THE PALACE THEATRE WATFORD LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 Company Registration No. 3218719 (England and Ylales) INIIIIIIIIII Al1 2111212023 COMPANIES HOUSE THE PALACE THEATRE WATFORD LIMFfED CONTEMrs Pag• Oirectors and Advisern Report of th8 DiroctOf8 3-12 Report of the Ind•pendent Auditors 13-15 Statement ol Financial Activities 16 Balan¢¢ Sheet 17 Stsloment of Cash Flows 18 14otes to the Flnanclal Ststem¢nts 19-29 THE PALACE THEATRE WATFORD LIMITED DIRECTORS AND ADVISERS Dlr•¢torn Chair John Hunt Kenny Dada Marityn Devonish- (appointed 4 July 2022) Agnieszka Dychton . Anne Fènton H￿rtard Groves Mark LavKence Carol Lingwwd 8it¢i Mauthoor 8inita Mehla-Parmar Brett Spen¢*r Patrick Stoddart Jayne Trotman Tirn)thy Wlliams. IiesNJned 22 September 20221 Govemoft¢8 Committee Governance Commthe Governance Committee Governance Committee Govemanc& Committee Directors nominaled by Watford Borough Counol. Secretary Jamie Arden Registered Office 20 Clarendon Road Wafford Herts WD17 IJZ Bankorn National We5trnin5ter Bank pk 72-74 HNJh Streel Herts WD17 28Q Audltorn PKF Lrttlejohn LLP 15 Westfe(ry Cirtxjs Canary Wharf London E14 4HD Charity Reglstp•ti¢)n number 1056950 Company Regtstration number 3218719 THE PALACE THEATRE WATFORD UMITED REPORT OF THE DIRECTORS The Directors ol the Charrtable ComFony present herewith th8ir Annual Report. togethar WFih the audtted Financial Statements for the year ended 31 March 2023. This report is intended to fulfil the requirements both of Section 234 of the Companies Act 2006 and of the Charities A¢t 2011.The Directors have adopted the provisigns of the Statement of Recommended Practice 'A¢covnting and Reporting by Charitiès" in PTeparing the annual reFWt and firBncial ststements ofthe charty. R•ference and Administrative Delails The Palace Theatre W8llord Limited is 8 charita￿e c￿npanY limited by guarantee and govemed by men￿rA￿JUrn and Artides of A&%ociation dated 17 May 1996. Public Benefft The Trustees confiffli that they have had regard to the guidance on public benefft issued by the Chanty Commission when considering the otsjectives and activities of the Charrtable G¢)mpany. Board of Difectorn The Directors and Trustse5 from 1 April 2022 to the dale of the signing of the Financaal Statements were as shown on page 2. The Direciors shall have PV•¥er at any tim• lo apwnt any person to be a Director, but so that the lotsl numbèr of Diie¢tors Shall not at any ts.me exceed the number fixed in accordance with the Articles. Any Director so apwnted shall hold office onty until the followng Annual General MeetM)g. and shall then be eligible frjr ro-eleth"on. but shall nol bB tsken into actounl In determining the Dirertor5who are lo retire by TOtat50n at such meet'n9. Two Direclors are nominateij by WatfoTd 8oTough Council. IThere are spe¢ifi¢ iequirements associated with the rotstion of Directors. the terns of which are stsled in ll Memorandum and Articles ofAsscoalKml. Trustees Teceive ongthng training. indUd￿9 attendance at Strateg￿ knTknng parties. or away days. The Directors and Trustee5 delegate the day to day running of the Organi￿110n to.. Brigid Lam)our- Art&8tic Director and Chief ExecutNe {until April 20231 Steve Marrnicffj- Ch￿f Execulive and Director of Programming {from Juty 2023) Jamie Arden- Executive Director and Company S￿retary Andrew Phillips- Director of Finance Powern tsf the C¢)mp•ny The Directors take this opportunity to confirm that under Clause 3 of the Charitable Company's Memorandum of AS￿l0110n, it is empowered to carry out the acliv¢ties ￿vieWed In the Ann¢Jal Report inclLtding, but not limited to. the beneficial investment of the Charitsble Company's fvnds. Stratogi¢ Obi•ctiv•s From April 2022 Watfor(I Palace Theatre entered into thè last yoar (Exten&on year) of the existing funding agreement with Arts Council EngLgnd- ￿8(lIng into a new three yeai agreement secured as an NPO from April 2023-March 2026. April 2023 will also mark the ¢yganisabon nTh)ving into delNeiing their visioTr for the Theatre. THE PALACE THEATRE WATFORD UMITED REPORT OF THE DIRECTORS WPT Mission Great Stories that entertsn. provoke, and In￿￿. on our stage and in our streets. WPT Vl$lon Everyone's Y￿1CoMe at the Palace. We aim to inspire and entertain through hKJh-qU81Fty, invenlive. and ambitious drama. new plays, musicals. dance and farnily shcws,. free outdoor festivals.. diverse sland-up; and 8 much-loved tra¢Jitional pantomin*. S•• yourself on our$tsg•. Wewant our shows to l(x)k like ouraudience" reflecting ourdiver8e communty, and fully fepresenting women. We encourage and celebrale ¢￿a￿Vity ￿ our town. gNing a platform to our ¢cKnmunilies and our young people. S•• It hore first We are proud that our kxamy prrxluced Sh￿ home-grtwm talent have toured natK)n81ty and intema*K)nally. been seen on BBC iPlayer. awards and transferred to the West End. WATFORD PALACE THEATRE - INSPIRATION ON YOUR DOORSTEP WATFORD PALACE THEATRE - STRATEGIC OBJECTIVES 2018-2023 For the period 2018 to 2023, the charitls strategic objectives are as follows.. 1. STRATEGIC OBJECTIVE ONE- STRIVE FOR EXCELLENCE To inerease the quality. diversty and impact oflhe work produc¢d at VVPT. 2. STRATEGIC 08JECTIVE TWO- ThINK LOCAL ANO 8E DIVERSE Develop work for a local aUd￿nce and fttrther dNergfy the aUd￿ce and pathipant demographic. 3. STRATEGIC OBJECTIVE THREE - 8E FINANCIALLY RESOURCEFUL. RESILIENT. SUSTAINABLE AND ENTREPRENEURIAL SignffiGanUy increase and d1Ve￿rfY contributed and eamo(l irKom¢ to p￿￿￿8 oiganisational resilience. 4. STRATEGIC OBJECTIVE FOUR- PARTICIPATE- BE COLLABORATIVE & CREATNE IN PROMOTION & AUDIENCE OEVELOPMENT Oevelop a stronger reLationship with the community to promota ond prowde OPFOrtunities lo P8rticipate wth the work m*Je at the venue. OUR ACHIEVEMENTS AGAINST OUR OBJECTIVES STRATEGIC OBJECTIVE 1: STRIVE FOR EXCELLENCE To Increase the quality. diverslty and impa¢t of tho produc•d atWPT IGH QUALrrY PERFORMANCES AND ENTERTAINMENT ON OUR STAGES 2022 was a year where we t￿)k our first steps intr) sustainable recovery from the ongoing irnpact of the Covi¢J 19 pandemic. It was a ye8r where we ¢oukl benefit from opentn9 fuity without restrictrjns and gal back lo making and hoSt￿g theatre on our various 5tsges. THE PALACE THEATRE WATFORD LIMITED REPORT OF ThE DIRECTORS The Mercha e 1936 11 was also a year that saw us stage one of our most aMb￿.0uS shcms to date, wth staging of our long- awaited produdon The Merchant of Venice 1936. stsrring Tr8¢y Ann Oberm8n As Shylock, and Brigid Lamiour dbrecting herlost show for Watford p3￿Ce Theatre. This proved to be otsr most successfijl d(ama shuw we have staged at Wafford Palace Theatre giving us momentum and ¢onfidenc8 to move forward conf￿entlY into our new chapter as an oigani5atr"on. The sh continues to have fijture life beyond Wattord, or•Jinalty transferring the p[oduct￿n lo HOME in Manchoster. before rekunching the show again for an eight-week UK tour. in partnership wth our commercial produceis Trafalgar Entertsinmont. This included relaunching the show al the Swan Theare at Ihe RSC, before lo¢Jring to venues such as York Theatre Royal, Chichester Festival Theatre and Wlton$ Music Hall in London. before returning to Stratford Upon for anolher RSC run in Swng 2024. As well as the Stage productioft. we also launched on of our most Innovative Education progr8mmes to complirTtenl the slage production. Our Merchant ofvenice educab.on programme incjuded three core strands a SCHOOLS WORKSHOP PROGRAMME 7Mth our partners Stand Up - that challenged antisemitism. isLamoph¢)bia and all forms of di￿riMination and promoted ￿5￿￿GI. rigM5 and respongbilities in young people's lives. This a150 included a FREE SCHOOLS PERFORMANCE as part of the njn. where 600 free ti¢kets were yiven lo local t8rgel schools to engage wrth the prcKluction and its themes. We also develoFed an interactive DIGITAL EDUCATION PLATFORM that provKled an exterKled platform from the production that explores the themes in more detail. provKled an insiyht into the backdrop oftho produ¢tth-the Batt of Cable Streat-and behind tha scenes m8terials (vid￿￿aUdIoflrn8geS) Ihatopen84 up the Theare making deashans of the acaors. their ehar8¢ter studies, the Dice¢tor th01￿$ in the rthears81 room, 8nd the creative team5 influences wth making ad staging this prcduction. The digrtal platfom) also provided a legacy for the production. to ensure in the venues the projuction is vi￿ting on the ewJht-wèek commercial tour, to any future lifv of the produG*on- lh* digitsl plalfomi re50ur¢es WAI o)ntinue lo eiist and Support the IBaming. Our last 5tsnd of the educats.on programme was ORDINARY VOICES. OLtr communty project, that brought the people and stories of ¢abk street in 1936 to lrfe as a pre-StTh¥ storytelling programme for gudien(*s visiting the production. M&rch8nt ofvenicè 1936 A￿d￿ceS in WatfoTd- 7261 acr055 the nJn" "Nolg.. the fwures ffor HOME (MancheslerlRSC Run and 8 Week Tour ¥Y41 1•alu￿ in next yearfs stalutory accounts). Digital ￿atforM engagement (to Marth 2023)- Page of over 20.0￿ and ngarty 8.000 yniquo users.. mei¢harrtofvenKe1936.¢0.uk rnerthant1936.￿.Uk WPT al Pantomime.. ea and the Beast 2022 was the first time, since the pandemi¢, th•t we could stsge a full ¢8pacity Pantomime again and thi5 year we staged Beauty and the Beast. Welcoming back for his 10th yeaf, our wonderhjl Pantornime Dame Terrence Fris¢h, returning lo play Sarah Sew-n-sew. to delKJhl audren¢es and lead the performance company in our festive extravaganza. Setting our Panto adaptats'on of the Class￿ Story in Paris, against th$ Rose Rouge Theatre'stalent compet￿"0n where Belle has visions ofbecorning an artist and meets her 8e8u, who is auditioning in the ts2ent conlest to eacn hts place on the bill to perfomi at the venue. However, our villain the dastardly Mag￿lan Dé￿ Vu, tries to stop OUT young coup￿. through any means necessary, turning his rnag￿a1 spells towards Beau and tuming him into a Beast. Slaying tru& to the beloved fairy-tale. the curse can only be broken if Someone truly falls in love wrth the Beast before Ihe final rose Fe.tal falL8 off. We were delwjhled that the Pantomime returned to audIer￿e numbers seen pre-pandemic. If not lor illMs$ in cast and the consequence of shows sadty bw'ny can￿lled, woukd have met thv box Dfficg target of £375K. £363K was final finanrAal income of t￿kets sold and heaNhy audience numbers returning- 17,802 - stsnd8 us in good stead and gives us confidence that audiences are returniTrJ to our Theatre 89 we rethver from the pandemic. THE PALACE THEATRE WATFORD LIMITED REPORT OF THE DIRECTORS OTHER ACHIEVEMENTS OF THE YEAR: ON OUR PMIN STAG Produ¢edlCo roduced shows ma in Walford.. A81GAIL'S PARTY written by Mike Leigh GLITTERBALL written by Y85min Wkje lour C0-P￿dUCtIon vAth Rif¢ol Little Women written by Louisa W Ar*tt. adapted by Anne￿arie Casey {our co-product￿￿ wilh Prtlochry Festival Theatre) UNDER WATER c￿prOdUced wth the GREEK NATIONAL OPERA and commissioned by Belfast Children's Fes*"val. Watford Paace Theatre and The Lowry. Salford. r main ROALD DAHL ANO IMAGINATION SEEKERS by Get Lost and Found MORGAN & WEST: UNBELIEVABLE SCIENCE by M(Mg¥n & Wesl WE STILL FAX by Ants Theatre THE BUBBLE SHOW by The Highland Joker IETan 8ackler) SEANCE by Daikfiekl, lor Halloween NICK SHARRArrs HALLOWEEN DRAWALONG by Makin Projects for Halloween GOURD FRIENOS. MAKE & TAKE by Vickne Hojden-swnlon for Halloween PUMPKIN CARVING 8y DADA Ltd {Raphael A. Dajal for HaIl￿¥een NOSFERATU by Minima (Alex Hogg) for Hallcyween DEAD CIVILISED." Cocktsils and Craft by Luminate Watford Ltd for Halloween THE ADVENTURES OF CAPTAIN CALAMITY by MAD House Entertainment Ltd {Dov Ciironl THE LITTLE PRINCE by Protein Dance SHARK IN THE PARK tamity shtyv by Nonsense Room Prc¥Juctions {Matthth¥ Brown) POP PRINCESSES famity shthv by Sweeney Efttertalnm￿t Ltd T. REXTASY - The Greatest Hrts Tour by Sweeney Entertainment Ltd HOFESH SCHECHTER- contemporary dance shthv 2.0 by Hofesh She¢hler Company Ltd ZOG AND THE FLYING DOCTORS famity show by Flec￿e BALLET BLACK.. Say rt Loud & Black Sun by Ballet Black QUEEN RHAPSOOY by MRC PresentsrnARC Entsrpri$e$ Ltd THE ELVIS YEARS.. The Story ofthe King by Mario Productions Ltd THE KING OF REGGAE - THE MAN - THE MUSIC by Rush ThealrB Company AN EVENING OF BURLESQUE by Entertainers Show Providers Ltd Fringe 22.. GENTRIF'CKED ￿Ork in Prcgress) by Kate L Euiott Fringe 22". STARDUST BIG BAND by Amy Spall Fringe 22.. THE ELECTRIC HEAD by ElectrK HeadlAlan Ronald stand U ramm• on our main sta SIMPLE POLITICS- ¢omediG stsn(lup shvw- by Simple Politics Limited STEWART LEE.. sNO￿LAKE1 TORNADO by s￿art LeeTrassword Prcrtjudions Ltd RUSSELL KANE LIVE- THE Ess￿ VARIANT! By Russel K¥nelOff The Kerb Productions Limitsd COMEDY LATES 1 - Oclober'22 by Makin Projects Ltd COMEDY LATES 2 - November'22 by Makin Projecls Ltd COMEDY LATES 3 - December'22 by Makin Projects Ltd 8RING YOUR OWN BABY COMEDY SHOW- Seplember'22 BRING YOUR OWN BABY COMEDY SHOW- November'22 BRING Y￿R OWN BABY COMEDY SHOW- Janu8ry'23 THE PALACE THEATRE WATFORD LIMffEO REPORT OF THE DIRECTORS STRATEGIC 08JECTIVE 2: THINK LOCAL AND BE DIVERSE D•velop work for a lo¢•laudienco and further diwwsify the audience andparts"¢ipant d•mographi¢. LOCAL SHOWS FOR DIVERSE AND INTREGENERATIONAL COMMUNITIES: Watford Pal* Theatre VMS one ofthe PK)r￿[S ofthe Theatre ￿ Education movement. as one ofthe first th&*r& in the l￿S to havo o dedi￿ted Theatre ￿u¢41￿)n department Atwatford Palaee Theatrewe celebrat0tt￿CreatiVlty of IC￿al chiklren, young people. and cross generational community pariicipants, with a range of creative opportunitses - from projects aimed at deveksping skills, through to ses3KJns that engender eNi¢ cohesion and provTrJing the opportunities to connect and make new friends particularly important for generaiion5 emerying from the isoLqbon brought on by the lo¢kdowns and covid-19 pandemic. Our Take Part activities with. in a fun, ￿dUSI¥e. and supporknve environment where everyone can Ihrwe. We proudly work alongside a variety of partner org8ntsa1￿nY a¢yoss the 8rts, voluntary, heatth and wellbeing, and youth sectors. to deliver cfeatNe projects and programmes. TAKE PART: VPT Palar* Youth TheaTe Young Orbital Youth Theatre Hertfordshire Film FeslNal ABIGAIL'S HOUSE PARTY Youth Advisory Board Palace Young Company Summer Propct- BUFFERING PALACE SCRATCH NIGHT STORYTELLING and STORYPLAY Projects ENRICH FESTIVAL by EnrichlHert3 Inclusive Theatre People's Palace Company Projects Communty Program- MASK WORKSHOPS I WTPI TRESTLE Community Program - MOVING MUSEUM OF MOTHERHOOO Pak¢e Young Company- SE￿LE DOWN TAKE PART OPEN DAY CREATIVE HUBS- Meriden and L8av8sden Walford Centenary Heritsge Project CHINESE CULTURE SHOW- Community Cekbrab'on DIWALI 2022." SEVENS- Communty celebr3b.on BLACK HISTORY MONTH - Community Cdebration HANUKKAH- Communrty Celebration CELEBRATE VAISAKHI- Community Celebration STRATEGIC OBJECTIVE 3.. BE FINANCIALLY RESOURCEFUL. RESILIENT. SUSTAINABLE AND ENTREPRENEURJAL &gn￿¢8￿11Y inC￿aSe and contrJ"biJted ande8medinLxym t0prov￿9 org8nis8tion81 resMienc&. HIRING THE THEATRE TO GENERATE MORE EARNED INCOME: Vvhetherthrough hires of Ouf main stagè to communty groups, amaleur companies and c8lÈbrathonslevents engaging with variou5 communthes, kncal groups using the spaces or their weekty classeslsocjals. or hir¢ng our building out to photoshoots. film bxations. business meetings of companyl¢har*ty award ¢eremonies- we rK)nslanlty find ways of sweating tyjr a55et (our beautrful grade 11 listed building). and ensuring Our building is open and porous as 8n important wnmunty asset and twi centrg hub. THE PALACE THEATRE WATFORD LIMITED REPORT OF THE DIRECTORS Commun" shows •nd Hfres: PIRATES OF PENZANCE by Abbo15 Langley Gilbert and Sulr¥an SLxi8ty IALGSS} WATFORD JAZZ FESTIVAL by Walford Jazz Junction FAME by Rare ProduGtions Ri$8 Studios hi TWO WORLDS CONCERT by London Gospel Choir Trinity Perfoming Arts Academy hire EVITA by Cassio Operatic (Casgo) NHS All Stars hire IOLANTHE by Abbots Lar@ley GilbÈrt and Sulivan Soo'ety IALGSSI PALACE ART GALLERY - various art inslalLitiOn￿eXh1bIlS in partnership with Amanarli5 (Amma Gyanl SATSANG SINGING LADIES- regulai session5 KNIT AND NAThER- regular knitting se590ns in our ¢afélbar 5pac8 STRATEGIC OBJECTIVE 4: PARncipATE - BE COLLABORATIVE & CREATIVE IN PRONIOTION & AUDIENCE DEVELOPMENT Develop a stronger relationship with tho community to pron￿￿8 4nd provid• opportunities ¢0 participate with the work made at th• ￿nUe. DYNAMIC AUDIENCE ENGAGEMENT BEYOND THE MAIN STAGE - OUTDOOR ARTS.. Imagine Watford. the leading FREE outdotsr arts festival in the three ¢ountks returned post the lockdown back into the main Highstreot in Watford - for on8 day only (due to budget rLJnstraintsl. A key part of Watford's event calendar, Imagine Wafford is an ex¢iting outdoor arts festival bring4n9 high-quality, open access performance to the streets of Watford, free for all the family. The event was in its eleventh year and after an absence from the centre ofwatforf due to ts COVKI pafitjem￿, the aim was to rnlum and to fegrow 3udien¢es ￿th 8 packed on&day event. Despite being onty ¢Jne day. the day was packed wth the usual wonder and m89ic we a5soci*e wiy) the festival. Imagine Watford brought to the Highstreet, the unexFected. flambjyant, brave, bright, lamily frtendly high-quality arts for all all for free. Alwng again or Ihe Peop￿ lo ¢ome together 3nd experience brilliant art in the stree15 where they live- bringing out their inner child and through a dynamic prograrnme of wodd ¢l¥ss arts that a￿ cheeky, a little bFtwikl. vwral, and anarchi¢. but also shows and perfom)an¢es with bucket loads of tenderness and heart - the aim was lo devekip a programme of wonder lo open Imaginat￿)nS. In 2022 the festival programme leatured: 11 art4Strc companies (including new commissions and local freelaneers) theatre. circ#Js, dance. and mu&c perfomiances local and nat￿nal arb'sts a mix of static stsges, lnstsllati￿$. and rowning Shows artistic on4ite decoration and inslalLalions transfomiing the Highstregt into a playground ol . wonder. P￿a¢e Youth Th8alr8 engagemonl All artists had strong track records of ￿rformIng in similar outdoor fvsts'val settings 8cross the UK aThJ Europe. We 81s0 invested in some exc4lsng new P￿e$ of work through our commissioning Strand. Victoria Cutf, (a lo¢al artist ￿mMiSSIO￿bI. made an outdoor marbse run $vpported by tl)e theatre'5 produ¢tion tearn and producing team. to create an interactive and immersive Marb￿ run game from sustainable and iecyclable materials- 811 lo explore the themes of environmenw reS￿r￿lb￿'ty. precipyt8tK*n, and the water cycleslsaving. We also ¢ommwh)ngd Timeless by Joli Vyann that has since toured extensivety to f8$tival$ a￿O$S UK and .Eumpe. Imagine WatkJrd- Aud*nce engagement- just over 10.000 visrted ¢)¥er Ihe one day. Imagine Watford is PrOgramft￿ by.. Watford Palxe Theatre and funded by Watft>rd PaLace Theatre, the Arts Counul England, and Watlord Borough Counril. spong)￿ by Frank and He￿n Ne81e. THE PALACE THEATRE WATFORO LIAl￿ED REPORT OF THE DIRECTORS EXTENSION YEAR 2022-2023 WORKING TOWARDS A NEW VISON FOR THE ORGANISATION - APRIL 2023 April 2022 March 2023 we a key ye8r as wa pivot from Ihe older business play 2018-2023 and move towards a new vison oi the Organisation. This new vision was SUPFOrted by Ouf successful acceptan￿ into the new National Portfolio framework 2023-2026 from our major stakeholderArts Council England. Thts was Coupled wrth wntinued support under a 5er¥ice level agreement by our kxal authoty Wgtlord Borough Council. to prowde cvlture to the town. WPT . NEW POSITIONING 2023-2026: Watford Palace Theatre (WPTI is WarfoTd's'Pa1a￿ of Entertainment~ provKling a great night out. th& best shows and something lor everyone. WPT is a succe55fv1. indu5ive. and ambitb)us ￿rd-wnnln9 PrOfe￿Onal theatre and k)cal charty. The organisation receives CO￿ funding from Arts Council England as one of their key National Portfolio Organisalions wrthin the Three COunt￿S. reg￿n of Hertfrjfdshire. BuckiThJh8mshire. and Bedtord¥hire. and has strong parfnership support ￿th Watlord Borough coun￿1. Our ambition for excelen¢e is supported by our sknlled and ￿$ped&d Technth Pr0dL￿tIoN department, housed ￿￿thIft our Wutilul h&Titag8 E¢fv4ardian 600- seat auditoiium and welk resourced technical facihb'g$. As well as producing Theatre in*de the building. we also make produ¢b"ons and events in Watford that go beyond our border$ and extensively cw1￿1U￿ and tour our shows'M&Je u) Watford. across the UK WPT NE¥V VI ION- .202 TFIEATRE, COMEDY. CABARET DIIAE. DANCE=. STAND-UP. FILM. MUSICAL. PANTO. BANDS. &AFE. BAR, GROUP.S. MASTERCLASSES. POPCORN AIID IOAOS MORE A GREAT NIGHTOUT THE BEST SHOWS-. SOMET,kllNG FOR EVERY'ONE . ".IMAGINE W ATFORD AXE PAA T CARE ')." SKILLS TRAINIPIG EST-ENO TRA TOURING NA TIONAL-PROFILE WORKSHOPS- LLfcAL-LAuNCXPAO The activities described above demonstrate that public benefil is being prowded by the Charsty. THE PALACE THEATRE WATFORD UMrrED REPORT OF THE DIRECTORS Flnonclal Ravi•w The Staternent of Financial ActNities shows a deficitof£295.21512022- deficitof £462.7411 for the financial year. This comprises a deficit before transfers on unreslricted funds of £82.57512022- deficit of £201,423) and a deficit on restricted funds of £212.64012022- def¢rt of £261.3181. The Dir8Ctors note lh* thi$ deficil is declared after re¢ogni$ing depre￿ation charges of£270.133 {being £40,161 appl￿￿ lo unreslricted funds. and £229,972 applied lo ￿$tricted funds). Financial Position in the C¢)ntoxt of Ongolng Commllments and Obltgatlo The Balance Sheet shcF*VS net assets of£5,341.715 at 31 March 2023 {2022- £5.636,9301. As at the same dats. Revenue subsidy amunting to £231.957 and £805.118 for the fdlowing 12-month period has been nfimied by Watford Borough Counctl and Arts Council England respecti￿. An agrwJ budget for the year lo 31 March 2024 has begn approved by the Board of Dtredors. Subsidi•ry Undertaking$ The Charitable Company's wholly own8d subsidiaiies. The Palace Theatre Wafford Bar Limited and The Palace Theatre Wattord ProdUCt￿S Limited. r¢mained domant throughout the year. Inve8tmttnt Policy The Charitsble Company hohjs sur￿uS cash on a deposilaccount lo r￿1Ve a rale 0finler8st￿mmensUIate with an appropriate level of se¢urity, whilst nol re51Tith"ng access for operab'onal PUfpose$ or payment of box office to touring companies and hires. Where sufficient surplus ￿$h remains available after due consideralion for longer tem liabilities. the Charitable Company utilises other rèlativèly low risk financial products (such as Fixed Rate Bonds) to m8ximise incorne. Parent Charitable Company'$ Rtserves Policy The Trustees h8ve Tevwed the Charitable Company's needs for ￿SelVeS in line with the guidance issued by the Charity CommissM)n and have agreed the following reserves pdiry.. the target level of unrestricted reserves is based on 70% of typ￿al box offi¢e in¢ome an(1 stx weeks running costs. Al the last calculation, the largat 1$ to hold free reserves of £250.000. The unrestricted general reserve (see page 171 stood at £250,666 on 31 March 202312022- £250,289). Thi% pJli¢y i4 re¥iewed annualty by the Trustees. Risk Assessment The Trustees have examinèd and pr￿￿ttsed the rrrf)5t ciilul risks to the Charitablè Company and. aB sull. a￿ confident that they have in place sufficient accountsbilty and fo¢ussed act￿n to protect the objectives of the charitab￿ Company. A risk register has been produced and is rev￿ed ty the Leadèrship Team and updated by the ExecJJtive Dire¢tor every two rTh)nths for considefakn.on by the 8oard. The major risk idontsfied ￿nc¢M$ the funding of the Gharilable Company. Arts Coun￿1 England and Walfor(18orovgh Counul have the right undef Service Level Agreements to ￿￿thdraW fvnding andlor request repayment 91 funtJ$ should those funds be applied to purFoses olher than the ststed ¢harTtable objectives. The Charitabl Company has pul in p18ce a lange of mitigatory measures. The Board operates a saparate govemance committee. with its own Chair. to maifttain a ts8nsp8rent al￿ obJecli¥e o¥erview. 10 THE PALACE THEATRE WATFORD LIMrrED REPORT OF THE DIRECTORS The Covid pandemic and its towards a more enderric, every Presented seasonal disease still represented the biggest risk to the Charitable Compan￿$ $uNNal in recènl years. Recovery from the lockdown closures and the end of the specAfic financial support rneasures ICJRS and Cujiural Recovery Fund monies). as well as audience confidence coming back intg Theatre5 and buying licke15 given the di￿￿Ult￿*S faced wilh the UK economy, rnade this period exception￿ty chall8nging. However, our robust fin8rt¢ial measures implemented during knGkdthYn period, couple with our prudent financial management, reserves policy, and continued lean operatrons. meant th8 Charitable Company was in a solid basa for survrying these challengiThJ economic fartors. Pl•n8 for future periods As we emerge from the Corrmawrus pandemK and $I￿lY retum to our ability to reopen and serve the people of Watford and beyond, our future pL7ns indude.. Securing our future ￿ndIng was Arts Ci>unal NPO framvwork and Watford Borough Council continues support Creating a new Artistic vi￿on, Mission. and Cor8 Purposs for the Pakc& Tho*e to 8n$ur* that the building and cuttural infrastructure is fft for purp05V In the tr*dium to longer terrn Delivering our Arb'stK programme Indoor￿Outdo0r￿onIIneI0n the road. statement of Twustees. Responsibilillès The Twslees (WI￿ are also Directors ofThe Palace Theatre W8tlord forthe purposes ofcompany law) a responsible for pieparing the Trvstees. Report and Ihe Financial Statements in accordance Mth applicab law and Unitod Kingdom A¢￿Un11n9 star￿ards Iunited Ktn9dom Generalty Ac￿pIed Athryunlrng Practte). Company and Charity law requires the Tmstees to pfftpare Financial Statements for e8¢h financial year. Under that law the Trustees have elected to prepaie the Financial Statements in accordance with the Charities. Statèment of Recommended Practice, Actounting and RePO￿"n9 by Ch8ritEs issued in March 2015 and Unrted Kingdom FinancKg1 Re￿rtIng and Accounb"ng Standards. Under Company and Charity law the Trustees must not approve the Financtal Statements unfess they are satisfied that they gi¥e a true and fair view of the statè of affairs of the Charrtable Company and of the irtcoming rèsouri*s and application of resources, including the income and expenditure of the Charitable Company {and the Group) for that ￿TIOd. In preparing thesg Finoncial Ststsments, the Trustees are required to". sew suitable ac¢ounting policie5 and th•n aFply them cvn$tstenlty,' observè the methods and principles ofth• Chglilw, SORP: make judgements and estimates that are ￿aSonable and prudent., slate whethèr applicable accounting $tsndard5 have" been foll¢￿Ved, subject to any material d$partures disck%eiJ and explained in the Financial Statements.. and prepore Ihe Financial Stslements on the goK)g concem basis untes$ it i8 inappropriats to presume that the Company will continue in business. The Trustees are responsible fof keepin9 proper attounting re￿rdS thal disckjse with reasonabk a￿￿1¥Y at any lime the financial posrtion of the Charitsble Company and ènablg them lo ensure that Ihe Financial ststements comply with the Companvas Act 2006. They are atso respon￿b￿ foi safeguarding ihe assets of the Charitable Company18nd the Group) and hen￿ for taking ￿aSOnable steps for the prevention and detectw)n of fraud and other Irregular￿.¥$. In accord8nc• company Iw. as th• C￿pan￿S Dirtctors. we confimi Ihat.. so far as we are awarè, Ihèrn is no fefevant audit inf0mlatic￿ of whth the Company's auditors are unaware.. and as the Directors of thè Company, we have taken all step$ that we ought to hav8 taken in ordèr to make OUTsefves aware ofany relevant audrt information and tr) estatAi5h thatthe Company's auditors are aware ofthat infomatK*n. THE PALACE THEATRE WATFORD LIMITED REPORT OF THE DIRECTORS Auditorn PKF Lrttleiohn LLPare appointed as auditorstothe Charitabjo Company and have indi¢aled thèirwillingness tr) continue in off￿. This report wa$ approv d by Ofder oflhe Board of Directors and ￿gned on its behatl by.. John Hunt Chair 27 November 2023 12 THE PALACE THEATRE WATFORD UMITED INDEPENDENT AUDITORS. REPORT Independ•nt Auditors. Report to th• M•m￿r5 of Th• Palace Th•atrn Watfoyd Limit•d Opinion We have audited the financi31 statements of The Palace Theatre Watford LinNted Ithe'charita￿2 wmpany'l for the year ended 31 March 2023 whlch comprise lh& Statement of FinancJ31 Acts¥￿&s, the B81ance Sheet, the C¥$h Flow Stslement and notes to the financial ststemen15. including a summary ol syJnificant accounknng policies. The financial rewrting framework that has been applied in Iheir prep8r8lion is applic8ble law end United Kingdorn Accounting Standards. including Financtal Reporting Standard 102 The Financial Reportsng Stsndard applrat4e in the UK and Republ￿ ol I￿land Iunited Kingdom Generally A¢cepled Ac￿untIng PTa¢tKel. In our opinion, the financral ststements- give a trL5e Bnd fair view of Ihe state of the ch8rTrtsble ￿MpanY'S affairs a5 at 31 March 2023 and of its in￿ming resources and applicalw)n of resource5, ￿CludiNa its income and expenditUTe, for Ihe year then ended., have been property P￿pa￿d in accor {105.447} Change in cash and ¢a$h equiv•lents in th• ye*r 1303.8381 {135.814) Cash aftd cash equbvalents at start of year 1.176.196 1,312.010 Ca•h and ca$h equival•nts a¢ end of y•ar 872.358 1.176.196 Reconciliatlon of nel expendlture to net Ilow fram oper4l*ng activities Nel e￿ndithre for ye Interest receivable Depreciation oftaJ7gible fixgj assets Ilncre8$ellDecrease in sktk IlncreasellDecrease in debtors Increa$ellDecre•sel in creditors 1295.2151 1462.741} 14.7961 {121} 270,133 272,525 1,921 4.5471 1212,7351 124.086) 25.344 188,603 Net eash flow provided from operating activiti•8 1215,348) 130.3671 The Accounting Policies and Notes on p4es 19 to 29 form p8rt of these Financtal state￿￿nts. 18 THE PALACE THEATRE WATFORD UMITED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2023 General inf0m￿lSOn and ba$1¥ of prepor•tlon The Palace Theatre Watford Limited is a company limited by guarnntee in the United Kingdom. In the eventof the charity being wound up. the liatylty in re5F*Ct ofthe guarantee 15 lirnrted lo £1 per member of the charty. The address of the registered office is given in the ¢h¥rty information on page 2 of these finan¢i8I stslemen15. Tho nature of the tharity's operalions and principal a¢b"vilies are sel out Fn the Report of the Trustees. The charity conslilutes a publi¢ ￿neffl entty as defined by FRS 102. The financial statements havè beèn pr&pared in a¢¢ordance wrth Accounting and Reporbng by charit￿$.. Statement of Recommended Practice applicabk to chafitE5 pfeparTrng their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021, the Financial Reporting Standard applicablo in the United Kingdorn and Republicof Ireland IFRS 1021. the Charities Act 2011. the Companies Act 2006 and UK Generalty Accepted P¢*bce as rt applies from 1 January 2019. The financial stat8menls a￿ ￿￿pared on a going concem basis under the historical cost ¢oDvention, modified to induda cèrtain items at fair value. The finanoal siatements are prepared in stsding whith is the functional currency of Ihe chanty. The significant accounling policies appl￿ in the p￿paratItin of these financ4al statements are set out below. These poliues have been consistentty appled lo all years presented unles5 Othe￿iSe stated. Gdng Concwn It. is the opini¢)n of the O￿lOr$[rruSteeS that the uso of the going wncem basts of a¢counbng is appropriate because.. . the￿ are no material Un￿rtainti&$ rdab.ng to events or coThJitions that may cast Significant doubt about the abilty of the Charrtable Comparry lo continue as a going Con￿rn.. . there is reasonab￿ expectstion that thè Charrtablg CDmp8ny has adeqvale resourtss to continue in operatbonal existence for the fores8eablè futuie. Accounting Polleles 2.1 Funds Unre$trlcted De¥ignatsd Funds Reftjrbishmenl Depreciatw)n Fund - costs related to smaff s¢ala ffjpirs and ¥enov¥tKJn5. and the assocaated depfecialton. Future Pr0dL￿tiOn and Artisb"c prqects - to hotd grant and other rmnies for use on future produdions and artists"c pro1￿S. Building #nd vi3itOT experience to hold gwt and other monies to cover building c￿nI￿genCY expenses and for phys(¢al improve￿￿￿tS lo enhan￿ the visitor experience. Lighting Desk DepreriaI￿n Fund - the depreaalion cost of thg lighting desk xquired in November 2012. Resilience Projects Fund- to hold grant and other moTriestofund onwff mhjnong tem impact projgds related to the Charitable Company's strategic reslience. Bor Refit Oepreciatw Fund costs ￿￿ted to the renovation of the Bar I Cafr areas. and the assoaaled depreciatson VAT Project Fund - fees and other expenses in relation to a review of the Theatre's historic VAT treatrnenl, and 5ub5equenl cjaim for a refund from HMRC 19 THE PALACE THEATRE WATFORD LthIITED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2023 Accounting Pollel•8 Iconllnued) R¢¥tricted Funds Theatre rèfurbishment f￿d - furKl$ receivedlre¢eivable smfi¢alty for the cost of the refurbishment of thg The81re. Catalysl Arts Fund - funds re¢eivedlre¢eivable speofi¢alty in ￿lat￿n lo the Ajts Council England's Calatysl Arts Capauty building and match fvnding scheme. lo support organisation$ in build5ng their fvndraising capacity and capability over a three-year ACE Cawtsl Fund - fvnding towards capital works lo enhance rehearsal facilittes. to improve energy efficiency ard to replace essential sperAalist equipment. New Writing Fund - funding towards invesknent In writi.ng new work. Merchant of Venicg - donations received to SUPF*Yt our future produ¢b"on of Shakespeare's The Merehanl of Ventce {a crèativ8 response to anti-semrb.sm in Britsin, sel in the London ol the 1930$). Arts Counul CuFtural R￿0very Fund- the governmenfs cultu￿ Recovery Fund, supporting cultural organisab"on$ through the Inp￿1 of the Covid-19 pandem￿. Garfield Weston Fountlab"on - grant received form the Weston Culture Fund to support our Take Part youth and communty progiammÈs. Amovnls a￿ drawn down against the fund and transferred to the general fund when expendFiuro 1$ in¢urred. Fund Transfers TrafisfeTS are made behyeen fvnds as and when the Tmstees deem them necessary. wtthin the thmits of any restri¢tion5 that are in place. 2.2 Incoming Resources Voluntary income induding donations. gifts and grants that provide core funding or are of a general nature are recognised where therè is ent￿eMent. probat%"lty ol receipt arKI the amunl can be measured with sufficient reliabilty. Such income is onty defer￿a where the donor has Specif￿ that the grant or donab.on must be used in a fvture accounting peric¥J. Investment income 1$ reo)gni8ed M a receplable basis. Ineome from charits￿e activities includes: income derived from theatrul productions tlthich 1$ accounted for in the period tn whic* thg prOduC￿n closes., grant income to support ¢du¢ab"on and youth activ￿"e5 is Twnised whet& there is entrfeff￿nt, certainty of receipt and the amount Can be rella￿Y measuied. 2.3 Resour¢•J Expended Expenditure is recognised when a Iwbility is Nicuryed. Charitable artivities indude expenditure associated with the stsging of theatn.cal prorluctions and partrcipalh)n adi¥￿e$. These include both the direct costs and supporl costs relating to these actNities. Expenditure on m8terialsfor sel. props 8nd costumes ale accounted for in the Consolidated ststement of Finan¢ial Adivities ISOFAI of the pen.od of the prtrJu¢bon. None of this expendiluie is capitalised, as sets are erther di$￿sed of. or sold oft ￿thin the same financial year, or very shortty after the financial year end. Support costs r8pres8nt central function costs. goveman¢e ¢osts and overhead$ and have been allocated be￿een the actiwtie5 of prc4JLKtions and participalicjn using an apportionment percentage calculated by comparing the direct costs attrsbutsNg to oa¢h ofthosè categories in the year. 20 THE PALACE THEATRE WATFORD LIMITED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2023 Accounling Policies Icontinu¢dl 2.4 Tangible Fixed A8$ets Fixed assets (other than those relat.ng lo producb"(¥n$ - see atM)vel are stated al historical cosL Depre¢oticy) is provided on all tangible fixed assets al rates cal¢ulaten pensh)n liabilth'es of £4.99412022 - £4,1831811 of which has been funded by unrestricted lunds. 25 THE PALACE THEATRE WATFORD LIMtrED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 IJJARCH 2023 12. Unrutricted Deslgnated Fund¥ The income fvnds of the Charilabje Company I￿l￿de the tolbwing deS￿nated lunds which have been set aside out of unrestricte(I lunds by the Trustees for speuk purp05e5.' Balance at 1 April In¢omlng OutgoSng 2022 rn$ourc¢s expend1￿re B•lance al 31 March 2023 Transfers General Funds 250.289 2.503,964 {2.580.7871 77,200 250,6e6 Designated Funds Refurbishmerrt Fund 6.743 Future Production & Art15tic Proiects 209,649 Building and Visitor Experien¢ 161,443 Resilience Project Fund 110,755 VAT Project Fund 17.975 11.123) 5,620 1 S9,649 245,814 190,755 17,975 140.0001 89,000 80.000 {4.629) 15.7521 129.OG¥) 629.813 Unrestrict•d Fund 756,854 2.503.964 12.586,5391 206,20Q 880.479 8alance at 1 Apiil Incoming Outgging 2021 rnsoufc•g •xpenditure Transfers B*lan¢• at 31 Mar¢h 2022 General Funds 250.792 1.921.529 {2.123,609} 201,577 250,289 Designated Funds Refurbishment Fund Future Production & Artith Proie¢t5 223.316 Buildin9 and Vi&tor Experience 161.443 Lighting Desk Depreciab"on 3.803 ResAlience Propcl Fund 133.255 VAT PiojeGt Fund 18,725 11.123) 6,743 120,CI)0) 209,649 161.443 6,333 13.803) 122,5001 110,755 17,975 {750) 548.408 6.333 {5.6761 {42,500} 5C6,565 Unrestricted Funds 799.200 1 ￿27.862 {2.129.2851 159.077 756,854 A description of the dewgnated fvnds can te found at note 2.1. 26 THE PALACE THEATRE WATFORD LIAirrED NOTES TO THE FINANCIAL STATEMENTS YEAR EMDED 31 MARCH 2023 13. Restricted Fund The income funds of the CharIta￿e Company indude fotknvmig restricted fundswhere the donor ha5 Specifi￿ the pUr￿Se for whtch the fund rs to be us&J: Balance at 1 April Incoming Outgolng 2022 resour¢*s expenditur• Balan¢e at 31 March 2023 Trdnsf•rs Theatre Refurbishment Fund 4,399.826 Catstysl Arts Fund 12,972 Arts Counol EngLqrxl C8yt81 Fund 40.578 New Vvrrting Fund 478 Mèrehanl ofVeni¢e 119,553 Arts Council Cullural Recovery Fund 97,246 Garfield Weston FoundatK)n 209,423 1195.479) 1298) 118.496) 4.204.347 10.780 22,082 478 1.606 {3,5001 23.250 (4,389) {138.4141 113.482} 15,352) 83,764 139,785 (64,286) 4,880.076 24,856 237,4 (206,2001 4,461,2 B•lance at 1 April Incoming Oulgoing 2021 resources expenditure Balance at 31 March 2022 Transfer5 Theatre Refurbishment Fund 4.595.30S Catalyst Arts Fund 15.045 Arts Council England Capital Fund 59,074 New Writing Fund 478 Merchant ofven 113,523 Arts Coun¢il Cuttural Recovery FurHI 202.046 Carfidd Weston Foundalioft 315,01)O (195.479) 12841 118.4961 4.399,826 12,972 40.578 478 119.553 150.0001 97,246 (105,5771 209,423 1.711 (3,500) 6.030 154.800) 5.300,471 7.741 {269,059) 1159,0771 4,880.076 ' A description olthe restrth funds can be found at note 2.1. 27 THE PALACE THEATRE WATFORD LIMrrED NOTES TO THE FINANCIAL STATEMENT5 YEAR ENDED 31 MARCH 2023 14. Alloc8tion of NetAsset8 behvwi Fund$ General Designated Restricted fvnd fund fund Total 2023 Tangible fixed assets Inve3trnent5 Current assets Current liabilities 134.786 200 473.083 {357.4031 5.620 4.226.429 4.366,835 200 234,807 1.332,083 1357,403) 624.193 Net assèts 250,666 629.813 4.461,236 5,341.715 General Oesignated Restricted fvnd fvnd fund Total 2022 Tangible fixed assets Investment$ Current assets Current liabiljties 96.535 2tKI 485.613 1332,059) 6.743 4.440.404 4.543.682 2C 439.672 1.425,107 {332,0591 499.822 Natassets 250.289 $06.565 4,880.076 5.646,930 15. Revenue Commitments The Charitable Company's annual Obligat￿ und•r an operaling 15 a5 foilows, an*sed 8ccording to the dale ofthe first ￿VIeW of the lease. 2023 2022 Land and. Land and Buiklings Buildings Operating le8se which expires.. Between 2 and 5 years 87.500 114,500 16. Capital Commitin¥nts There We￿ r￿ contracted capital ctsnmiknents at 31 March 2023 {2022- none). 28 THE PALACE THEATRE WATFQRD LIM￿ED NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2023 17. Related Party Relationships and Transactions During the year. the following Trustees have b*n connected vnth organisations that have made payments to the Charitable Company= Councillor Agnieszka Dychton. Councillor Timothy Williams and C￿n¢1110r Marilyn Devonish- Wafford Borough Council - Service provision fee5 of £231.957 {2022". £231.957) and further funding of £50,000 (2022 - £106,CW}. Deborah Lincoln- Warner Bros International - sponsorship £- (2022: £17,5(KI) 29