## **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 2021** ## **THE PALACE TRUST** ## **CHARITY & GROUP CONSOLIDATED FINANCIAL STATEMENTS WITH GROUP ANNUAL DIRECTORS REPORT** ## **YEAR ENDED 31 DECEMBER 2021** |**Contents**|**Page**| |---|---| |Reference & Administrative Information|1| |Trustees’ Annual Report|2 – 7| |Independent Auditor’s Report|8 – 11| |Consolidated Statement of Financial Activities|12| |Charity statement of Financial Activities|13| |Consolidated and Charity Balance Sheet|14| |Consolidated Cash Flow Statement|15| |Notes to the Financial Statements|16 – 29| **THE PALACE TRUST** ## **REFERENCE & ADMINISTRATIVE INFORMATION** ## **YEAR ENDED 31 DECEMBER 2021** |**_Chair_**|_Rear Admiral D Wood_|| |---|---|---| |**_Vice Chair_**|_Mr P Stickland_|| |**_Trustees/Directors_**|_Mr M Blandford_|_(resigned18 November 2021)_| ||_Ms M Boylan_|| ||_Very Revd Dr J Davies_|| ||_Mr N Denison_|| ||_Mr P Dickinson_|_(appointed 1 October 2021)_| ||_Lady E Gass_|| ||_Mr R Hawes_|_(appointed 1 December 2021)_| ||_Mr Michael Minta_|| ||_Mrs C Reed_|_(appointed 1 December 2021)_| ||_Mr B Roberts-Wray_|| ||_Mr P Stickland_|| ||_Rt Revd T Willmott_|_(appointed 14 September 2021)_| ||_Mrs J Wills_|| ||_Rt Revd R Worsley_|_(appointed 25 May 2021)_| |**_Company No._**|_09404519_|| |**_Charity Registered Number_**|_1160830_|| |**_Registered Office_**|_The Bishop’s Palace_|| ||_Wells_|| ||_Somerset_|| ||_BA5 2PD_|| |**_Company Secretary_**|_Mrs R Martin_|_(resigned 15 October 2021)_| ||_Mrs N Lansdown_|_(appointed 1 December 2021)_| |**_Treasurer_**|_Mr N Denison_|| |**_Auditor_**|_Burton Sweet Limited_|| ||_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 2021** The Trustees present their report and financial statements for the 12 month period ended 31 December 2021. 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 2021 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 and share the Palace and its story as a place of enjoyment and reflection for the benefit of all. 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 made substantial progress towards 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 previous years to make them a centre for inspiring and 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 2 **THE PALACE TRUST** ## **TRUSTEES’ ANNUAL REPORT** ## **YEAR ENDED 31 DECEMBER 2021** 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, its commercial activities and 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, in particular with the introduction of community engagement measures designed to reach out to those most in need for little or no cost to them. 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** 2021 was again impacted by Covid although less severely than in 2020. Although the Gardens remained open throughout the year, however ability to trade was hit by restrictions inside the Palace buildings, and in particular, in the café. On 17[th] May, indoor hospitality and tourism reopened along with hotels. On 19[th] July (nearly a month later than originally expected) most other restrictions were removed. Visitor sales did not recover fully until June, but the Gardens were popular with locals throughout the lockdown period. Access to the Gardens provided peace and mental and physical health benefits to a widening audience. Those in the local area continued to appreciate the yearly ‘People’s Ticket’ and Membership sales also increased. The Community Garden was enhanced by the appointment of a Community Gardener with a focus on encouraging groups to benefit from this resource. The ever-popular Antiques Roadshow was filmed at the Palace among a busy programme of popular events including outdoor theatre, and new events such as outdoor exercise and wellness classes, and folk singing, bringing a sense of normality to members and visitors in abnormal times, along with other perennial events such as the Garden Festival, Christmas Markets and Christmas Lights and Decorations. Projects were begun to develop the site and how visitors enjoy it, to create a new Visitor Reception, and to begin working towards carbon net zero. ## **Achievements and Performance** In 2021 the Palace achieved the Visit England Gold Standard Award in recognition for the excellent standards in our facilities and visitor welcome. The year was extremely successful, despite the difficult operating environment, in that the Palace welcomed the highest ever number of visitors to the site, with 140,000 paying visitors and over 500,000 in the Free Area. This represented a 40% increase in Visitor numbers from 2020, and exceeded the objectives set by almost 20%. The People’s Ticket, introduced in May 2020, continues to support our charitable aims by allowing local people to visit as many times as they like for a 12-month period. Feedback from local people has continued to show great appreciation for this, and for allowing them to feel a sense of ownership of this historic site, and that it isn’t “just for tourists and the wealthy”. 3 **THE PALACE TRUST** ## **TRUSTEES’ ANNUAL REPORT** ## **YEAR ENDED 31 DECEMBER 2021** A further success was in maintaining excellent levels of Palace Memberships, which was retargeted towards supporters who wished to engage more with the Trust (as a cost of double the People’s Ticket). New open evenings, talks and tours were conceived to give added benefit, along with advance booking options for popular events. Performance is significantly above both expectations and objectives set for the year and is a good indicator of the level of support for the Palace and its aims amongst the local community. Our Community Engagement programme grew further, and a Community Engagement Assistant was appointed in autumn 2021 to enable more work to be done in this area. A Community Membership scheme was devised and implemented, and 50 free group memberships were given out to community groups in order to enable access for those who were least likely to be able to visit previously. These include Mental Health groups, school groups, vulnerable adults groups, groups from the food bank centre and many more. Their ability to visit has allowed them to experience something new and discover this stunning site on their doorstep. Community Engagement work involved a total of 68 organisations throughout the year and the impact upon many of these groups has been substantial in terms of delivering joy and opportunities in a very difficult period. Other schemes focused on widening access for groups to be able to meet safely, using the resources of the Palace for free. These included weekly and monthly meet ups in our Education Room, Gardens and Café for several groups who would otherwise have struggled to maintain their meetings. An initiative to give out a small percentage of free tickets for events for those who would not otherwise be able to experience them was begun. These included free Father Christmas tickets for a children’s hospice, and for those on Pupil Premium. Also 40 People’s Tickets were donated to Wells Food Bank, and weekly collections of vegetables grown on site were made to them. Our education and learning objectives were fully met via our apprentice and intern schemes, with a Digital Marketing Apprentice in association with Strode College and interns from Bristol University. We also had a successful Kickstart Scheme placement in our Gardens who went on to find other work subsequently. A team from Bristol University also came to carry out an environmental project at the Palace. We held a sculpture trail in association with Wells Cathedral and Wells and Mendip Museum, and 7 school groups were able to visit at a reduced rate to engage with this. We also offered free school visits to the 70 schools nearest to the Palace, of which around 10% took up the offer. This was a lower than anticipated number due to the effects on school trips of the pandemic. A new scheme to offer 10 free places every week to local parishes from Bath & Wells Diocese was also agreed in 2021. In line with the Trust’s sustainability aims, consultations were held to direct the best path towards reaching net zero, and the first stage of a metering and monitoring system for energy usage was installed. A 10 point charter was created to map out 10 points towards reducing the Palace’s negative impact on the environment. ## **Volunteering Opportunities** The number of volunteering opportunities returned to pre-Covid levels as restrictions eased and confidence grew, and a group of around 150 volunteers assisted the staff to run the site in 2021. The Trust is extremely grateful for the loyalty and contribution of its volunteers without which it could not function effectively as a site, and is delighted that so many of its volunteers have returned, along with new volunteers, in 2021. ## **Plans for Future Periods** 2021 was the first year of the five-year strategy. The Senior Management Team welcomed the clarity and vision of the strategy. The Chief Executive and the Senior Management Team were closely involved with 4 **THE PALACE TRUST** ## **TRUSTEES’ ANNUAL REPORT** ## **YEAR ENDED 31 DECEMBER 2021** Trustees in the creation of the Plan. There was a real sense of ownership and all have a strong commitment to implementation over the next five years. Several factors were impacted by the pandemic, but the 5 year plan is still expected to be achieved by 2025. Plans for a new Visitor Reception to be built in 2022 are well underway, along with the use of the Medieval Gatehouse to house the growing staff team, and a consultant has been appointed to assist with exploration of themes for future reinterpretation of the Palace Buildings. ## **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 £1,277,628, £653,000 of which is designated and £117,909 is Tangible fixed assets. 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. ## **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. - 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** The Charity hold totals funds of £1,277,628 at the end of the financial year. Free reserves available for the use by the Charity are deemed to be those that are readily realisable, less funds whose uses are restricted or else designated for particular purposes. The calculation therefore excluded £117,909 tangible fixed assets that will continue to be used in the day-to-day running and restricted funds of £nil. It also excludes other designated funds of £653,000, which exists to fund various projects to conserve and enhance the Bishops Palace. As a matter of policy, each year the Trustees review the level of free reserves. The Board considers the exposure to major risks in terms of their likely impact on its income sources and planned expenditure in the medium term. The 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 5 **THE PALACE TRUST** ## **TRUSTEES’ ANNUAL REPORT** ## **YEAR ENDED 31 DECEMBER 2021** At present the target range for free reserves is £239k to £478k.which equates to between 3 and 6 months of reported expenditure. At the year end, the actual free reserves were £507k, The Trustees recognise this is slightly above their target range by £29k however, re-investment into the Trust is anticipated with environmental and interpretation projects planned. ## **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. The Palace Trust Memorandum and Articles were incorporated in January 2015 and the charitable aims are to preserve for the benefit of the public the fabric of The Bishop’s Palace (as a place of historic and architectural interest) in order to facilitate access to The Bishop’s Palace by the public for their education and interest, and to promote such charitable purposes as will advance the religious and other charitable work of the Church of England in such manner as the Trustees shall from time to time decide and are 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 six times a year 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. The Chief Executive Rosie Martin Resigned in October 2021 and was replaced on Interim basis by Merryn Kidd and James Cross until December 2021. Jan Wallwork Clarke appointed in November 2021 as Chief Executive with start date of January 2022. Department heads are responsible for the day to day running of The Bishop’s Palace including Director of Development and Transformation, visitor services, catering, Finance & HR, marketing, venue hire, volunteer management, gardening, property, and collections. A total of 49 staff were employed by the Trust and its subsidiary during the 12-month period ended 31 December 2021 with 42 in post at 31 December 2021 Volunteering returned to nearer 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. The introduction of fixed term appointments and succession planning framework will be drawn up by the proposed new Staffing Committee. This and other specific sub committees to the Board are expected to be formed in the first part of 2022 to deliver support in targeted areas such as Governance, EDI, Finance and Fundraising as well as in the areas of Conservation and Curation of the Built Historic heritage assets. 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 > 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. 6 **THE PALACE TRUST** ## **TRUSTEES’ ANNUAL REPORT** ## **YEAR ENDED 31 DECEMBER 2021** 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. ## **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 2021 financial statements. This report was approved by the Board on 19 May 2022 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 2021** ## **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 2021 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 2021 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 8 ## **THE PALACE TRUST** ## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE PALACE TRUST** ## **YEAR ENDED 31 DECEMBER 2021** 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 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 9 **THE PALACE TRUST** ## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE PALACE TRUST** ## **YEAR ENDED 31 DECEMBER 2021** 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. Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: - the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; - we identified the laws and regulations applicable to the parent charity and its subsidiary through discussions with directors and other management, and from our knowledge and experience of the sector; - we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements of the operations of the parent charity and its subsidiary, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation; - we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and - identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance through the audit. We assessed the susceptibility of the parent charity and its subsidiary’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: - making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; - considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and - understanding the design of the parent charity and its subsidiary’s remuneration policies. To address the risk of fraud through management bias and override of controls, we: - performed analytical procedures to identify any unusual or unexpected relationships; - tested journal entries to identify unusual transactions; - assessed whether judgements and assumptions made in determining the accounting estimates set out in the accounting policies were indicative of potential bias; and - investigated the rationale behind significant or unusual transactions. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: - agreeing financial statement disclosures to underlying supporting documentation; - reading the minutes of meetings of those charged with governance; - enquiring of management as to actual and potential litigation and claims; and - reviewing correspondence with HMRC, relevant regulators and the parent charity and subsidiary’s legal advisors. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. 10 **THE PALACE TRUST** ## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE PALACE TRUST** ## **YEAR ENDED 31 DECEMBER 2021** Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. 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 Limited Statutory Auditor The Clock Tower 5 Farleigh Court Old Weston Road Flax Bourton Bristol BS48 1UR Date: ………………….. 11 **THE PALACE TRUST** ## **CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (Including Income & Expenditure Account)** ## **YEAR ENDED 31 DECEMBER 2021** |**Note**
**Income from:**
Donations and legacies
**2**
Charitable activities
**3**
Other trading activities
**4**
Investments
**5**
**Total income**
**Expenditure on:**
Raising funds
**6**
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**
**2021**
**£**
**£**
**£**
**£**
576,575
-
-
576,575
609,890
-
-
609,890
688,374
-
-
688,374
1,816
-
-
1,816|Total
Funds
2020
£
758,635
410,029
447,492
2,667| |---|---|---| ||1,876,655
-
-
1,876,655|1,618,823| ||572,361
-
-
572,361
824,528
52,913
-
877,441|485,939
724,385| ||1,396,889
52,913
-
1,449,802|1,210,324| ||6,959
-
-
6,959|3,164| ||486,725
(52,913)
-
433,812
(644,504)
644,504
-
-|411,663
-| ||(157,779)
591,591
-
433,812
-
-
-
-|411,663
-| ||(157,779)
591,591
-
433,812
800,415
179,318
-
979,733|411,663
568,070| ||642,636
770,909
-
1,413,545|979,733| 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 16 to 29 form part of these financial statements See note 13 for fund-accounting comparative figures** 12 ## **THE PALACE TRUST** ## **CHARITY STATEMENT OF FINANCIAL ACTIVITIES (Including Income & Expenditure Account)** ## **YEAR ENDED 31 DECEMBER 2021** |**Note**
**Income from:**
Donations and legacies
**2**
Charitable activities
**3**
Other trading activities
**4**
Investments
**5**
**Total income**
**Expenditure on:**
Raising funds
**6**
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**
**2021**
**£**
**£**
**£**
**£**
541,330
-
-
541,330
609,890
-
-
609,890
141,958
-
-
141,958
1,816
-
-
1,816|Total
Funds
2020
£
684,272
410,029
104,561
2,667| |---|---|---| ||1,294,994
-
-
1,294,994|1,201,529| ||78,929
-
-
78,929
824,528
52,913
-
877,441|45,304
724,385| ||903,457
52,913
-
956,370|769,689| ||6,959
-
-
6,959|3,164| ||398,496
(52,913)
-
345,583
(644,504)
644,504
-
-|435,004
-| ||(246,008)
591,591
-
345,583
752,727
179,318
-
932,045|435,004
497,041| ||506,719
770,909
-
1,277,628|932,045| 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 16 to 29 form part of these financial statements See note 14 for fund-accounting comparative figures** 13 ## **THE PALACE TRUST** ## **BALANCE SHEET** **AS AT 31 DECEMBER 2021 Company Number: 09404519** |**Note**
**Fixed assets**
Tangible assets
**15**
Investments
**16**
**Current assets**
Stock
Debtors
**18**
Cash at bank and in hand
**Creditors: amounts falling due**
**within one year**
**19**
**Net current assets**
**Total assets less current liabilities**
**Creditors: amounts falling due**
**19**
**after more than one year**
**Net assets**
**Funds**
**Unrestricted funds**
General funds
**23**
Non-charitable trading funds
**23**
Designated funds
**23**
**Restricted funds**
**23**
**Total funds**|**Group**
**2021**
**£**
181,183
56,128|**Charity**
**2021**
**£**
117,909
56,129|**Group**
**2020**
**£**
177,851
49,169|**Charity**
**2020**
**£**
122,904
49,170| |---|---|---|---|---| ||237,311
7,256
29,275
1,264,993|174,038
246
104,635
1,099,055|227,020
5,317
45,309
876,139|172,074
-
178,015
667,351| ||1,301,524
(125,290)|1,203,936
(100,346)|926,765
(124,052)|845,366
(85,395)| ||1,176,234|1,103,590|802,713|759,971| ||1,413,545
-|1,277,628
-|1,029,733
(50,000)|932,045
-| ||1,413,545|1,277,628|979,733|932,045| ||506,719
135,917
770,909
-|506,719
-
770,909
-|752,727
47,688
179,318
-|752,727
-
179,318
-| ||1,413,545|1,277,628|979,733|932,045| 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 ….......... 2022 and are signed on their behalf by: ..................................................... Rear Admiral David Wood Chair **The notes on pages 16 to 29 form part of these financial statements** 14 **THE PALACE TRUST** ## **CONSOLIDATED CASH FLOW STATEMENT** ## **YEAR ENDED 31 DECEMBER 2021** |**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**|**2021**
**£**
(46,232)
1,816|**2021**
**£**
433,270
(44,416)|2020
£
518,989
(62,396)
2,667| |---|---|---|---| ||||(59,729)| |||388,854|459,260| ## **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 16 to 29 form part of these financial statements** 15 **THE PALACE TRUST** **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 DECEMBER 2021** ## **1 Accounting policies** ## **Basis of preparing the financial statements** The accounts (financial statements) have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued in October 2019 and the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) and the Companies Act 2006 and UK Generally Accepted Practice as it applies from 1 January 2019. 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. 16 **THE PALACE TRUST** **NOTES TO THE FINANCIAL STATEMENTS** **YEAR ENDED 31 DECEMBER 2021** ## **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. 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 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** p g p y y 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** |Donations
Gift Aid Donation from subsidiary Palace
Enterprises (Wells) Ltd
Grants
Church Commissioners
Job Retention Scheme
NLHF Heritage Emergency Fund
NLHF Cultural Recovery Fund
Other small grants
Refunded tax
**Charity sub-total**
Job Retention Scheme
Other government grants
Business Rates Relief
Inter-group eliminations
**Group donations and legacies**|**Unrestricted**
**Unrestricted**
**General**
**Designated**
**Restricted**
**Total Funds**
**Funds**
**Funds**
**Funds**
**2021**
**£**
**£**
**£**
**£**
21,346
-
-
21,346
-
-
-
-
63,975
-
-
63,975
2,572
-
-
2,572
-
-
-
-
352,450
-
-
352,450
4,898
-
-
4,898
96,089
-
-
96,089|**Total Funds**
**2020**
**£**
35,884
24,518
89,500
49,993
250,000
182,450
-
51,927| |---|---|---| ||541,330
-
-
541,330
10,745
-
-
10,745
24,500
-
-
24,500
-
-
-
-
-
-
-
-|684,272
56,232
15,649
27,000
(24,518)| ||576,575
-
-
576,575|758,635| Income from donations and legacies in the prior year has been classed as unrestricted general funds. 17 **THE PALACE TRUST** **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 DECEMBER 2021** - **3 Income from charitable activities Group & Charity** |**Income from charitable activities**
**Group & Charity**||| |---|---|---| |Entrance fee
Membership income|**Unrestricted**
**Unrestricted**
**General**
**Designated**
**Restricted**
**Total Funds**
**Funds**
**Funds**
**Funds**
**2021**
**£**
**£**
**£**
**£**
501,212
-
-
501,212
108,678
-
-
108,678|Total Funds
2020
£
334,083
75,946| ||609,890
-
-
609,890|410,029| Income from charitable activities in the prior year has been classed as unrestricted general funds. |**4**
**Income from: Other trading activities**
**Group & Charity**
Shop income
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**
**2021**
**£**
**£**
**£**
**£**
16,680
-
-
16,680
65,606
-
-
65,606
55,787
-
-
55,787
1,973
-
-
1,973
1,912
-
-
1,912|Total Funds
2020
£
1,567
74,080
17,994
2,136
8,784| |---|---|---| ||141,958
-
-
141,958
543,012
-
-
543,012
7,822
-
-
7,822
39,200
-
-
39,200
-
-
-
-
21,879
-
-
21,879
109
-
-
109|104,561
322,013
3,035
(8)
20,197
63,466
8,308| ||612,022
-
-
612,022
(65,606)
-
-
(65,606)|417,011
(74,080)| ||688,374
-
-
688,374|447,492| Income from other trading activities in the prior year has been classed as unrestricted general funds. ## **5 Investment Income Group & Charity** |Dividends and interest received|**Unrestricted**
**Unrestricted**
**General**
**Designated**
**Restricted**
**Total Funds**
**Funds**
**Funds**
**Funds**
**2021**
**£**
**£**
**£**
**£**
1,816
-
-
1,816|Total Funds
2020
£
2,667| |---|---|---| Investment income in the prior year has been classed as unrestricted general funds. 18 **THE PALACE TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 DECEMBER 2021** |**6**
**Expenditure on: Raising funds**
**Group & Charity**
_Direct costs_
Cost of goods sold
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**
**2021**
**£**
**£**
**£**
**£**
495
-
-
495
56,867
-
-
56,867
13,071
-
-
13,071
8,496
-
-
8,496|Total Funds
2020
£
-
27,347
8,459
9,498| |---|---|---| ||78,929
-
-
78,929
135,698
-
-
135,698
33,905
-
-
33,905
256,761
-
-
256,761
67,068
-
-
67,068
65,606
-
-
65,606
-
-
-
-|45,304
109,891
24,046
255,015
51,683
74,080
24,518| ||559,038
-
-
559,038
(65,606)
-
-
(65,606)|539,233
(98,598)| ||572,361
-
-
572,361|485,939| Expenditure on raising funds in the prior year has been classed as unrestricted general funds. ## **7 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**
**2021**
**£**
**£**
**£**
**£**
63,029
-
-
63,029
88,229
-
-
88,229
-
-
-
-|Total Funds
2020
£
59,257
(23,341)
24,518| |---|---|---| ||151,258
-
-
151,258|60,434| |||| Net income/(expenditure) from trading activities in the prior year has been classed as unrestricted general funds. 19 **THE PALACE TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 DECEMBER 2021** ## **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
**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|**Support**
**Direct**
**Costs**
**Total**
**Costs**
**(Note 9)**
**2021**
**£**
**£**
**£**
151,573
13,737
165,310
21,381
77,851
99,232
5,254
607,645
612,899| |---|---| ||178,208
699,233
877,441| ||**Support**
**Direct**
**Costs**
**Total**
**Costs**
**(Note 9)**
**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| ||**Total**
**2021**
**£**
**£**
**£**
-
49,904
49,904
-
21,704
21,704
3,213
28,921
32,134
-
51,949
51,949
-
4,508
4,508
-
11,775
11,775
-
32,055
32,055
-
14,082
14,082
-
1,280
1,280
-
50,254
50,254
-
9,806
9,806
5,283
395,456
400,739
-
20,639
20,639
-
5,830
5,830
-
1,070
1,070
**Raising**
**funds**
**Charitable**
**activities**| ||8,496
699,233
707,729| 20 **THE PALACE TRUST** **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 DECEMBER 2021** ## **9 Support costs (** _**continued**_ **)** ## **Prior year comparative** |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|**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
**Raising**
**funds**
**Charitable**
**activities**| |---|---| ||9,498
610,232
619,730| 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. ## **10 Net income/ (expenditure)** |This is stated after charging:
Depreciation of tangible fixed assets
Auditors fees - audit
Auditors fees - accountancy|**Group**
**2021**
**£**
42,375
10,530
1,870|**Charity**
**2021**
**£**
20,639
5,830
1,070|**Group**
**2020**
**£**
31,954
9,900
1,155|**Charity**
**2020**
**£**
15,441
5,500
735| |---|---|---|---|---| There were no Trustees' remuneration or other benefits for the year ended 31 December 2021 nor for the period ended 31 December 2020. The total Trustees' expenses paid during the year ended 31 December 2021 to two trustees for travel expenses were £1,385 (2020: £1,558). The total Trustee, key management personnel and other related party donations in the year were £nil (2020: £nil). 21 **THE PALACE TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 DECEMBER 2021** |**11**
**Staff costs and numbers**
The aggregate payroll costs were:
Wages and salaries
Social security costs
Employers pension
Redundancy costs|**Group**
**2021**
**£**
601,765
32,951
24,807
-|**Charity**
**2021**
**£**
361,503
21,649
17,587
-|**Group**
**2020**
**£**
593,033
36,064
17,850
1,940|**Charity**
**2020**
**£**
361,267
20,529
11,411
1,940| |---|---|---|---|---| ||659,523|400,739|648,887|395,147| 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**
**2021**
**No.**
10
32|**Charity**
**2021**
**No.**
8
15|**Group**
**2020**
**No.**
12
27|**Charity**
**2020**
**No.**
9
15| |---|---|---|---|---| ||42|23|39|24| 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**
**2021**
**No.**
8
17|**Charity**
**2021**
**No.**
6
9|**Group**
**2020**
**No.**
8
16|**Charity**
**2020**
**No.**
6
8| |---|---|---|---|---| ||25|15|24|14| No employee received emoluments of more than £60,000. The key management personnel for 2021 (which consists of the Trustees, the Chief Executive and Joint Interim Chief Executives) employee benefits totalled £112,039 for the Group & Charity. The key management personnel for 2020 (which consisted of the Trustees, the Chief Executive, Development Project Manager and Head Gardener) employee benefits totalled £106,633 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. 22 **THE PALACE TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 DECEMBER 2021** ## **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 2020**
**Total funds at 31 December 2020**
**Net movement in funds**
**Net movement in funds before taxation**|**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| 23 **THE PALACE TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 DECEMBER 2021** ## **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 2020**
**Total funds at 31 December 2020**
**15**
**Tangible fixed assets**
**Group**
**Cost**
At 1 January 2021
Additions
Disposals
At 31 December 2021
**Depreciation**
At 1 January 2021
Charge for the year
Elim on disposal
At 31 December 2021
**Net book value**
At 31 December 2021
At 31 December 2020
**Net movement in funds**|**Computer**
**equipment**
**£**
31,457
9,172
(823)|**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| |||**Furniture,**
**fittings and**
**Outdoor**
**Catering**
**equipment**
**equipment**
**equipment**
**Totals**
**£**
**£**
**£**
**£**
16,295
139,238
125,880
312,870
5,312
1,018
30,730
46,232
(180)
-
(14,226)
(15,229)| ||39,806|21,427
140,256
142,384
343,873| ||16,917
6,725
(703)|13,496
37,591
67,015
135,019
1,492
11,552
22,606
42,375
(211)
-
(13,790)
(14,704)| ||22,939|14,777
49,143
75,831
162,690| ||16,867|6,650
91,113
66,553
181,183| ||14,540|2,799
101,647
58,865
177,851| 24 **THE PALACE TRUST** **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 DECEMBER 2021** ## **15 Tangible fixed assets (** _**continued**_ **)** ## **Charity** |**Cost**
At 1 January 2021
Additions
Disposals
At 31 December 2021
**Depreciation**
At 1 January 2021
Charge for the year
Elim on disposal
At 31 December 2021
**Net book value**
At 31 December 2021
At 31 December 2020|**Furniture,**
**Computer**
**fittings and**
**Outdoor**
**Catering**
**equipment**
**equipment**
**equipment**
**equipment**
**Totals**
**£**
**£**
**£**
**£**
**£**
31,457
16,295
139,238
23,760
210,750
9,172
5,312
1,018
231
15,733
(823)
(180)
-
-
(1,003)| |---|---| ||39,806
21,427
140,256
23,991
225,480| ||16,917
13,496
37,591
19,842
87,846
6,725
1,492
11,552
870
20,639
(703)
(211)
-
-
(914)| ||22,939
14,777
49,143
20,712
107,571| ||16,867
6,650
91,113
3,279
117,909| ||14,540
2,799
101,647
3,918
122,904| ## **16 Fixed asset investments** ## **Group** |Opening balance
Unrealised gains/(losses)
Historical cost of investments|**Unlisted**
**Total**
**securities**
**2021**
**£**
**£**
49,169
49,169
6,959
6,959|**Total**
**2020**
**£**
46,005
3,164| |---|---|---| ||56,128
56,128|49,169| ||**Total**
**2021**
**£**
33,593|**Total**
**2020**
**£**
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. 25 ## **THE PALACE TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 DECEMBER 2021** ## **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**
**£**
49,170
6,959|**Total**
**2021**
**£**
49,170
6,959|**Total**
**2020**
**£**
46,006
3,164| |---|---|---|---| ||56,129|56,129|49,170| |||**Total**
**2021**
**£**
33,594|**Total**
**2020**
**£**
33,594| |||**Total**
**2021**
**£**
56,128
1|**Total**
**2020**
**£**
49,169
1| |||56,129|49,170| 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** **Percentage Principal Country shareholding activity** Palace Enterprises (Wells) Limited 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|**2021**
**£**
647,267
(426,363)
**Year ended**
**31 December**|2020
£
515,892
(388,952)
Year ended
31 December| |---|---|---| ||220,904
(132,675)|126,940
(125,763)| ||88,229
-|1,177
-| ||88,229
47,688
88,229|1,177
71,029
1,177| ||135,917
-|72,206
(24,518)| ||**135,917**|**47,688**| 26 **THE PALACE TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 DECEMBER 2021** |**18**
**Debtors**
Trade debtors
Amount owed by group undertakings
Prepayments and accrued income
Other debtors
**19**
**Creditors: amounts falling due within one year**
**Amounts falling due within one year**
Trade creditors
Social security, pensions and other taxes
Other creditors
Accruals and deferred income
**Amounts falling due after more than one year**|**Group**
**2021**
**£**
4,086
-
25,189
-|**Charity**
**2021**
**£**
2,693
77,945
23,997
-|Group
2020
£
16,868
-
25,001
3,440|Charity
2020
£
16,942
127,922
24,933
8,218| |---|---|---|---|---| ||29,275|104,635|45,309|178,015| ||**Group**
**2021**
**£**
71,156
16,309
8,408
29,417|**Charity**
**2021**
**£**
64,382
14,331
8,408
13,225|Group
2020
£
39,659
17,884
488
66,021|Charity
2020
£
35,014
9,408
488
40,485| ||125,290|100,346|124,052|85,395| ||-|-|50,000|-| |**20**
**Reconciliation of net movement in funds to net cash inflow from operating activities**
Statement of Financial Activities: Net movement in funds
Investment income
Depreciation
(Profit) / loss on disposal of fixed assets
(Decrease) / increase in creditors: Due within one year
(Decrease) / increase in creditors: Due after more than one year
(Increase) / decrease in debtors
(Increase) in stock
**Net cash inflow from operating activities**
**21**
**Analysis of changes in cash flow during the year**
**2021**
**£**
Cash at bank and in hand
1,264,993
**2020**
**£**
Cash at bank and in hand
876,139
Unrealised net (gain) / loss on investments|**20**
**Reconciliation of net movement in funds to net cash inflow from operating activities**
Statement of Financial Activities: Net movement in funds
Investment income
Depreciation
(Profit) / loss on disposal of fixed assets
(Decrease) / increase in creditors: Due within one year
(Decrease) / increase in creditors: Due after more than one year
(Increase) / decrease in debtors
(Increase) in stock
**Net cash inflow from operating activities**
**21**
**Analysis of changes in cash flow during the year**
**2021**
**£**
Cash at bank and in hand
1,264,993
**2020**
**£**
Cash at bank and in hand
876,139
Unrealised net (gain) / loss on investments|**2021**
**£**
433,812
(1,816)
42,375
(6,959)
525
1,238
(50,000)
16,034
(1,939)|2020
£
411,663
(2,667)
31,954
(3,164)
-
(40,088)
50,000
64,961
6,330| |---|---|---|---| |||433,270|518,989| |||2020
£
876,139|Change
388,854| ||**2020**
**£**
876,139|2019
£
416,879|Change
459,260| 27 **THE PALACE TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 DECEMBER 2021** |**22**
**Movement in funds**
**Group**
**Unrestricted funds**
**Designated funds**
Palace interpretation
Fixed assets
Cultural Recovery Fund
**General funds**
General fund
Unrestricted funds subtotal
**Charity funds**
Palace Enterprises (Wells) Limited
Inter-group eliminations
**Total funds (Group)**
**Previous year**
**Group**
**Restricted Funds**
Great Hall
**Unrestricted funds**
**Designated funds**
Palace interpretation
Fixed assets
Cultural Recovery Fund
**General funds**
General fund
Unrestricted funds subtotal
**Charity funds**
Palace Enterprises (Wells) Limited
Inter-group eliminations
**Total funds (Group)**|**At**
**At**
**1 Jan**
**Gains /**
**31 Dec**
**2021**
**Income**
**Expenditure**
**Transfers**
**(losses)**
**2021**
**£**
**£**
**£**
**£**
**£**
**£**
24,140
-
-
628,860
-
653,000
122,904
-
(20,639)
15,644
-
117,909
32,274
-
(32,274)
-
-
-
752,727
1,294,994
(903,457)
(644,504)
6,959
506,719| |---|---| ||932,045
1,294,994
(956,370)
-
6,959
1,277,628| ||932,045
1,294,994
(956,370)
-
6,959
1,277,628
47,689
647,267
(559,038)
-
-
135,918
(1)
(65,606)
65,606
-
-
(1)| ||47,688
581,661
(493,432)
-
-
135,917| ||| ||979,733
1,876,655
(1,449,802)
-
6,959
1,413,545| ||**At**
**At**
**1 Jan**
**Gains /**
**31 Dec**
**2020**
**Income**
**Expenditure**
**Transfers**
**(losses)**
**2020**
**£**
**£**
**£**
**£**
**£**
**£**
11,400
-
(11,400)
-
-
-| ||11,400
-
(11,400)
-
-
-| ||24,140
-
-
-
-
24,140
110,347
-
(15,443)
28,000
-
122,904
-
-
-
32,274
-
32,274
351,154
1,201,529
(742,846)
(60,274)
3,164
752,727| ||485,641
1,201,529
(758,289)
-
3,164
932,045| ||497,041
1,201,529
(769,689)
-
3,164
932,045
71,030
515,892
(539,233)
-
-
47,689
(1)
(98,598)
98,598
-
-
(1)| ||71,029
417,294
(440,635)
-
-
47,688| ||| ||568,070
1,618,823
(1,210,324)
-
3,164
979,733| ## **Designated funds** The Palace interpretation fund relates to a large development project currently in the planning phase 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 Great Hall fund relates to the conservation and development of the Great Hall ruin. 28 **THE PALACE TRUST** **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 DECEMBER 2021** ## **22 Movement in funds** _**(continued)**_ ## **Inter-group eliminations** A donation to the Trust from Palace Enterprises of £nil (2020: £24,518) and a management charge of £65,606 (2020: £74,080) 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 Inter-group eliminations along with the elimination of Enterprise's share capital upon consolidation. ## **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**
**2021**
**funds**
**funds**
**funds**
**Total**
**£**
**£**
**£**
**£**
-
117,909
-
117,909
-
-
56,129
56,129
-
-
1,099,055
1,099,055
-
653,000
(648,465)
4,535| |---|---| ||-
770,909
506,719
1,277,628
-
-
135,918
135,918
-
-
(1)
(1)| ||-
770,909
642,636
1,413,545| ||**Restricted**
**Designated**
**Unrestricted**
**2020**
**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| ## **24 Related party transactions** Nicola Nuttall was a trustee in the year and was charged £Nil (2020: £6,300) in rent for the use of the Gatehouse. A balance of £Nil (2020: £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 2021** 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 2021** |**Income From:**
_Donations and legacies_
Gift Aid Donation from subsidiary Palace
Enterprises (Wells) Ltd
Donations
Grants
Church Commissioners
Job Retention Scheme
NLHF Heritage Emergency Fund
NLHF Cultural Recovery Fund
Other small grants
Refunded tax
_Investment income_
Dividends and interest received
Gain on investments
_Charitable activities_
Entrance fee
Membership income
_Other trading activities_
Shop income
Management fee income - Palace Enterprises (Wells) Limited
Event income
Solar panel income
Rental income
**Total income**|**Total Funds**
**2021**
**£**
-
21,346
63,975
2,572
-
352,450
4,898
96,089|Total Funds
2020
£
24,518
35,884
89,500
49,993
250,000
182,450
-
51,927| |---|---|---| ||541,330
1,816
6,959|684,272
2,667
3,164| ||8,775
501,212
108,678|5,831
334,083
75,946| ||609,890
16,680
65,606
55,787
1,973
1,912|410,029
1,567
74,080
17,994
2,136
8,784| ||141,958|104,561| ||1,301,953|1,204,693| 31 **THE PALACE TRUST** ## **CHARITY DETAILED STATEMENT OF FINANCIAL ACTIVITIES** ## **YEAR ENDED 31 DECEMBER 2021** |**Expenditure on:**
_Direct Raising Funds Costs_
Cost of goods sold
Event costs
Commission sales expense
_Direct Charitable Activities Costs_
Preserve the fabric of the Palace and Grounds:
Maintenance costs
Garden maintenance
Public access and education
_Support Costs_
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**
Auditors fees - audit
Auditors fees - accountancy
**Total expenditure**
**Net (expenditure)/income**|**Total Funds**
**2021**
**£**
495
56,867
13,071|Total Funds
2020
£
-
27,347
8,459| |---|---|---| ||70,433
151,573
21,381
5,254|35,806
82,047
29,110
2,996| ||178,208
49,904
21,704
32,134
51,949
4,508
11,775
32,055
14,082
1,280
50,254
9,806
400,739
20,639
5,830
1,070|114,153
38,974
26,326
28,437
48,593
3,395
4,350
28,099
18,394
1,041
1,917
3,379
395,147
15,443
5,500
735| ||707,729
956,370|619,730
769,689| |||| ||345,583|435,004| 32