THE PALACE THEATRE WATFORD LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 MARCH 2021
*AAKIX3WA*
2411212021
COKIPANIES HOUSE
#32
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 Lin￿oOd
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 cla￿ndOn Re￿d
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
p￿Pann9 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 opportUn￿Y 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 ente￿d 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 Freelan￿r 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 seCU￿d furlough income through HMRC'S Coronavirus Job
Retention Scheme
Protected jobs. supporting casual workers. U￿ng 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 re￿pening.
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 s11x￿Y 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 lndoorsl0utd￿rsI0n1lne/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 DI￿10r$ 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 finan￿31 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 A￿untIng
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 proV￿e 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 proCedU￿S 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 prO￿dureS 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
signif￿an1 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 be￿een 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 a￿l¥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 fa￿de 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 Charita￿e 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 be￿een 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 Re￿Very 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
Non*slablishment salaries
Non*slablishment 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) re￿iVed 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 ca￿tal 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 E￿erience
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 Cal￿tal 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