## **THE PALACE TRUST, A COMPANY LIMITED BY GUARANTEE**
**COMPANY NO. 09404519**
**REGISTERED CHARITY NO. 1160830 (ENGLAND & WALES)**
**CHARITY & GROUP CONSOLIDATED FINANCIAL STATEMENTS WITH GROUP ANNUAL DIRECTORS REPORT**
**YEAR ENDED 31 DECEMBER 2020**
## **THE PALACE TRUST**
## **CHARITY & GROUP CONSOLIDATED FINANCIAL STATEMENTS WITH GROUP ANNUAL DIRECTORS REPORT**
## **YEAR ENDED 31 DECEMBER 2020**
|**Contents**|**Page**|
|---|---|
|Reference & Administrative Information|1|
|Trustees’ Annual Report|2 – 7|
|Independent Auditor’s Report|8 – 10|
|Consolidated Statement of Financial Activities|11|
|Charity statement of Financial Activities|12|
|Consolidated and Charity Balance Sheet|13|
|Consolidated Cash Flow Statement|14|
|Notes to the Financial Statements|15 – 29|
## **THE PALACE TRUST**
## **REFERENCE & ADMINISTRATIVE INFORMATION**
## **YEAR ENDED 31 DECEMBER 2020**
|**_Chair_**|_Rear Admiral D Wood_||
|---|---|---|
|**_Vice Chair_**|_Mr P Stickland_||
|**_Trustees/Directors_**|_Mr M Blandford_||
||_Ms M Boylan_||
||_Dr K Brown_|_(resigned 14 February 2021)_|
||_Very Revd Dr J Davies_||
||_Mr N Denison_||
||_Lady E Gass_||
||_Ms R Gofton_|_(resigned 15 October 2020)_|
||_Rt Revd P Hancock_|_(resigned 12 May 2021)_|
||_Mr Michael Minta_|_(appointed 18 February 2021) _|
||_Ms G Nayler_|_(resigned 15 October 2020)_|
||_Mrs N Nuttall_|_(resigned 15 October 2020)_|
||_Mr B Roberts-Wray_||
||_Mr P Stickland_||
||_Mrs J Wills_|_(appointed 3 March 2020)_|
||_Ms N Watts_|_(From 27 April 2020 to 15 October 2020)_|
||_Rear Admiral D Wood_||
|**_Company No._**|_09404519_||
|**_Charity Registered Number_**|_1160830_||
|**_Registered Office_**|_The Bishop’s Palace_||
||_Wells_||
||_Somerset_||
||_BA5 2PD_||
|**_Company Secretary_**|_Mrs R Martin_||
|**_Treasurer_**|_Mr N Denison_||
|**_Auditor_**|_Burton Sweet_||
||_The Clock Tower_||
||_5 Farleigh Court_||
||_Old Weston Road_||
||_Flax Bourton_||
||_Bristol BS48 1UR_||
|**_Bankers_**|_National Westminster Bank plc_||
||_7 High Street_||
||_Wells_||
||_Somerset_||
||_BA5 2AD_||
1
**THE PALACE TRUST**
## **TRUSTEES’ ANNUAL REPORT**
## **YEAR ENDED 31 DECEMBER 2020**
The Trustees present their report and financial statements for the 12 month period ended 31 December 2020. The financial statements have been prepared in accordance with the Financial Reporting Standard (FRS102) and the Charities SORP (FRS102) based thereon. The Trustees who served from 1 January to 31 December 2020 are listed on the previous page.
## **Strategic Aims**
The charitable purposes of The Palace Trust are to preserve for the benefit of the public the fabric of The Bishop’s Palace and to promote such charitable purposes as will advance the religious and other charitable work of the Church of England.
Today, The Palace Trust seeks to conserve The Bishop’s Palace for future generations: welcoming all who seek a place of beauty, reflection and enjoyment. The charity fulfils its purpose by taking forward detailed actions that meet five strategic objectives covering:
**1. Reach more and a wider range of people**
- Our ambition is to welcome 160,000 visitors to the Palace by 2025. The ambition is based on three approaches. First, the development of the visitor offer, with significantly improved interpretation around the built heritage of the site. Second, a broader, more dynamic public events programme. Third, making our heritage accessible to those who will benefit from it the most, who do not currently have the means to engage.
**2. Be a national beacon for community engagement and wellbeing**
- We want the Palace to be a best practice model of community engagement. We are moving to a new way of working where people will always come first. We will start with our staff, volunteers and visitors and extend out beyond our moat to become the beating heart of our local community, welcoming supporting and engaging all who can benefit from our incredible resource. We will actively champion our gardens and programming as a resource for peoples on-going wellbeing.
**3. Realise the next phase of The Bishop’s Palace development**
- By 2025 The Palace Trust will have transformed the visitor experience of the Palace buildings. New interpretation will be engaging, immersive and will transform people’s understanding and enjoyment of The Bishop’s Palace.
**4. Invest in a sustainable future**
- A sustainable future hangs on three key areas, sustainability in terms of environmental impact, financial and social sustainability as we re-engage people who may be fearful of reintegration into society following the pandemic. The Palace Trust will have a net zero carbon footprint by 2025 and will have rebuilt reserves depleted during the coronavirus pandemic.
**5. Become a centre of excellence in the field of horticulture**
- The Gardens are the Palace’s (as a heritage attraction) primary asset. The next step in furthering the work that has been done in the last twelve years is to make them a centre for training the next generation of gardeners.
## **Public Benefit**
In setting The Palace Trust’s preceding aims and following objectives and activities, the Trustees have given careful consideration to the Charity Commission’s guidance on public benefit and continue to preserve and make accessible The Bishop’s Palace and its fourteen acres of gardens to the public, as a place of historic, architectural and landscape interest.
The Palace Trust achieves its purpose by opening the site to the public throughout the year, aiming to engage a diverse audience through a programme of public events, activities, exhibitions, it’s commercial activities and
2
**THE PALACE TRUST**
## **TRUSTEES’ ANNUAL REPORT**
## **YEAR ENDED 31 DECEMBER 2020**
community engagement programme. The Bishop’s Palace is central to the experience and enjoyment of Wells and will remain so as The Palace Trust continues to grow and expand its public offer. The Palace Trust undertakes an annual plan of conservation and repair works ensuring The Bishop’s Palace remains in the public domain for future generations.
## **Objectives and Activities**
## **Objectives**
The Palace Trust continued to carry out the objectives for which it was established, namely, to preserve and make accessible The Bishop’s Palace and its fourteen acres of gardens to the public, as a place of historic, architectural and landscape interest
## **Activities**
The Palace and gardens had a difficult year in the face of the pandemic, closing its doors to the public for two months between March and May during Lockdown 1. The Palace building and café interior remained closed for much of the year, opening and closing according to the government regulations at the time. With green space at a premium, we were pleased to be able to keep the gardens open for the rest of the year for people’s relaxation and wellbeing. All private events such as wedding receptions were cancelled but some public events and activities were able to go ahead in an adapted programme, such as outdoor theatre, adult and children’s trails, a medieval weekend, and a Christmas programme of activities, namely “Christmas at the Palace”. Community engagement activities grew throughout the year, as we worked closely with partners to assist the local community through the crisis, becoming an integral part of Wells Coronavirus Network – a coordinated response to assist those in need. We launched the “People’s Ticket” giving visitors annual access to The Bishop’s Palace for a £15 entrance ticket, replacing the £10 day ticket: this proved popular with local residents, and contributed to people’s wellbeing.
## **Achievements and Performance**
The Palace experienced an excellent first quarter, opening, through Wells Heritage Partners, a new Tourist Information Centre and employing a member of staff as manager, with the objective of improving the visitor experience to the City. Excellent income was generated through site hire as a film venue in both January and February. This successful first quarter assisted financially as visitor numbers began to drop off in the second half of March.
In many respects, 2020, was a successful year for the Palace, despite the pandemic and the uncertain operating environment. Given the emphasis on outdoor activity and wellbeing, we received over 101,000 visitors to the site as they took advantage of the COVID safe environment of the gardens. We expected the People’s Ticket to have a detrimental effect on membership sales, reducing it to up to 80% of 2019 figures. However, this was not the case, and sales remained robust at 75%. The People’s Ticket had a positive effect on gift aid, increasing it by 20% in the second half of the year in comparison to 2019.
In some respects, the pandemic accelerated plans for greater community engagement and involvement. The Trust became an integral part of the community response to the pandemic, working with local community groups that formed the Wells Coronavirus Network assisting residents where needed. A short survey of visitors towards the end of the year provided evidence we were meeting our objective and were attracting audiences that had not previously visited the Palace. We worked hard to become a place of wellbeing, for example, by: installing “chatty benches” (sitting indicates you would appreciate a conversation); becoming the meeting place for Mendip Health Connections to hold their “Talking Cafes”; conducting a dementia audit and following up on its recommendations; conducting staff training on hidden disabilities and the provision of the Sunflower Lanyard that indicates a person has a hidden disability; and by taking out a joint lease with the Cathedral for carpark places and seeking planning permission for a gate directly into the Community Garden for people with disabilities. We were able to deliver an expanded “Christmas at the Palace” event with the objective of bringing
3
**THE PALACE TRUST**
## **TRUSTEES’ ANNUAL REPORT**
## **YEAR ENDED 31 DECEMBER 2020**
joy to individuals and families at a time when people were most missing their loved ones and unable to spent time with them and which attracted record breaking numbers for a December. Our efforts were well rewarded, receiving our highest ever total score from VisitEngland as part of their Quality Assurance scheme and being invited as one of eight organisations to be a case study for innovation in the tourist industry during a challenging year.
The provision of volunteering opportunities at the Palace reduced during the year, especially as we tend to attract an older demographic. However, volunteering continued through Wells Coronavirus Network (WCN) and with funding from the Heritage Emergency Fund, we set up a new platform in conjunction with WCN, Lets Do It Wells, through Volunteer Makers. This allowed organisations across Wells and beyond to post volunteering opportunities that required a few minutes, a few hours, a day, or long term.
We received substantial funds from HMRC through the furlough system and other small grants. We took advantage of the decrease in VAT and Eat Out to Help Out. We received £250,000 grant through the Heritage Emergency Fund provided by the National Lottery Heritage Fund that assisted in both running and development costs to help us re-open and become a more resilient organisation. We are grateful to the Cultural Recovery Fund for their grant of £364,000 that paid for operational costs November 2020 to March 2021. These grants allowed us to; complete an exhibition celebrating 800 years of the Bishop’s Palace; complete a Governance, Staffing and Activity Review; undertake an IT assessment and audit; buy new equipment for safe opening, including PPE and signage, and IT equipment for homeworking; and provide job security to all staff with the payment of all staff costs for over seven months.
## **Plans for Future Periods**
The pandemic inevitably delayed development plans. However, a new five year strategy was developed that puts community engagement at the heart of all that we do. A renewed focus on community engagement and access and inclusion of vulnerable groups will ensure more people benefit from the Bishop’s Palace. It is the Palace’s ambition to substantially reduce its carbon footprint over the coming years, to increase its biodiversity, and to offer courses in horticulture. Whilst plans for renewed interpretation of the Palace building were delayed during 2020, we expect to accelerate those plans from 2021 onwards.
## **Financial Review**
The Palace Trust’s financial position improved over the year. At year end, the Trust had unrestricted net assets (excluding the trading subsidiary), of £932,045, £179,318 of which is designated. This position reflects our ability to innovate and act quickly in a crisis, attract grant funding, and continue as a location for filming. It is the charity’s policy not to commit The Palace Trust to any new major programme of work until sufficient funds are accumulated in reserves to satisfy existing obligations.
The Trust held £49,170 as investments. It is the Trust’s policy to place surplus funds into the CBF Investment Fund if they are not likely to be required in the short term.
## **Risk Policy**
The Trustees undertook a comprehensive review of risks during the past year and maintain a register of those risks which would affect the reputation and financial status of The Palace Trust. This register is maintained by the Trustees and includes a ranking of risk that takes account of likelihood and severity of impact. Risks that could have a material impact on The Palace Trust are singled out for particular attention.
- A prolonged period of inclement weather. Wet weather can lead to a drop in footfall and thus visitor income. This is mitigated by steps taken to increase footfall in the shoulder months thereby reducing the reliance on summer months, and in the long term to develop the site as an all-weather attraction.
4
**THE PALACE TRUST**
## **TRUSTEES’ ANNUAL REPORT**
## **YEAR ENDED 31 DECEMBER 2020**
- Long term conservation and use of the site. The Bishop’s Palace and gardens is owned by the Church Commissioners and the long-term conservation and use of the site is governed by a Management Agreement between The Palace Trust and Church Commissioners. Regular communication in combination with a regularly reviewed agreement ensures continuity and preservation of the 800 year old Palace.
- The pandemic recovery plan is unsuccessful and further restrictions are enforced during the year, reducing visitor income. We will continue to adapt the visitor offer to the current measures, make use of government assistance, seek grant funding where possible and increase our reserves requirement.
## **Reserves Policy**
At 31 December 2020, total reserves were £979,733 of which £nil was restricted and £179,318 was designated. Up to £300,000 is expected to be spent in progressing long term development projects in 2021.
It is the Trustees / directors’ policy for unrestricted general reserves at the year-end to be of sufficient size to cover the period from January to March where The Palace Trust runs a deficit prior to the summer peak in income based on the budget for the year. Some adjustments are made based on cash flow and contingencies for 25% reduction in income over the first quarter. Due to emergency grant income, losses are expected to be minimal going into 2021. However, the risk of business interruption over the winter of 2021/2022 is such that with a reduced visitor income of 50%, the necessary reserves are calculated to be £300,000 at 31 December 2021.
Unrestricted general reserves were £800,415 at 31 December 2020. The reserves were around £500,000 above the targeted amount and the Trustees are pleased that The Palace Trust is able to withstand a pandemic.
## **Structure, Governance and Management**
## **Constitution of The Palace Trust**
The Palace Trust was set up in 1968 by Trust Deed in order to preserve The Bishop’s Palace in Wells for: inspection by the public as a place of historic and architectural interest; and the advancement of charitable worth of the Church of England in a manner chosen from time to time by the Trustees and approved by the Church Commissioners.[1]
Today, The Palace Trust continues to work towards these charitable aims, by opening The Bishop’s Palace and its fourteen acres of gardens up to the public and running it as a heritage site, visitor attraction and registered charity.
## **Organisational Structure and Management**
The Board of Trustees meet on a monthly basis to discuss organisational progress and to agree major decisions around strategy and budget. The Chief Executive is responsible for implementing the organisational strategy and for devising and implementing the business plan. Department heads are responsible for the day to day running of The Bishop’s Palace including visitor services, catering, marketing, venue hire, volunteer management, gardening, property, and collections.
> 1 The Bishop’s Palace is owned by The Church Commissioners, with control of the land and buildings delegated to The Palace Trust, as outlined in a Management Agreement.
5
**THE PALACE TRUST**
**TRUSTEES’ ANNUAL REPORT**
## **YEAR ENDED 31 DECEMBER 2020**
A total of 41 staff (27 full time equivalents) were employed by the Trust and its subsidiary during the 12 month period ended 31 December 2020 with 33 in post at 31 December 2020 (21 full time equivalents). Whilst volunteering inevitably reduced over the year, we are confident it will return to a more normal levels in 2021.
## **Recruitment, induction and training of Trustees**
Trustees are appointed according to the skills and experience required to deliver a successful operation. New Trustees are recruited via advertisement and application. Interviews are carried out by a Trustee panel before a decision on whether to appoint is made. There is currently no minimum or maximum length of service for a Trustee, but following the Governance review, this is expected to change. New Trustees are provided with an induction pack and associated papers, which include a copy of the Governing Documents, previous audited accounts, recent Trustees’ meeting minutes, dates of forthcoming meetings, plus information on the history of The Bishop’s Palace and the objects and organisational structure of The Palace Trust. A detailed induction programme is in place involving the Chair of Trustees and key members of staff.
## **Relationship with other entities**
The management of catering, events (both corporate and private) and filming is undertaken by Palace Enterprises (Wells) Ltd (‘PEL’), which is a wholly owned subsidiary of The Palace Trust. Income generated by this subsidiary may be donated to the charity by way of an annual Gift Aid donation if available from distributable profits.
## **Statement of Trustees’ Responsibilities**
The Trustees are responsible for preparing the Report of the Board of Trustees and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
The law applicable to charities in England and Wales requires the Trustees to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the charity and of the group and of the incoming resources and application of resources, including income and expenditure, of the group for the year. In preparing those financial statements, the Trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company or the group will continue in operation
The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and which enable them to ensure that the financial statements comply with the Charities Act 2011 and the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
6
**THE PALACE TRUST**
## **TRUSTEES’ ANNUAL REPORT**
## **YEAR ENDED 31 DECEMBER 2020**
## **Provision of Information to Auditor**
Each of the persons who are directors at the time when this Directors’ Report is approved has confirmed that so far as that director is aware, there is no relevant audit information of which the company’s auditor is unaware and that director has taken all the steps that ought to have been taken as a director in order to be aware of any information needed by the company’s auditors in connection with preparing their report and to establish that the company’s auditor are aware of that information.
## **Appointment of Auditor**
The Trustees / Directors have appointed Burton Sweet for the audit of the 2020 financial statements.
This report was approved by the Board on 20[th] May 2021 and signed on its behalf by:
Rear Admiral David Wood Chair
The Palace Trust The Bishop’s Palace Wells, Somerset BA5 2PD
7
**THE PALACE TRUST**
## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE PALACE TRUST**
## **YEAR ENDED 31 DECEMBER 2020**
## **Opinion**
We have audited the financial statements of The Palace Trust (the “the parent Charity”) and its subsidiary, Palace Enterprises (Wells) Limited (the ‘group’) for the year ended 31 December 2020 which comprise the Consolidated Statement of Financial Activities, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement and notes to the financial statements, including 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, including Financial Reporting Standard 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the Charity’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Charity’s members those matters we are required to state in them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Charity’s members as a body, for our audit work, for this report, or for the opinions we have formed.
In our opinion, the financial statements:
- give a true and fair view of the state of the group’s and of the Charity’s affairs as at 31 December 2020 and of the group’s income and expenditure for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **Basis for opinion**
We conducted our audit in accordance with international Standards in Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities 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 Charity in accordance with the ethical requirements that are 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 to provide a basis for our opinion.
## **Conclusions relating to going concern**
In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity or the group's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised 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 information included in the annual report other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained in the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial
8
**THE PALACE TRUST**
## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE PALACE TRUST**
## **YEAR ENDED 31 DECEMBER 2020**
statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
## **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 trustees’ report (incorporating the directors’ report) for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the trustees’ report (incorporating the directors’ report) have been prepared in accordance with applicable legal requirements.
## **Matters on which we are required to report by exception**
In the light of the knowledge and understanding of the charity, the group and their environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ report (incorporating the director’s report). We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or;
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of trustees’ remuneration specified by law are not made; or
-
- we have not received all the information and explanations we require for our audit; or
- the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies’ exemptions in preparing the directors’ report and from the requirement to prepare a strategic report.
## **Responsibilities of trustees**
As explained more fully in the trustees’ responsibilities statement, the trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the Charity’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the Charity or its subsidiary or to cease operations, or have no realistic alternative but to do so.
## **Auditor’s responsibilities for the audit of the financial statements**
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
9
**THE PALACE TRUST**
## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE PALACE TRUST**
## **YEAR ENDED 31 DECEMBER 2020**
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Our understanding of the nature, sector, laws and regulations, control environment and enquiry into the current events and activities of the Charity and Group reduces the risk of non-detection.
Our response to the risk of irregularities included reviews of minutes, analytical procedures, the enquiry of management, consideration of provisions, sample testing, journal testing and the assessment of accounting policies and judgements.
The experience and scepticism of our team to irregularities informed our process. Due to the nature of irregularities, our ability to detect them reduces where such transactions are deliberately hidden, not material or appear to be in-line with expectations.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/apb/scope/private.cfm This description forms part of our auditor’s report.
## **Joshua Kingston ACA (Senior Statutory Auditor)**
For and on behalf of Burton Sweet Chartered Accountants and Statutory Auditor The Clock Tower 5 Farleigh Court Old Weston Road Flax Bourton Bristol BS48 1UR
Date: …………………..
10
**THE PALACE TRUST**
## **CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (Including Income & Expenditure Account)**
## **YEAR ENDED 31 DECEMBER 2020**
|**Note**
**Income from:**
Donations and legacies
**2**
Charitable activities
**3**
Other trading activities
**4**
Investments
**7**
**Total income**
**Expenditure on:**
Raising funds
**5**
Charitable activities
**8**
**Total expenditure**
Gains/(losses) on investments
**16**
**Net income/(expenditure)**
**10**
Transfers between funds
**22**
**Net movement in funds before taxation**
Tax on profit/loss of ordinary activities
**17**
**Net movement in funds**
**Total funds at 1 January**
**22**
**Total funds at 31 December**
**22**|**Unrestricted**
**Unrestricted**
**Total**
**General**
**Designated**
**Restricted**
**Funds**
**Funds**
**Funds**
**Funds**
**2020**
**£**
**£**
**£**
**£**
758,635
-
-
758,635
410,029
-
-
410,029
447,492
-
-
447,492
2,667
-
-
2,667
1,618,823
-
-
1,618,823
485,939
-
-
485,939
697,542
15,443
11,400
724,385
1,183,481
15,443
11,400
1,210,324
3,164
-
-
3,164
438,506
(15,443)
(11,400)
411,663
(60,274)
60,274
-
-
378,232
44,831
(11,400)
411,663
-
-
-
-
378,232
44,831
(11,400)
411,663
422,183
134,487
11,400
568,070
800,415
179,318
-
979,733|Total
Funds
2019
£
164,587
434,642
851,563
2,957
1,453,749
641,598
694,677
1,336,275
7,249
124,723
-
124,723
11
124,734
443,336
568,070|
|---|---|---|
The group has no recognised gains or losses other than the results for the year as set out above.
All of the activities of the group are classed as continuing
**The notes on pages 15 to 29 form part of these financial statements See note 13 for fund-accounting comparative figures**
11
**THE PALACE TRUST**
## **CHARITY STATEMENT OF FINANCIAL ACTIVITIES (Including Income & Expenditure Account)**
## **YEAR ENDED 31 DECEMBER 2020**
|**Note**
**Income from:**
Donations and legacies
**2**
Charitable activities
**3**
Other trading activities
**4**
Investments
**7**
**Total income**
**Expenditure on:**
Raising funds
**5**
Charitable activities
**8**
**Total expenditure**
Gains/(losses) on investments
**16**
**Net income/(expenditure)**
**10**
Transfers between funds
**22**
**Net movement in funds**
**Total funds at 1 January**
**22**
**Total funds at 31 December**
**22**|**Unrestricted**
**Unrestricted**
**Total**
**General**
**Designated**
**Restricted**
**Funds**
**Funds**
**Funds**
**Funds**
**2020**
**£**
**£**
**£**
**£**
684,272
-
-
684,272
410,029
-
-
410,029
104,561
-
-
104,561
2,667
-
-
2,667
1,201,529
-
-
1,201,529
45,304
-
-
45,304
697,542
15,443
11,400
724,385
742,846
15,443
11,400
769,689
3,164
-
-
3,164
461,847
(15,443)
(11,400)
435,004
(60,274)
60,274
-
-
401,573
44,831
(11,400)
435,004
351,154
134,487
11,400
497,041
752,727
179,318
-
932,045|Total
Funds
2019
£
165,736
434,642
219,426
2,957
822,761
41,275
694,677
735,952
7,249
94,058
-
94,058
402,983
497,041|
|---|---|---|
The group has no recognised gains or losses other than the results for the year as set out above.
All of the activities of the group are classed as continuing
**The notes on pages 15 to 29 form part of these financial statements See note 14 for fund-accounting comparative figures**
12
## **THE PALACE TRUST**
## **BALANCE SHEET**
**----- Start of picture text -----**
AS AT 31 DECEMBER 2020 Company Number: 09404519
Group Charity Group Charity
Note 2020 2020 2019 2019
£ £ £ £
Fixed assets
Tangible assets 15 177,851 122,904 147,409 110,347
Investments 16 49,169 49,170 46,005 46,006
227,020 172,074 193,414 156,353
Current assets
Stock 5,317 - 11,647 -
Debtors 18 45,309 178,015 110,270 122,452
Cash at bank and in hand 876,139 667,351 416,879 335,504
926,765 845,366 538,796 457,956
Creditors: amounts falling due
within one year 19 (124,052) (85,395) (164,140) (117,268)
Net current assets 802,713 759,971 374,656 340,688
Total assets less current liabilities 1,029,733 932,045 568,070 497,041
Creditors: amounts falling due 19 (50,000) - - -
after more than one year
Net assets 979,733 932,045 568,070 497,041
Funds
Unrestricted funds
General funds 23 752,727 752,727 351,154 351,154
Non-charitable trading funds 23 47,688 - 71,029 -
Designated funds 23 179,318 179,318 134,487 134,487
Restricted funds 23 - - 11,400 11,400
Total funds 979,733 932,045 568,070 497,041
**----- End of picture text -----**
The Trustees have prepared group accounts in accordance with section 398 of the Companies Act 2006 and section 138 of the Charities Act 2011. These accounts are prepared in accordance with the special provisions of Part 15 of the Companies Act relating to small companies and constitute the annual accounts required by the Companies Act 2006 and are for circulation to members of the company.
These financial statements were approved by the Trustees on …..................... and are signed on their behalf by:
..................................................... Rear Admiral David Wood Chair
**The notes on pages 15 to 29 form part of these financial statements**
13
**THE PALACE TRUST**
## **CONSOLIDATED CASH FLOW STATEMENT**
## **YEAR ENDED 31 DECEMBER 2020**
|**Notes**
**Net cash inflow from operating activities**
**20**
**Non-operational cash flows**
**_Investing activities_**
Payments for tangible fixed assets
Investment income
Net cash inflow for the year
**21**|**2020**
**£**
(62,396)
2,667|**2020**
**£**
518,989
(59,729)
459,260|2019
£
125,953
(30,007)
2,957
(27,050)
98,903|
|---|---|---|---|
## **Cashflow restrictions**
Charity law prohibits the use of net cash inflows on any endowed or other restricted fund to offset net cash outflows on any fund outside its own Objects, except on special authority. In practice, this restriction has not had any effect on group cash flows for the year.
**The notes on pages 15 to 29 form part of these financial statements**
14
**THE PALACE TRUST**
**NOTES TO THE FINANCIAL STATEMENTS**
## **YEAR ENDED 31 DECEMBER 2020**
## **1 Accounting policies**
## **Basis of preparing the financial statements**
The financial statements have been prepared under the historical cost convention, with the exception of listed investments which are included at market value. The financial statements have been prepared under the 'small companies' provisions of the Companies Act 2006 and in accordance with the Financial Reporting Standard FRS102 and the Charities Statement of Recommended Practice (SORP FRS102) based thereon.
The charity is a public benefit entity as defined under FRS102.
There are no material uncertainties about the charity’s ability to continue as a going concern, despite the significant uncertainty being caused by the worldwide COVID-19 crisis. Whilst the Trustees expect there to be a significant impact on the charity’s operations and reserves in the coming months and years, the charity has sufficient reserves to be able to meet these challenges.
## **Basis of consolidation**
The Consolidated Statement of Financial Activities (SOFA), Consolidated Balance Sheet and Consolidated Cash Flow Statement consolidate the financial statements of the Charity and its subsidiary, Palace Enterprises (Wells) Limited. The results of the subsidiary are consolidated on a line by line basis.
## **Fund accounting**
General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the Charity and which have not have been designated for other purposes.
Designated funds comprise unrestricted funds that have been set aside by the Trustees for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements.
Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors which have been raised by the Charity for particular purposes. The cost of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.
## **Income**
All income is included in the Statement of Finance Activities when the Charity is legally entitled to the income and the amount can be quantified with reasonable accuracy. Income such as life membership income is deferred where the conditions for receipt are not met at the end of the accounting period.
Income represents the total income receivable during the period, including gate receipts, shop sales, interest and dividends received, and gift aid receipts. Lifetime membership income is considered donated income and recognised upon receipt.
Gifts donated for resale are included as income when they are sold. No amounts are included in the financial statements for service donated by volunteers.
Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
## **Expenditure**
All expenditure is accounted for on an accruals basis inclusive of any VAT which cannot be recovered and has been included under expense categories that aggregate all costs for allocation to activities.
Expenditure on raising funds includes those incurred in trading activities.
Charitable activities include expenditure on maintaining The Bishop’s Palace and includes both direct costs and support costs relating to those activities.
Governance costs are those incurred in connection with administration of the charity and compliance with constitutional and statutory requirements. Governance costs are included within charitable activity support costs.
15
**THE PALACE TRUST**
**NOTES TO THE FINANCIAL STATEMENTS**
**YEAR ENDED 31 DECEMBER 2020**
## **1 Accounting policies (continued)**
## **Tangible fixed assets**
Tangible fixed assets are classified as such when they have a value over £100 and a useful life of over one year. They are stated at cost less depreciation, which is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives.
## **Tangible fixed assets - Depreciation**
Depreciation is provided at the following annual rates in order to write off each asset over its estimated economic life.
**----- Start of picture text -----**
|||
|---|---|
|Computer hardware and software|3-5 years straight line|
|Fixtures and Fittings|20% straight line|
|Outdoor equipment|2-15 years straight line|
|Catering equipment|20% straight line|
**----- End of picture text -----**
Assets transferred from the old Palace Trust (Charity No. 256356) were transferred at the net book value on 1 May 2015 and are depreciated on a straight line basis with the duration based on how many months they had remaining on the former Palace Trust before declining to a nil value rounded to the nearest year.
## **Investments**
Investments are stated at market value at the balance sheet date. The Statement of Financial Activities includes the net gains and losses arising on revaluations and disposals throughout the year.
Investments in subsidiaries are valued at cost less provision for impairment.
## **Stocks**
Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks.
## **Taxation**
The charity is exempt from corporation tax on its charitable activities.
## **Winding up or dissolution of the charity**
If upon winding up or dissolution of the charity there remain any assets, after satisfaction of all debts and liabilities, the assets represented by the accumulated fund shall be transferred to some other charitable body or bodies having similar objects to the charity.
## **2 Donations and legacies Group & Charity**
**----- Start of picture text -----**
|||||||
|---|---|---|---|---|---|
|Unrestricted|Unrestricted|
|General|Designated|Restricted|Total Funds|Total Funds|
|Funds|Funds|Funds|2020|2019|
|£|£|£|£|£|
|Donations|35,884|-|-|35,884|21,261|
|Gift Aid Donation from subsidiary Palace|24,518|-|-|24,518|1,149|
|Enterprises (Wells) Ltd|
|Grants|
|Church Commissioners|89,500|-|-|89,500|85,112|
|Job Retention Scheme|49,993|-|-|49,993|-|
|NLHF Heritage Emergency Fund|250,000|-|-|250,000|-|
|NLHF Cultural Recovery Fund|182,450|-|-|182,450|-|
|Refunded tax|51,927|-|-|51,927|58,214|
|Charity sub-total|684,272|-|-|684,272|165,736|
|Job Retention Scheme|56,232|-|-|56,232|-|
|Eat Out to Help Out|15,649|-|-|15,649|-|
|Business Rates Relief|27,000|-|-|27,000|-|
|-|-|
|Inter-group eliminations|(24,518)|(24,518)|(1,149)|
|Group donations and legacies|758,635|-|-|758,635|164,587|
**----- End of picture text -----**
16
**THE PALACE TRUST**
**NOTES TO THE FINANCIAL STATEMENTS**
## **YEAR ENDED 31 DECEMBER 2020**
## **2 Donations and legacies (** _**continued**_ **)**
|**Prior year comparative**
Donations
Gift Aid Donation from subsidiary Palace
Enterprises (Wells) Ltd
Grants
Church Commissioners
Refunded tax
**Charity sub-total**
Inter-group eliminations
**Group donations and legacies**|**Unrestricted**
**Unrestricted**
**General**
**Designated**
**Restricted**
**Total Funds**
**Funds**
**Funds**
**Funds**
**2019**
**£**
**£**
**£**
**£**
20,361
-
900
21,261
1,149
-
-
1,149
85,112
-
-
85,112
58,214
-
-
58,214
164,836
-
900
165,736
(1,149)
-
-
(1,149)
163,687
-
900
164,587|
|---|---|
- **3 Income from charitable activities Group & Charity**
|Entrance fee
Membership income|**Unrestricted**
**Unrestricted**
**General**
**Designated**
**Restricted**
**Total Funds**
**Funds**
**Funds**
**Funds**
**2020**
**£**
**£**
**£**
**£**
334,083
-
-
334,083
75,946
-
-
75,946
410,029
-
-
410,029|Total Funds
2019
£
334,167
100,475
434,642|
|---|---|---|
Income from charitable activities in the prior year has been classed as unrestricted general funds.
17
**THE PALACE TRUST**
**NOTES TO THE FINANCIAL STATEMENTS**
## **YEAR ENDED 31 DECEMBER 2020**
## **4 Income from: Other trading activities**
|**Group & Charity**
Shop income
Event sponsorship
Management fee income - Palace
Enterprises (Wells) Limited
Event income
Solar panel income
Rental income
**Charity sub-total**
Restaurant income
Event catering
Event site hire
Retail income
Film income
Other income
**Subsidiary sub-total**
Inter-group eliminations
**Group income from other trading activities**|**Unrestricted**
**Unrestricted**
**General**
**Designated**
**Restricted**
**Total Funds**
**Funds**
**Funds**
**Funds**
**2020**
**£**
**£**
**£**
**£**
1,567
-
-
1,567
-
-
-
-
74,080
-
-
74,080
17,994
-
-
17,994
2,136
-
-
2,136
8,784
-
-
8,784
104,561
-
-
104,561
322,013
-
-
322,013
3,035
-
-
3,035
(8)
-
-
(8)
20,197
-
-
20,197
63,466
-
-
63,466
8,308
-
-
8,308
417,011
-
-
417,011
(74,080)
-
-
(74,080)
447,492
-
-
447,492|Total Funds
2019
£
13,640
1,500
137,529
54,499
1,458
10,800
219,426
514,269
100,409
56,621
59,442
38,171
754
769,666
(137,529)
851,563|
|---|---|---|
Income from other trading activities in the prior year has been classed as unrestricted general funds.
## **5 Expenditure on: Raising funds Group & Charity**
|**Group & Charity**
_Direct costs_
Event costs
Commission sales expense
Support costs (note 9)
**Charity sub-total**
_Direct costs - subsidiary_
Cost of goods sold
Other direct costs
Wages, salaries and agency staff
Overheads - subsidiary
Management charge
Donation to parent
**Subsidiary sub-total**
Inter-group eliminations
**Group expenditure on raising funds**|**Unrestricted**
**Unrestricted**
**General**
**Designated**
**Restricted**
**Total Funds**
**Funds**
**Funds**
**Funds**
**2020**
**£**
**£**
**£**
**£**
27,347
-
-
27,347
8,459
-
-
8,459
9,498
-
-
9,498
45,304
-
-
45,304
109,891
-
-
109,891
24,046
-
-
24,046
255,015
-
-
255,015
51,683
-
-
51,683
74,080
-
-
74,080
24,518
-
-
24,518
539,233
-
-
539,233
(98,598)
-
-
(98,598)
485,939
-
-
485,939|Total Funds
2019
£
22,575
9,355
9,345
41,275
228,869
26,156
289,456
55,842
137,529
1,149
739,001
(138,678)
641,598|
|---|---|---|
Expenditure on raising funds in the prior year has been classed as unrestricted general funds.
18
**THE PALACE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS**
## **YEAR ENDED 31 DECEMBER 2020**
## **6 Calculation of net income / (expenditure) from trading activities**
|Charity
Subsidiary
Inter-group eliminations
Group net income / (expenditure) from trading
activities|**Unrestricted**
**Unrestricted**
**General**
**Designated**
**Restricted**
**Total Funds**
**Funds**
**Funds**
**Funds**
**2020**
**£**
**£**
**£**
**£**
59,257
-
-
59,257
(23,341)
-
-
(23,341)
24,518
-
-
24,518
60,434
-
-
60,434|Total Funds
2019
£
178,151
30,665
1,149
209,965|
|---|---|---|
Net income/(expenditure) from trading activities in the prior year has been classed as unrestricted general funds.
## **7 Investment Income Group & Charity**
|Dividends and interest received|**Unrestricted**
**Unrestricted**
**General**
**Designated**
**Restricted**
**Total Funds**
**Funds**
**Funds**
**Funds**
**2020**
**£**
**£**
**£**
**£**
2,667
-
-
2,667|Total Funds
2019
£
2,957|
|---|---|---|
Investment income in the prior year has been classed as unrestricted general funds.
## **8 Expenditure on: Charitable activities Group & Charity**
|Preserve the fabric of the Palace and Grounds:
Maintenance costs
Garden maintenance
Public access and education
**Prior year comparative**
Preserve the fabric of the Palace and Grounds:
Maintenance costs
Garden maintenance
Public access and education|**(Note 9)**
**Direct**
**Support**
**Total**
**Costs**
**Costs**
**2020**
**£**
**£**
**£**
82,047
6,668
88,715
29,110
48,190
77,300
2,996
555,374
558,370
114,153
610,232
724,385
**(Note 9)**
**Direct**
**Support**
**Total**
**Costs**
**Costs**
**2019**
**£**
**£**
**£**
64,125
9,360
73,485
19,719
37,882
57,601
7,704
555,887
563,591
91,548
603,129
694,677|
|---|---|
19
**THE PALACE TRUST**
**NOTES TO THE FINANCIAL STATEMENTS**
## **YEAR ENDED 31 DECEMBER 2020**
## **9 Support costs Group & Charity**
|Rent, rates, light and heat
Cleaning costs
Advertising
Office costs
Subscriptions
Legal fees
Professional fees
Accountancy
Bank charges
Staff training and recruitment
Travel and entertainment
Wages and salaries
Depreciation
**Governance costs - charity**
Auditors fees - audit
Auditors fees - accountancy
**Prior year comparative**
Rent, rates, light and heat
Cleaning costs
Advertising
Office costs
Subscriptions
Professional fees
Accountancy
Bank charges
Staff training and recruitment
Travel and entertainment
Wages and salaries
Depreciation
**Governance costs - charity**
Auditors fees - audit
Auditors fees - accountancy|**Total**
**2020**
**£**
**£**
**£**
-
38,974
38,974
-
26,326
26,326
2,844
25,593
28,437
-
48,593
48,593
-
3,395
3,395
-
4,350
4,350
-
28,099
28,099
-
18,394
18,394
-
1,041
1,041
-
1,917
1,917
-
3,379
3,379
6,654
388,493
395,147
-
15,443
15,443
-
5,500
5,500
-
735
735
9,498
610,232
619,730
**Total**
**2019**
**£**
**£**
**£**
-
40,500
40,500
-
18,268
18,268
4,213
37,912
42,125
-
43,532
43,532
-
2,954
2,954
-
12,039
12,039
-
14,657
14,657
-
1,935
1,935
-
7,645
7,645
-
12,981
12,981
5,132
387,581
392,713
-
17,185
17,185
-
5,375
5,375
-
565
565
9,345
603,129
612,474
**Expenditure**
**on:**
**Charitable**
**activities**
**Expenditure**
**on:**
**Charitable**
**activities**
**Expenditure**
**on:**
**Raising**
**funds**
**Expenditure**
**on:**
**Raising**
**funds**|Total
2019
**£**
40,500
18,268
42,125
43,532
2,954
-
12,039
14,657
1,935
7,645
12,981
392,713
17,185
5,375
565
612,474|
|---|---|---|
Support costs are split between fundraising costs and charitable activity costs based upon usage.
Only expenditure in the charity is considered to be support costs and able to be allocated between charitable activities and fundraising costs.
20
**THE PALACE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS**
## **YEAR ENDED 31 DECEMBER 2020**
## **10 Net income**
This is stated after charging:
|Depreciation of tangible fixed assets
Auditors fees - audit
Auditors fees - accountancy|**Group**
**2020**
**£**
31,954
9,900
1,155|**Charity**
**2020**
**£**
15,441
5,500
735|**Group**
**2019**
**£**
28,367
9,240
725|**Charity**
**2019**
**£**
17,163
5,375
565|
|---|---|---|---|---|
There were no Trustees' remuneration or other benefits for the year ended 31 December 2020 nor for the period ended 31 December 2019.
The total Trustees' expenses paid during the year ended 31 December 2020 to one trustee for travel expenses were £1,558 (2019: £1,708).
The total Trustee, key management personnel and other related party donations in the year were £nil (2019: £1,400).
## **11 Staff costs and numbers**
|The aggregate payroll costs were:
Wages and salaries
Social security costs
Employers pension
Redundancy costs|**Group**
**2020**
**£**
593,033
36,064
17,850
1,940
648,887|**Charity**
**2020**
**£**
361,267
20,529
11,411
1,940
395,147|**Group**
**2019**
**£**
606,409
33,824
14,612
-
654,845|**Charity**
**2019**
**£**
345,235
19,658
10,431
-
375,324|
|---|---|---|---|---|
The average weekly number of employees during the year, calculated on the basis of average headcount, was as follows:
|Management and administration
Other staff|**Group**
**2020**
**No.**
12
27
39|**Charity**
**2020**
**No.**
9
15
24|**Group**
**2019**
**No.**
15
34
49|**Charity**
**2019**
**No.**
11
15
26|
|---|---|---|---|---|
The average weekly number of employees during the year, calculated on the basis of full-time equivalents, was as follows:
|Management and administration
Other staff|**Group**
**2020**
**No.**
8
16
24|**Charity**
**2020**
**No.**
6
8
14|**Group**
**2019**
**No.**
11
18
29|**Charity**
**2019**
**No.**
7
8
15|
|---|---|---|---|---|
No employee received emoluments of more than £60,000.
The key management personnel (which consists of the Trustees, the Chief Executive, Development Project Manager and Head Gardener) employee benefits totalled £106,633 (2019: £86,304) for the Group & Charity.
## **12 Taxation**
The charity is exempt from corporation tax as all its income is charitable and applied for charitable purposes. The charity's trading subsidiary, Palace Enterprises (Wells) Limited, attracts corporation tax only to the extent that profits remain within it to grow its activities. Further available profits are donated responsibly to the charity.
21
**THE PALACE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS**
## **YEAR ENDED 31 DECEMBER 2020**
## **13 Consolidated fund-analysis comparative figures**
|**Group**
**Income from:**
Donations and legacies
Charitable activities
Other trading activities
Investments
**Total income**
**Expenditure on:**
Raising funds
Charitable activities
**Total expenditure**
Gains/(losses) on investments
**Net income/(expenditure)**
Transfers between funds
**Tax on profit of ordinary activities**
**Total funds at 1 January 2019**
**Total funds at 31 December 2019**
**Net movement in funds**
**Net movement in funds before taxation**|**Unrestricted**
**Unrestricted**
**Total**
**General**
**Designated**
**Restricted**
**Funds**
**Funds**
**Funds**
**Funds**
**2019**
**£**
**£**
**£**
**£**
163,687
-
900
164,587
434,642
-
-
434,642
851,563
-
-
851,563
2,957
-
-
2,957
1,452,849
-
900
1,453,749
641,598
-
-
641,598
667,370
19,445
7,862
694,677
1,308,968
19,445
7,862
1,336,275
7,249
-
-
7,249
151,130
(19,445)
(6,962)
124,723
(13,825)
13,825
-
-
137,305
(5,620)
(6,962)
124,723
11
-
-
11
137,316
(5,620)
(6,962)
124,734
284,867
140,107
18,362
443,336
422,183
134,487
11,400
568,070|
|---|---|
22
**THE PALACE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS**
## **YEAR ENDED 31 DECEMBER 2020**
## **14 Consolidated fund-analysis comparative figures**
## **Charity**
|**Income from:**
Donations and legacies
Charitable activities
Other trading activities
Investments
**Total income**
**Expenditure on:**
Raising funds
Charitable activities
**Total expenditure**
Gains/(losses) on investments
**Net income/(expenditure)**
Transfers between funds
**Total funds at 1 January 2019**
**Total funds at 31 December 2019**
**Net movement in funds**|**Unrestricted**
**Unrestricted**
**Total**
**General**
**Designated**
**Restricted**
**Funds**
**Funds**
**Funds**
**Funds**
**2019**
**£**
**£**
**£**
**£**
164,836
-
900
165,736
434,642
-
-
434,642
219,426
-
-
219,426
2,957
-
-
2,957
821,861
-
900
822,761
41,275
-
-
41,275
667,370
19,445
7,862
694,677
708,645
19,445
7,862
735,952
7,249
-
-
7,249
120,465
(19,445)
(6,962)
94,058
(13,825)
13,825
-
-
106,640
(5,620)
(6,962)
94,058
244,514
140,107
18,362
402,983
351,154
134,487
11,400
497,041|
|---|---|
## **15 Tangible fixed assets**
## **Group**
|**Cost**
At 1 January 2020
Additions
At 31 December 2020
**Depreciation**
At 1 January 2020
Charge for the year
At 31 December 2020
**Net book value**
At 31 December 2020
At 31 December 2019|**Furniture,**
**Computer**
**fittings and**
**Outdoor**
**Catering**
**equipment**
**equipment**
**equipment**
**equipment**
**Totals**
**£**
**£**
**£**
**£**
**£**
22,511
14,090
126,408
87,465
250,474
8,946
2,205
12,830
38,415
62,396
31,457
16,295
139,238
125,880
312,870
12,353
12,372
28,070
50,270
103,065
4,564
1,124
9,521
16,745
31,954
16,917
13,496
37,591
67,015
135,019
14,540
2,799
101,647
58,865
177,851
10,158
1,718
98,338
37,195
147,409|
|---|---|
23
**THE PALACE TRUST**
**NOTES TO THE FINANCIAL STATEMENTS**
## **YEAR ENDED 31 DECEMBER 2020**
## **15 Tangible fixed assets (** _**continued**_ **)**
## **Charity**
|**Cost**
At 1 January 2020
Additions
At 31 December 2020
**Depreciation**
At 1 January 2020
Charge for the year
At 31 December 2020
**Net book value**
At 31 December 2020
At 31 December 2019|**Furniture,**
**Computer**
**fittings and**
**Outdoor**
**Catering**
**equipment**
**equipment**
**equipment**
**equipment**
**Totals**
**£**
**£**
**£**
**£**
**£**
22,511
14,090
126,408
19,743
182,752
8,946
2,205
12,830
4,017
27,998
31,457
16,295
139,238
23,760
210,750
12,353
12,372
28,070
19,610
72,405
4,564
1,124
9,521
232
15,441
16,917
13,496
37,591
19,842
87,846
14,540
2,799
101,647
3,918
122,904
10,158
1,718
98,338
133
110,347|
|---|---|
## **16 Fixed asset investments**
## **Group**
|Opening balance
Unrealised gains/(losses)
Historical cost of investments|**Unlisted**
**Total**
**securities**
**2020**
**£**
**£**
46,005
46,005
3,164
3,164
49,169
49,169
**Total**
**2020**
**£**
33,593|**Total**
**2019**
**£**
38,756
7,249
46,005
**Total**
**2019**
**£**
33,593|
|---|---|---|
The unlisted investments comprise 2,400 shares in the Central Board of Finance of the Church of England Investment Fund. All investments are held in the UK.
24
**THE PALACE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS**
## **YEAR ENDED 31 DECEMBER 2020**
## **16 Fixed asset investments (** _**continued**_ **)**
|**Charity**
Opening balance
Unrealised gains/(losses)
Historical cost of investments
**Charity investments at market value comprise:**
Shares in the Central Board of Finance of the Church of England Investment Fund
Shareholding in Palace Enterprises (Wells) Limited|**Unlisted**
**securities**
**£**
46,006
3,164
49,170|**Total**
**2020**
**£**
46,006
3,164
49,170
**Total**
**2020**
**£**
33,594
**Total**
**2020**
**£**
49,169
1
49,170|**Total**
**2019**
**£**
38,757
7,249
46,006
**Total**
**2019**
**£**
33,594
**Total**
**2019**
**£**
46,005
1
46,006|
|---|---|---|---|
All the fixed asset investments are held in the United Kingdom. Palace Enterprises (Wells) Limited (Company No. 03013064) is a wholly owned subsidiary of The Palace Trust, a company limited by guarantee (Company No. 09404519). A summary of the trading results for the subsidiary is set out in note 17.
## **17 Principal subsidiaries**
## **Company name**
Palace Enterprises (Wells) Limited
**Percentage Principal Country shareholding activity** England and 100% Provision of catering services Wales
## **Palace Enterprises (Wells)**
|Turnover
Cost of sales
**Gross profit**
Administrative expenses
**Profit/(loss) on ordinary activities before taxation**
Tax on profit/loss on ordinary activities
**Profit/(loss) for the period**
Shareholders funds/(deficit) brought forward
Profit/(loss) for the period
Charitable donation (profit gift-aided to Trust)
Shareholders funds/(deficit) carried forward|**2020**
**£**
515,892
(388,952)
126,940
(125,763)
1,177
-
1,177
71,029
1,177
72,206
(24,518)
**47,688**
**Year ended**
**31 December**|2019
£
769,666
(544,481)
225,185
(193,371)
31,814
11
31,825
40,353
31,825
72,178
(1,149)
**71,029**
Year ended
31 December|
|---|---|---|
25
**THE PALACE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS**
## **YEAR ENDED 31 DECEMBER 2020**
**----- Start of picture text -----**
18 Debtors
Group Charity Group Charity
2020 2020 2019 2019
£ £ £ £
Trade debtors 16,868 16,942 72,713 37,206
Amount owed by group undertakings - 127,922 - 50,743
Prepayments and accrued income 25,001 24,933 37,557 34,503
Other debtors 3,440 8,218 - -
45,309 178,015 110,270 122,452
19 Creditors: amounts falling due within one year
Group Charity Group Charity
2020 2020 2019 2019
Amounts falling due within one year £ £ £ £
Trade creditors 39,659 35,014 68,618 58,839
Social security, pensions and other taxes 17,884 9,408 14,840 8,126
Other creditors 488 488 180 180
VAT - - 26,013 15,132
Accruals and deferred income 66,021 40,485 54,489 34,991
124,052 85,395 164,140 117,268
Amounts falling due after more than one year
Loans 50,000 - - -
20 Reconciliation of net movement in funds to net cash inflow from operating activities
2020 2019
£ £
Statement of Financial Activities: Net movement in funds 411,663 124,734
Investment income (2,667) (2,957)
Depreciation 31,954 28,367
Unrealised net (gain) / loss on investments (3,164) (7,249)
(Decrease) / increase in creditors: Due within one year (40,088) 37,430
(Decrease) / increase in creditors: Due after more than one year 50,000 -
(Increase) / decrease in debtors 64,961 (57,682)
(Increase) in stock 6,330 3,310
Net cash inflow from operating activities 518,989 125,953
21 Analysis of changes in cash flow during the year 2020 2019 Change
£ £
Cash at bank and in hand 876,139 416,879 459,260
2019 2018 Change
£ £
Cash at bank and in hand 416,879 317,976 98,903
**----- End of picture text -----**
26
**THE PALACE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS**
## **YEAR ENDED 31 DECEMBER 2020**
**----- Start of picture text -----**
22 Movement in funds
Group At At
1-Jan Gains / 31-Dec
2020 Income Expenditure Transfers (losses) 2020
£ £ £ £ £ £
Restricted Funds
Great Hall 11,400 - (11,400) - - -
11,400 - (11,400) - - -
Unrestricted funds
Designated funds
Palace interpretation 24,140 - - - - 24,140
Fixed assets 110,347 - (15,443) 28,000 - 122,904
Cultural Recovery Fund - - - 32,274 - 32,274
General funds
General fund 351,154 1,201,529 (742,846) (60,274) 3,164 752,727
Unrestricted funds subtotal 485,641 1,201,529 (758,289) - 3,164 932,045
Charity funds 497,041 1,201,529 (769,689) - 3,164 932,045
Palace Enterprises (Wells) Limited 71,030 515,892 (539,233) - - 47,689
Inter-group eliminations (1) (98,598) 98,598 - - (1)
71,029 417,294 (440,635) - - 47,688
Total funds (Group) 568,070 1,618,823 (1,210,324) - 3,164 979,733
Previous year
Group At At
1-Jan Gains / 31-Dec
2019 Income Expenditure Transfers (losses) 2019
£ £ £ £ £ £
Restricted Funds
Dragon's Lair 2,500 - (2,500) - - -
Great Hall 14,362 - (2,962) - - 11,400
Internship 1,500 900 (2,400) - - -
18,362 900 (7,862) - - 11,400
Unrestricted funds
Designated funds
Palace interpretation 26,400 - (2,260) - - 24,140
Fixed assets 113,707 - (17,185) 13,825 - 110,347
General funds
General fund 244,514 821,861 (708,645) (13,825) 7,249 351,154
Unrestricted funds subtotal 384,621 821,861 (728,090) - 7,249 485,641
Charity funds 402,983 822,761 (735,952) - 7,249 497,041
Palace Enterprises (Wells) Limited 40,354 769,666 (738,990) - - 71,030
Inter-group eliminations (1) (138,678) 138,678 - - (1)
40,353 630,988 (600,312) - - 71,029
Total funds (Group) 443,336 1,453,749 (1,336,264) - 7,249 568,070
**----- End of picture text -----**
27
**THE PALACE TRUST**
**NOTES TO THE FINANCIAL STATEMENTS**
## **YEAR ENDED 31 DECEMBER 2020**
## **22 Movement in funds** _**(continued)**_
## **Designated funds**
The Palace interpretation fund relates to a large development project currently in the planning phase. This includes a high walkway along the top of the Great Hall ruin and fresh interpretation in the Palace building.
The fixed assets fund represents the net book value of the assets held by the charity.
The cultural recovery fund represents funds designated to support the charity through the COVID-19 pandemic.
## **Restricted funds**
The Dragon’s Lair fund relates to the interactive interpretation area for children constructed in 2016, with maintenance expenditure in each subsequent year.
The Great Hall fund relates to the conservation and development of the Great Hall ruin.
The Internship fund relates to donations and grants to help pay a modest salary to a summer intern.
## **Inter-group eliminations**
A donation to the Trust from Palace Enterprises of £24,518 (2019: £1,149) and a management charge of £74,080 (2019: £137,529) was charged to Palace Enterprises by the Trust during the year. The management charge was for overhead costs including staff time, advertising and heat and light. These items have been removed from the consolidated SOFA and are included in the Intergroup eliminations along with the elimination of Enterprise's share capital upon consolidation.
28
**THE PALACE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS**
## **YEAR ENDED 31 DECEMBER 2020**
## **23 Analysis of net assets between funds**
|Tangible fixed assets
Fixed asset investments
Cash at bank and in hand
Other current assets
**Charity**
Palace Enterprises (Wells) Limited
Inter-group eliminations
**Group**
**Previous year**
Tangible fixed assets
Fixed asset investments
Cash at bank and in hand
Other current assets
**Charity**
Palace Enterprises (Wells) Limited
Inter-group eliminations
**Group**|**Restricted**
**Designated**
**Unrestricted**
**funds**
**funds**
**funds**
**Total**
**£**
**£**
**£**
**£**
-
122,904
-
122,904
-
-
49,170
49,170
-
-
667,351
667,351
-
56,414
36,206
92,620
-
179,318
752,727
932,045
-
-
47,689
47,689
-
-
(1)
(1)
-
179,318
800,415
979,733
**Restricted**
**Designated**
**Unrestricted**
**funds**
**funds**
**funds**
**Total**
**£**
**£**
**£**
**£**
-
110,347
-
110,347
-
-
46,006
46,006
11,400
-
324,104
335,504
-
24,140
(18,956)
5,184
11,400
134,487
351,154
497,041
-
-
71,030
71,030
-
-
(1)
(1)
11,400
134,487
422,183
568,070|
|---|---|
## **24 Related party transactions**
Nicola Nuttall was a trustee in the year and was charged £6,300 (2019: £10,800) in rent for the use of the Gatehouse. A balance of £nil (2019: £nil) was outstanding at the year-end. This is considered to be a market rent.
29
**THE PALACE TRUST**
**MANAGEMENT INFORMATION**
**YEAR ENDED 31 DECEMBER 2020**
The following pages do not form part of the statutory financial statements which are the subject of the auditor's report on pages 8 to 10
30
**THE PALACE TRUST**
## **CHARITY DETAILED STATEMENT OF FINANCIAL ACTIVITIES**
## **YEAR ENDED 31 DECEMBER 2020**
**----- Start of picture text -----**
Total Funds Total Funds
2020 2019
£ £
Income From:
Donations and legacies
Gift Aid Donation from subsidiary Palace
24,518 1,149
Enterprises (Wells) Ltd
Donations 35,884 21,261
Grants
Church Commissioners 89,500 85,112
Job Retention Scheme 49,993 -
NLHF Heritage Emergency Fund 250,000 -
NLHF Cultural Recovery Fund 182,450 -
Refunded tax 51,927 58,214
684,272 165,736
Investment income
Dividends and interest received 2,667 2,957
Gain on investments 3,164 7,249
5,831 10,206
Charitable activities
Entrance fee 334,083 334,167
Membership income 75,946 100,475
410,029 434,642
Other trading activities
Shop income 1,567 13,640
Event sponsorship - 1,500
Management fee income - Palace Enterprises (Wells) Limited 74,080 137,529
Event income 17,994 54,499
Solar panel income 2,136 1,458
Rental income 8,784 10,800
104,561 219,426
Total income 1,204,693 830,010
**----- End of picture text -----**
31
**THE PALACE TRUST**
## **CHARITY DETAILED STATEMENT OF FINANCIAL ACTIVITIES**
## **YEAR ENDED 31 DECEMBER 2020**
**----- Start of picture text -----**
Total Funds Total Funds
2020 2019
£ £
Expenditure on:
Direct Raising Funds Costs
Event costs 27,347 22,575
Commission sales expense 8,459 9,355
35,806 31,930
Direct Charitable Activities Costs
Preserve the fabric of the Palace and Grounds:
Maintenance costs 82,047 64,125
Garden maintenance 29,110 19,719
Public access and education 2,996 7,704
114,153 91,548
Support Costs
Rent, rates, light and heat 38,974 40,500
Cleaning costs 26,326 18,268
Advertising 28,437 42,125
Office costs 48,593 43,532
Subscriptions 3,395 2,954
Legal fees 4,350 -
Professional fees 28,099 12,039
Accountancy 18,394 14,657
Bank charges 1,041 1,935
Staff training and recruitment 1,917 7,645
Travel and entertainment 3,379 12,981
Wages and salaries 395,147 392,713
Depreciation 15,443 17,185
Governance costs
Auditors fees - audit 5,500 5,375
Auditors fees - accountancy 735 565
619,730 612,474
Total expenditure 769,689 735,952
Net (expenditure)/income 435,004 94,058
**----- End of picture text -----**
32