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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

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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

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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

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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.

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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

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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)

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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)

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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.

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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

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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

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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

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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.
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## 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

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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.
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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)
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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