Docusign Envelope ID. 378401CO-1C3146E8-BEB74B61325C6ADE Potential Difference Theatre (A Company Limited by Guarantee) Report and unaudited Financial Statements for the year ended 30 September 2022 Company number: 08674697 {England and Wales) Charity number: 1166204
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B61325C6ADE Potential Difference Theatre Contents Page Reference and administration details Trustees, report Independent Examinerfs report to the trustees io-ii Statement of Financial Activities 12 Balance sheet 13 Notes to the financial statements 15-20
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Reference and administration details Directors L Osepciu Khaliq T Strack J Baggaley Ichairl Registered office 160 Wynford Road London Nl 9SW Independent Examiner Scott Lawrence Hazlewoods LLP Windsor House Bayshill Rd Cheltenham GL50 3AT Charity number Company number 1166204 08674697
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Report of the trustees for the year ending 30 September 2022 The trustees are pleased to present their annual trustees, report together with the financial statements of the charity for the year ending 30 September 2022 which are also prepared to meet the requirements for a directors, report and accounts for Companies Act purposes. The financial statements comply with the Charities Act 2011, the Companies Act 2006, the Memorandum and Articles of Association, and Accounting and Reporting by Charities.. Statement of Recommended Practice applitable to charities preparing their actounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021. Our purposes The purpose of the charity is: To advance the arts for the public benefit by the promotion in particular, but not exclusively, of the art ofdrama. Mlsslon Statement Potential Difference's mission is to use the power of theatre and storytelling to engage, excite and inspire people about science, philosophy, and technology. Each project we make sparks from a concept that has a significant impact on our lives and is full of theatrical potential. We seek out extraordinary writers, theatre-makers and designers and bring them together with technologists, academics, and specialists to inform and inspire each otherfs practice. Through this unusual creative process, we aim to craft stories that are intellectually and viscerally engaging and that challenge the divide between the sciences and the arts. We curate a programme of events and online material to facilitate tonversations and stimulate debate. We develop new technology and strive to use it to create new sorts of narrative experiences that challenge theatre's boundaries and reach new audiences. The trustees have referred to Section 17 of the Charities Act 2011 and to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing our aims and objectives and in planning our future activities. In particular, the trustees consider how planned activities will contribute to the aims and objectives they have set.
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Report of the trustees for the year ending 30 September 2022 Actlvltles and achlevements of the year Alongside the rest of the theatre industry, 2022 Saw us able to resume in person activities and to be able to Start planning activitie5 further ahead than has been possible for the last few years. In partiCLJlar, we were able to deliver one of our larger projects, Classbot 450. 'CLASSBOT 450, The main focus of the year was the delivery of a pilot of our project Classbot 450, made in co- production with KIT Theatre. The pilot built on successful research and development projects during 2020 and 2021. Having had to tancel delivery a number of times due to the COVID-19 pandemic, we were delighted to realise the project at two primary schools in June. Classbot 450 is an interactive adventure that erupts unexpectedly in primary schools, taking over their normal school life for a week. It 15 designed to address the urgent need for support in delivering coding education in primary schools. It uses live immersive drama and an accessible coding interface to offer an intensive and engaging series of coding workshops to year 3 or 4 pupils expanding on areas of the Key Stage 2 curriculum. It also encourages children across the whole of the primary age group to engage with some of the philosophical and economic questions posed by the massive advancements in Artificial Intelligence anticipated over the next 30 years. We presented Classbot to 1,180 children at Salusbury Primary School, a 3 form entry school in Brent, and Brentfield, a 2.5 form entry school in Brent. The adventure began when every child was called to an assembly where they were informed the school was part of a 'new government initiative" the Classbot 450 programme. They would be part of testing the world's first robot teacher over the next week. Lex, the robot (who was played by an actor in a robot suit) was then unveiled from her charging pod and bombarded with questions by the children. However, during her first trial teaching session, Lex started to glitch before malfunctioning dramatically while attempting to write an answer on the whiteboard. Her human minders had no idea what to do, but the children discovered a label on her suit that directed them to Lex's 'coding interface". This was a custom website that we developed for the project allowing children to design their own programs to run on Lex. These programs consisted of simple building blocks to give Lex instructions Isuch as "walk two steps forward" or "turn 90 degrees to your left") that could be combined into sophisticated programs to solve real world problems. Using our own technology developed for the project, these instructions were converted into audio and relayed to the actor portraying Lex via a hidden earpiece. Lex would then enact the children's programs in real time. The interface was modelled on existing the visual coding tools such as "Scratch. that the children use in school coding lessons. It was used over the week to offer a variety of coding challenges to help Lex and advance the story. On discovering the coding interface, the children were able to fix the broken instructions which had made Lex unable to reach the whiteboard. Unfortunately, while uploading the new instructions to Lex, her memories were accidentally wiped, and she forgot how to be a teacher. Attempting to fix this, Lex visited all other classes in the school aged 4-11, to get their input on different things a teacher would need to be able to do. For younger age groups, this involved simple workshops such as introducing Lex to their classrooms, teaching her what a song or a story was. While older year
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Report of the trustees for the year ending 30 September 2022 groups had more sophisticated tasks such as experimenting with how to tonfigure Lex's personality to give her the traits she needed to be a good teacher. With all this information uploaded to Lex, she was switched back on during a whole school assembly, and it was discovered she had suddenly become fully conscious and self-aware. As pupils started to explore the philosophical implications of a completely conscious robot Lex's misguided creator Agatha got in touch with the news that she would be coming to the school to observe whether she was truly conscious, before taking her away to take her apart and switch her off forever. This led to a dramatic final act in which every year group was assigned a different task to help Lex escape such as programming her to be stealthy or debating with Agatha about the ethics of shutting her down. The action culminated in a showdown via Zoom between Lex, at Euston Station, and Agatha, who was still hunting for her in the school. Thanks to the hard work of the children in distracting Agatha, arguing with her, and opening her emotions to the idea of a conscious robot, she agreed to let Lex go and live her own life. The pilot was highly successful, and we believe it was of great benefit to the children taking part. It sparked children's imaginations and gave them a central role in the story with their choices and actions critical to helping Lex. We believe they will remember their experiences for a very long time. "Even now the children ore still osking, where his Lex, how is she doing?15 she going to be visiting again ?- (Y3 teacher, Salusbury) The narrative, workshops and tasks gave children a framework and motivation to engage with the role of Al, robotics, and automation in the world they are growing up. Children and teachers became caught up in activities and discussions around how they felt about having a robot teacher such as.. how a robot should be allowed to behave,. whether it should be allowed to tell a lie; whether robots could be conscious and what it might mean if they were. These conversations expanded into other lessons during the week and spilt into the school corridors and playground. "My clossfound the whole experience incredibly immersive, adventurous, educotionol, and on epic leorning journey oll obout coding. By the end of the odventure most of the closs hod {alsoJ developed a keener understanding of the philosophical questions raised via Lex., (Y3 teacher, Salusburyj Our unique approach to allowing children to write and execute programs on Lex proved particularly compelling. During the pilot, 180 pupils in years 3 and 4 had intensive coding workshops, based around the Key Stage 2 curriculum. These were designed to be accessible to any coding ability while being able to challenEe those who were more confident. Teachers reported far higher engagement than normal, especially from children with special educational needs ISENI or those with English as an additional language IEALI- groups who often struggle with coding. During the coding exercises, children were not thinking about solving a problem on a screen but how to help this live three- dimensional robot in front of them. Every child had the chance to see their programs running on Lex and to debug and fix them in real time. And by having a human actor enacting these program, she was able to add humour, apply judgement or provide hints to help make failure less frustrating. "It wos oble to enguge children in leorrjing coding without reolising they were doing so. It provoked a widerphi10sophicol debate umong the older students. All children wanted to help Lex escape regordless of oge" (Asslstont Heudteocher, Salusbury)
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Report of the trustees for the year ending 30 September 2022 Through building a relationship with Lex and giving the children agency to help her, and to advance the narrative, through coding tasks, the children were better able to access the curriculum. While the non-coding activities, such as creative writing assignments, debating tasks, and performance workshops, gave children a context where science and arts subjects were brought together. Classbot created a high level of engagement from children who often engage less With STEM activities both at school and in their lives beyond. We were particularly pleased to hear from teachers about the impact Classbot had on SEN and EAL children. "Some of the children, especially my speciol needs children and the EAL os well... they dorj't Iways get irjvolved or cun't always access the curriculum. Usually, they would look at someone more able with a bit more experience. However, the way it was loid outfor them, they were guided to work out where the bug wos, the way you engoge the narrative through the learning ensured that oll children participated really well., (Y3 teacher, Sulusburyj" Teachers also reported that they saw girls engaging with the project far more than usual for science and technology activities. In addition, parents became curious about the project and would ask about the robot at the school gates and in parent WhatsApp groups. In response, we brought Lex to the gates to meet parents at the end of the day. Teachers at Salusbury school commented that some of the parents reached in this way were not known to the school previously and so helped the school to engage with more parents, particularly those from disadvantaged backgrounds. We are grateful to John Lyon's Charity for funding the pilot project. It also received additional support throuEh grants to our partners KIT Theatre from Arts Council England and the Old Oak and Park Royal Development Corporation. The funding allowed us to offer the project free of charge to our two partner schools. Overall, we were thrilled with the success of Classbot and the responses from children and te3chers. We believe it is a project that uniquely combines our skills using technology, storytelling, and the power of live experiences to inspire audiences to engage with complex ideas, as well as the skills of our partners KIT Theatre in using immersive performance to create transformative educational adventures in school environments. Following the success of the project, we are delighted to have been awarded a three-year grant from John Lyon's Charity to refine and scale up the production and deliver it in many more primary schools between 2024 and 2026. Wefound that a lot of children who moy not normally be os engaged in written work, were really engaged with Lex, ond theyformed a connection with her and they were waving at her in the holls, they were highfiving her... Their number one priority Was how cun we help Lex huve this good life where she is happy... Overall, they were reolly engaged in the learning. They saw the problems thot the team presented, the coding problems, und they thought of real-world woy5 to solve those problems... it mode them o lot more engoged in computing, robotics and just technology in generol. (Assistant Heodteocher, Solusbury)
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Report of the trustees for the year ending 30 September 2022 'FRAGMENTS' After many years in development, we had planned to present a production of Fragments in April 2022. However, the sharp rise in covid cases over December and january during the Omicron wave made continuing on this timescale an unacceptable risk. Fragments will be our largest project to date and the delays and disruption that would be caused by a covid case getting into the company or creative team could easily have left us unable to produce, so it was decided to cancel production once again. However, over the year we were able to continue with script development, run a number of workshops with actors and creatives, and to re-engage partners and make plans towards prodLJCtion in Spring 2023. Our funders remain supportive to this timetable and key partners and members of the creative team are committed to the project. We look forward to producing it in 2023. Future Plans Next year will see the finished production of our new play Fragments which will run at The Playground Theatre London and tour to the Old Fire Station, Oxford, alongside a wide programme of events, workshops, and films. We also hope to resume development of our early pilot The Invisible Friend, alongside some other future projects, and to put plans in place for the wider rollout of Classbot over the next 3 years. Ongoing impact of COVID-19 on the charity This was the first year since the pandemic in which we were largely able to resume normal activities without requiring significant adaptations for COVID. We have been able to relax most of our practices for working safely around COVID-19 and that has greatly eased the planning and coordination that must be done around each project. However, the pandemic continued to have an impact on our work. As noted above, it led to deferral of activities on Fragments. It also greatly complicated our planning and delivery of Clossbot. Teachers have faced greater pressures than before in trying to make up for two disrupted years of education as a result, schools have been slow to welcome b3ck large external projects. This made it hard to get schools to commit to the project dates and the delivery timetable for Classbot had to be moved twice during the year and was only confirmed at extremely short notice. Thi5 led to work being delivered in a very condensed timeframe and put more burden on the team managing the project. In resuming delivery of larger scale in-person projects, we are required to put a lot more thought and effort into contingency planning and building resilience into our project teams around illness. We generally cannot afford the additional cost and complexity of understudies, or to provide cover for every team member in case of illness. This means that must be comfortable with a higher level of risk to a project's delivery than would previously have felt acceptable. As in previous years, in delivering each project, the art15tic director and associate producers assess the risk5 that COVID-19 might pose to the viability of that project such as changing restrictions, a key team member needing to isolate, or a key venue or partner needing to withdraw. We draw up contingency plans to minimise potential losses arising from such scenarios.
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Report of the trustees for the year ending 30 September 2022 The pandemic has had a significant impact on the size of the freelance workforce, their wellbeing and capacity to take on work that continues to make it challenging to hire staff for projects. We expect these impacts to be felt within the industry for a number of year5 to come. We continue to benefit from the increased interest in use to technology across the sector. Classbot has been an excellent showcase of our unique approach to working with technology and we have two further projects in development that combine live performance and digital technology that should be able to capitalise on this trend. The trustees have considered detailed forecast and budgets for rescheduled projects and are of the opinion that the Charity has sufficient reserves to continue for the foreseeable future and to continue meeting our charitable objectives. We are grateful to the support we received from Arts Council England's Emergency Response Grants scheme. We have not needed to access any other Government support and do not anticipate needing to do so. Financial review The trustees are pleased to report that 2021122 saw the charity generate a surplus from its charitable activities which will be reinvested in future charitable activities. The principal funding sources were donations and from grants to finance the various projects, as detailed above and disclosed in the notes to the financial statements. We understand the requirements under Charity regulations to disclose our involvement in fundraising. The Charity is not involved in such activities as monies are predominantly generated from grants and any donations received do not incur fundraisin8 Costs. Reserves policy The Potential Difference Reserves Policy is to maintain sufficient level of reserves to enable normal unavoidable operating costs to be met over a period of up to twelve months and to take account of potent131 risks and contingencies that m3y arise from time to time. The Trustees regularly monitor and review the effectiveness of the policy in the light of the changing funding and financial climate and other risks. The trustees have reviewed the reserves policy in the light of COVID-19 and consider that it remains adequate. Directors and trustees The directors of the charitable comp3ny (the charity) are its trustees for the purpose of charity law. The trustees serving during the year and since the year end were as follows.. S Hitch (resigned 221091221 J Baggaley L Osepciu
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Report of the trustees for the year ending 30 September 2022 l Khaliq T Strack Governing Document Potential Difference Theatre is a company limited by guarantee governed by its Memorandum and Articles of Association dated 29 October 2015. It was registered as a charity with the Charity Commission on 24 March 2016. Appolntment of trustees The directors of the charitable company I'the charity") are its trustees for the purpose of charity law and throughout this report are collectively referred to as the trustees. As set out in the Articles of Association, the trustees must be at least three and no more than seven in number. They can be appointed at any time throughout the year and stand for re-election at the AGM. Rotation of directors is by one third of the longest serving directors retiring at the AGM with no disbar to reappointment. Policies and procedures adopted for the induction and training of trustees are ongoing and incorporated indirectly into the regular trustees, meetings. Organisation The trustees oversee the charitable purpose and mission and approve structure and strategy. The board normally meets quarterly covering development and finance. The trustees have delegated the responsibility of managing the day-to-day operations of the charity to the Artistic Director. Related parties and co-operation with other organisations None of our trustees receive remuneration or other benefit from their work with the charity. Any connection between a trustee or senior manager of the charity with a production company, contracted actor, performer, or exhibitor Must be disclosed to the full board of trustees in the same way as any other contractual relationship with a related party. A summary of transactions with all related parties is set out in note 7 to the financial statements. Risk management The trustees have a risk management strategy which comprises.. an annual review of the principal risks and uncertainties that the charity faces; the establishment of policies, systems, and procedures to mitigate those risks identified in the annual review,. and the implementation of procedures designed to minimise or manage any potential impact on the charity should those risks materialise. This work has identified that financial sustainability is the major financial risk for the charity. A key element in the management of financial risk is a regular review of available liquid funds to settle debts
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Report of the trustees for the year ending 30 September 2022 as they fall due, and active management of trade debtors and creditors balances to ensure sufficient working capital by the charity. Attention has also been focussed on non-financial risks arising from fire, health and safety of artists and audience, management of performing rights and ensuring equal opportunitie5. These risks are managed by having robust policies and procedures in place, and engaging experienced practitioners to oversee the risk management for each project in these operational areas. These accounts are prepared in accordance with the special provisions of Part 15 of the Companies Act relating to small companies. By order of the board of trustees J Baggaley
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Independent Examiner's report to the trustees of Potential Difference Theatre Independent Examiner's Report to the Trustees of Potential Difference Theatre I report to the trustees Iwho are also Directors for the purpose of company lawl on my examination of the financial statements of Potential Difference Theatre I'the charitable company'l for the year ended 30 September 2022 which comprise the Statement of Financial Activities, the Balance Sheet and related notes. This report is made solely to the charity's trustees, as a body, in accordance with section 145 of the Charities Act 2011. My work has been undertaken so that I might state to the charity's trustees those matters l am required to state to them in this report and for no other purpose. To the fullest extent permitted by law, I do not accept or assume responsibility to anyone other than the charity and the charitys trustees as a body, for my work, for this report, or for the opinions I have formed. Responsibilities and basis of report As the trustees of charitable tompany you are responsible for the preparation of the financial statements in accordance with the requirements of the Companies Act 20061'the 2006 ACVI. Having satisfied myself that the financial statements of the charitable company are not required to be audited under Part 16 of the Act and are eligible for independent examination, I report in respect of my examination of the charitable company's financial statements carried out under section 145 of the Charities Act 2011 I'the 2011 Act'l and in carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 14515llbl of the 2011 Act. An independent examination does not involve gathering all the evidence that would be required in an audit and consequently does not cover all the matters that an auditor considers in giving their opinion on the financial statements. The planning and conduct of an audit goes beyond the limited assurance that an independent examination can provide. Consequently l express no opinion as to whether the financial statements present a 'true and fair, view and my report is limited to those specific matters set out in the independent examinerfs statement. Independent examiner's Statement I have completed my examination. I confirm that no material matters have come to my attention in connection with the examination giving me cause to believe that in any material respect.. accounting records were not kept in respect of the charitable company as required by section 386 of the 2006 Art,. or the financial statements do not accord with those records,. or the financial statements do not comply with the accounting requirements of section 396 of the 2006 Act other than any requirement that the financial statefflents give a 'true and fair view which is not a matter considered as part of an independent examination,. or the financial statements have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accoLJnting and reporting by charities applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021. io
DocuSign Envelope ID: 378401CO-1C31-46E8-BEB7-4B61325C6ADE
Potential Difference Theatre
Independent Examiner’s report to the trustees of Potential Difference Theatre
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the financial statements to be reached.
Scott Lawrence FCA DChA 29 June 2023 Date:
11
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Statement of Financial Activities (including income and expenditure account} for the year ended 30 September 2022 2022 2022 Restricted 2022 Total 2021 2021 Unrestricted Restricted 2021 Total Unrestricted Note Income.. Donations Charitable activities Grants 12,500 8,337 12,500 11,705 21.819 25,056 5,319 2,790 45 2,189 25,095 25,101 7,508 27,885 3,368 21,819 20,837 25,187 46,024 33,165 27.329 60,494 Expendlture- Expenditure on charitable activities 110,9911 127,7111 138,7021 114,7511 123,5731 138,3241 Total Expenditure 110,9911 127,7111 138,7021 114,7511 123,5731 138.3241 Net lexpenditurel / income Transfer between funds 9,846 12,4921 12,S241 2,492 7,322 18,414 14,2211, 3,756 4,221, 22,170 12 Net movement In funds 7.354 1321 7,322 14,193, 7,977, 22.170 Reconciliation of funds Total funds brought forward S3,4341 17,7121 71,146 39,241 9,735 48,976 Total funds carried forward 60,788 17.680 78,468 53,434, 17,712, 71.146 The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities. A prior year reserve allocation adjustment has been made for covid-related funding. Totals remain unaffected 12
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Balance Sheet as at 30 September 2022 2022 2021 Note Curreni assets Debtor5 Cash at bank io 14,523 87,621 102,144 9,434 95,958 105,392 Creditor5.' amounts falling due within one year li 123,6761 134,2461 Net assets 78,468 71,146 The funds of the charity Unrestricted income fund5 Restricted income fund5 12 12 60.788 17,680 53.4341 17,712L Total charityfunds 78,468 71,146 A prior year reserve allocation adjustment has been made for covid-related funding. Totals remain unaffected The charitable company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 30 September 2022. The members have not required the company to obtain an audit of its financial statements for the year ended 30 September in accordance with Section 476 of the Companies Act 2006. The trustees acknowledge their responsibilities for lal ensuring that the charitable company keeps accounting records that comply with Sections 386 and 387 of the Companies Act 2006 and Ibl preparing financial statements which give a true and fair view of the state of affairs of the charitable company as at the end of each financial year and of its surplus or deficit for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the charitable company. Under Section 454 of the Companies Art 2006, on a voluntary basis, the trustees can amend these financial statements if they subsequently prove to be defective. These financial statements have been prepared in accordance with the special provisions relating to small companies within Part 15 of the Companies Act 2006 and with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021. The notes at pages 15 to 20 form part of these accounts. 13
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Balance Sheet as at 30 September 2022 29/612023 The financial statements were approved by the trustees on . and signed on its behalf by.. J Baggaley Company number: 08674697 (England and Wales) 14
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Notes to the financial statements for the year ended 30 September 2022 Accounting Policies The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are as follows.. al Basis of preparation The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFR5 1021 Icharities SORP IFRS 1021, the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 and the Companies Act 2006. Potential Difference Theatre meet5 the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy notelsl. The charity has taken advantage of the exemption to prepare a Statement of Cash Flows as per the Charity SORP IFRS 1021. bl Going concern The Trustees have assessed the going concern status of the Charity and have considered the available cash on hand and available unrestricted funds at the point of approving the financial statements, reviewed detailed forecasts, that take into account the impact of COVID-19 on the planned projects for the forthcoming 12 months and the availability of grants in response to the pandemic. Having given consideration to the above the Trustees consider that the Charity has sufficient reserves to meet its liabilities and have prepared the financial statements on a going concern basis. cl Income Income is recognised when the charity has entitlement to the funds, any performance conditions attached to the itemlsl of income have been met, it is probable that the income will be received, and the amount can be measured reliablv. Income from government and other grants, whether 'capital' grants or'revenue, grants, is recognised when the charity has entitlement to the funds, any performance conditions attached to the grants have been met, it is probable that the income will be received, and the amount can be measured reliably and is not deferred. Income received in advance of a theatric31 performance or provision of other specified service it is deferred until the criteria for income recognition are met. dl Donated services and facilitie5 Donated professional services and donated facilities are recognised as income when the charity has control over the item, any conditions associated with the donated item have been met, the receipt of 15
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Notes to the financial statements for the year ended 30 September 2022 economic benefit from the use by the charity of the item is probable and that economic benefit can be measured reliably. On receipt, donated profession31 services and donated facilities are recognised on the basis of the value of the gift to the charity which is the amount the charity would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised in expenditure in the period of receipt. el Fund accounting Unrestricted funds are available to spend on activities that further any of the purposes of charity. Designated funds are unrestricted funds of the charity which the trustees have decided at their discretion to set aside to use for a specific purpose. Restricted funds are donations or grants which the donorlgrantor has specified are to be solely used for particular areas of the Company's work or for specific artistic projetts being undertaken by the Company. fj Expenditure and irrecoverable VAT Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required, and the amount of the obligation can be measured reliably. Expenditure is classified under the following activity headings.. Expenditure on charitable activities includes the costs of performances, exhibitions and other educational activities undertaken to further the purposes of the charity and their associated support costs. Other expenditure represents those items not falling into any other heading. Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred. gl Governance and support costs Support costs are those functions that assist the work of the charity but do not directly undertake charitable activities. Support costs include back-office costs, finance, and governance costs which support the Company's artistic programmes and activities. All expenditure is allocated against charitable activities. h) Cash at bank and in hand Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account. il Creditors and provisions Creditor5 and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due. 16
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Notes to the financial statements for the year ended 30 September 2022 j) Financial instruments The Company only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortlsed cost using the effective interest method. Legal status of the Company The Company is a company limited by guarantee and has no share capital. In the event of the charity being wound up, the liability in respect of the guarantee is limited to £1 per member of the charity. Income from charitable activities and other income 2022 Unrestrlcted 2022 Restrlcted 2022 Totsl 2021 2021 Unrestrlcted Restrl¢ted 2021 Total Earned income from theatre productions Cornrnissioned charitable li li 90 90 752 7,443 3,368 4,120 7,443 4,285 2,080 2,099 6,384 2,080 Theatre Tax Relief Isee notÈ 101 Theatre Tax Relief adjustments 2019 11,0491 11,0491 Other 131 131 8.337 3,368 11,705 5,320 2,189 7.509 17
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Notes to the financial statements for the year ended 30 September 2022 Analysis of expenditure on charitable activities 2022 2022 Restricted 2022 Total 2021 2021 Unrestricted Restricted 2021 Total Unrestricted Production fee5 Venue hire and fee5 Marketing / PR Other production costs Travel and subsistence Produttion insurance Covid-related costs Artistic team fee5 Governance costs Isee note 51 Support Costs Independent examination 3,699 22,866 667 1,056 1,394 1,728 26,565 667 1.212 1.394 2.023 319 5,250 180 1,566 126 79 235 19,759 1,608 150 974 319 25,009 1,788 1,716 I,ioo 398 235 156 295 319 763 763 4,234 31 680 3,386 3,386 4,234 31 472 2,664 10,991 472 680 2,370 14,751 2.664 38,702 2,370 38,324 27,711 23,573 Restricted fund expenditure relates to expenditure directly attributable to the 'Fragments" "Classbot" 'Digital Natives" and 'Theatre in a time of COVID" restricted projects. Artistic team fees include time spent in management of the charitable company but predominantly relate to seed development of projects. The charity benefitted from the significant contribution of Dr Laura Swift of the Open University, in her work in co-writing and other work on Fragments. Analysis of governance costs The Company considers that all appropriate governance related costs have been attributed to governance. Trustee remuneration The charity trustees were not paid, nor did they receive any other benefits from employment with the Company in the year12021.. £nill neither were they reimbursed expenses during the year12021: £nill. No charity trustee received payment for professional or other services supplied to the charity12021.. Related party transactlons There were no transactions to related parties during the year. Government Grants No government grant income was received in 202212021.. £nill 18
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B81325C6ADE Potential Difference Theatre Notes to the financial statements for the year ended 30 September 2022 Corporation Taxation The charity is exempt from tax on income and Eains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects. The charity has accrued recoverable Theatre Tax Relief of £7,44312021: £2,080). io Debtors 2022 2021 Accounts receivable Prepayrnents and accrued incorne Theatre Tax Relief receivable Gift Aid receivable 13 2,500 9,523 2,500 14,523 4,364 5,057 9,434 li Credltors: amounts falllng due wlthln one year 2022 2021 Accounts Payable Accruals and deferred income 210 23,466 23,676 34,246 34,246 Accruals and deferred income for the year are as follows.. Accruals 2022 2021 Accrued expenses 13,053 13,053 3,631 3,631 Deferred income 2022 2021 Governrnent grant5 Other charitable grants Comrnissioned activities 9,155 9,155 21.460 1,259 10,414 30,615 Grants and commissioned activities related to productions that did not take place in 2022 have been deferred to 2023. 19
Docusign Envelope ID. 378401CO-1C3146E8-BEB74B61325C6ADE Potential Difference Theatre Notes to the financial statements for the year ended 30 September 2022 12 Analysis of charitable funds 2022 2022 Restricted 2022 Total 2021 2021 2021 Total Unrestricted Unrestricted Restricted Balance l October Incorne Expenditure Transfer between reserves 53,4341 20,837 110,9911 12,4921 60.788 17,7121 71,146 25,187 46,024 127,7111 138,7021 2,492 17,680 39,241 9,735 48,976 33,165 27,329 60,494 114,7511 123,5731 138.3241 14.2211, 4,2211 53,4341 17,7121 Balance at 30 September 78,468 71.146 A prior year reserve allocation adjustment has been made for covid-related funding. Totals remain unaffected Allocation of assets between funds.. 2022 2022 Restricted 2022 Total 2021 2021 Unrestricted Restricted 2021 Total Unrestricted Debtors Cash at bank Creditors Net a55ets 12,023 54,800 16,0351 60,788 2,500 14,523 32,821 87,621 117,6411 123,6761 17,680 78.468 9,434 9,434 46,942, 49,016, 95,958 12,9421 131,3041 134,2461 53,4341 17,7121 71,146 A prior year reserve allocation adjustment has been made for covid-related funding. Totals remain unaffected Name of restricted fund Fragments fund Classbot Digital Natives Theatre in a time of Covid Description, nature and purposes of the fund To fund the Fragments prodLJCtion. To fund the Classbot production. To fund the Digital Natives production Ino activity in 20221 To fund the "Making theatre in a time of COVID" productions Ino activity in 20221 Unrestricted funds totalling £2,49212021- £4,221 after adjusting for covid-related funding) have been transferred to the restricted fund in relation to core budget expenditure allocated to the restricted funds and in relation to general reserves applied to restricted fund activities. 20