THE PALACE THEATRE WATFORD LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021 AAKIX3WA 2411212021 COKIPANIES HOUSE
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Cornpany Registration No. 3218719 (England and Wales)
THE PALACE THEATRE WATFORD LIMITED CONTENTS Page Directors and Advisers Report of the Directors Report of the Independent Auditors 9-11 Statement of Flnancial Activilies 12 Balan¢e Sheet 13 Statemenl of Cash Flows 14 Notes to the Financial Slatements 15-25
THE PALACE THEATRE WATFORD LIMITED DIRECTORS AND ADVISERS Oire¢tors Chair Deborah Lincoln Govemance Committee Karen Collett . (resigned 22 March 2021) Kenny Dada Anne Fenton John Hunt Mark Lawrence Carol LinoOd Binita Mehla-Panmar John Prilchard (resigned 23 September 2020) Georgina Rae Brell Spencer Patrick Stoddart Jayne Trolman Timothy Williams ' Govemance Committee Govemance Committee Governance Committee Directors nominaled by Watford Borough Council. Secretary Jamie Arden Registered Office 20 clandOn Red Wattord HertsWD17 1JZ Bankers National Westminster Bank plc 72-74 High Sireel Watford Herts WD17 2BQ Audltors PKF Littlep)hn LLP 15 Westferry Circus Canary Wharf London E14 4HD Charity Registration number 1056950 Company Registration number 3218719
THE PALACE THEATRE WATFORD LIMITED REPORT OF THE DIRECTORS The Direclors of the Charitable Company presenl herewith their Annual Report, logelher with the audited Financial Statements for the year ended 31 March 2021. This report is intended to fulfil the requirements both of Section 234 of the Companies Acl 2006 and of the Charilies Act 2011.The Directors have adopted the prowsions of the Statement of Recommended Practice "Accounting and Reporting by Charities" in pPann9 the annual report and financial statements of the charity. Reference and Administrative Details The Palace Theatre Wafford Limited is a charitable company limtled by guarantee and governecl by a Memorandum and Articles of Assoaation dated 17 May 1996. Public Benefit The Trustees confirrn that they have had regard to the guidance on public benefil issued by the Charity Commission when wisidering the objectives and actiwties of the Charitable Company. Board of Directors The Directors and Trustees from 1 April 2020 lo the dale of the signing of ihe Financial Statements were as shown on page 2. The Directors shall have power at any time lo appoint any person to be a Director. but so that the total number of Directors shall not al any time exceed the nurnber fixed in accordance with the Articles. Any Oireclor so appointed shall hold office only until the following Annual General Meeting, and shall then be eligible for rfrelection. but shall nol be taken into a¢¢ount in delemiining the Directors who are to retire by rotslion al such meeting. Two Directors are nominated by Watford Borough Council. {There are specific requirements assoualed wilh the rolalion of Directors. the tems of which are staled in the Memorandum and Articles of Association). Trustees receive ongoing training, induding attendan at an annual away day. The Directors and Trustees delegate the day to day running of the organisation lo: Brigid Lamour- Artistic Oirector and Chief Executive Jamie Arden - Executive Director and Company Secretary Andrew Phillips- Director of Finan Power5 of the Company The Directors take this opportUnY to confim that under Clause 3 of the Charitable Company's Memorandum of Association. it is empowered to ¢arry out the aclivilies reviewed in the Annual Report induding. but not limited to. the beneficial inveslmenl of the Charitable Company's funds. Strategic Objectives From April 2018 Watford Palace Theat IWPT) ente into our new 4 year Business Plan 2018-2022. WATFORD PALACE THEATRE MISSION AND VISION STATEMENT 2018-2022 WPT Mission Great stories that entertsin. provoke and inspire, on our stage and in our streets. WPT Vision Everyone's welcome at the Palace. We aim lo inspire and entertain through high-qualily. inventive and ambitious drama. new plays. musicals. dance and family shows: free ouldoor festivals.. diverse stand-up.. and a much-loved traditional panlomime. THE PALACE THEATRE WATFORD LIMITED REPORT OF THE DIRECTORS
See yourself on our stsge. We want our shows lo look like our audience.. reflecting our diverse community. and fully represenling women. We encourage and celebrate creativity in our town, giving a platfom lo our communities and our young people. See It here first. We are proud that our localty produced shows and home grown talent have toured nationally and intemationally. been seen on BBC iPlayer. won awards and transferred lo the West End. WATFORD PALACE THEATRE - INSPIRATION ON YOUR DOORSTEP Strategic Objectives For the next four years 2018-2022. the charities strategic obje¢tives are as follows.. STRATEGIC OBJECTIVE ONE STRIVE FOR EXCELLENCE To In¢aSe the qualtty, diversity and impact of the work prcrtyuced at WPT STRATEGIC OBJECTIVE TWO THINK LOCAL AND BE DIVERSE Develop work lor a local audience and fvrther diversify the audience and participant demographic. STRATEGIC OBJECTIVE THREE BE FINANCIALLY RESOURCEFUL. RESILIENT. SUSTAINABLE AND ENTREPRENEURIAL Significantly increase and diversify contributed and earned income lo provide organisational resilience STRATEGIC OBJECTIVE FOUR PARTICIPATE- BE COLLABORATIVE & CREATIVE IN PROMOTION & AUDIENCE DEVELOPMENT Develop a slronger relati¢Ship with the community to promote and provide opportunities to participate with the work made al the venue. Achlevements agalnst ObjectSves Just a few weeks before the new financial year began on 1 April 2020. the Theatre had lo close its doors as Ihe country ented its first Covid 19 pandemic lockdown and entered a time of unpre¢edented challenges. The Charity met these with resilience and irnagination (Strategic Objective 3). responding to priorities now recognised as key across the industry. The organisation rapidly adapted ways of thinking and working. pivoting decisively towards the new Arts Council England strategic priorities for 2023 onwards in LET'S CREATE. through in-depth Leadership Team discussions of strategy and values, and supporting Watford Borough Council's local agenda {Strategic Objective 21. Our Initial 'on the hoof digitsl response to lockdown was our Palace@Home slond. including zoom play- readings in partnership with Pillochry Festival Thealre. with actors in England and Scotland. the writer in Ireland. and audiences as far afield as America and the Orkneys. As the extent of the crisis became clear, this was superseded by a tailored programme inviting local freelancers lo propose projects for specific largel audiences, with WPT marketing expertise offered as support in kind.
THE PALACE THEATRE WATFORD LIMITED REPORT OF THE DIRECTORS STRATEGIC OBJECTIVE 1: STRIVE FOR EXCELLENCE To increase the quality. diversity and impact of the work produced at WPT Secured Cultural Recovery Fund support of £248,481 to move from survival mode to inclusive creativity, enabling work to make the building Covid secure. and major new creative initiatives.. Underwriting risk for an allemative Christmas experien. replaong the cancelled pantomime The Three Counties Freelanr Callout, an open callovt to local freelancers wh05e situation was precarious - offering tailored support for new projects. Planned lo be the Spring season on our stage. bul adapted in response to the second lockdown and delivered over a longer period on various live. digital and hybrid platforms. We received applications from 60 groups or individuals and supported a dozen of them. Our SUPPOrt has helped freelancers secure matching investment from other local and national sources. STRATEGIC OBJECTIVE 2: THINK LOCAL AND BE DIVERSE Develop work for a local audience and further diversify the audience and participant demographic. Looked outwards to our local community as a leader in Wattord's cultural strategy, and to the Three Counties Active role in Watford Borough Council's Watford Togetherf initiative Takn'ng action to become more indusive in response to global reflections on raosm Investing in local freelan tslent and exploring Dew plalforms and styles of creative work STRATEGIC OBJECTIVE 3: BE FINANCIALLY RESOURCEFUL. RESILIENT, SUSTAINABLE AND ENTREPRENEURIAL Significantly increase and diversify contributed and eamed income to provide organisational resilience. Acted decisively to secure finanaal stability. manage risk, and secure additional fijnding Removed panlomime income from annual budget expectations a full quarter earlier than most theatres All full time staff apart from the Execulive Team pul on flexible furlough, with no redundancies made - in contrast to sector peers Managed staff time cosl-effectively and seCUd furlough income through HMRC'S Coronavirus Job Retention Scheme Protected jobs. supporting casual workers. Ung fudough time to invest in online training Migrated all operations online smoothly as per business continuity planning Secured £315.000 investment from Garfield Weston Foundation in new Take Part youth and community activities with local partners. designed lo support young people. who have been so severely affected by the pandemic Hired out the building for Covid secure filming. generating income while dosed to the public - Iwo music videos. one TV sitcom. short films and a feature film Vacancies occurring were not replaced. bul duties covered flexibly by other team members Redeployed in-house skills, eg redeveloped the bar to increase profitably while dosed to the public Shared best practice and supr)ort through the network of Mid -scale Theatres Covid secure team met weekly to assess risks and responses, not relying passively on Govemmenl or induslry advice SustainatHlity Group meetin9 monthly to lead a Iransition to more sustainable ways of working
THE PALACE THEATRE WATFORD LIMITED REPORT OF THE DIRECTORS STRATEGIC OBJECTIVE 4 PARTICIPATE- BE COLLABORATIVE & CREATIVE IN PROMOTION & AUDIENCE DEVELOPMENT Develop a stronger relationshlp with the community to promote and provide opportunities to parti¢ipate with the work made at the venue. Moved swiftly to ¢ale Palace@Home digital output, with a focus on wellbeing Active role in WBC Watford Together initiative Moved all participation work online swiftly in order to give continuity and support lo users Secured £315.000 investment from Garfield Weston Foundation in new Take Part youth and Community activities with local partners. designed to support young people. who have been so severely affected by the pandemic Retained PR consultant. and Chief Executive appeared on ITV News at Ten as well as other media appearances The activities described above demonstrate that public benefit is being provided by the Charity. Financial Review The Statement of Financial Activities shows a surplus of £544,151 {2020 deficit of £172.066} for the financial year. This comprises a surplus before transfers on unrestricted funds of £207.957 (2020 - deficit of £73.625) and a surplus on restricted funds 01 £336,19412020 - deficit of £98.441 }. The Directors note that this surplus is declared after recognising depreciation Charges of £315.814 (being £213.975 applied to restricted funds. and £101.839 applied to unrestricted funds). As at the year ended 31 March 2021. new and exceptional income sources have been recognised, resulting from successful applications for Covid-19 related and other support. being Restricted Grants from Arts Council England's Cultural Recovery Fund of £248.481.' and The Garfield Weslon Foundation of £315,000. Much of the related expenditure wll aclually lake place in the period from 1 April 2021 due to the extended periods of lockdown causing further delay to the Theatre's repening. Income also in¢lude5 HMRC'S Coronavirus Job Retention Scheme monies of £388.852 which has been recognised in the same period as the wage expenditure for fudoughed staff Ihat il supported. Financlal Position in the Context of Ongoing Commitments and Obligations The Balance Sheet shows nel assets of £6.099.671 at 31 March 2021 (2020 - £5.555.520)- As al the same dale. Revenue subsidy amounting lo £231.957 and £805.118 for the following 12 month period has been confirmed by Wattord Borough Council and Arts Council England respectively. An agreed budget for the year to 31 March 2022 has been approved by the Board of Direclors. Subsidiary Undertakings The Charitable Company's wholly owned subsidiaries, The Palace Theatre Wafford Bar Limiled and The Palace Theatre Watford Productions Limiled, remained domiant throughout the year. Investment Policy The Charitable Company holds surplus cash on a deposit account to receive a rate of interest Commensurate with an appropriate level of security. whilsl nol restricting access for operational purposes or paymenl of box office lo touring mpanieS and hires. Where sufficient surplus cash remains available after due consideration for longer term liabilities. the Charitable Company ulilises other relatively low risk financial products (such as Fixed Rate Bonds) to maximise income. Parent Charitable Company's Reserves Policy The Trustees have reviewed the Charitable Company's needs for reserves in line with the guidance issued by the Charity Commission and have agreed the following reserves policy= the target level of unrestricted reserves is based on lo° of typical box office income and six weeks running costs. Al the last calculation. the target is to hold free serveS of £250.000. The unrestricted general reserve (see page 13) stood at £250.792 on 31 March 2021 {2020- £250.232)- This policy is reviewed annually by the Trustees.
THE PALACE THEATRE WATFORD UMITED REPORT OF THE DIRECTORS Risk Assessment The Tnjstees have examined and prioritised the most critical risks to the Charitable Company and. as a result, are confident that they have in place sufficient accountability and focussed action to protect the objectives of the Charitable Company. A risk register has been produced and is reviewed by the Leadership Team. and updated by the Executive Director every tsvo months for consideralion by the Board. The major risk identified concems the funding of the Charitable Company. Arts Council England and Watford Borough Council have the right under Service Level Agreements to withdraw fijnding andlor request repayment of funds should those funds be applied to purposes other than Ihe stated Charitable objectives. The Charitable Company has pul in place a range of miligatory measures. The Board operates a separate governance committee. with ils own Chair. to maintain a transparent and objective overview. The Covid epidemic represented the biggest risk to the Charitable Company's survival in recent years. However our Reserves policy, the leanness of the staff team. and a policy of keeping eslablishmenl costs within the totsl of grant income received. meant the Charitable Company was able to survive this year. Plans for future periods As we emerge from the Coronavirus pandemic arKI s11xY return lo our ability to reopen and serve Ihe people of Wattord and beyond. our FU1u Plans indude.. Creating a new website and brand Creating a new vision for Take Part l Youth & Community Investing in making a Covid Secure Front of House area and a'Digilally Capable. and Covid Resilient stage Oeveloping a brand-new vision for the Palace Theatre to ensure that the building and cultural infraslruclure is fil for purpose in the medium to longer term Securing a new Scenic Workshop and Store- Creating a new Artistic Vision. Mission, and Core Purpose Delivering our Artistic Prcgramme lndoorsl0utdrsI0n1lne/0n the road
THE PALACE THEATRE WATFORD LIMITED REPORT OF THE DIRECTORS Stalement of Trusleos. Responsibilities The Trustees (who are also Directors of The Palace Theatre Walford for the purposes of company law) are responsible for preparing the Trustees, Report and the Financial Statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). Company and Charity law requires the Truslees to prepare Financial Statement5 for each financial year. Under that law the Trustees have elected to prepare the Finanaal Statements in accordance with the Charities, Statement of Recommended Practice. Accounting and Reporb"ng by Charities issued in March 2015 and United Kingdom Financial Rew)rting and Accounting Standards. Under Company and Charity law Ihe Trustees musl not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Charitable Company and of the incoming resources and application of resources. including the income and expenditure of the Charitable Company {and Ihe Group) for that period. In preparing these Financial Statements. the Trustees are required to= select suitable accounting policies and then apply them consistenuy. observe Ihe methods and prinoples of Ihe Charities. SORP: make judgements and ests'mates that are reasonable arKi pnjdent; slate whether applicable accounting stsndards have been followed. subject lo any malerial departures disclosed and explained in Ihe Financtal Ststements: and prepare the Financial Statements on the going concern basis unless il is inappropriate to presume Ihal the Company wll continue in business. The Trustees are responsible for keeping proper accounting records that disdose with reasonable accuracy at any lime the financial posib.on of the Charitable Company and enable them lo ensure that the Financial Slalefflenls comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Charitable Company land the Group) and hence lor taking reasonable steps for the prevention and deleclion of fraud and other irregularib'es. In accordance with company law. as the Company's Directors. we (a)nfirm that: so far as V are aware. there is no relevant audit infomation of which the Company's auditors are unaware., and as the DI10r$ of the Company. we have taken all steps that we ought to have taken in order to make ourselves aware of any relevanl audit inlomiation and to establish that the Company's auditors are aware of Ihat infomiation. Auditors PKF Littlejohn LLP are appointed as audiiors to the Charitable Company and have indicated their willingness lo continue in office. This report was approved by order of the Board of Directors and signed on its behalf by.. Deborah Llncoln Chair 2021
THE PALACE THEATRE WATFORD UMITED INDEPENDENT AUDITORS, REPORT Independent Auditors. Report to the Members of The PalaGe Theatre Warford Limited Oplnion We have audited the finan31 statements of The Palace Theatre Watford Limited (the 'charitable company'l for the year ended 31 March 2021 which comprise the Statemenl of Finanual Activities. the Balan Sheel, the Cash Flow Statement and notes lo the financial slalements. induding a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards. inctuding Financial Reporting Standard 102 The Financial Reporting Siandard applicable in Ihe UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). Sn our opinion, the financial ststements- give a true and fair view of the stale of the charitable company's affairs as al 31 March 2021 and of its incoming resources and application of resources. including its income and expenditure. for the year then ended: have been properly prepared in accordance with United Kingdom Generally Accepted AuntIng Practs'ce.. and have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in ac¢ordan¢e with Intemalional Standards on Auditing {UK) (ISAS (UK)) and applicable law. Our responsibilitses under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that a relevant to our audit of the financial statements in the UK, including the FRC'S Ethical Standard. and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate lo proVe a basis for oui opinion. Conclusions relating to going con¢ern In auditing the financial statements. we have conduded that the Trustees, u5& of the going concem basis of accounting in the preparation of the financial stslemenls is appropriate. Based on the work we have perfomed. we have not identified any material uncertainties relating to events or conditions that. individually or collectively, may cast significant doubt on the charitable company's ability to continue as a going concem for a period of at least tsvelve months from when the financial statements are aulhorised for issue. Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report. Other information The other information comprises the informab.on included in the Annual Report of the Trustees, other than the financial stalements and our audilorfs report thereon. The Trustees are responsible for the other infomation contained within the Annual Report of the Trustees. Our opinion on the financial slalemenls does not cover the other information and. except to the extent otherwise explicitly stated in our report. we do not express any form of assuran conclusion thereon. Our responsibility is to read the other infom)atson and. in doing so. consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in Ihe ¢ovrse of the audit. or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to delemine whether this gives rise to a material misstatement in the financial siatemenls themselves. If, based on the work we have performed. we condude that Ihere is a material misslalemenl of this other information. we are required to report that fact. We have nothing to report in thi5 regard.
THE PALACE THEATRE WATFORD UMITED INDEPENDENT AUDITORS, REPORT Opinions on other matters prescribed by the Companies Act 2006 In our opinion. based on the work undertaken in the Course of the audit: the information given in the Annual Report of the Tru51ees (which incllides the Directors, report) prepared for the purposes of company law. for the finanaal year for which the financial stalemenls are prepared is consislent with the financial statements- and the Annual Report of the Trustees (which includes the Directors. report) has been prepared in accordance with applicable legal reqvirernents. Matters on which we are required lo report by exception In the light of the knovAedge and understanding of the charitable company and it5 environmenl obtained in the course of the audit. we have not identified material misstatemenls in the Annual Report of the Trustees. We have nothing lo report in respect of the followirg matters in relation to which the Companies Act 2006 requires vs lo report to you if. in our opinion- adequate accounting records have not been kept. or returns adequale for our audit have not been received from branches t visited by us- or the finanual statements are not in agreement with the accounting records and relums. 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. Responsibilities of Trustees As explained more fully in the Trustees. responsibilities slalemenl. the Trustees (who are also the director5 ol the charitable company for the purposes of company lawl are responsible for the preparation of the financial statements and for being satisfied Ihal they give a true and fair view. and for such internal control as Ihe Trustees delemine is necessary to enable the preparation of finanaal stslemenls that are free from material misstslement, vthether due lo fraud or error. In preparing the financial statements. the Trustees are responsible for assessing the charitable company's ability lo continue as a going concern. disclosing. as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees eilher inlend to liquidale the charitable company or to cease operations. or have no realistic altemalive but lo do so. Auditor's responsibilities for the audit of the financial statements Our objectives are to obtairb reasonable assuran about whether the financial statements as a whole are free from material misstatement. whether due lo fraud or error. and lo issue an auditorfs report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAS (UK) will always delect a material misstatement when il exists. Misstatements Can arise from fraud or error and are considered material if. individually or in the aggregate. they could reasonably be expected to Influen the economic decisions of users laken on the basis of these rinancial stalemenls. Irregularities. including fraud. are instance5 of non-compliance with laws and regulations. We desion procedures in line with our responsibilits'es, outlined above. lo delect material misslalernents in respect of irregularities, including fraud. The extenl lo which our procedures are capable of detecting irregularities, including fraud is detailed below.. We obtained an understanding of the charilable company and the sector in which il operates to identify laws and regulations that could reasonably be expected lo have a direct effect on the rinancial slatemenls. We obtained our understanding in this regard through discussions wilh management. sector search and application of cumulative audit knowledge and experience. 10
THE PALACE THEATRE WATFORD LIMITED INDEPENDENT AUDITORS, REPORT We determined the principal laws and regulations relevant to Ihe charitable company in this regard lo be those arising from the Companies Act 2006. Charilies Act 2011, Charities (Accounts and Reports) Regulations 2008, Financial Reporting Standard 102 and the Charities SORP. We designed our audit proCedUS to ensure the audit team considered whether there were any indications of non-compliance by the charity with those laws and regulations. These procedures included. bul were not lirnited lo enquiries of Trustees, review of minutes and review of legal and regulalory corresponden. We also identified the risks of material misstatement of the financial slalements due lo fraud. We considered. in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls. that there was a potential for management bias in the recognition of revenue. We addressed this through reviewing revenue in the year for evidence of entiuemenl and at the year end to ensure accounted for in the correct period. As in all of our audits. we addressed the risk of fraud arising from management override of controls by performing audit prOdureS which included but were nol limited lo.. the testing of joumals- reviewing accounting estimates for evidence of bias-, and evaluating the business rationale of any signifan1 Iransactions Ihat a unusual or outside the nomal course of business. Because ofihe inherent limitations of an audit. there is a risk thatwe will not delect all irregularities. including those leading lo a material misstatement in the financial statemenls or non-compliance with regulation. This risk increases the more Ihal compliance wilh a law or regulation is removed from the events and transactions flected in the finan¢ial statemenls, as we will be less likely to become aware of instances of non- compliance. The risk is also greater regarding irregularities occurring due to fraud ralher than error, as fraud involves intentional concealment. forgery. collusion. ornission or misrepresentation. A further description of our responsibilities for the audit of the finanaal slalemenls is located on the Financial Reporting Council's website al.. wMv.frc.org.ukJauditorsresponsibility"es. This description foms part of our auditor's report. Use of our report This report is made solely to the charitable ¢ompany's membets, as a body. in accordance with Chapter 3 ol Part 16 of the Companies Act 2006. Our audit work has been undertaken so thal we might stsle to the charitable company's members those matters we are required to state to them in an auditorfs report and for no other purpose. To the fullest extent pemiitted by law. we do not accept or assume responsibility lo anyone. other than the Charitable company and the tharitable company's members as a body. for our audit work, for this report, or for the opinions we have fomed. Alastair Duke (Senior Statutory Auditorl 15 Westferry Circus For and on behalf of PKF Littlejohn LLP Canary Wharf Siatutory Audltor London E14 4HD Dale.. 21 December 2021
THE PALACE THEATRE WATFORD LIMITED STATEMENT OF FINANCIAL ACTIVITIES YEAR ENDED 31 MARCH 2021 2021 2021 Unrostricted Restricted funds funds 2021 Total funds 2020 Total funds Not• Incorning Resources Grants receivable and fees Donations and gifts Bank interest Ancillary trading activitses Coronavirus Job Retention Scheme 1.043.519 22.479 1.069 367 388.852 563,481 1.607.000 2.068 24.547 1,069 367 388.852 1,035.415 136,958 2.948 86.712 1.456.286 565.549 2,021.835 1,262.033 Charitable Activities Production Participalion Other 15.324 11.857 9.639 15.324 11,857 9,639 813,424 37,760 151.115 36.820 36,820 1,002,299 Total Income 1,493.106 565.549 2.058.655 2,264,332 Expenditure on: Raising funds Gharilable Activities Production Partiapalion 1.507 1,793 4,372 1.103.399 180.243 196.999 1,300,398 32.070 212.313 2.333.244 98.782 Total Expenditure 1.285.149 229.355 1.514.504 2,436,398 Net Incomel(Expenditure) 207,957 336.194 544.151 {172,0661 Transfers beeen funds 13 33.841 {33.841) Total funds brought forward 557.402 4,998.118 5,555.520 5.727.586 Total funds carried forward 799.200 5.300.471 6.099.671 5.555.520 All income and expenditure derives from continuing activitr'es. The statement of financial activities indudes all gains and losses Cognised during the year. The Accounting Polioes and Notes (M pages 15 to 25 form part of these Financial Slatements. 12
THE PALACE THEATRE WATFORD LIMITED (Company Registration number 3218719) BALANCE SHEET YEAR ENDED 31 MARCH 2021 2021 2020 Note Fixed Assets Tangible assets Investments 4.709.639 200 5.018.951 200 4.709,839 5.019.151 Current Assets Stock Deblors Cash at bank and in hand 2,564 217,714 1,313.010 6.207 289.958 481,257 10 1,533,288 777,422 Creditors: am¢Junls falling due within one year 11 {143.456} 1241.0531 Net Current Assels 1.389.832 536,369 Net Assets 6.099,671 5.555,520 Income Funds Restricled Funds 13 5,300.471 4,998,118 Unre$tri¢t¢d Funds General Designated 250,792 548.408 250.232 307,170 12 Total Unreslricled Funds 799.200 557,402 Total Charity Funds 6,099,671 5.555.520 Approved by the Board on J3 December 2022 and signed on its behalf by.. Deborah Lincoln Chair The Accounlin9 Poliues and Notes on pages 15 to 25 fom part of these Financial Statements. 13
THE PALACE THEATRE WATFORD LIMITED STATEMENT OF CASHFLOWS YEAR ENDED 31 MARCH 2021 2021 2020 Cash flow provlded from operating al¥ltIeS 837,187 58.836 Cash flow from investing activities Payments to acquire tangible fixed assets Interest receivable 16.503) 1.069 {18,185) 2,948 Net cash flow (used in) investing activities 15.434) 115,237) Change in cash and cash equivalents in the year 831.753 41,599 Cash and cash equivalents at start of year 481,257 439.658 Cash and cash equivalents at end of year 1.313.010 481.257 Reconciliation of net income to net cash flow from operating activities Nel lncomellexpendilu} for year Inleresl receivable Depreciation of tangible fixed assets Decrease in stock Decrease in debtors (Decrease> in creditors 544.151 {1,0691 315,815 3,643 72,244 (97.597) (172,066) {2,948) 308.661 485 11.184 {88.480) Net cash Ilow provlded from operatlng aclivltles 837,187 56.836 The Accounting Policies and Notes on pages 15 to 25 fonn part of these Financial Statements. 14
THE PALACE THEATRE WATFQRD LIMITED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2021 General Infomiation and basis of preparation The Palace Theatre Watford Limited is a company limited by guarantee in the United Kingdom. In the event of the charity being wound up. Ihe liability in respect of the guarantee is limited lo £1 per member of the charity. The address of the giStered office is given in the charity information on page 2 of these financial statements. The nature of the charity's operations and prinapal aclivilies are sel out in the Report of the Trustee5. The charity constitutes a public beneffil entity as deffined by FRS 102. The financial statements have been prepared in accordance wilh Accounting and Reporting by Charities.. Slalemenl 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), the Financial Reporting Standard applicable in Ihe United Kingdom and Republic of Ireland IFRS 102}, the Charities Act 2011, the Companies Act 2006" and UK Generally Accepted Practice as il applie5 from 1 January 2019. The financial statements are prepared on a going concern basis under the historical cost Convention. modified to include certain items at fair value. The financial statements are prepared in sterling which is Ihe functional currency of the charity. The significant accounting poliues applied in the preparation of these financial stalements are sel out below. These policies have been consistenuy applied to all year5 presented unless otherwise stated. Going Concern It is the opinion of the DirectorsffTUStees that the use of the going concern basis of accounting is appropriate because- there are no rnaterial uncertainties relating to events or conditions that may cast significant doubl about the ability of Ihe Charilable Company lo continue as a going concern.. there is reasonable expectation thal Ihe Charitable Company has adequate resources to continue in operational exisIen for the foreseeable fvture. Accounting Policies 2.1 Funds Unrestricted Designated Funds Refurbishment Depreciation Fund costs related lo small scale repairs and renovations. and the associated depreciation. Future Production and Artistic projects - to hold grant and olher monies for use on future productions and artistic projects. Building and visitor experience to hold grant and other monies lo cover building contingency expenses and for physical improvements lo enhance the visitor experience. FaGade Renovation Fund - costs relaled to the n0VatIon of the building fade and the asso¢ialed depreciation. Lighting Desk Oepreciation Fund - the depreciation cost of the li9hting desk acquired in November 2012. Resilience Projects Fund- to hold grant and other monies lo fund one-off midllong term impact projects related to the Charitae Company's strategic resilience. Bar Refit Depreciation Fund associated depreciation costs related to the renovation of the Bar I Cafe areas, and the VAT Project Fund fees and other expenses in relation to a VIeW of the Theatre's historic VAT treatment. and subsequent claim for a refund from HMRC 15
THE PALACE THEATRE WATFORD LIMITED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2021 A¢¢ounting Policies (continuedl Restricted Funds Theatre refurbishment fund- funds receivedlreceivable specifically for the cosl of the refvrbishment of the Theatre. Catalyst Arts Fund funds CeiVedIreceiVab1e specifically in relation to the AMS Council England's Catalyst Arts Capacity building and match funding scheme, to support organisalions in building their fundraising capacity and capability over a three-year period. ACE Capital Fund - funding towards capitsl works lo enhance rehearsal facilities. to improve ener9y effiuency and to replace essential specialist equipment. New Writing Fund - funding towards investmenl in writing new work. Merchant of Venice donations received lo support our future production of Shakespeare's The Merchant of Venice la creative response lo anti-semitism in Britain. sel in the London of the 1930s). Arts Council Cultural Recovery Fund - the government's Culture Recovery Fund, supporting cultural organisations through the impact of the Covid-19 pandemic. Garfield Weston Foundation - grant received fom the Weston Culture Fund to support out Take Part youth and community prcrt3rammes. Fund Transfers Transfers are made between fvnds as and when the Trustees deem them necessary, within the limits of any restrictions that are in place. 2.2 Incomlng Resources Voluntary income including donations. gifts and grants thal provide core funding or are of a general nature are recognised where there is entitlement, probability of receipt and the amount Can be measured with suffiuent reliability. Such income is only deferred where the donor has specified that the granl or donation must be used in a future accounting period. Inveslmersl income is recognised on a receivable basis. Income from charitable activities indude$: income derived from theatrical productions which is accounted for in the period in which the productions take place" grant income lo support education and youth activities which is recognised where there is enlitlemenl. certainty of receipt and the amount can be reliably measured. 2.3 Resources Expended Expenditure is recognised when a liability is incurred. Charitable activities include expenditure associated with the staging of theatrical productions and participation activities. These include both the difect costs and support COSts relab.ng lo these activities. Expenditure on materials for set. props and coslumes are aGGounled for in the consolidalp.rt stalemenl of Financial Acts'vtlies (SOFA) of the period of the production. None of this expendilure is capilalised. as sets are either disposed of. or sold on within the same financial year, or very shortly after the financial year end. Support costs represent central fijnction costs, governance costs and overheads and have been Ilocaled beeen the activities of productions and patticipation using an apportionmenl percentage calculated by comparing the direct costs attributable to each of those calegones in the.year. 16
THE PALACE THEATRE WATFORD LIMITED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2021 Accountlng Policies Icontinued) 2.4 Tangible Fixed Assets Fixed assets (other than those relating lo productions see above) are stated at historical cost. Depreciation is provided on all langible fixed assets al rates calculated to write each asset down lo its estimated residual value evenly over its expected useful life, as follows.. Plant. equipment and machinery Information technology Leasehold improvements Long leasehold propety 10¢A _ 25Yo Straight line 100h _ 33Vo Straight line 200/0 slraighl line 2.SQ/o Straight line 2.5 Stock Stock is valued al the lower of cost and nel realisable value. after making due allowance for obsolete or slow moving items. 2.6 Leased assets and obligalions All operating lease rentals are charged lo the SOFA on a straight line basis over the lease term. 2.7 New Writing Arrangernents These are advance cosls incurred for possible future shows where the Charitable Company commissions a writer lo work on a production which may or may not eventually be produced. The costs are written off lo the SOFA in the year in which they are incurred. 2.8 Pensions The Charitaile Company operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Charitable Company lo the fvnd in respect of the year. 2.9 Taxation The Charitable Company is exempt from Corporation Tax a$ 811 of its income is charitable and is applied for charitable purposes. The Charitable Company is registered for Value Added Tax IVAT)- irrecoverable VAT {where applicable) is included in the cost of those ilems lo which il relates. 17
THE PALACE THEATRE WATFORD LIMITED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2021 Net Incomel(Expenditure) 2021 2020 This is stated after charging= Auditors. remuneration Depreciation Operating leases - land and buildings 8,888 315.815 8.490 308.661 24.048 Incomin9 Resources 2021 2020 Grants Receivable and fees Unrestricted income from: Arts Council England - grant Service provision fees - Wattord Borough Counol 805,118 238,401 790,571 244.844 Restricted income from". Arts Council England - Cultural ReVery Fund grant Garfield Weston Foundation- granl 248.481 315.0(10 1.607.000 1.035,415 Incoming Resources from Charitable Activities Production.. Box office income - produced Box office income- co produced Box office income - presenled Other production income Film sales Hire fees income Front of house sales 921 428,652 22.276 72,528 168.889 29,657 65,172 26,249 6,056 24 598 7.725 15,324 813.423 Partt'cip21ion'. Educational activities Extemal funding 8.457 3,400 31,564 6.196 11.857 37.760 Other= Tax relief Sundry income 6.418 3.221 113.516 37,599 9,639 151,115 Total income from charitable activities 36,820 1.002.299 Income from grants receivable and fees was £1.607.00012020 - £1.035.415) of which £563,481 12020 - £ NIL) was attributable to restricted funds and £1,043.51912020- £1.035.415) was attributable to unrestricted funds. Income from charitable activities was £36,820 {2020 £1,002,299) of which £ NIL 12020 - £ NIL) was attribulabl8 lo restricted funds arKI £36.820 (2020- £1,002.299) was attributable to unrestricted funds. 18
THE PALACE THEATRE WATFORD LIMITED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2021 Employee Information - Staff Costs 2021 2020 Establishment salaries Establishment social security costs Establishment pension costs Nonslablishment salaries Nonslablishment social security costs Non*stablishment pension costs 671,778 59.621 15.269 169.897 1,158 1.573 740.439 66.436 15,278 349,735 2,852 5.057 919.296 1.179,797 One employee {2020- one) reiVed emoluments between £60,000 and £70,000. The total amount of employee benefits received by key management personnel. considered to be the Executive Team, during the year was £177,006 {2020- £202,061)- Average Monlhly Number of Ernployees during the Year Part-tlme Casuauseasonal 2021 2020 Establishment Non Establishment 25 37 27 29 Transa¢tion$ with Directors The Directors of the Charitable Company received no remuneration or reimbursement of expenses in Ihe year (2020- £nil). . Total Resources Expended 6.1 Analysis of Charitable Expenditure Direct costs SupF)Ort ost$ Total 2021 Total 2020 Production Participation 98.732 16.693 1.201.666 195.620 1.300,398 2.333,244 212,313 98.782 115.425 1.397.286 1,512,711 2.432.026 Charitable expenditure was £1.512.711 {2020 - £2.432,026) of which £229.06912020 £216,138) was attributable to restricted funds and £1.283.642 12020 £2.215.888) was attributable to unrestricted funds. 19
THE PALACE THEATRE WATFORD LIMITED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2021 Total Resources Expended (continued) 6.2 Analysis of Support Costs Charitable Governance Activities Costs Total 2021 Total 2020 Wages Eslablishmenl Administration Marketing and box office Oepreciation Bank charges and interest Legal and accountancy fees Board Audit 866.127 92,033 93.047 35.200 299.173 2.372 866.127 92.033 93.047 35.200 299,173 2,372 446 854.855 173,757 100,264 67,592 291.379 3,841 2,987 320 8,540 446 8.888 8,888 1,387.952 9.334 1.397.286 1.503.535 Support costs are allocated as shown in the table above and then further apportioned belween the two charitable activilies undertaken. Support costs are allocated on a basis consistent wth the use of resources. Tangible Assets Leasehold Improvement projects Plant Long and leasehold Equipment machinery property Total . Cost At 1 April 2020 Additions 407.808 721.554 6,503 349,984 7.819.178 9,298,524 6.503 At 31 March 2021 407.808 728.057 349,984 7,819.178 9,305.027 Depreciation At 1 April 2020 Charge for the year 321.975 58,013 594,456 57.368 334.748 4.955 3.028,394 4,279,573 195,479 315,815 At 31 March 2021 379.988 651,824 339.703 3.223.873 4,595,388 Net Book Value At 31 March 2021 27.820 76.233 10.281 4.595.305 4,709.639 At 31 March 2020 85,833 127.098 15,236 4,790.784 5,018,951 20
THE PALACE THEATRE WATFORD LIMITED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2021 8. Investment- subsidiary trading companies 2021 2020 Shares in group undertakings: Cost at 1 April and at 31 March 200 200 The Charitsble Company owns 100°A of Ihe ordinary shafe capital of The Palace Theatre Wafford Productions Limited, vthich is incorporated in England and Wales. The subsidiary company was domianl during the year. The Charitable Company owns 100°A of the ordinary share capital of The Palace Theatre Watford Bar Limited, which is incorporated in England and Wales. The Charitable Company has 1000/0 control over this SLTrbsidiary company. This subsidiary company has been donnant from 1 April 2015, but previously operated lo provide working catal finance for the charitable parent Charitable Company by covenanting distributable profits to The Palace Theatre Wafford Limited. The subsidiary cornpany operated catering facilities at the theatre. 9. Stocks Stock 2,564 6.207 10. Debtors Trade debtors Prepayments and ac¢rued income 6.453 211,261 21.505 268,453 217,714 289,958 11. Creditors: Amounts falling due within one year Trade creditors Amounts due lo subsidiary companies Social security and other Lqxes Other creditors Accruals and deferred income 26.236 200 14.536 22,357 80.127 57,219 200 17.021 20,077 146,536 143.456 241.053 Included in accruals and deferred inw7ie is deferred income of £19.970 (2020 - £65.972) which comprises advance ticket sales. £65.972 was released to the SOFA in the year to 31 March 2021 and £19.970 will be released to the SOFA in the year to 31 March 2022. Included in other creditors are defined conlribution pension liabilities of £3.078.51 all of which has been funded by vnrestricled funds. 21
THE PALACE THEATRE WATFORD LIMITED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2021 12. Unrestricled Designated Funds The income funds of the Charitable Company include the following designated funds which have been sel aside out of unrestricted funds by the Trustees for specific purposes.. Balance at 1 April Incoming Outgoing 2020 resources expenditure Balance at 31 March 2021 Translers General Fund$ 250.231 1,493.106 (1.259.387) {233.159) 250.792 Designaled Funds Refurbishment Fund 8.989 Future Production & Artistic Projects 136.316 Building and Visitor Experience 74.443 Facade Renovation 14.357 Lighting Desk Depreciab'on 7,604 Resilience Project Fund 40.255 Bar Refit Depreciation Fund 5.831 VAT Project Fund 19.375 (1.123) 7,866 223.316 161,443 87.000 87.000 {14.357> (3,8011 3.803 133.255 93.000 15.8311 (6501 18,725 307.170 (25,762) 267,000 548.408 Unrestricted Funds 557.402 1,493.106 11.285.149} 33.841 799,200 Balance at 1 April Incomlng Outgoing 2019 resources expenditure Balance at 31 March 2020 Transfers General Funds 250.644 2,144.962 12,194,873) 49,500 250.233 Designated Funds Refurbishment Fund 10.112 Future Production & Artlstic Projects 174,915 Building and Visitor Eerience 74.443 Facade Renovation 28,715 Lighting Desk Depreciab'on 11.405 Resilience Project Fund 46.755 Bar Refit Depreciation Fund 11.664 VAT Project Fund 19.375 (1,123) 8.989 136.316 74.443 14.357 7.604 40.255 5.831 19,375 1,401 140.000) (14.358) (3,801) (6,500) (5,833) 377.384 1.401 {25.115) {46.5001 307.170 Unrestricted Funds 628.027 2.146,363 12,219,988) 3.000 557.402 A description of the designated funds can be found at note 2.1. 22
THE PALACE THEATRE WATFORD LIMITED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2021 13. Restricted Fund The income funds of the Charitable Company indude the following restricted funds where the donor has specified the purpose for which the fvnd is to be used.. Balance at 1 April Incoming Outgoing 2020 resources expenditure 8alan¢e at 31 March 2021 Transfers Theatre Refurbishment Fund Catalyst Arts Fund Arts Council England Capital Fund New Wriling Fund Merchanl of Venice Arts Council Cultural Recovery Fund Garfield Weston Foundation 4.790.784 15.763 77,570 478 113,523 (195.479) {2,786) (18,496) 4.595.305 15.045 59,074 478 113,523 202.046 315.000 2.068 248.481 315.0(XJ (12.594) 133.841) 4.998.118 565,549 (229,355) 133.841) 5.300.471 Balance at 1 April Incomjng Outgoing 2019 resources expenditure Balance at 31 March 2020 Transfers Theatre Refurbishment Fund Catalyst Arts Fund Arts Council England Caltal Fund New Writing Fund Merchant ofvenice 4,986,263 16,752 96.066 478 {195.4791 {2931 118.4961 4,790,784 15,763 77.570 478 113,523 {3,000) 115.665 (2.142) 5.099.559 117.969 {216,410) {3,000} 4.998.118 A description of the $tricted funds can be found at note 2.1. 23
THE PALACE THEATRE WATFORD UMITED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2021 14. Allocatlon of Net Assets botweon Funds General Designated Restricted fund fund fund Total 2021 Tangible fixed assets Investments Currenl assets Current liabilities 43.591 200 350.457 {143,456) 11.669 4.654,379 4.709.639 200 648.092 1.533.288 1143,456} 536,739 Nel assets 250.792 548.408 5,31)0,471 6,099.671 General Designated Restrsct¢d fund fund fund Total 2020 Tangible fixed assets Investments Current assets Current liabilits.es 113.816 200 377,269 {241.053) 36.781 4,868,354 5.018.951 200 777,422 {241.0531 270.389 129.764 Nel assets 250.232 307.170 4.998,118 5,555.520 15. Rovenue Commitments The Charitable Company's annual obligation under an operating lease is as follows, analysed according lo the date of the first review of the lease. 2021 2020 Land and Land and Buildings Buildings Operating lease which expires= Within 1 year 12.024 16. Capital Commitments There We no contracted Capital ¢ommitments al 31 March 2021. {2020 - none). 24
THE PALACE THEATRE WATFORD LIMITED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2021 17. Related Party Relationships and Transactions During the year. the following Trustees have been connected wrth organisations that have made payments to the Charitable Company: Covncillor Karen Collett arKI Councillor Timothy Willk?ms- Wattord Borough Council- Service provision fees of £238.401 (2020= £244.844) and further funding of £nil (2020 - £85.000>. Deborah Lincoln - Warner Bros Intemalional - sponsorship NIL {2020= £3.0001.) Dan Baxter Wafford Bid Limited Wice Chair Sponsorship Income £NIL {2020'. £2.500) Marketing Expense £NIL {2020'. £1,500) and 25