done at home.

• Roll out of automatic meter readers for gas, electricity and water across all sites to facilitate accurate data collection and scrutiny of consumption data, to proactively track and manage energy consumption.

• Plant replacement and LED lighting upgrades have taken place. Our Building Management System controls and connectivity continue to be optimised and expanded as part of the maintenance and upgrade of buildings and utility systems, to proactively review energy use and improve energy efficiency.

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Streamlined Energy and Carbon Reporting 2021/22

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
	2022 (tCO2e)		2021 (tCO2e)
	Location	Market	Location	Market
	based**	based*	based**	based*
Emissions Scope 1	633	633	461	461
Emissions Scope 2***	610	42	705	151
Total Scope 1 & 2	1,243	675	1,166	612
Emissions Scope 3	10	10	3	3
Total GHG emissions (1-3)	1,253	685	1,169	615

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

* GHG emissions for grid electricity calculated according to the Market-based method supported by contractual arrangements with suppliers for the purchase of renewable electricity.

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

*** Actual electricity emissions in the prior year were approximately 300,000 kWh lower than estimated

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

Energy Use

Energy Consumption	2022	2021
	KWh(m)	KWh(m)
Scope 1	3.44	2.49
Scope 2	2.88	3.00
Scope 3	0.04	0.01
Total kWh	6.36	5.50

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

18 Company Number 2713536

Royal Collection Trust

TRUSTEES’ REPORT 2021/22

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 26,851 m[2] . Royal Collection Trust emitted 0.047 tonnes of CO2e per m2 of NIA when using grid average conversions. Royal Collection Trust emitted 0.025 tonnes of CO2e per m2 of NIA when allowing for REGOs.

Energy consumption used to calculate emissions	Gas: 3,404,074 kWh
	Company owned vehicles: 38,528 kWh
	Electricity: 2,873,105 kWh (of which all except
	197,492 kWh is REGO backed renewable)
	Employee ownedvehicles: 39,443kWh
Emissionsfromcombustionofgas tCO2e (scope1)	624tonnes
Emissionsfrombusiness travel incompany ownedvehicles	9.1tonnes
Emissions from purchased electricity (scope 2, location	610 tonnes (using grid average)
based)	41.9 tonnes (allowing for REGO backed renewable
	generation)
Emissions from business travel in rental cars or employee	9.7 tonnes
owned vehicles where company is responsible for
purchasing thefuel(scope 3)
	1,252.3 tonnes (using grid average)
Total gross CO2e based on the above	684.2 tonnes (allowing for REGO back renewable
	generation)

19 Company Number 2713536

Royal Collection Trust

TRUSTEES’ REPORT 2021/22

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:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

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

• assess the group’s and the parent charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

• use the going concern basis of accounting unless they either intend to liquidate the group or the parent charitable company or to cease operations, or have no realistic alternative but to do so.

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

20 Company Number 2713536

Royal Collection Trust

TRUSTEES’ REPORT 2021/22

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

6 July 2022

21 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 2022 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:

• give a true and fair view of the state of the group’s and of the charitable company’s affairs as at 31 March 2022 and of the group’s incoming resources and application of resources, including its income and expenditure, for the year then ended;

• have been properly prepared in accordance with UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland ; and

• have been prepared in accordance with the requirements of the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005, and regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended).

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:

• we consider that the Trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;

22

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

• we have not identified, and concur with the Trustees’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the group or the charitable company's ability to continue as a going concern for the going concern period.

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:

• Enquiring of trustees/directors, internal audit and inspection of policy documentation as to the Group’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.

• Reading minutes of the Board of Trustees, and Audit and Risk Assurance Committee meetings.

• Using analytical procedures to identify any unusual or unexpected relationships.

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.

We did not identify any additional fraud risks.

We performed procedures including:

• Identifying journal entries and other adjustments to test based on risk criteria and comparing the identified entries to supporting documentation. These included those posted to unusual accounts.

• Assessing significant accounting estimates for bias.

23

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

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), 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 non-compliance 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

24

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

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:

• we have not identified material misstatements in the other information;

• in our opinion the information given in the Trustees' Annual Report, which constitutes the strategic report and the directors’ report for the financial year, is consistent with the financial statements; and

• in our opinion those reports have been prepared in accordance with the Companies Act 2006.

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:

• the charitable company has not kept adequate and proper accounting records or returns adequate for our audit have not been received from branches not visited by us; or

• the charitable company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of trustees’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

We have nothing to report in these respects.

Trustees’ responsibilities

As explained more fully in their statement set out on page 20 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.

25

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

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.

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

8th July 2022

26

Royal Collection Trust

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (incorporating the consolidated income and expenditure account)

For the year ended 31 March 2022

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 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 Custodial control 7 Other Donations payable 5 Interest payable 6 Total expenditure Net (deficit)/income Transfer between funds 20 Actuarial gain/(loss) 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 - 391 12,707 - 314 - 10,427 - 154 - 1 - 49 - 23,652 391 46 - 10,919 - 10,965 - 17,219 - 4,001 98 1,815 13 2,241 - 1,346 - 26,622 111 176 - 1,178 - 38,941 111 (15,289 ) 280 609 (609 ) 3,000 - (11,680 ) (329 ) 36,663 1,044 24,983 715	2022 Total £000 391 12,707 314 10,427 154 1 49 24,043 46 10,919 10,965 17,219 4,099 1,828 2,241 1,346 26,733 176 1,178 39,052 (15,009 ) - 3,000 (12,009 ) 37,707 25,698	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

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 31 to 60 form part of these financial statements.

27 Company Number 2713536

Royal Collection Trust

THE ROYAL COLLECTION TRUST STATEMENT OF FINANCIAL ACTIVITIES

For the year ended 31 March 2022

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 20 Exhibitions and displays 20 Conservation Custodial control Other expenditure Interest payable 6 Total expenditure Net (deficit)/income Other recognised gains: Transfer between funds Actuarial gain(loss) 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 3,127 - - 391 12,707 - 90 - 182 - 606 - 16,712 391 46 - 46 - 23,318 - 2,710 98 987 13 2,241 - 1,346 - 30,602 111 109 - 1,178 - 31,935 111 (15,223 ) 280 609 (609) 3,000 - (11,614 ) (329) 35,918 1,044 24,304 **715 **	2022 Total £000 3,127 391 12,707 90 182 606 17,103 46 46 23,318 2,808 1,000 2,241 1,346 30,713 109 1,178 32,046 (14,943 ) - 3,000 (11,943 ) 36,962 25,019	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

The notes on pages 31 to 60 form part of these financial statements.

28 Company Number 2713536

Royal Collection Trust

CONSOLIDATED AND TRUST BALANCE SHEET

As at 31 March 2022

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 /(liabilities) 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	2022 Group Trust £000 £000 4,251 4,129 46,570 45,957 - 7,000 50,821 57,086 4,052 - 2,974 4,691 1,360 290 688 10 9,074 4,991 (5,397) (8,258) 3,677 (3,267) (33,500) (33,500) 20,998 20,319 4,700 4,700 25,698 25,019 290 290 425 425 715 715 - - 50,531 49,796 (30,248) (30,192) 4,700 4,700 24,983 24,304 25,698 25,019	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

The notes on pages 31 to 60 form part of these financial statements. These financial statements were approved by the Trustees on 6 July 2022 and were signed on their behalf by:

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

29

Company Number 2713536

Royal Collection Trust

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 March 2022

Reconciliation of net deficit to net cash used in operating activities 2022 £000 Net deficit for the year (12,009) Adjustments for: Excess of pension scheme (gain)/loss over contributions (3,000) Amortisation 278 Depreciation 3,733 Loss on disposal of fixed assets 519 (Increase)/decrease in stock (30) (Increase)/decrease in debtors (849) Increase/(decrease) in creditors 1,224 Interest receivable (1) Interest payable 1,178 Net cash used in operating activities (8,957) Statement of cash flows Net cash used in operating activities (8,957) Cash flows from investing activities: Interest income 1 Purchase of intangible fixed assets - Purchase of tangible fixed assets (793) Net cash used in investing activities (792) Cash flows from financing activities Net (repayment)/drawdown of loan (1,000) Payment of loan interest (1,178) Net cash provided by financing activities (2,178) Change in cash and cash equivalents in the year (11,927) Cash and cash equivalents at the beginning of the year 13,975 Cash and cash equivalents at the end of the year 2,048 Analysis of cash and cash equivalents Cash at bank and in hand 688 Bank deposits 1,360 Total cash and cash equivalents 2,048

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

Net deficit for the year Adjustments for: Excess of pension scheme (gain)/loss over contributions Amortisation Depreciation Loss on disposal of fixed assets (Increase)/decrease in stock (Increase)/decrease in debtors Increase/(decrease) in creditors Interest receivable Interest payable Net cash used in operating activities Statement of cash flows Net cash used in 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 Net (repayment)/drawdown 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

The notes on pages 31 to 60 form part of these financial statements.

30 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 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.

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. In addition, sensitivity analysis has been prepared to reflect a severe plausible downside scenario. This analysis takes account of the requirements to service and repay borrowing facilities.

The Trust has loan facilities that permit borrowing of up to £52 million. This consists of two facilities, a term loan and a revolving credit facility. At the end year, £33.5 million of the total facility has been drawn. The facility is repayable in instalments starting in July 2023, after which the maximum facility will be £46.5 million. 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 be able to continue in operation for a period of at least 12 months from the approval of the financial statements and will have sufficient funds to meet their liabilities as they fall due, and will comply with loan covenants and the requirements to service and repay the loan.

31 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

1 Accounting policies (continued)

On this basis, the Trustees have concluded that it is appropriate to prepare the financial statements on a going concern basis.

Basis of consolidation

The group (collectively referred to as Royal Collection Trust or “the Group”) 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 2022.

Income

Income represents:

• the amounts derived from admission charges (including any Gift Aid receivable) which are culturally exempt from VAT;

• income (excluding VAT), from the sale of goods and reproduction rights;

• the receipt of royalties from publications and merchandise; donations; and

• other income includes booking fees and sundry income.

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.

32 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

1 Accounting policies (continued)

Exhibition costs

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

Publishing

The cost of producing each 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	-	40 years
Property improvements	-	5 to 20 years
Plant and machinery	-	5 to 20 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.

33 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

1 Accounting policies (continued)

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

Fixed assets and depreciation

for estimated depreciation is charged against income and held in accruals until the final valuation is known and recorded in the fixed asset register. Where a project is complete and the asset is in use, but a retention is outstanding, the retention and associated depreciation are also accrued.

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.

The pension costs and obligations of the Royal Households Group Pension Scheme are calculated on the basis of a range of assumptions, including the discount rate, inflation rate, salary growth and mortality. Differences arising as a result of actual experience differing from the assumptions, or future changes in the assumptions will be reflected in subsequent periods. A small change in assumptions can have a significant impact on the valuation of the liabilities. More details on the assumptions used are given in Note 22. Furthermore, the apportionment of assets between participating employers is subject to judgement, and the approach used has been applied consistently with the funding valuation and over time.

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

• Cash and long-term bank deposits – measured at the amount of cash held;

• Trade debtors – initially measured at settlement amount, subsequently this may be adjusted to reflect credit risk;

• Accrued income – measured at the amount expected to be received, subsequently this may be adjusted if the expectation of receipt changes; and

• Trade creditors – measured at the amount to be settled net of any trade discounts.

• Loans (liabilities) – measured at amortised cost. Transaction costs are spread over the life of the facility

• Loans (assets) – measured at amortised cost.

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.

34 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

1 Accounting policies (continued)

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.

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. 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.

35 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

1 Accounting policies (continued)

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.

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 & royalties Fees	2022 £000 120 34 154	2021 £000 - 29
		29

36 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

3 Net deficit is stated after charging:

Auditor's remuneration: Audit of these financial statements Audit of subsidiary undertakings Depreciation, amortisation and impairment Owned assets Operating lease charges	2022 £000 41 19 3,773 338	2021 £000 42 20 3,751 306

Auditor’s 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 Pledges de-recognised in the year	2022 £000 391 - 391	2021 £000 53 (306)
		(253)

In 2021/22 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:

nations payable Donations made in the year were as follows:
Privy Purse Charitable Trust	Group 2022 £000 176	Group 2021 £000 44	Trust 2022 £000 -	Trust 2021 £000 -
	176	44	-	-

6 Investment income and interest payable

Investment income on cash deposits Interest received on loan to subsidiary Interest and charges payable on bank loans	Group 2022 £000 1 -	Group 2021 £000 109 -	Trust 2022 £000 1 181	Trust 2021 £000 103 1
	1 Group 2022 £000 1,178	109 Group 2021 £000 362	182 Trust 2022 £000 1,178	104 Trust 2021 £000 362

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 46 9,772 15,997 3,218 1,578 2,179 1,221 34,011 Direct costs £000 129 7,276 17,641 8,796 1,474 2,698 677 38,691	Central & HR £000 - 686 704 589 174 43 87 2,283 Central & HR £000 - 556 580 536 165 41 82 1,960	IT £000 - 162 179 95 24 6 12 478 IT £000 - 218 243 129 32 8 16 646	Finance £000 - 236 262 140 35 9 17 699 Finance £000 - 321 356 190 47 12 25 951	Govern- ance £000 - 63 77 57 17 4 9 227 Govern- ance £000 - 73 91 77 25 6 12 284	2022 Total £000 46 10,919 17,219 4,099 1,828 2,241 1,346
						37,698
						2021 Total £000 129 8,444 18,911 9,728 1,743 2,765 812 42,532

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

8 Key management personnel, staff numbers and staff 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 £351 per Trustee (2020/21: £319). None of the Trustees received reimbursed expenses (2020/21: nil).

39 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

8 Key management personnel, staff numbers and staff costs (continued)

Management Board

Key Management Personnel of the Group are the Trustees and Management Board. The Members of the Management Board are the Director of the Royal Collection, the Finance Director and the Commercial Director.

During the prior year, an additional six people participated in the Management Board until the organisational restructure that took effect on 1 January 2021.

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

Current structure Old structure (until 31 Dec) Total	2022 Total benefits £000 431 - 431	2022 Pension contribution (included in total benefits) £000 37 - 37	2021 Total benefits £000 105 826 931	2021 Pension contribution (included in total benefits) £000 9 113
				122

Three of the members of the Management Board, received reimbursed expenses totalling £4,729 (2020/21: five - £2,300).

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

	Total	remuneration		Salary		Pension	Pension
	2022	2021	2022		2021	2022	2020
	£000	£000	£000		£000	£000	£000
Tim Knox	147	152	134		134	13	18

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 Key management personnel, staff numbers and staff costs (continued)

The average monthly head count was 693 staff (2021: 759 staff). 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 set out below. This table has been re-presented for the prior year to reflect the new organisational structure:

Care of the Royal Collection Visitor experience Central retail, publishing & communications Management & support services Royal Household shared services aggregate payroll costs of these persons were as follows: Wages and salaries Redundancy payments Social security costs Other pension costs	Number of FTE employees 2022 2021 73 93 303 378 47 55 16 15 66 67 505 608 2021/22 2020/21 £000 £000 14,105 17,092 - 2,159 1,336 1,693 1,689 2,682 17,130 23,626	Number of FTE employees 2022 2021 73 93 303 378 47 55 16 15 66 67 505 608 2021/22 2020/21 £000 £000 14,105 17,092 - 2,159 1,336 1,693 1,689 2,682 17,130 23,626	Number of FTE employees 2022 2021 73 93 303 378 47 55 16 15 66 67 505 608 2021/22 2020/21 £000 £000 14,105 17,092 - 2,159 1,336 1,693 1,689 2,682 17,130 23,626
			23,626

The aggregate payroll costs of these persons were as follows:

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 2020/21 reflect the restructuring programme undertaken during that year and include £317,000 of payments accrued at the year-end. This balance was paid in full in 2021/22.

41 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

8 Key management personnel, staff numbers and staff costs (continued)

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 the Group or directly funded by the Group (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 £120,001 - £130,000 £130,001 - £140,000 £160,001 - £170,000 £190,001 - £200,000 £230,001 - £240,000	2021/22 All staff Management Board 8 - 2 - - - - - - - - - 1 1 2 2 - - - - - - 13 3*	2020/21 All staff Management Board* 9 - 3 2 1 - 1 - 3 - 1 1 - - 4 3 1 1 1 1 1 1
		25 9

*Management Board includes all employees who have served on Management Board at any point during the year. No contributions to defined benefit pension schemes were made in respect of any members of staff (2020/21: five, £80,000).

**Redundancy payments that were accrued in 2020/21 and included in the bandings for that year are excluded from 2021/22.

42 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

8 Key management personnel, staff numbers and staff costs (continued)

For 2020/21, the benefits received were unusually 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 £120,001 - £130,000 £130,001 - £140,000	2021/22 All staff Management Board 8 - 2 - - - - - - - 1 1 2 2 13 3	2020/21 All staff Management Board 6 - 2 2 1 1 3 3 1 1 - - 2 2
		15 9

No contributions to defined benefit pension schemes were made in respect of any members of staff (2020/21: two, £54,000).

9 Governance costs

External audit Internal audit Allocated internal costs Trustee expenses (see note 8)	Group 2022 £000 60 74 90 3	Group 2021 £000 62 86 133 3 284	Trust 2022 £000 41 18 25 3	Trust 2021 £000 42 21 57 3
	227		87	123

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	2022 2021 £000 £000 5 541 (5) (541) 1,470 5 1,470 5

43 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

11 Intangible assets

Group Cost At 1 April 2021 Disposals /write-off At 31 March 2022 Amortisation At 1 April 2021 Charge for the year Disposals /write-off At 31 March 2022 Net book value At 31 March 2022 At 31 March 2021 Trust Cost At 1 April 2021 Disposals /write-off At 31 March 2022 Amortisation At 1 April 2021 Charge for the year Disposals /write-off At 31 March 2022 Net book value At 31 March 2022 At 31 March 2021	Software development £000 1,398 (76 ) 1,322 1,191 83 (76 ) 1,198 124 207 863 (38 ) 825 852 9 (38 ) 823 2 11	Pug Yard Access £000 4,903 - 4,903 581 195 - 776 4,127 4,322 4,903 - 4,903 581 195 - 776 4,127 4,322	Total £000 6,301 (76) 6,225 1,772 278 (76) 1,974 4,251 4,529 5,766 (38) 5,728 1,433 204 (38) 1,599 4,129 4,333

The intangible assets balance includes £4.1 million (2021: £4.3 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 2022 it has 21 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 2021 40,523 Additions 314 Transfers 4,873 Disposals /write-off - At 31 March 2022 45,710 Depreciation At 1 April 2021 8,431 Charge for the year 1,288 Disposals /write-off - At 31 March 2022 9,719 Net book value At 31 March 2022 35,991 At 31 March 2021 32,092 Trust Cost At 1 April 2021 40,523 Additions 314 Transfers 4,873 Disposals /write-off - At 31 March 2022 45,710 Depreciation At 1 April 2021 8,431 Charge for the year 1,288 Disposals /write-off - At 31 March 2022 9,719 Net book value At 31 March 2022 35,991 At 31 March 2021 32,092	Building developments £000 Group Cost At 1 April 2021 40,523 Additions 314 Transfers 4,873 Disposals /write-off - At 31 March 2022 45,710 Depreciation At 1 April 2021 8,431 Charge for the year 1,288 Disposals /write-off - At 31 March 2022 9,719 Net book value At 31 March 2022 35,991 At 31 March 2021 32,092 Trust Cost At 1 April 2021 40,523 Additions 314 Transfers 4,873 Disposals /write-off - At 31 March 2022 45,710 Depreciation At 1 April 2021 8,431 Charge for the year 1,288 Disposals /write-off - At 31 March 2022 9,719 Net book value At 31 March 2022 35,991 At 31 March 2021 32,092	Property improvement £000 12,010 42 361 (318) 12,095 5,718 936 (318) 6,336 5,759 6,292 11,528 38 361 (315) 11,612 5,492 889 (315) 6,066 5,546 6,036	Plant and machinery Furniture, fittings and equipment Assets in course of construction £000 £000 £000 7,959 9,318 6,641 74 114 249 - 389 (5,623) (63 ) (269) (515) 7,970 9,552 752 6,429 5,844 - 318 1,191 - (63 ) (265) - 6,684 6,770 - 1,286 2,782 752 1,530 3,474 6,641 7,547 7,191 6,641 71 112 249 - 389 (5,623) (63 ) (112) (515) 7,555 7,580 752 6,202 4,114 - 287 1,039 - (63 ) (112) - 6,426 5,041 - 1,129 2,539 752 1,345 3,077 6,641	Plant and machinery Furniture, fittings and equipment Assets in course of construction £000 £000 £000 7,959 9,318 6,641 74 114 249 - 389 (5,623) (63 ) (269) (515) 7,970 9,552 752 6,429 5,844 - 318 1,191 - (63 ) (265) - 6,684 6,770 - 1,286 2,782 752 1,530 3,474 6,641 7,547 7,191 6,641 71 112 249 - 389 (5,623) (63 ) (112) (515) 7,555 7,580 752 6,202 4,114 - 287 1,039 - (63 ) (112) - 6,426 5,041 - 1,129 2,539 752 1,345 3,077 6,641	Total £000 76,451 793 - (1,165) 76,079 26,422 3,733 (646) 29,509 46,570 50,029 73,430 784 - (1,005) 73,209 24,239 3,503 (490) 27,252 45,957 49,191
	45,710
	8,431 1,288 -
	9,719
	35,991
	32,092
	40,523 314 4,873 -
	45,710
	8,431 1,288 -
	9,719		6,426	5,041
	35,991		1,129	2,539
	32,092		1,345	3,077

Assets in the course of construction relates to capital expenditure that has not yet met the criteria for recognition on the fixed asset register. These are assets that are not yet ready for use, except for an accrued cost of £186,000 relating to retentions on finished assets and associated depreciation accrued of £16,000. In the prior year an accrual of £218,000 was recognised in current liabilities as an estimate of the depreciation for assets available for but for which final costs were not available. The asset table above now includes depreciation on these assets, which have been transferred from Assets in the Course of Construction to the appropriate asset class.

The net book value of intangible and tangible assets held at 31 March 2022 amounted to £50.8 million, of which £46.1 million was held for charitable activities and £4.7 million 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:

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 2022 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 base rate plus 2.4%. The loan is secured on the assets of Royal Collection Enterprises Limited.

15 Stock and work in progress

Finished goods Work in progress	Group 2022 £000 3,196 856 4,052	Group 2021 £000 3,134 888 4,022	Trust 2022 £000 - - -	Trust 2021 £000 - -
				-

Stock is stated net of a provision of £396,000 (2021: £473,000). The provision has been reduced from the prior year reflecting increased activity for the online shop and the improved outlook for retail sales in 2022 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 2022 £000 775 - 399 1,800 2,974	Group 2021 £000 279 - 633 1,213 2,125	Trust 2022 £000 195 3,318 2 1,176 4,691	Trust 2021 £000 11 458 - 1,136
				1,605

Amounts included within prepayments and accrued income and recoverable more than one year after the reporting date include accrued fundraising pledges of £0.3 million (2020/21: £0.5 million).

17 Movement in cash and net debt

Cash deposits and in hand Bank loans > 1 year Net cash debt	31 March 2021 Cash from operating and investing activities Cost of borrowings Net loan drawdown/ repayment 31 March 2022 £000 £000 £000 £000 £000 13,975 (9,749) (1,178) (1,000) 2,048 (34,500) - - 1,000 (33,500)
	(20,525) (9,749) (1,178) - (31,452)

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 2022 £000 2,024 - 8 3,365 5,397	Group 2021 £000 888 - 9 3,276 4,173	Trust 2022 £000 557 7,021 - 680 8,258	Trust 2021 £000 333 1,807 - 1,675
				3,815

19 Creditors due in more than one year

Loan Undrawn facility	Group 2022 £000 33,500 18,500	Group 2021 £000 34,500 17,500	Trust 2022 £000 33,500 18,500	Trust 2021 £000 34,500
				17,500

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. 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. The covenant attached to this loan is the same as the covenant for the facility below.

2. Revolving Credit Facility

This is a £30 million facility agreed in March 2021. £11.5 million was drawn at the year end. Amounts drawn under the agreement are charged at an annual rate of 2.8% plus the bank’s base rate. 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 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, and the Charity expects to comply with the covenant for the full term of the loan.

48 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

20 Income Funds

Group At 1 April 2021 Incoming resources Resources expended Transfers Gains At 31 March 2022 Group At 1 April 2020 Incoming / (outgoing) resources Resources expended Transfers Losses At 31 March 2021 Trust At 1 April 2021 Incoming resources Resources expended Transfers Gains and (losses) At 31 March 2022 Trust At 1 April 2020 Incoming / (outgoing) resources Resources expended Transfers Gains and losses At 31 March 2021		Restricted funds Designated funds £000 £000 1,044 2,125 391 - (111) - (609) (2,125 ) - - 715 - 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 1,044 2,125 391 - (111) - (609) (2,125 - - 715 - Restricted funds Designated funds £000 £000 1,455 8,216 (254) - (157) (6,067 ) - (24 ) - - 1,044 2,125	Designated funds £000 2,125 - - (2,125 ) - - Designated funds £000 8,216 - (6,067 ) (24 ) - 2,125 Designated funds £000 2,125 - - (2,125 -	Designated funds £000 2,125 - - (2,125 ) - - Designated funds £000 8,216 - (6,067 ) (24 ) - 2,125 Designated funds £000 2,125 - - (2,125 -	Pension reserve £000 1,700 - - - 3,000		General funds £000 32,838 23,652 (38,941) 2,734 - 20,283 General funds £000 62,751 6,877 (36,814 ) 24 - 32,838 General funds £000 32,093 16,712 (31,935) 2,734 - 19,604 General funds £000 62,006 2,908 (32,845) 24 - 32,093		Total £000 37,707 24,043 (39,052) - 3,000 25,698 Total £000 74,222 6,623 (42,938) - (200) 37,707 Total £000 36,962 17,103 (32,046) - 3,000 25,019 Total £000 73,477 2,654 (38,969) - (200) 36,962
					4,700
					Pension reserve £000 1,800 - 100 - (200) 1,700 Pension reserve £000 1,700 - - ) - 3,000 4,700 Pension reserve £000 1,800 - 100 - (200) 1,700
				-
							General funds £000 62,006 2,908 (32,845) 24 - 32,093

49 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

20 Income Funds(continued) Restricted funds: Presentation and interpretation: Publishing Supporters Fund Future Programme Learning Fund Learning Supporters Fund Art of Japan Other restricted funds Exhibitions: The Queen's Gallery, London The Queen's Gallery, Edinburgh Total restricted funds	Opening Funds £000 54 609 50 1 27 741 222 81 303 1,044	Income £000 300 - 44 12 35 391 - - - 391	Expenditure £000 (35) - (51) (5) (7) (98) (9) (4) (13) (111)	Transfer to general funds £000 - (609) - - - (609) - - - (609)	Closing Funds £000 319 - 43 8 55 425 213 77 290 **715 **

Presentation and Interpretation

The Publishing Supporters Fund includes support for specific titles and some funding for general spend. Income during the year includes pledges in support of Cassiano titles (£150,000) and European Sculpture (£140,000).

The Future Programme Fund included donations to support aspects of construction of the new learning centre at Windsor Castle and the development of Physic Garden at the Palace of Holyroodhouse. At 31 March 2022, both projects are complete and the funds have been fully utilised for the purpose intended. There is no restriction on the use of the assets to which the donations contributed, beyond being used to support the charitable objectives of engaging and informing the public about the Royal Collection. The restricted fund has therefore been transferred to general funds.

The Learning Supporters fund represents donations in support of learning projects, both for specified purchases and general funding of learning programmes.

The Art of Japan Fund includes donations given to support the exhibition “Japan: Courts and Culture”, including making films and hosting a conference “Japan and Britain: Courtly and Artistic Exchange”.

Other restricted funds include funding towards digitisation of images and records of specific items within the Collection, and in the current year a donation of £35,000 to fund the screening of Platinum Jubilee celebrations at the Palace of Holyroodhouse.

Exhibitions

These restricted funds are amortised over the economic life of capital assets at The Queen’s Gallery in London and The Queen’s Gallery, Edinburgh.

50 Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

20 Income Funds (continued)

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 2022 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 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 2022 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	Restricted funds £000 - 290 425 - - - 715 Restricted funds £000 - 303 741 - - - 1,044 Restricted funds £000 - 290 - 425 - - - 715 Restricted funds £000 - 303 - 741 - - - 1,044	Restricted funds £000 - 290 425 - - - 715 Restricted funds £000 - 303 741 - - - 1,044 Restricted funds £000 - 290 - 425 - - - 715 Restricted funds £000 - 303 - 741 - - - 1,044	Designated funds £000 - - - - - - - Designated funds £000 - - 2,125 - - - 2,125 Designated funds £000 - - - - - - - - Designated funds £000 - - - 2,125 - - - 2,125		Pension reserve £000 - - - - - 4,700 4,700 Pension reserve £000 - - - - - 1,700 1,700 Pension reserve £000 - - - - - - 4,700 4,700 Pension reserve £000 - - - - - - 1,700 **1,700 **	Pension reserve £000 - - - - - 4,700 4,700 Pension reserve £000 - - - - - 1,700 1,700 Pension reserve £000 - - - - - - 4,700 4,700 Pension reserve £000 - - - - - - 1,700 **1,700 **	General funds £000 4,251 46,280 8,649 (5,397) (33,500) - 20,283 General funds £000 4,529 49,726 17,256 (4,173) (34,500) - 32,838 General funds £000 4,129 45,667 7,000 4,566 (8,258 ) (33,500 ) - 19,604 General funds £000 4,333 48,888 7,000 10,187 (3,815 ) (34,500 ) - 32,093		Total 2022 £000 4,251 46,570 9,074 (5,397 ) (33,500 ) 4,700 25,698 Total 2021 £000 4,529 50,029 20,122 (4,173 ) (34,500 ) 1,700 37,707 Total 2022 £000 4,129 45,957 7,000 4,991 (8,258 ) (33,500 ) 4,700 25,019 Total 2021 £000 4,333 49,191 7,000 13,053 (3,815 ) (34,500 ) 1,700 36,962
	Restricted funds £000 - 290 - 425 - - - 715 Restricted funds £000 - 303 - 741 - - - 1,044				Pension reserve £000 - - - - - - 4,700 4,700 Pension reserve £000 - - - - - - 1,700 **1,700 **

51

Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

21 Commitments

Capital commitments at 31 March 2022 for which no provision has been made were as follows:

follows:
Contracted Authorised but not contracted	Group 2022 £000 78 -	Group 2021 £000 1,110 - 1,110	Trust 2022 £000 78 - 78	Trust 2021 £000 1,110 -
	78			1,100

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:

- within one year - in the second to fifth year - later than five years	Group 2022 £000 296 499 46	Group 2021 £000 295 689 139 1,123	Trust 2022 £000 12 2 - 14	Trust 2021 £000 12 1 -
	841			13

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 Worksave (Mastertrust) Pension Scheme

Schemes 1 and 2 are closed to new members. Employees 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 2020.

It is the stated policy of the Trustees that the Charity’s share of the 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 2019 and updates that valuation for International Accounting Standard 19: Employee Benefits (IAS19) annually. The total liabilities of the scheme of £124.9 million (2021: £122.1 million) are disclosed in the Consolidated Fund Account. Royal Collection Trust funds all or part of the employment costs of 6 of the 38 active members of the scheme as at 31 March 2022 (2021: 8 of 38 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 £1,689,000 (2020/21: £2,682,000).

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)

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 2020 and no regular contributions are expected to be paid by Royal Collection Trust to the Scheme during the year to 31 March 2023 (year to 31 March 2022: £nil).

The results of the latest funding valuation at 31 December 2020 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 2022	31 March	2021
	% per annum	% per annum
RPI inflation	3.5		3.2
CPI inflation	2.8		2.5
Rate of general long term increase in salaries	3.8		4.0
Pension increase (LRP15)	3.3		3.1
Discount rate for scheme liabilities	2.7		2.1
Demographic assumptions
	31 March 2022	31 March 2021
	Years		Years
Life expectancy for male currently aged 65	22.8		21.5
Life expectancy for a female currently aged 65	24.9		23.5
Life expectancy at 65 for male currently aged 45	24.1		22.8
Life expectancy at 65 for a female currently aged 45	26.3		25.1
Cash commutation	Members assumed	to take their cash	lump
	sum at	retirement

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) cheme assets
UK equities Overseas equities Fixed interest gilts Index-linked gilts Property Cash	31 March 2022 £m % 0.6 2 13.9 42 2.5 7 9.6 29 3.2 10 3.3 10 33.1 100	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

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

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 2022 £m 33.1 (28.4) 4.7 - 4.7	31 March 2021 £m 32.6 (30.9) 1.7 - 1.7

When determining the asset recognised on the balance sheet, it has been assumed that The 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

Operating costs Current service cost Administration costs Expense recognised in profit and loss	31 March 2022 £m - 0.1 0.1	31 March 2021 £m 0.2 0.1
		0.3

55

Company Number 2713536

Royal Collection Trust

NOTES (forming part of the Financial Statements)

22 Pension schemes (continued)

Amounts recognised in other comprehensive income

	31 March	31 March	31 March
	2022	2021
	£m		£m
Re-measurements in other comprehensive income
Gains on scheme assets during the year	1.8		4.0
Gains/(losses) on scheme liabilities during the year	1.2		(4.2 )
Amounts recognised in other comprehensive income	3.0		(0.2 )
Changes to the valuation of the defined benefit obligation during the year
	31 March	31	March
	2022		2021
	£m		£m
Obligation at the start of the year	30.9		27.8
Current service cost	-		0.2
Interest cost on defined benefit obligations	0.6		0.6
Actuarial (gains)losses on scheme liabilities	(1.2 )		4.2
Net benefits paid out	(1.9 )		(1.9)
Obligation at the end of the year	28.4		30.9
Changes to the fair value of scheme assets during the year
	**31 March 2022 **	31 March 2021
	**£m **		£m
Fair value at the start of the year	32.6		29.6
Interest income on scheme assets	0.6		0.6
Gains on scheme assets	1.8		4.0
Contributions by the employer	0.1		0.4
Administration costs incurred	(0.1 )		(0.1 )
Net benefits paid out	(1.9 )		(1.9)
Fair value at the end of the year	33.1		32.6

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	Obligation	Surplus/(deficit)
Following a 0.25% decrease in	Change	0.0	1.2	(1.2)
the discount rate
	New value	33.1	(29.6)	3.5
Following a 0.25% increase in	Change	0.0	0.9	(0.9)
the inflation assumption
(excluding salary increases)	New value	33.1	(29.3)	3.8
Following a 1-year increase in	Change	0.0	1.1	(1.1)
life expectancies
	New value	33.1	(29.5)	3.6

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	2022	2021	Details of Transaction
	£000	£000
Royal Household	3,325	3,363	Charges to Royal Collection Trust (RCT) for various services
	(439)	(1,026)	including personnel, payroll, pensions administration, internal
			audit, records management, property maintenance services and IT
			services.
Royal Household	58	50	Recovery from the Royal Household of costs incurred on behalf
	16	2	of the Royal Household.
Privy Purse	176	44	Donation to the PPCT in lieu of its right to charge for admission
Charitable	-	-	to Queen Mary’s Dolls’ House, Windsor Castle.
Trust (PPCT)
St George’s	493	206	Payment to St George’s Chapel in respect of admissions to St
Chapel	58	2	George’s Chapel, Windsor Castle collected by Royal Collection
			Enterprises Limited (RCEL) as agent.
Privy Purse (including Windsor	26	11	Sale of goods for resale to the Privy Purse; recharge of costs
Farm Shop and Royal farms)	12	4	incurred by RCEL on behalf of the Privy Purse.
Privy Purse (including Windsor	13	11	Payment to Privy Purse in respect of costs incurred on behalf of
Farm Shop and Royal farms)	(1)	(2)	RCEL, and royalties payable by RCEL for use of Royal Farms milk
			andcontributions to shared funds.
A G Carrick (Highgrove)	22	258	Sales of goods for resale to A G Carrick, and commission earned
	12	2	by RCEL on sales of admission tickets for the gardens at
			Highgrove House.
Office of HRH The Prince of	3	3	Recovery of costs incurred on behalf of HRH The Prince of Wales
Wales	2	2	and the sale of RCEL stock.
Office of HRH The Prince of	2	-	Payments to the Office of HRH The Prince of Wales in respect of
Wales	nil	-	costs incurred on behalf of RCEL.
Historic Royal Palaces (HRP)	91	28	Recovery of costs from HRP for maintenance, services and goods
	5	9	from resale purchased from RCEL.
Balmoral Estate	10	3	Purchase by Balmoral Estate of RCEL goods for resale.
	2	-
Sandringham Estate	25	-	Purchase by Sandringham Estate of RCEL goods for resale.
	nil	-
Royal Household Staff	19	12	Contribution to the Fund for the benefit of employees of The
Wellbeing Fund	(9)	-	Royal Household including Royal Collection Trust.
Royal Households Group	118	96	Administration costs for the defined benefit pension scheme.
Pension Scheme	(13)	16

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. The Company is exempt from the requirement to disclose the details of related party transactions with its subsidiary undertaking.

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 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 official residences of The Queen.

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 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 2022

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 2022 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	2022 £000 31,251 (25,374) 5,877 (2,494) (176) 34 3,241 (181) - 3,060 2022 £000 15,157 (14,478) 679 746 (67) 679	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

60 Company Number 2713536