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2024-03-31-accounts

GRAEAE THEATRE COMPANY LIMITED (THE)

(A Company Limited by Guarantee)

FINANCIAL STATEMENTS FOR THE YEAR ENDED

31 MARCH 2024

COMPANY REGISTRATION NUMBER: 01619794

CHARITY REGISTRATION NUMBER: 284589

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

CONTENTS

Page
Report of the Trustees 2-13
Independent Auditor's Report 14-17
Statement of Financial Activities 18-19
Balance Sheet 20
Statement of Cash Flows 21
Notes to the Financial Statements 22-38

1

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Report of the Trustees for the year ended 31 March 2024

The Trustees present their report and the financial statements for the year ended 31 March 2024.

The report has been prepared in accordance with the Charities Act 2011 and is also the report of the directors for the purposes of the Companies Act 2006.

The financial statements have been prepared in accordance with the accounting policies set out on pages 2224 therein and comply with the charitable company’s Memorandum and Articles of Association, applicable laws and 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 United Kingdom and Republic of Ireland (FRS 102).

For the purpose of determining disclosure requirements the charity is classified as:

Reference and administrative details

Charity number 284589 Company number 01619794 Registered office Bradbury Studios, 138 Kingsland Road, London E2 8DY Directors and Trustees

The directors of the charity are its Trustees for the purpose of charity law. The Trustees who served during the year and since the year-end are as follows:

Samantha Tatlow Re-appointed 6 December 2021 Appointed as Chair 11 October 2021
Sharon Marshall Re-appointed 18 January 2021 (resigned 2 December 2024)
Jessi Parrott Re-appointed 6 December 2021
Lisa Oguntoyinbo Appointed 4 May 2021
Nathan Crossan-Smith Appointed 6 December 2021
Anthony Lee Appointed 6 December 2021
Andrea Walter Appointed 7 March 2022 (resigned 19 November 2024)
Deborah Rees Appointed 5 September 2022
Ayzah Ahmed Appointed 19 September 2023
Robin Cantrill Fenwick Appointed 19 September 2023

Throughout this report the word “Trustees” refers to the individuals and the word “Board” refers to the Trustees acting as a body.

Secretary Elizabeth Luxford (appointed 13 December 2022) Joint Chief Executive Officer and Artistic Director (from 26 November 2021) Jenny Sealey, OBE Joint Chief Executive Officer and Executive Director (from 26 November 2021) Kevin Walsh Auditor Buzzacott LLP, 130 Wood Street, London EC2V 6DL Bankers CAF Bank Ltd, 25 Kings Hill Avenue, West Malling, Kent ME19 4JQ

2

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Report of the Trustees for the year ended 31 March 2024

Structure, governance and management

Governing document

The charity is constituted as a company limited by guarantee and is governed by its Memorandum and Articles of Association dated 10 December 1981 and updated in December 2011. There are currently eight members, each of whom agrees to contribute £1 in the event of the charity being wound up.

Appointment of Trustees

As set out in the Articles of Association, the Board may at any time appoint any member of the company as a member of the Board, subject to a maximum of twelve members. Any member so appointed retains his/her office until the next Annual General Meeting and is then eligible for re-election. At each Annual General Meeting one-third of the members who have been longest in office retire. All retiring members are eligible for re-election subject to the limits to terms of office set out in the Articles of Association. The charity aims for a Board where 50% or more of the Trustees identify as Deaf, disabled and neurodivergent (currently 63%).

Regular skills’ audits are carried out and, when considering appointing new Trustees, the Board has regard to the requirement for any additional specialist skills needed.

Trustee induction and training

New Trustees are provided with an information pack to brief them on their legal obligations under charity and company law, the content of the Memorandum and Articles of Association, the business plan and the recent financial performance of the charity. Trustees are encouraged to attend training courses about the responsibilities of being a trustee at a venue and time convenient to them. Trustees are also encouraged to visit the charity’s office to meet employees and other Trustees outside the formal meetings. Trustees’ Away Days are held from time to time so that the company’s key aims and objectives can be discussed and reviewed. Trustees are also encouraged to attend productions and appropriate in-house training events.

Organisation

The Board meets, at least quarterly, to manage the affairs of the company. Four Trustees must be present for the meeting to be quorate. Since the COVID19 pandemic, meetings have been in a hybrid of Zoom conferencing software and in-person meetings. To aid accessibility meetings are shorter, with more breaks, captioned, BSL interpreted and recorded.

There is also a Finance and General Purposes sub-committee which meets up to four times a year. The purpose of the committee is to provide a greater level of scrutiny of, and support to, company officers with a responsibility for financial management.

The Board has adopted the NCVO Charity Governance Code. This has fed into the formation of Graeae’s Governance Policy which was formally adopted on 5 March 2023. The policy includes Board role descriptions, person specification and a scheme of delegation of Board authority.

The Joint Chief Executive Officers are appointed by the Board to manage the day to day operations of the charity.

To facilitate effective operations, the Joint CEOs delegate authority, in line with the Board’s scheme of delegation, for operational matters including finance, employment, fundraising, and the artistic, training and educational output of the charity.

The key management personnel for the period covered by this report are:

Other charities and related parties

The charity does not have any subsidiary undertakings. The charity collaborates from time to time with other organisations, particularly in the theatre sector, that may also be charities but does not have any formal long term arrangement with any other charity except in relation to grants received for specific activities.

3

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Report of the Trustees for the year ended 31 March 2024

Public benefit

The objects of the charity, as set out in the Articles of Association, are to promote, maintain, improve and advance education, particularly by the production of educational plays and the encouragement of the Arts including the arts of drama, opera, operetta, dance, ballet, music, singing, literature, poetry, sculpture, painting, mime and puppetry.

The charity’s particular purpose as a touring theatre company is to develop and promote disabled-led accessible theatre for a wide–ranging audience. The charity’s main activities undertaken to further its purpose are theatrical productions and training, education and learning activities.

The Board has given due consideration to the Charity Commission’s published guidance on the Public Benefit requirement under section 17 of the Charities Act 2011 when reviewing the charity’s aims and objectives and in planning future activities. The Board considers that all of the charity’s objectives deliver benefit to the public, as explained below.

Objectives and activities

Graeae’s vision is to create world-class accessible theatre, which breaks down barriers, challenges ableist preconceptions and places Deaf, Disabled and neurodivergent artists centre stage (hereon referred to as Disabled artists).

Graeae’s mission is to ignite artistic curiosity, pioneer a radical dramatic language, and champion accessibility. We do this by providing a diversity of platforms for new generations of artists, locally, nationally and internationally, through the creation of trail-blazing theatre.

Graeae is a disabled-led human rights company, founded on the need to tackle social injustice, discrimination and exclusion. It is fuelled by the pursuit of inclusion and artistic excellence and champions disabled people in the arts.

The company’s strategic aims are to:

In promoting and producing world-class theatre, led by Disabled directors, writers and performers, Graeae seeks to dismantle barriers to employment in the arts. Despite legislative progress and slowly shifting attitudes, there remains a lack of recognition of the talents of Disabled people.

The programme of work seeks to address this through our productions which showcase the skills of Disabled performers. Productions, through the creative use of sign language, audio description, captioning and relaxed environments also open up theatre to Deaf, blind, Disabled and neurodiverse audiences, ensuring that all members of the public benefit from access to the arts. Where possible, ticket prices for Disabled audience members are subsidised and shows are toured to venues across the UK which have a high standard of access for Disabled people.

Professional development training programmes provide accessible and inclusive opportunities for learning. They are delivered for aspiring actors, directors and writers to learn the skills they need to work as

4

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Report of the Trustees for the year ended 31 March 2024

Objectives and activities (continued)

professionals. Training programmes are significantly subsidised, in recognition of the economic barriers often faced by Disabled artists, and are open to those artists throughout the UK.

Graeae’s outreach programme fuels the next generation of theatre-makers and audiences. Professionally trained Disabled artists and workshop leaders act as important role models for young participants, raising aspirations and proving that a career in the arts is possible for all. Through investment in training and education, Graeae can effect change within the industry both for individuals and organisations alike, from young people through to professionals, to ensure that there are equal opportunities for all people to benefit from the arts.

The company continues to advocate equality for all Deaf, disabled and neurodivergent artists and their right to participate in all aspects of society. Despite the impact of the Equality Act, in reality, access is still very uneven in the arts. Most spaces provide only limited levels of accessibility, can cope with only a small number of disabled artists and technicians at any one time, and are capable of dealing with only a limited range of impairments.

Graeae continues to champion access in a number of ways: by using Bradbury Studios as a model of best practice in inclusive design; through authentic representation of disability in theatre; through training and outreach programmes and through advocacy work with other organisations.

Graeae’s strategic planning is underpinned by sound governance and continual monitoring of work, measuring quantitatively achievements against targets as well as qualitatively through feedback from audiences and beneficiaries on their experience of Graeae’s work.

Achievements and performance

2023-26 Strategy April 2023 marked the start of a new three year national strategy which will open up the cultural landscape for disabled artists, participants and audiences countrywide.

Utilising a battalion of allied arts venues and training partners, Graeae will dismantle the barriers faced by independent artists by building connections with theatres, arts organisations and training providers, establishing the next generation of arts leaders.

The strategy will deepen engagement with Disabled artists by delivering an intersectional, Disabled-led tapestry of art and culture and bold, radical, creatively-stimulating theatre.

This will be achieved through collaboration with trusted partners nationally, and in particular, the North West through cultural hubs in Merseyside, and the East in partnership with Mercury Theatre, Colchester. This cohesive approach will create new pathways to culture for Disabled people as artists, participants and audiences.

In the meantime, Graeae’s London HQ “Bradbury Studios” will undergo a transformation in order to accommodate more Disabled-led arts organisations and offer affordable usage for Disabled artists.

Graeae strives to be the “National Theatre for Disabled People” and this strategy will take the organisation one step closer to that goal.

Productions and artistic activities

For the first time, in 2023 Graeae established a sustained presence outside of London, working in two areas with venues to collaborate artistically, train artists and improve access across multiple programmes:

· A base in Merseyside, working across both Shakespeare North Playhouse in Knowsley and Liverpool Everyman; organisations with new artistic leadership striving to diversify audiences and transform their offer for Disabled artists.

5

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Report of the Trustees for the year ended 31 March 2024

· A base at Mercury Theatre in Colchester; the only producing venue in Essex, with wide reach across Levelling Up areas, collaborating on a wide range of projects including new writing and artist development.

All three organisations invested in staff (two new associate artists), training (to be delivered in 2024-25) and creative projects. The co-funded associate artist posts will connect the learning across the network and help ensure that industry shift happens.

For the venues, Graeae would be an “Associate Company”.

Activities over the period reflect this collaborative approach:

In addition, Graeae invested in opening up the arts for young people and isolated artists:

High Times and Dirty Monsters

In Autumn 2023, Graeae worked with 20 Stories High, a Liverpool-based theatre company, to create a raucous, radical, celebratory and hard-hitting hip hop show for young people aged 14+. The show toured Liverpool, Newcastle, Leeds, Ellesmere Port, Derby, Manchester and London and reached audiences of 5,100 young people. A connected outreach programme reached 1,804 young people through 45 workshops.

Beyond

It was a delight to be able to continue the Beyond programme with a new cohort of venues and 20 new disabled artists, many of whom had never connected with Graeae before.

Graeae has a responsibility to nurture a disability arts industry with many players. As such, Beyond was developed to bridge relationships between artists, leaders and national partner venues to unlock resources and leadership pathways for Disabled people. In 2023, the new cohort were recruited and started their Beyond journey – putting the building blocks in place for more intensive engagement in 2024.

6

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Report of the Trustees for the year ended 31 March 2024

Self-Raising

For the first time, Graeae’s artistic director Jenny Sealey took to the stage to tell her story of growing up Deaf in a hearing family. This critically acclaimed production opened at Pleasance Dome, Edinburgh Festival, before transferring to Soho Theatre in London and touring the country. It reached 4,626 people on its run and led to Jenny being invited to share her Desert Island Discs on BBC Radio 4.

Write to Play

The long-running writer development programme mentored alumni to write their next script, become the next generation of trainers through Writers Teach Writing and shared four new powerful stories through the scratch night Crips With Chips at Liverpool Everyman.

Youth Hub

The training and learning team have been working with Liverpool Everyman, Shakespeare North Playhouse, 20 Stories High and Theatre Porto to identify young people who would benefit from connecting with Graeae and may be interested in a youth group. The stage is set for more collaboration in 2024.

Children’s Company and Young Company

The two groups, one aimed at younger children and the other at 14+, met much more regularly this year. There are really strong bonds that have been built over a long time and the groups were able to perform a devised piece as a curtain raiser at Bernie Grants Arts Centre before High Times and Dirty Monsters . Theatre trips and workshops led by 20 Stories High added to the textural complexity of the offer which is helping young Disabled people build life skills, learn from professionals and have fun.

Digital Resources

Thanks to investment from Bloomberg Philanthropies, we have been able to transform our digital profile over the last year. A new website, better understanding of social media and a new audience strategy have meant that we are working more connectedly across all of our digital streams.

Additionally, we have been able to invest in a bank of digital resources which will help transform careers for disabled artists. These include:

And 39 more downloads, videos, blogs and interviews.

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The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Report of the Trustees for the year ended 31 March 2024

Achievements and performance (continued)

Raising funds

The majority of the charity’s income is provided by grants from Arts Council England and from trusts and foundations. To secure these grants the charity has to prepare detailed applications and subsequently, if successful, to provide reports to the funders on the outcome of the relevant activities. The Board considers that the time invested in fundraising activities is vital to maintaining good relationships with funders and increase the possibility of securing longer term and repeat funding. The main individual funder remains Arts Council England (ACE) through the National Portfolio. The other funders which provided grants during the year are listed in note 21 to the financial statements.

In April 2023, Graeae received an uplift on their existing grant from ACE based on a new three-year strategic plan which in which Graeae would work towards being “The National Theatre for Disabled People”. The strategy firmly establishes sector-change projects such as Beyond and Write to Play as central to how the company operates, builds strong regional partnerships and enables Graeae to invest in a more nationalised workforce.

Graeae aims to achieve best practice in the way in which it communicates with funders, donors and other supporters. The majority of funding comes from organisational funders (rather than individuals), and we set high standards in the way that we present our work. Every application and communication is assessed against standards of representation, empowerment and ownership and we only approach funders with a demonstrable commitment to diversity and inclusivity.

In communicating with individual supporters, we take care with the tone and frequency of communications and the accuracy of data to minimise the pressure on supporters. Graeae is registered with the Fundraising Regulator and adheres to the Code of Fundraising Practice. Graeae applies best practice to protect supporters’ data and has updated its Data Management Policy and Privacy Policy in line with GDPR.

Graeae undertakes to react to and investigate any complaints regarding its fundraising activities and to learn from them and improve its service. The charity has received no complaints about its fundraising activities.

Plans for future periods

The three year strategy will continue in 2024-25 and 2025-26.

Productions and other artistic activities

Graeae will partner with Shakespeare North Playhouse and Theatre by the Lake on a vibrant new adaptation of Romeo and Juliet , touring from September 2024.

Short, Sharp Shock , a new play that highlights the experiences of young people at the Medomsley Detention Centre in the 1980s, will be performed in Newcastle in 2025.

Training, education and learning

Our investment in training and developing Disabled artists continues with :

Wider strategy for the future

Graeae’s strategy for 2022-26 firmly establishes its reputation as the national theatre for disabled people. Through partnerships in the North West and East of England, the company will build a lasting presence for Disabled people in the regions, opening up the arts for many people that have been denied the opportunity before. The strategy sees Graeae investing in training opportunities, collaborative productions and acknowledging its responsibilities to share skills, resources and connections with the wider disability arts sector.

8

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Report of the Trustees for the year ended 31 March 2024

The funding strategy builds on the relative success of 2019-22, in which reserves remained within Boardagreed limits, while delivery increased and the organisation focused better on the needs of the community. However, core costs remain a challenge. In 2011-12 core funding from Arts Council England was £551,147, in 2021-22 it was £574,784; a 4% increase after ten years. In that same ten year period Graeae’s headline annual rent has increased by 107% from £98,763 to £205,000.

Graeae received an uplift from Arts Council England linked to new activity in 2023-26, the continuation of the Beyond programme and two new members of staff (Associate Director North and Associate Artist East). Funding towards overheads remains the same, making for a challenging future at Bradbury Studios.

Capital Project

As part of the strategy to tackle rising overheads, there was a review of assets and their function in delivering against charitable objectives. Bradbury Studios was found to be a vital resource for Disabled artists and the risk of losing it for the community would be a major set-back to many careers and projects.

The Board decided to review usage of the building and invest in changes that would help Graeae invite more artists in future and make it a lasting home for two other Disabled-led arts organisations.

In 2023-24, designs were drawn up and fundraising commenced for a capital project. By April 2024, £590,450 had been secured meaning that works could commence. Building works will take place in 2024-25 and the new licensees will move in 2025-26. It is hoped that the new funding model will help make the building a more affordable, accessible and dynamic home to Disabled artists for the next 15 years.

9

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Report of the Trustees for the year ended 31 March 2024

Financial review

Income

Total income for the year amounted to £1,338,023 (2023: £1,396,163) of which £1,032,730 (2023: £1,017,840) related to grants and donations receivable without which Graeae could not generate the range of productions and training, education and learning activity that it undertakes. A list of those funders is on page 38.

The charity’s principal funding source during the year was Arts Council England which provided core revenue funding of £769,104 (2023: £574,784).

The charity received funds of £90,988 (2023: £116,880) from the “Access to Work” scheme run by the Department of Work and Pensions. This scheme enables the charity to reclaim some of the additional costs incurred in setting up and providing specific work-related access support. Since April 2018 the government has placed an annual cap on the specific support provided by Access to Work for the artistic director. This cap does not always cover the actual requirements of the job which varies depending on activity.

Income from charitable activities includes box office, venue fee and royalties of £52,976 (2023: £122,746), Theatre Tax Relief of £20,766 (2023: £18,052) and fees from training and workshops of £40,002 (2023: £50,477). The charity also received income of £75,448 (2023: £62,895) from trading activities (including the hire of office and rehearsal space and sales of books).

Expenditure

Total expenditure has decreased from £1,724,808 for the year ended 31 March 2023 to £1,424,987 in 2023-24.

Excluding support costs, expenditure in 2023-24 included:

Excluding support costs, 2022-23 included:

Deferred production costs

At 31 March 2024 deferred production costs were £19,763 relating to Romeo and Juliet and Bad Lads .

Risk management

The Board periodically reviews the major external risks to which the charity is exposed and has established systems to mitigate those risks, as far as is reasonably possible. Internal risks are mitigated via robust policies and procedures covering all areas of management, human resources, financial probity, health and safety, environmental issues and diversity targets.

10

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Report of the Trustees for the year ended 31 March 2024

Risk management (continued)

After mitigation there remains a level of residual financial risk which the Board manages by detailed monitoring of cash flow and fundraising targets alongside a reserves policy informed by the residual risks as discussed below.

Principal risks and uncertainties

The Board is particularly concerned with risks that have the potential to cause the charity to cease operations, and have set in place policies to mitigate those risks. These include:

Lack of strategy and forward planning leading to financial management difficulties. The charity’s management prepare three-year Business Plans, regularly updated, and annual budgets, reviewed quarterly by the Board against actual income and expenditure and monthly at a Departmental level. Longer term planning (five to ten years) is challenging because the premises from which Graeae operates are subject to a five yearly rent review, which can have a material effect on overheads.

Health and safety and environmental issues The Joint CEOs monitor the charity’s activities, in Bradbury Studios and elsewhere, and ensures that appropriate policies are in place to provide a safe working environment and to meet other legal requirements.

Failure of an income source The charity does not commit to major projects until funds are confirmed and / or sufficient reserves are earmarked. Graeae has been confirmed as a National Portfolio Organisation by Arts Council England for the 2023-24, 2024-25 and 2025-26 financial years and so the Board considers that the charity remains a going concern.

Reserves policy

At 31 March 2024 restricted funds amounted to £1,341,660 (2023: £1,498,861) and unrestricted funds were £1,151,074 (2023: £1,080,837).

Designated funds

Some unrestricted funds have been designated by the Board to address specific areas of financial risk.

• Financial management difficulties

Annual and three year budgets are prepared by the charity and there are detailed budgets for individual productions and training projects. However, theatrical projects retain a significant level of risk around audiences, personnel, timing, and funding. In order that the charity can maintain an ambitious programme and support important outreach opportunities the Board has designated a reserve to assist with funding shortfalls: Artistic fund £30,000 (2023: £40,000). This fund will have the flexibility to be spent across the artistic programme, meaning a separate Training, education and learning fund of £20,000 was wound down to £nil.

The Esmée Fairbairn Foundation has supported Graeae’s new writing programme since 2013. Their main grant (£100,000 per year for two years) covers the period January 2023 to December 2025. A designated fund of £35,000, to be released in 24/25, reflects the higher spend in that funding year.

The charity occupies leased premises that are subject to an upward rent review every five years. The Board originally designated a reserve to partially offset the effect of these increases: Leasehold property. The charity has now reduced this reserve to £nil, the Board choosing not to hold a designated fund for unknown operating cost.

During the year, Graeae embarked on a feasibility study and fundraising drive for a capital project linked to their main premises in Hoxton. The designated fund for the pre-project costs related to the management and advice required for this project was £30,000. The total cost of the project was £34,428 so this fund is now £nil.

11

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Report of the Trustees for the year ended 31 March 2024

Reserves policy (continued)

Designated funds (continued)

The Board is aware of the importance of investment in succession planning and skills’ development and has designated a fund to support this investment: Strategic development fund £20,000 (2023: £20,000).

A marketing fund has been reduced during the year due to the higher investment in 2023 meaning there are fewer risks of unplanned expenditure in the immediate future. The Marketing fund is £2,000 (2023: £10,000).

Fixed asset purchases impact operational budgets over more than one year. The Board designates funds to cover the cost of purchasing and replacing fixed assets where these are not funded by specific grants: Fixed asset fund £12,732 (2023: £17,563). The relevant depreciation is offset against the fund each year.

The charity has a responsibility for the health and safety of people working in and visiting Bradbury Studios. In order to maintain a safe and pleasant working environment the Board has designated a fund for periodic equipment and building maintenance and for unplanned major repairs: Sinking fund £100,000 (2023: £100,000).

• Loss of income source

The charity obtains financial support from the government’s Access to Work Scheme. Not all access expenses are met by the scheme. However, a previously established Access Fund (2023: £25,000) was wound down in order to properly reflect the irreclaimable access in the year in which it was incurred.

Further details about the designated funds can be found in note 15 to the financial statements.

The Board is also aware that failure to comply with regulatory requirements could have potential for significant financial impact on the charity (fines) or closure but considers that it is inappropriate to make specific financial provision for such matters.

General funds

After designating funds to address particular risks the Board aims to hold unrestricted general funds in the region of six months’ operating costs. Unrestricted general funds at 31 March 2024 amounted to £951,342 (2023: £783,274). The average monthly operating cost during the year (which excludes the direct costs of productions and training) was £65,630 (2023: £62,350). The balance of undesignated general funds at 31 March 2024 based on past costs represents 15.2 months of operating costs (2023: 12.6 months). In the current economic climate the Board is comfortable with holding this level of general funds.

12

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Report of the Trustees for the year ended 31 March 2024

Statement of Trustees’ Responsibilities

The Trustees (who are also directors of The Graeae Theatre Company Limited for the purposes of company law) are responsible for preparing the Trustees’ report and financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law 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 charitable company and of the income and expenditure of the charitable company for that period.

In preparing these financial statements, the trustees are required to:

The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Each of the Trustees confirms that:

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

This report was approved by the Board on 11 December 2024 2024 and signed on its behalf by:

Samantha Tatlow MBE Chair

13

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Independent auditor’s report to the members of The Graeae Theatre Company Limited

Opinion

We have audited the financial statements of The Graeae Theatre Company Limited (the ‘charitable company’) for the year ended 31 March 2023 which comprise the statement of financial activities, the balance sheet and the statement of cash flows, and the notes to the financial statements including the principal 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).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on 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 charitable company 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 charitable company and charitable company’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.

14

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Independent auditor’s report to the members of The Graeae Theatre Company Limited

Other information

The trustees are responsible for the other information. The other information comprises the information included in the annual report and financial statements, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, 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 or a material misstatement of the other information. 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:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ 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:

15

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Independent auditor’s report to the members of The Graeae Theatre Company Limited

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement, the trustees (who are also the directors of the charitable company for the purposes of company law) 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 the trustees 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 charitable company’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 charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included but were not limited to:

16

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Independent auditor’s report to the members of The Graeae Theatre Company Limited

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 trustees and other management and the inspection of regulatory and legal correspondence, if any.

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/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charitable company'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 charitable company's members those matters we are required to state to 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 charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Catherine Biscoe (Senior Statutory Auditor)

For and on behalf of Buzzacott LLP, Statutory Auditor

130 Wood Street

London EC2V 6DL

Date: 18 December 2024

17

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Statement of Financial Activities (incorporating an income and expenditure account) For the Year Ended 31 March 2024

For the Year Ended 31 March 2024
Notes
Income from:
Donations and grants
2
Charitable activities
3
Other trading activities
4
Investments
5
Total
Expenditure on:
Raising funds
6
Charitable activities
7
Total
Net (expenditure) income
11
Transfers between funds
15
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Total funds carried forward
15		 Restricted
Funds
£
188,762
90,988
-
-
279,750
98,071
255,869
353,940
(74,190)
(83,011)
(157,201)
1,498,861
1,341,660		 General
Designated
£
£
843,968
-
113,744
-
75,448
-
25,113
-
1,058,273
-
218,074
-
812,800
40,173
1,030,874
40,173
27,399
(40,173)
140,669
(57,658)
168,068
(97,831)
783,274
297,563
951,342
199,732
Unrestricted Funds		 Total
Funds
2024
£
1,032,730
204,732
75,448
25,113
1,338,023
316,145
1,108,842
1,424,987
(86,964)
-
(86,964)
2,579,698
2,492,734

The Statement of Financial Activities includes all gains and losses recognised in the above financial year.

All income and expenditure derive from continuing activities during the above financial year.

18

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Statement of Financial Activities (incorporating an income and expenditure account) For the Year Ended 31 March 2023

Notes
Income from:
Donations
2
Charitable activities
3
Other trading activities
4
Investments
5
Other income
6
Total
Expenditure on:
Raising funds
7
Charitable activities
8
Total
Net (expenditure) income
11
Transfers between funds
15
Net movement in funds
Reconciliation of funds:
Total funds brought forward
15
Total funds carried forward
15		 Restricted
Funds
£
418,459
116,880
-
-
-
535,339
53,130
605,471
658,601
(123,262)
(82,944)
(206,206)
1,705,067
1,498,861		 General
Designated
£
£
579,381
20,000
191,275
-
62,895
-
7,273
-
-
-
840,824
20,000
171,020
-
831,510
63,677
1,002,530
63,677
(161,706)
(43,677)
144,895
(61,951)
(16,811)
(105,628)
800,085
403,191
783,274
297,563
Unrestricted Funds		 Total
Funds
2023
£
1,017,840
308,155
62,895
7,273
-
1,396,163
224,150
1,500,658
1,724,808
(328,645)
-
(328,645)
2,908,343
2,579,698

The Statement of Financial Activities includes all gains and losses recognised in the above financial year.

All income and expenditure derive from continuing activities during the above financial year.

19

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Balance Sheet at 31 March 2024

Notes 2024 2023
£ £
Fixed assets:
Tangible assets 1,251,701 1,338,302
Heritage assets 1,300 1,300
_ _
Total fixed assets 12 1,253,001 1,339,602
_ _
Current assets:
Debtors 13 145,244 224,077
Cash at bank and in hand 1,161,353 1,153,677
_ _
Total current assets 1,306,597 1,377,754
Liabilities:
Creditors: amounts falling due within one year 14 66,864 137,658
_ _
Net current assets 1,239,733 1,240,096
_ _
Total net assets 2,492,734 2,579,698
_ _
The funds of the charity:
Restricted Funds 15 1,341,660 1,498,861
Unrestricted Funds
Designated 15 199,732 297,563
General 15 951,342 783,274
_ _
Total charity funds 2,492,734 2,579,698
_ _ -

Approved by the Board on 11 December 2024 and signed on its behalf by

………………….. Samantha Tatlow Chair

Company no. 01619794

20

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Statement of Cash Flows For the Year Ended 31 March 2024

Notes
Cash flows from operating activities:
Net cash (used in) generated by operating activities
A
Cash flows from investing activities
Interest received
Purchase of tangible fixed assets
Net cash generated by (used in) investing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at 1 April 2023
Cash and cash equivalents at 31 March 2024
A
Reconciliation of net income to net
cash flow from operating activities
Net (expenditure) income for the reporting period
Adjustments for:
Depreciation charges
Interest received
Decrease in debtors
Decrease in creditors
Net cash (used in) generated by operating activities		 2024
£
(16,196)
25,113
(1,241)
23,872
7,676
1,153,677
1,161,353
86,964
87,842
(25,113)
98,833
(70,794)
(16,196)		 2023
£
105,005
7,273
(8,556)
(1,283)
(106,288)
1,259,965
1,153,677
(328,645)
95,184
(7,273)
200,762
(65,033)
105,005

No separate reconciliation of net debt has been prepared as there is no difference between the net cash/(debt) of the charity and the above cash and cash equivalents.

21

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Notes to the Financial Statements For the Year Ended 31 March 2024

1 ACCOUNTING POLICIES

(a) Basis of preparation

These financial statements have been prepared for the year to 31 March 2024 under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant accounting policies below or the notes to these financial statements.

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their financial statements in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) (Charities SORP FRS 102), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities Act 2011.

The charity constitutes a public benefit entity as defined by FRS 102.

The financial statements are presented in sterling and are rounded to the nearest pound.

(b) Critical accounting estimates and areas of judgement

Preparation of the financial statements requires the trustees and management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include:

(c) Assessment of going concern

The trustees have assessed whether the use of the going concern assumption is appropriate in preparing these financial statements. The trustees have made this assessment in respect of a period of one year from the date of approval of these financial statements.

The trustees of the charity have concluded that there are no material uncertainties related to events or conditions that may cast significant doubt on the ability of the charity to continue as a going concern. The trustees are of the opinion that the charity will have sufficient resources to meet its liabilities as they fall due.

(d) Income

(1) Donations and legacies, including grants which are not conditional on delivering certain levels of activity, are recognised when these are receivable unless the donor has specified that the donation or grant relates to a future period or that certain pre-conditions must be fulfilled before use. In these cases amounts received are recognised in the relevant period or when the pre-conditions have been met and until then are treated as deferred income. Donations and grants for particular purposes are identified as restricted funds.

(2) Income from box office and venue fees is included in income in the period in which the relevant production takes place.

(3) Theatre Tax Relief claimable by the charity is recognised as income in the year in which the elegible expenditure is incurred.

(4) Other income is recognised on a receivable basis when there is legal entitlement to receipt.

(5) Income relating to rentals in a subsequent period is treated as deferred income.

(6) The value of donated services and gifts in kind provided to the charity are recognised as income at their open market value in the period in which they are receivable, where the benefit to the charity can be reliably measured. An equivalent amount is included as expenditure under the relevant heading in the Statement of Financial Activities or capitalised as appropriate.

22

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Notes to the Financial Statements For the Year Ended 31 March 2024 (continued)

1 ACCOUNTING POLICIES (continued)

(e) Expenditure

(1) Expenditure is accounted for on an accruals basis.

(2) Expenditure on raising funds comprises those costs incurred in attracting donations, grants and trading income, plus a proportion of the underlying support costs of the company.

(3) Expenditure on charitable activities comprises those costs incurred on productions, other artistic activities, training and outreach programmes, and grants made to organisations and individuals. It includes both costs that can be allocated directly to those activities plus a proportion of the underlying support costs of the company.

(4) Core staff costs, office administrative expenses and premises costs are allocated to the costs of raising funds and charitable activities on an estimate of time spent by staff supporting these activities. (5) Governance costs, which comprise costs directly attributable to the management of the charity’s assets, organisational procedures and the necessary legal procedures for compliance with statutory requirements, are included within administrative expenses.

(f) Productions

(1) For productions occurring wholly within one financial year box office and venue fees are recognised in that year and costs are recognised as incurred. Typically costs are incurred in advance of income being generated.

(2) Where a production spans the year-end and is expected to be loss making, the expected loss is recognised in full in the year in which the loss is foreseen.

(3) Where production set up costs have been incurred prior to the year-end but the production has not yet opened, the set up costs are carried forward at the balance sheet date as deferred production costs until such time as the production opens.

(4) Where Graeae Theatre Company Limited acts as a financially contributing co-producer only that contribution is recognised in the year it is granted.

(g) Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation. Assets costing less than £500 are not capitalised. Depreciation is provided on a straight line basis to write off the assets over their anticipated useful economic lives, as follows:

Leasehold property 30 years
Computer equipment 2 years
Office equipment, production equipment, motor vehicles 4 years

Assets under development, being the accumulated costs of designing and building bespoke equipment, are included under tangible fixed assets but are not depreciated until the assets are brought into use. If a decision is made to discontinue development then the accumulated costs are written off in the year that decision is made.

(h) Heritage assets

Heritage assets are works of art which are held and maintained principally for their contribution to knowledge and culture. Heritage assets are not depreciated.

(i) Debtors

Debtors are recognised at their settlement amount, less any provision for non-recoverability. Prepayments are valued at the amount prepaid. They have been discounted to the present value of the future cash receipt where such discounting is material.

Other debtors include an estimate of Theatre Tax Relief claimable by the charity.

23

1 ACCOUNTING POLICIES (continued)

(j) Cash at bank and in hand

Cash at bank and in hand represents such accounts and instruments that are available on demand or have a maturity of less than three months from the date of acquisition.

(k) Creditors and provisions

Creditors and provisions are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Creditors and provisions are recognised at the amount the charity anticipates it will pay to settle the debt. They have been discounted to the present value of the future cash payment where such discounting is material.

(l) Fund structure

General funds represent those monies which are freely available for application towards achieving any charitable purpose that falls within the charity’s objects.

Designated funds comprise monies set aside out of unrestricted general funds for specific future purpose or projects.

Restricted funds comprise i) monies raised for, or their use restricted to, a specific purpose, or contributions subject to donor imposed conditions, and also ii) the net book value of tangible fixed assets is included in restricted funds where those assets are funded through restricted grants or donations which require the charity to hold those assets on an ongoing basis for a specific purpose.

(m) Operating lease commitments

Rentals payable under operating leases are charged against expenditure as incurred over the lease term

(n) Pension commitments

The company contributes to a defined contribution pension scheme on behalf of its employees. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension costs charge represents contributions paid and payable in the year by the company.

(o) Foreign currencies

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange prevailing at the balance sheet date. Transactions in foreign currencies are recorded at the date of the transactions. All differences are taken to the Statement of Financial Activities.

(p) Financial instruments

The charity only holds basic financial instruments as defined in FRS 102. The financial assets and financial liabilities of the charity and their measurement basis are as follows:

Financial assets – other debtors are basic financial instruments and are debt instruments measured at amortised cost. Listed investments are a basic financial instrument as detailed above. Prepayments are not financial instruments.

Cash at bank – classified as a basic financial instrument and is measured at face value. Financial liabilities – accruals and other creditors are financial instruments, and are measured at amortised cost.

(q) Taxation

The company is a registered charity and is therefore not liable for corporation tax on income derived from its charitable activities, as it falls within the various exemptions available to registered charities.

24

(r) Grant making

Grants to organisations and individuals are accounted for when the award is made.

24

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Notes to the Financial Statements

For the Year Ended 31 March 2024 (continued)

2 INCOME FROM DONATIONS AND GRANTS
INCOME FROM DONATIONS AND GRANTS 2024 2023
**Restricted ** Unrestricted **Total ** **Restricted ** Unrestricted Total
£ £ £ £ £ £
Arts Council England (ACE) - 769,104 769,104 - 574,784 574,784
Other grants received (see note 21) 188,762 36,250 225,012 418,459 20,000 438,459
Donations - 38,614 38,614 - 4,597 4,597
__ __ __ __ __ __
Total voluntary income 188,762 843,968 1,032,730 418,459 599,381 1,017,840
__ __ __ __ __ __

The funding from Arts Council England and the grants from other funders included under this heading are provided to help the company implement its business plan or to support particular projects but entitlement to the grant is not conditional on fulfilling specific performance-related conditions.

3 INCOME FROM CHARITABLE ACTIVITIES

INCOME FROM CHARITABLE ACTIVITIES
2024 2023
**Restricted ** Unrestricted **Total ** **Restricted ** Unrestricted Total
£ £ £ £ £ £
Venue fees and royalties - 52,976 52,976 - 122,746 122,746
Fees from training, workshops and other artistic - 40,002 40,002 - 50,477 50,477
Theatre Tax Relief (TTR) - 20,766 20,766 - 18,052 18,052
Access to Work 90,988 - 90,988 116,880 - 116,880
__ __ __ __ __ __
Total income from charitable activities 90,988 113,744 204,732 116,880 191,275 308,155
__ __ __ __ __ __

4 INCOME FROM OTHER TRADING ACTIVITIES

2024 2023
**Restricted ** Unrestricted **Total ** **Restricted ** Unrestricted Total
£ £ £ £ £ £
Income from hire of space and equipment - 48,820 48,820 - 56,676 56,676
Sales of merchandise and other income - 26,628 26,628 - 6,219 6,219
__ __ __ __ __ __
Total income from other trading activities - 75,448 75,448 - 62,895 62,895
__ __ __ __ __ __
INCOME FROM INVESTMENTS
2024 2023
**Restricted ** Unrestricted **Total ** **Restricted ** Unrestricted Total
£ £ £ £ £ £
Interest on deposit accounts - 25,113 25,113 - 7,273 7,273
__ __ __ __ __ __
Total income from investments - 25,113 25,113 - 7,273 7,273
__ __ __ __ __ __

5 INCOME FROM INVESTMENTS

25

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Notes to the Financial Statements For the Year Ended 31 March 2024 (continued)

6 EXPENDITURE ON RAISING FUNDS 2024 2023
**Restricted ** Unrestricted **Total ** **Restricted ** Unrestricted Total
£ £ £ £ £ £
Expenditure on raising grants and donations - 66,657 66,657 - 63,764 63,764
Expenditure on digital infrastructure 84,321 - 84,321 39,960 - 39,960
Expenditure on other trading activities - 34,428 34,428 - 14,092 14,092
Support costs for raising funds 13,750 116,989 130,739 13,170 93,164 106,334
__ __ __ __ __ __
Total expenditure on raising funds 98,071 218,074 316,145 53,130 171,020 224,150
__ __ __ __ __ __

In 2022-24 the company was awarded funding from the Bloomberg Digital Accelerator Programme to be used in the development of its website and audiences. Expenditure against this programme is recorded as restricted digital infrastructure in expenditure on raising funds.

7 EXPENDITURE ON CHARITABLE ACTIVITIES

2024 2023
**Restricted ** Unrestricted **Total ** **Restricted ** Unrestricted Total
£ £ £ £ £ £
Productions and other artistic - 190,059 190,059 322,785 188,514 511,299
Support costs for productions and other artistic 39,205 333,572 372,777 57,154 404,315 461,469
Training, education and learning (TEL) 178,631 5,745 184,376 194,517 82,948 277,465
Support costs for TEL 38,033 323,597 361,630 31,015 219,410 250,425
__ __ __ __ __ __
Total expenditure on charitable activities 255,869 852,973 1,108,842 605,471 895,187 1,500,658
__ __ __ __ __ __

26

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Notes to the Financial Statements For the Year Ended 31 March 2024 (continued)

8 ANALYSIS OF SUPPORT COSTS

Support costs are allocated by management estimates of the proportion of staff time spent supporting the three main activities, as follows:

supporting the three main activities, as follows:
Raising Productions Training
funds and other education
artistic and learning
2024 Total
Allocation for year ended 31 March 2024 15% 43% 42% 100%
£ £ £ £
Staff 65,530 186,846 181,258 433,634
Premises 49,530 141,226 137,003 327,759
Administration 15,679 44,706 43,369 103,754
_ _ _ _
130,739 372,778 361,630 865,147
_ _ _ _
2023 Total
Allocation for year ended 31 March 2023 13% 56% 31% 100%
£ £ £ £
Staff 48,250 209,395 113,633 371,278
Premises 36,167 156,956 85,175 278,298
Administration 21,917 95,118 51,617 168,652
_ _ _ _
106,334 461,469 250,425 818,228
_ _ _ _

9 ANALYSIS OF STAFF COSTS

Employees 2024 2023
£ £
Salaries and wages 507,649 542,070
Social security costs 44,145 44,418
Pension costs 34,889 34,209
_ _
Total employee costs 586,683 620,697
_ _

The company operates a defined contribution pension scheme. At 31 March 2024, there were 17 employees (2023: 15) with retirement benefits accruing under this scheme.

The average head count (number of staff employed) on the payroll during the year (including casual and part-time staff) was 17.25 (2023: 18.5).

The average number of full-time equivalent employees on the payroll during the year (including casual and part-time staff) was 13.3 (2023: 14.9).

27

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Notes to the Financial Statements For the Year Ended 31 March 2024 (continued)

10 ANALYSIS OF STAFF COSTS (continued)

There were two employees during the year with emoluments (excluding pension contributions) between £60,001 and £70,000 (2023: one).

The key management personnel are the trustees, the Joint Chief Executive Officers, and the Finance Director. The trustees were not paid during the year or the prior year. The salary and pensions paid for the other key management personnel in respect of their services to the charity are shown below.

11 Salary
NI
Pension
£
£
£
Jenny Sealey, joint CEO and Artistic Director
65,000
7,715
4,550
Kevin Walsh, joint CEO
61,500
7,232
4,095
Matt Jones, Finance Director
52,250
5,955
3,658
Salary
NI
Pension
£
£
£
Jenny Sealey, joint CEO and Artistic Director
60,600
7,480
4,200
Kevin Walsh, joint CEO
55,350
6,712
3,780
Charles Mills, Finance Director (outgoing)
32,354
3,652
2,145
Matt Jones, Finance Director (incoming)
21,213
2,404
1,450
Pay multiples of full time equivalent earnings for monthly paid staff at the
2024
start of the financial year
Highest to median
2.0
Highest to lowest
3.0
Non-payroll
2024
In addition to employees paid through the payroll the company contracts
£
with specific individuals to provide services in relation to the company's activities.
These individuals include actors, musicians, directors, choreographers, designers,
stage managers, duty managers, practitioners, facilitators, access support workers,
interpreters, fundraisers, marketing consultants and financial consultants.
The total costs associated with these additional individuals is:
295,849
_
NET INCOME BEFORE TRANSFERS
2024
£
Net income before transfers is stated after charging:
Depreciation
87,849
Auditor's remuneration (statutory audit)
15,180		 2024
Total
£
77,265
72,827
61,863
211,955
2023
Total
£
72,280
65,842
38,151
25,067
201,340
2023
2.0
3.0
2023
£
442,424
_
2023
£
95,184
14,450

28

The Graeae Theatre Company Limited

(A Company Limited by Guarantee)

Notes to the Financial Statements For the Year Ended 31 March 2024 (continued)

12 FIXED ASSETS

Heritage
assets
£
COST
At 31 March 2023
1,300
Additions
-
At 31 March 2024
1,300
DEPRECIATION
At 31 March 2023
-
Charge for the year
-
At 31 March 2024
-
NET BOOK VALUES
At 31 March 2024
1,300
At 31 March 2023
1,300		 Computer
Equipment
£
60,728
1,241
61,969
56,884
3,844
60,728
1,241
3,844		 Production
Equipment
£
124,326
-
124,326
124,326
-
124,326
-
-		 Office
Equipment
£
120,031
-
120,031
109,981
2,563
112,544
7,487
10,050		 Leasehold
Property
£
2,443,033
-
2,443,033
1,118,625
81,435
1,200,060
1,242,973
1,324,408		 Total
£
2,749,418
1,241
2,750,659
1,409,816
87,842
1,497,658
1,253,001
1,339,602

The heritage asset is a painting of Nabil Shaban by Eleanor Johnson which was donated to the company in November 2016.

**13 ** DEBTORS 2024 2023
£ £
Trade debtors 36,797 53,211
Other debtors and prepayments 88,774 153,716
Deferred production costs 19,673 17,150
_ _
145,244 224,077
_ _
**14 ** CREDITORS: AMOUNTS FALLING DUE 2024 2023
WITHIN ONE YEAR £ £
Trade creditors 11,985 58,290
Other taxes and social security 15,976 14,708
Deferred income - 5,318
Other creditors and accruals 38,903 59,342
_ _
66,864 137,658
_ _

The company operates a defined contribution scheme for its employees. There were contributions due in creditors of £4,748 at 31 March 2024 (2023 £4,210).

29

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Notes to the Financial Statements

For the Year Ended 31 March 2024 (continued)

15 MOVEMENTS IN FUNDS

At 31 March Income Expenditure Transfers Transfers At 31 March
2023 to General from General 2024
£ £ £ £ £ £
Restricted funds
Leasehold property, including ACE Sustain 1,318,861 - - (81,133) - 1,237,728
Equipment grants 3,370 - - (1,878) - 1,492
Cross project grants 85,040 25,000 (84,321) - - 25,719
Productions and other artistic activities - - - - - -
Training, education and learning 91,590 163,762 (178,631) - - 76,721
Access to Work - 90,988 (90,988) - - -
_ _ _ _ _ _
Total restricted funds 1,498,861 279,750 (353,940) (83,011) - 1,341,660
_ _ _ _ _ _
Unrestricted funds
Designated funds
New writing fund 35,000 - - - - 35,000
Artistic fund 40,000 - - (10,000) - 30,000
Training, education and learning 20,000 - (5,745) (14,255) -
Marketing fund 10,000 - - (8,000) - 2,000
Strategic development fund 20,000 - - - - 20,000
Fixed asset fund 17,563 - - (4,831) - 12,732
Access fund 25,000 - - (25,000) - -
Sinking fund 100,000 - - - - 100,000
Leasehold property operational fund - - - - - -
Leasehold property capital fund 30,000 - (34,428) - 4,428 -
_ _ _ _ _ _
Total designated funds 297,563 - (40,173) (62,086) 4,428 199,732
General funds 783,274 1,058,273 (1,030,874) 145,097 (4,428) 951,342
_ _ _ _ _ _
Total unrestricted funds 1,080,837 1,058,273 (1,071,047) 83,011 - 1,151,074
_ _ _ _ _ _
Total funds 2,579,698 1,338,023 (1,424,987) - - 2,492,734
_ _ _ _ _ _

Summary of transfers between restricted funds and unrestricted funds Depreciation of assets purchased with restricted funds 83,011 83,011 -

30

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Notes to the Financial Statements For the Year Ended 31 March 2024 (continued)

15 MOVEMENTS IN FUNDS (continued)

At 1 April Income Expenditure Transfers Transfers At 31 March
2022 to General from General 2023
£ £ £ £ £ £
Restricted funds
Leasehold property, including ACE Sustain 1,399,994 - - (81,133) - 1,318,861
Equipment grants 5,249 - - (1,879) - 3,370
Cross project grants 85,576 155,000 (155,604) - 68 85,040
Productions and other artistic activities 185,444 106,159 (291,603) - - -
Training, education and learning 28,804 157,300 (94,514) - - 91,590
Access to Work - 116,880 (116,880) - - -
_ _ _ _ _ _
Total restricted funds 1,705,067 535,339 (658,601) (83,012) 68 1,498,861
_ _ _ _ _ _
Unrestricted funds
Designated funds
New writing fund 140,716 20,000 (63,677) (62,039) - 35,000
Artistic fund 40,000 - - (12,443) 12,443 40,000
Training, education and learning 20,000 - - - - 20,000
Marketing fund 15,096 - - (5,096) - 10,000
Strategic development fund 25,200 - - (5,200) - 20,000
Fixed asset fund 21,179 - - (12,172) 8,556 17,563
Access fund 25,000 - - (6,801) 6,801 25,000
Sinking fund 100,000 - - (2,382) 2,382 100,000
Leasehold property operational fund 16,000 - - (16,000) - -
Leasehold property capital fund - - - - 30,000 30,000
_ _ _ _ _ _
Total designated funds 403,191 20,000 (63,677) (122,133) 60,182 297,563
General funds 800,085 840,824 (1,002,530) 205,145 (60,250) 783,274
_ _ _ _ _ _
Total unrestricted funds 1,203,276 860,824 (1,066,207) 83,012 (68) 1,080,837
_ _ _ _ _ _
Total funds 2,908,343 1,396,163 (1,724,808) - - 2,579,698
_ _ _ _ _ _
Summary of transfers from restricted funds to unrestricted funds
Depreciation of assets purchased with restricted funds
Transfer from general to cover restricted cost of TL programme		 83,012
(68)
83,012
(68)

31

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Notes to the Financial Statements For the Year Ended 31 March 2024 (continued)

15 MOVEMENTS IN FUNDS (continued)

Restricted funds

Leasehold property fund

The leasehold property fund was set up in 2007-08 for funding received in the development of the Bradbury Studios. The building was acquired under a 30-year lease. The transfer for the year represents the annual depreciation charge.

Equipment grants

These funds represent grants received to contribute to the cost of purchasing, developing or maintaining specific assets. No grants were received during the year (2023: £nil). During the year £1,878 (2023: £1,879) was applied for depreciation on the assets purchased, maintenance costs, and costs incurred on equipment no longer being developed.

Cross project grants

These are grants that support a range of Graeae's activities.

During 2023-24 Graeae received the balance of £25,000 (for a total £150,000 received) from Bloomberg Philanthropies as part of their Digital Accelerator Programme. £84,321 of which was spent in 2023-24. (2022-23: £39,960)

Productions and other artistic activities

There were no restricted production grants received or expended in 2023-24

Training, education and learning

Grants totalling £163,762 (2023: £157,300) were received in the year to contribute to the costs of the youth programme, the new writing programmes Write to Play and Play Labs, Ensemble, the Beyond project and other workshop activities. £178,631 was spent in-year.

Access to Work

The company receives funds from the Department of Work and Pension's "Access to Work" scheme. The scheme enables the company to reclaim some of the additional costs incurred in setting up and providing work-related access support.

32

The Graeae Theatre Company Limited (A Company Limited by Guarantee) Notes to the Financial Statements For the Year Ended 31 March 2024 (continued)

15 MOVEMENTS IN FUNDS (continued)

Unrestricted funds

General funds

General funds represent those funds that are unrestricted and are not designated for other specific purposes.

New Writing fund

Funding received in 2023-24 was £107,500 with expenditure of £138,148. Rather than release designated funds to cover the difference, it was decided that £35,000 funds would be preserved for anticipated net spend in 2024-25.

Artistic Fund

The artistic fund allows the company to develop a more strategic and ambitious programme in the future. In 2023-24 £10,000 was released from the fund to support Graeae's production of Self Raising , which was additional activity for the year.

£30,000 was preserved in the fund to support all additional activity to programme in future years, including in the training and learning department.

Training, education and learning fund

This fund supported important outreach opportunities which may not been funded through specific grants.

The Board has agreed to release this fund to general at 31 March 2024.

Marketing fund

The marketing fund is available to support marketing and publicity costs of future projects. As the fund has been underutilised in prior years, the Board has agreed to release £8,000 to our general funds and to maintain this fund at £2,000 at 31 March 2024.

Strategic Development Fund

The strategic development fund supports investment in succession planning, skills development, strategic advice and fundraising activities. This fund was not utilised during 2023-24 due to the audience development grant received through the Bloomberg Digital Accelerator Programme. At 31 March 2024 the board has agreed to set this fund at £20,000 for the purposes of the development of our new fundraising programme and corporate workshop strategy.

Fixed asset fund

The fixed asset fund is to cover the cost of purchasing and replacing fixed assets where these are not funded by specific grants. During the year £4,831 (2023: £12,172) was utilised in respect of depreciation on assets.

33

The Graeae Theatre Company Limited (A Company Limited by Guarantee) Notes to the Financial Statements For the Year Ended 31 March 2024 (continued)

15 MOVEMENTS IN FUNDS (continued)

Unrestricted funds

Access fund

Disabled people make up 45%-55% of the workforce in any given year. This fund is set up to support access costs that are not covered by Access to work or by specific grants. It was not utilised in 2023-24 (2023: £6,801) The Board has agreed to release the funds to general at 31 March 2024.

Sinking fund

The sinking fund has been set up to cover equipment maintenance, general wear and tear of the building and unplanned maintenance. The fund was not utilised during the year. (2023: £2,382) The Board has agreed to maintain this fund at £100,000 at 31 March 2024

Leasehold Property operational fund.

The leasehold property operational fund was originally set up to provide for the anticipated quinquennial rent reviews under the lease and increases in costs of the building generally. During the 2022-23 financial year we have taken the advice of our auditors that it is not common practice to designate funds for unknown operational costs and so with the Board's agreement this fund was released in 2022-23.

Leasehold Property capital fund.

During 2024-25 Graeae is embarking on a project to make capital adjustments to Bradbury Studios to allow the better utilisation of this asset. This fund was set up to provide for the initial legal and project related costs related to these works. As of April 1, 2024, all funds were expended and future project costs will be provided by grants secured for the project.

34

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Notes to the Financial Statements For the Year Ended 31 March 2024 (continued)

16 ANALYSIS OF NET ASSETS BETWEEN FUNDS

2024
**Restricted ** **Unrestricted ** Unrestricted Total
General Designated
£ £ £ £
Fixed assets 1,237,728 1,300 13,973 1,253,001
Current assets 113,448 1,007,390 185,759 1,306,597
Current liabilities (9,516) (57,348) - (66,864)
_ _ _ _
At 31 March 2024 1,341,660 951,342 199,732 2,492,734
_ _ _ _
2023
**Restricted ** **Unrestricted ** Unrestricted Total
General Designated
£ £ £ £
Fixed assets 1,320,739 1,300 17,563 1,339,602
Current assets 200,584 897,170 280,000 1,377,754
Current liabilities (22,462) (115,196) - (137,658)
_ _ _ _
At 31 March 2023 1,498,861 783,274 297,563 2,579,698
_ _ _ _

17 CAPITAL COMMITMENTS

The company had no capital commitments at 31 March 2024 or at 31 March 2023.

35

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Notes to the Financial Statements For the Year Ended 31 March 2024 (continued)

18 OPERATING LEASE COMMITMENTS

At 31 March 2024 the charity was committed to making the following payments under noncancellable operating leases:

cancellable operating leases:
2024 2023
£ £
Land and buildings - operating leases payments due
In under one year 120,000 137,700
Later than one year and not later than two years 120,000 121,475
Later than two years and not later than five years 360,000 360,000
Later than five years 1,115,507 1,235,507
_ _
1,715,507 1,854,682
_ _
Plant and machinery - operating leases payments due
In under one year 2,000 2,000
Later than one year and not later than two years 2,000 2,000
Later than two years and not later than five years 1,000 3,000
_ _
5,000 7,000
_ _

The lease agreement for the premises at Bradbury Studios is subject to a quinquennial rent review. (see also note 19). The next review is due at 18 July 2028.

Following the year end, the company has renewed a lease on a store in Erith for one (1) further year, expir

19 LEGAL CHARGE

On 24 November 2008, the company signed a lease relating to premises at Bradbury Studios, 138 Kingsland Road, London, E2 8DY for a term of 30 years expiring 17 July 2038. The lease premium paid was £1,000,000 plus VAT of £175,000.

Arts Council England (ACE) provided a grant to cover the cost of the premium and other costs relating to the premises. It was a condition of the grant that ACE have a fixed and floating security over the assets of the company. The charge is also dated 24 November 2008.

36

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Notes to the Financial Statements For the Year Ended 31 March 2024 (continued)

20 RELATED PARTY TRANSACTIONS

Payments to Trustees 2024 £ Ayzah Ahmed Appointed 09/19/23 540

Board Member Ayzah Ahmed is also engaged in a freelance capacity as Young Associate. Ayzah came through Graeae’s Young Company and is now starting life as a professional artist. It is important that the next generation of artists are represented on Graeae’s Board. The payments for work delivered are linked to running workshops for the next Young Company cohort and are not renumeration for her responsibilities as Board Member.

Board member Robin Cantrill Fenwick is also a trustee of the North East Theatre Trust. During the year the charity received box office income of £1,498 (2023 - £nil) from the North East Theatre Trust.

No Trustees were renumerated for attendance at Board meetings or work undertaken by the Trustees

No Trustees reveived any reimbursed expenses during the year (2023 - none).

37

The Graeae Theatre Company Limited (A Company Limited by Guarantee)

Notes to the Financial Statements

For the Year Ended 31 March 2024 (continued)

21 OTHER GRANTS RECEIVED
OTHER GRANTS RECEIVED 2024 2023
**Restricted ** Unrestricted **Total ** **Restricted ** Unrestricted Total
£ £ £ £ £ £
Note 2 - income from donations
Arts Council England project grant - - - 102,409 - 102,409
Garfield Weston 0 35,000 35,000 30,000 - 30,000
Bloomberg Digital Accelerator Programme 25,000 - 25,000 125,000 - 125,000
City Bridge Trust 56,012 - 56,012 57,300 - 57,300
Esmée Fairbairn Foundation 100,000 - 100,000 100,000 20,000 120,000
Keith Howard Foundation 3,000 - 3,000 - - -
Beyond Hull Project Funding 3,000 - 3,000 - - -
Katie Bradford Arts Trust 1,000 1,000 - - -
Theatre Partners - Microbursaries 1,750 - 1,750 - - -
British Council Bangladesh WOW - 250 250 - - -
VIsion Foundation - - - 3,750 - 3,750
_ _ _ _ _ _
188,762 36,250 225,012 418,459 20,000 438,459
_ _ _ _ _ _

22 POST BALANCE SHEET EVENTS

In April 2024, Graeae received confirmation that the organisation had been successful in an application for capital funding from Arts Council England. The grant and matched grant funding will cover the cost to redevelop the leased premises, faciliating additional income from licencees.

38

Graeae Theatre Company Limited

Post-audit management report Year ended 31 March 2024

The Trustees

Graeae Theatre Company Bradbury Studios 138 Kingsland Road London E2 8DY

18 December 2024

Post-audit management report for Graeae Theatre Company Limited for the year ended 31 March 20234

This post-audit management report presents the observations and matters which came to our attention during our audit, which are considered to be significant, as required by International Standard on Auditing (UK) 260.

The audit of the financial statements does not relieve management or those charged with governance of their responsibilities for the preparation of the financial statements.

We would like to take this opportunity to thank the finance team for their assistance provided during the course of our audit.

Yours faithfully

Catherine Biscoe

for Buzzacott LLP

Buzzacott LLP is a limited liability partnership and is registered in England and Wales with registered number OC329687. A list of LLP members is available at our registered office address as above. Registered to carry out audit work by the Institute of Chartered Accountants in England and Wales.

Contents

Executive summary ........................................................................................................... 1 Key audit findings ............................................................................................................. 4 Other information ............................................................................................................. 7 Appendix 1: Adjusted and unadjusted misstatements ..................................................... 9 Appendix 2: Audit observations and recommendations ................................................ 11 Appendix 3: Current developments ................................................................................ 13

Key contacts Catherine Biscoe Engagement Partner Tel: 020 7556 1384 Email: biscoec@buzzacott.co.uk Rob Cloke

Engagement Manager Tel: 020 7556 1441 Email: cloker@buzzacott.co.uk

Buzzacott LLP, 130 Wood Street, London, EC2V 6DL

Graeae Theatre Company Post-audit management report for the year ended 31 March 2024

Executive summary

Purpose of the external audit

In summary, we report that:

The purpose of this report is to bring to the attention of the Board as those charged with governance the findings from our recent audit of the financial statements of Graeae Theatre Company Limited, for the year ended 31 March 2024, for your consideration and to enable you to address matters arising where appropriate. Throughout this report, “you” and “your” refer to the Board. “We” and “our” refer to Buzzacott LLP.

As auditor, we are responsible for performing the audit in accordance with ISAs (UK), which is directed towards forming and expressing an opinion on the financial statements for the year ended 31 March 2024 that have been prepared by management with the oversight of those charged with governance, and other matters required by legislation.

Our work has been carried out in accordance with our audit planning letter dated 11 July 2024. We summarise our main findings below and provide more detail in the following pages.

The matters raised in this report have been discussed with Kevin Walsh.

Page 1 of 27

Graeae Theatre Company Limited Post-audit management report for the year ended 31 March 2024

Audit progress

The wording of our auditor’s report is unchanged from last year.

Our audit work was originally scheduled to be carried out in July, in order for the accounts to ready for approval at the September Trustees’ meeting. This timetable was based on a complete balancing set of financial statements being available for the start of the audit in July.

At the start of the planned audit a number of discrepancies were identified in the financial statements, and although some work could be completed in July, the fieldwork was postponed until a complete and corrected set of financial statements were available. These were eventually completed with the assistance of an independent contractor in November, and we have worked closely with management to complete our audit in time for the accounts to be approved and submitted ahead of the December filing deadline.

We would like to take this opportunity to thank all those with whom we dealt during the audit for their assistance and co-operation, in particular Kevin Walsh and Susanne Baumann

Accounting and internal controls systems

Our work during the audit included an examination of some of the charity’s transactions, procedures and controls with a view to expressing an opinion on the financial statements for the year ended 31 March 2024.

This work was not directed primarily towards discovering weaknesses, other than those that would affect our audit opinion, or towards the detection of fraud. We have included in this report only matters that have come to our attention as a result of our normal audit procedures and consequently our comments should not be regarded as a comprehensive record of all weaknesses that may exist or of all improvements that might be made.

We found no significant deficiencies in the accounting and internal control systems during our audit. However, we have made some recommendations for improvements, which are detailed in the key audit findings section of this report.

Auditor’s report

Prior year’s post audit report

We do not propose any modifications to our audit opinion and, therefore, we intend to issue an unqualified opinion in our auditor’s report.

We are pleased to report that the matters raised in our report last year have been satisfactorily dealt with except for the issues relating to the fixed asset register.

Page 2 of 27

Graeae Theatre Company Limited Post-audit management report for the year ended 31 March 2024

Accounting policies, accounting estimates and disclosures

Other than as described below, the accounting policies used in preparing the financial statements are unchanged from the previous year.

Our work included a review of the adequacy of disclosures in the financial statements and consideration of the appropriateness of the accounting policies and estimation techniques adopted by the charity. We found the disclosed accounting policies, significant accounting estimates and the overall disclosure and presentation to be appropriate for the charity.

Page 3 of 27

Graeae Theatre Company Limited Post-audit management report for the year ended 31 March 2024

Key audit findings

Annual Report and Financial Statements format

The financial statements have been prepared, as last year, in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice (Charities SORP FRS 102).

that these are not to be adjusted, due to their lack of significance to the overall result portrayed by the financial statements.

Materiality

Materiality threshold £26,400

There are no significant changes to the format of the financial statements this year.

Adjustments made during the audit

A list of the adjustments which have been made to the figures presented to us for audit is attached in Appendix 1. These have all been discussed and agreed with Kevin Walsh.

We will obtain written representations from you, as trustees, that you concur with these adjustments.

Reporting threshold: £1,320

Materiality refers to the relative significance of a particular matter in the context of the financial statements as a whole. An item would be considered material if its omission or its erroneous inclusion would reasonably influence the decisions of those using the financial statements.

We are required to report corrected audit misstatements, and uncorrected audit misstatements in excess of our reporting threshold which is set at 5% of overall materiality.

Unadjusted misstatements

A list of misstatements identified during our audit which remain unadjusted is attached in Appendix 1. The list does not include items which are considered to be clearly trivial. We will obtain written representations from you, as trustees,

Our materiality threshold is based on 2% of operational income. A lower level of materiality may be selected for specific areas of the financial statements and for some disclosure items e.g. transactions and other financial arrangements with trustees and their connected persons.

Page 4 of 27

Graeae Theatre Company Limited Post-audit management report for the year ended 31 March 2024

When considering the impact of misstatements discovered during the course of our audit and considering the implications for our report of such misstatements, we will refer to this level amongst other things. Whether a misstatement is ‘material’ or not is ultimately down to the auditor’s judgement.

Observations and recommendations on the accounting system and financial reporting function

The table below provides a summary of any observations made concerning weaknesses in the charity’s accounting and internal control systems.

Observations included in the “A” grade (red) banding indicate that, in our opinion, there is a risk of significant financial impact on the charity that must be addressed immediately.

“B” grade (orange) banding recommendations relate to those issues where there is a risk of moderate financial impact on the charity, such as a control failure or the absence of a control in an area of moderate risk. These items should be addressed shortly.

Priority No of
points		 Relating to Relating to
A -
• Aged creditors
B 2 • Salary documentation
• Declarations of interest
• Fixed asset register*
C 2
• Aged debtors

*Items marked with an asterisk are observations which were also made and reported in our post-audit report to you last year, but which remain unresolved.

Observations included in the “C” grade (yellow) banding indicates that the matter, although important, does not warrant urgent attention and should be addressed within an agreed timeframe.

Further details in respect of the observations and recommendations as a result of our audit work are given in Appendix 2.

The matters have all been discussed with Kevin Walsh, who has appropriate management authority.

Page 5 of 27

Graeae Theatre Company Limited Post-audit management report for the year ended 31 March 2024

Prior year observations

We are, however, pleased to report that the following observations made last year have been satisfactorily dealt with:

Priority Relating to

B

Segregation of duties

We recognise that the number of your accounting staff makes a complete system of internal control impracticable and that the trustees exercise close personal supervision, which we consider reasonable in the circumstances. We have taken this into account in conducting our audit and in preparing this report.

Page 6 of 27

Graeae Theatre Company Limited Post-audit management report for the year ended 31 March 2024

Other information

Letter of representation

Professional ethics

We enclose the draft letter of representation which we will request the trustees to approve and sign at the same time as the financial statements. This includes acknowledgement of the trustees’ responsibility for the design and implementation of internal controls to prevent and detect fraud.

As set out in our planning letter, we understand the following applied to the year ended 31 March 2024.

If the above information is no longer correct, please contact Catherine Biscoe or Rob Cloke.

In accordance with our profession’s ethical guidance and further to our letter confirming audit planning arrangements we wish to bring the following matters to your attention:

Current developments

We have attached a summary of other recent and ongoing developments as Appendix 3 to this report. The matters included in this appendix may not all be directly relevant to the charity. However, we are aware that a lot of trustees are involved with more than one organisation, therefore we have included items for general information.

Page 7 of 27

Graeae Theatre Company Limited Post-audit management report for the year ended 31 March 2024

Updates, insights and seminars

We would be pleased to receive your comments and reaction to this letter.

As part of our commitment to the charity sector, during the year the Charity Team issues occasional Updates and Insights on matters of relevance to the sector and also holds a number of seminars free of charge throughout the year. We would be delighted to welcome representatives of your charity to our seminars or to add trustees and management to our email distribution lists if this would be welcome. News and Insights are also available on our website at News and insights (buzzacott.co.uk), where there is also an opportunity to sign up to our mailing list should you wish.

This report has been prepared for your private use only. It has been prepared on the understanding that it will not be shared with any third party without our prior written consent and we can therefore assume no responsibility to any other party. Any recommendations contained herein are based on the information you have provided and UK law and judicial and administrative interpretation as of the date of this letter. Should the facts provided to us be incorrect or incomplete, or should they change, our recommendations may be inappropriate. Buzzacott LLP accepts no liability for losses arising from changes in UK law, interpretation or practice or in public policy that are first published after the date of this report.

If you require any further information or assistance, we shall be very pleased to help you.

Page 8 of 27

Graeae Theatre Company Limited Post-audit management report for the year ended 31 March 2024

Appendix 1: Adjusted and unadjusted misstatements

Audit adjustments

Statement of financial activities Statement of financial activities Balance sheet Balance sheet
Description Debit (£) Credit (£) Debit (£) Credit (£)
1 DR Accrued income 11,328
CR Other creditors and accruals 11,328
Being the adjustment to move ATW accrued income posted to other creditors and
accruals.
2 DR Expenditure 41,891
CR Prepayments 41,891
Being the adjustments to eliminate double posted prepayments
3 DR Other debtors 16,707
CR Theatre Tax Relief income 16,707
Being the adjustments to accrue Theatre Tax Relief due on productions in 2023/24.

The above adjustments had the effect of decreasing the charity’s surplus by £25,184.

Page 9 of 26

Graeae Theatre Company Post-audit management report for the year ended 31 March 2024

Disclosure adjustments

Unadjusted misstatements

Statement of financial activities Statement of financial activities Balance sheet Balance sheet
Description Debit (£) Credit (£) Debit (£) Credit (£)
1 DR Office equipment accumulated depreciation 11,955
CR Office equipment cost 11,955
Being the adjustment to bring the fixed asset note in line with the FAR.
2 DR Bad debt expense 7,128
CR Trade debtors 7,128
Being the adjustment to write off old debtor balances.

The above misstatements, if adjusted, would have had the effect of increasing the charity’s deficit by £7,128.

Page 10 of 26

Graeae Theatre Company Post-audit management report for the year ended 31 March 2024

Appendix 2: Audit observations and recommendations

Observation Implication Recommendation Management comment
B Aged creditors
It was noted on review of trade creditor Where the aged creditor listing doesn’t We
recommend
that
a
monthly		 Agreed
balances that the aged creditor listing agree to TB, this is symptomatic of reconciliation between aged creditors
was non-trivially out from the trade failures in internal reporting and could and TB takes place in order to identify
creditor balance per the TB. lead to large discrepancies in the and rectify any differences.
future if differences compound.
B Salary documentation
There
was
no
up-to-date
salary		 Where there is no evidence of salary, We recommend thatallchanges to Agreed
documentation available for the CEO. this can lead to incorrect salaries being gross salary are documented in a signed
paid to employees, constituting a loss letter to the relevant employee.
of funds to the charity.
B Declarations of interest
It was noted on review of Trustee and Where proper declarations if interests We recommend that all Trustees Agreed
KMP declarations of interest that only are not made, the charity runs the risk complete
timely
declarations		 of
the register from 2022 was available. of entering into inappropriate related interest, either updating the register
Further, it was noted that not all party transactions. annually, or on a rolling basis as
Trustees had completed declarations of interests change.
interests.

Page 11 of 26

Graeae Theatre Company Post-audit management report for the year ended 31 March 2024

Observation Implication Recommendation Management comment
C
Fixed asset register*
It was noted on review of the fixed asset This may make it difficult to track We recommend a full review of the
register that it is set up in a way which which assets are fully depreciated, fixed asset register is undertaken. This
makes it difficult to identify individual leading to assets remaining on the FAR will involve a reconciliation to trial
assets and their associated depreciation. too long. balance figures, a reconfiguration of
individual asset reporting, and a survey
It was also noted the FAR did not match
up to the note in the accounts (which we		 Where variances compound, this could
lead to material differences in internal		 of all fully depreciated assets to write
off any which may no longer be in use.
have
raised
as
an
unadjusted		 and external reporting.
misstatement).
Finally, as raised last year, there are a Assets which are fully depreciated and
number of fully depreciated assets which remain in the accounts could be
remain on the fixed asset register, as materially
distorting
cost
and
there have been no disposals in 23/24. accumulated depreciation figures.
C
Aged debtors
On review of trade debtors, it was noted Where old debtors remain on the We recommend that a monthly review
that there was a non-trivial balance of books, these can end up distorting of aged debtors is carried out where old
old debtors which remained on the aged fund levels through an overstatement debts are identified and investigated,
debtors listing at year-end, mostly of current assets. and written off where necessary.
relating to JobCentrePlus.

Page 12 of 26

Graeae Theatre Company Post-audit management report for the year ended 31 March 2024

Appendix 3: Current developments

Trustees’ Annual Report and Accounts

Changes to UK GAAP

In March 2024, the Financial Reporting Council published amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland .

The amendments encompass a number of changes including:

The amendments will be effective for accounting periods beginning on or after 1 January 2026 and can be read at:

https://media.frc.org.uk/documents/Amendments_t o_FRS_102_and_other_FRSs.pdf

Development of new Charity Statement of Recommended Practice (SORP)

The new Charities Statement of Recommended Practice (SORP) had been expected to be published in August 2024 but a revised timeline for release is being considered. An update on this will be issued in due course.

Background on the 15 topics for change that have been considered by the SORP Committee are available at: https://charitysorp.org/engagebriefings-to-inform-the-engagement-process-indeveloping-the-next-sorp

Company size thresholds

On 14 October 2024, the Secretary of State for Business and Trade confirmed in a ministerial statement that the Labour government will take forward the previous government’s plans to increase the company size thresholds. Legislation is expected to be laid before Parliament before the end of this year and is expected to come into force on 6 April 2025. The full statement can be read at: - https://questions - statements.parliament.uk/written statements/detail/2024-10-14/hcws126

The impact of this is that many companies currently classed as medium-sized will be able to move down to the small category. This will potentially enable them to apply a less rigorous financial reporting regime.

Page 13 of 26

Graeae Theatre Company Post-audit management report for the year ended 31 March 2024

Companies House reforms

On 26 October 2023, the Economic Crime and Corporate Transparency Act 2023 was enacted. It provides the framework to reform Companies House to improve the integrity of the data it holds and to clamp down on the abuse of the UK corporate structures for money laundering.

On 4 March 2024, parts of the Act came into force. These included granting Companies House greater powers to query information, stronger checks on company names, new rules for registered office addresses and new lawful purpose statements.

Although there is currently no published timetable, implementation of the following key changes are expected in the future:

all small companies will be required to file a directors’ report and profit and loss account (as well as a balance sheet).

• Identity verification for those setting up, managing and controlling companies The government will require identity checks on directors of companies, general partners in Limited Partnerships, designated members in LLPs and people with significant control (PSCs). Those submitting information to Companies House will also be subject to the same identity checks. Individuals who fail to verify their identity will be subject to new criminal and civil sanctions.

• Restrictions on corporate directorships Corporate directorships will be restricted to entities registered in the UK, and the corporate directors will need to be associated with natural persons who will be subject to identity checks. Different rules will apply to corporate members of LLPs or corporate general partners of LPs but with a similar aim of increasing transparency over the control of these entities.

• More information on a company’s shareholders The reform proposes a requirement for private companies, and traded companies where shareholders hold at least 5% of the issued shares of any class of the company, to provide a one-off full shareholder list. Any changes will be updated annually when a company files a confirmation statement.

The government is considering a new approach so that accounts will only need to be filed once instead of separately to Companies House, HMRC and other agencies.

Charities Act 2022

The phased implementation of the Charities Act 2022 is now complete with all changes now being applied. The key changes relate to how trusts and unincorporated associations make changes to governing documents, new rules around selling, leasing or disposing of land and new guidelines on how gifts to charities that are merging are treated.

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Further information can be found at: https://www.gov.uk/guidance/charities-act-2022guidance-for-charities

Update on ex-gratia payments

Typically, ex-gratia payments would breach trust law, as they divert funds from charitable purposes. However, section 106 of the Charities Act 2011 permitted the Charity Commission to authorise such transactions when trustees deemed the payments as a moral obligation. With the aforementioned changes in the Charities Act 2022, charities will gain increased authority to make ex-gratia payments of up to a certain threshold without obtaining prior consent from the Charity Commission.

The new thresholds are income based, and are:

The detailed legislation is at:

https://www.legislation.gov.uk/ukpga/2022/6/secti on/15/enacted

Sustainability and reporting

Whilst many companies and organisations are including sustainability and climate change-related information in their annual reports, only the largest private and listed companies are required to provide such information. This disclosed information is not yet subject to any independent ‘checking’ which has

resulted in the ‘greenwashing’ claims about some unverified information contained in annual reports.

June 2023 saw the issue of the first two international sustainability reporting standards aimed at improving trust and confidence in company disclosures about sustainability and climate change. The two IFRS Sustainability Disclosure Standards are internationally effective from 1 January 2024 although they have not yet been adopted by UK standard setters. However, it is likely that compliance will become mandatory in the near future. To begin with, the obligation may only be for large companies but, the ‘trickle down’ process is likely to require many organisations to ensure that they can provide adequate information to others in their supply chain who have the reporting obligation. As is usually the way, the reporting obligation will ultimately be extended to smaller and not-for-profit entities.

In anticipation of the above, it is advisable to start discussions around sustainability reporting and data early and more information can be found at:

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Review of reporting quality by the FRC

The FRC has published its review of reporting practices by the UK’s largest private companies. This thematic review highlights areas of improvement and examples of good practice in corporate reporting. The aim is to enhance transparency and consistency in financial disclosures, thereby building trust and investment in the UK market whilst aligning more with international guidelines to ensure high ethical standards and independence among UK audit firms. Key findings for future reports emphasise the need for:

The full thematic review can be read at: https://www.frc.org.uk/news-andevents/news/2024/01/review-of-reporting-by-theuks-largest-private-companies/

Policy and Governance

Charity Commission 2024-2029 Strategy

The Charity Commission has published its new strategy with five key priorities:

The regulator is in the process of identifying a set of strategic impact measures which will be published in mid-2024. The Commission aims to report against those measures for the first time in the Annual Report for 2024-25, which will be published in July 2025.

The full strategy can be read at: https://www.gov.uk/government/publications/chari ty-commission-strategy-2024-2029/charitycommission-strategy-2024-2029

UK Corporate Governance Code 2024

The UK Corporate Governance Code was revised in January 2024 with the key focus being to enhance transparency and accountability of UK premium listed companies and help support the growth and competitiveness of the UK and its attractiveness as a

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place to invest. The Code does not set out a rigid set of rules; instead, it offers flexibility through ‘comply or explain’ reporting against the Provisions. The main change in the 2024 Code is a new requirement under Provision 29 for a declaration of effectiveness by the board in relation to material controls which will come into force on 1 January 2026. The other, less substantial, changes to the Code will take effect from 1 January 2025.

The full Code can be read at: https://media.frc.org.uk/documents/UK_Corporate_ Governance_Code_2024_kRCm5ss.pdf

A summary of key changes since the 2018 Code, as published by the FRC, can be found at: https://media.frc.org.uk/documents/UK_Corporate_ Governance_Code_2024_Key_Changes.pdf

Charity Governance Code

A review of the Charity Governance Code takes place roughly every three years to ensure it remains relevant. A consultation has been launched to gather feedback on potential enhancements to the

Code, focusing on its content, structure, applicability to different charity sizes, language, and userfriendliness. The consultation runs to 11 August 2024 with a response being planned in Autumn 2024 with an updated Code expected in early 2025.

For further reading please see: - https://www.charitygovernancecode.org/en/about the-code-1/updating-the-code

Recruitment challenges of Chairs’

New research by Bayes Business School’s Centre for Charity Effectiveness highlights the need for charities to better understand the motivations of potential chairs, particularly younger generations, to address recruitment challenges. Surveying 61 chairs and 23 support representatives, the study found that the pipeline of future chairs is a significant concern, with barriers such as time pressures, responsibility level and a lack of diversity deterring potential candidates. The report emphasises the demanding nature of the chair role, recommending rigorous and inclusive recruitment processes

promoting the role as aspirational, and providing future focussed support.

The full paper can be read at: https://www.bayes.city.ac.uk/__data/assets/pdf_fil e/0009/794133/Bayes-CCE-The-Future-CharityChair-report-June2024.pdf

Charity Commission updates to guidance on decision making of trustees

When making decisions, trustees must follow the below seven principles in line with CC27, the Charity Commission’s bespoke guidance on this topic:

  1. act within their powers;

  2. act in good faith;

  3. be sufficiently informed;

  4. take into account all relevant factors;

  5. identify and disregard any irrelevant factors;

  6. manage conflicts of interest; and

  7. ensure their decision is within the range of decisions that a reasonable trustee body could make

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September 2024 saw the first update to CC27, the Charity Commission guidance on decision making, in 11 years. Whilst the principles remain the same, the guidance is more concise taking 12 minutes to read, rather than 24 minutes in the previous iteration.

All trustees are therefore encouraged to read the following: - https://www.gov.uk/government/publications/its your-decision-charity-trustees-and-decision-making

Trustees and whistleblowing

A tribunal appeal has raised the question of whether a charity trustee “is or should be treated as a worker” when seeking to be protected as a whistleblower. The Employment Appeal Tribunal published its judgment in the case involving Nigel MacLennan and the British Psychological Society (BPS). MacLennan was a trustee and president-elect at BPS when he uncovered and reported “serious concerns of corporate governance failings” there to the Charity Commission.

After making his disclosures, he was subjected to a disciplinary process and expelled from BPS in May 2021 following allegations of “persistent bullying”, which he denied.

Last year, an Employment Tribunal ruled that MacLennan was not a worker at BPS and had no jurisdiction to hear his claims around detriment for making protected disclosures.

MacLennan appealed the decision, arguing that he should be treated as a worker and protected from reprisals for blowing the whistle under articles 10 and 14 of the European Convention on Human Rights (ECHR).

This ruling opens the door to potential protection for trustees and the full judgement can be read at: https://assets.publishing.service.gov.uk/media/6716 36d5583ef2380ad997dd/Dr_Nigel_MacLennan_v_T he_British_Psychological_Society__2024__EAT_166. pdf

Charity Commission updates to meeting guidance for Zoom and Teams calls

The Charity Commission’s updated guidance (CC48) emphasises the need for charities to comply with and update their governing documents to accommodate online and hybrid meetings. It includes details on voting procedures, managing technical issues, and ensuring participation in virtual settings. The guidance applies to all types of charities and meetings, aiming to improve governance and assist trustees in their role.

Detailed guidance can be read at: https://www.gov.uk/government/publications/chari ties-and-meetings-cc48

Fundraising Code

The Fundraising Regulator is in the final stage of its review and update of the Code of Fundraising Practice. The new code will be published alongside a timetable for implementation in early 2025 following a widespread consultation exercise.

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Information on likely changes can be found at: - https://www.fundraisingregulator.org.uk/code consultation-2024

Fundraising levy

designed to help trustees have informed discussions when faced with a choice that has potentially significant consequences but accepts that the default position for trustees should be to accept donations. In making their decision, trustees should:

The full guidance can be read at: - - https://www.gov.uk/guidance/accepting refusing and-returning-donations-to-your-charity

Charity Commission guidance on investing charity

money

The Fundraising Regulator has announced it will increase the voluntary levy it asks charities to pay by up to 50% over two years, following a consultation with the sector.

The Charity Commission has recently streamlined its guidance on investing charity money making it more accessible to trustees. Amongst other things, it:

Its increases, the first in eight years, will mean the largest charities pay £22,500 a year, a £7,500 rise on current rates.

Further information on the revised rates can be seen at: https://www.fundraisingregulator.org.uk/registratio n/fees/changes-to-levy-registration-fee

Charity Commission guidance on accepting donations

The Charity Commission has published new guidance to help charities when deciding whether to accept, refuse or return a donation. The guidance is

The regulator also warns trustees not to allow their personal views, or any external pressures that do not relate to their charity’s purposes, to influence them to act in a way that is not in their charity’s best interest.

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Further detail can be found at:

Charity Commission renews calls for urgent action from UK banking sector

For more information see:

https://www.gov.uk/government/news/new-datasuggests-nearly-half-of-charities-experience-issueswhen-banking

New website to provide charities support with bank accounts

The full guidance can be read at: https://www.gov.uk/government/publications/chari ties-and-investment-matters-a-guide-for-trusteescc14

Charity investment governance principles

In autumn 2024, the Charity Finance Group are unveiling the Charity Investment Governance Principles to aid trustees in managing charity investments. These principles will include guidance on legal considerations, governance, integrity, decision making, effectiveness, equity and accountability. The principles aim to address gaps in existing investment governance practices and empower trustees with practical advice.

The Charity Commission’s annual sector survey has unveiled concerning findings with 42% of trustees reporting that their charities experienced poor service from banks in the last 12 months. The risks associated with inadequate banking services extends beyond inconveniences, potentially risking the provision of charitable activities and promoting unsafe financial practices, such as the use of personal accounts to ensure charitable activities continue. There have been instances where accounts have been frozen with minimal notice after identification requests further highlight the severity of the issues. It is important for the banking sector to address these challenges promptly to ensure the continuation operations of charitable organisations and safeguard their valuable contributions to society.

UK Finance have launched a website to help charities open and manage bank accounts, featuring tools like an account finder and FAQs. This initiative addresses difficulties many charities face with banking services, aiming to simplify the process and improve the service quality. The project has been supported by the Treasury and the Charity Commission.

The website can be found at: - https://www.ukfinance.org.uk/our - - expertise/commercial finance/voluntary - - organisation banking guide

Charity Fraud Report 2023

The Fraud Advisory Panel issued its 2023 Charity Fraud Report in January 2024 following a survey of

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121 charities, of which 62% generated income of over £10m, within the UK. The below key findings were noted:

The report identifies that the most common frauds relate to misappropriation of cash or other assets, expenses, procurement, false beneficiaries or cyber matters with two-thirds of charities reporting that frauds were detected as a result of internal controls

in place indicating the importance of designing a control environment with fraud risk at the centre.

Fraud prevention strategies include ensuring robust policies are in place (and are being followed) on cybersecurity, anti-fraud and conflicts of interest, whilst also ensuring adequate training is provided to those associated with the charity on a regular basis. A fraud response plan should also be devised and implement in case of any adverse event.

The full report, including the Panel’s top tips for preventing fraud (on page 22 and 23) can be read at: https://www.fraudadvisorypanel.org/document/202 3-charity-fraud-report/

VAT fraud alert

VAT practitioners have been made aware of instances where taxpayers’ bank account details have been amended on the HMRC portal without their knowledge, resulting in VAT repayments being diverted to unknown third parties. This issue came to light when clients reported that expected repayments had not arrived, and it was discovered

that forged director signatures were used to change the bank details. Taxpayers filing repayment claims should therefore regularly check that their bank details have not been altered.

Cyber-attacks

The British Library was subject to a cyber-attack in October 2023 and has published a “lessons learned” paper to help others in the sector who may experience similar. It covers the detail of the attack, and the impact it has had on operations, future infrastructure and risk assessments. The paper can be read at: https://www.bl.uk/home/british-librarycyber-incident-review-8-march-2024.pdf

Annual Return 2022 findings

The Charity Commission has recently released the Annual Return 2022, highlighting key trends across the sector for financial years ending in 2022. The key trends are as follows:

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For further detail please see: https://www.gov.uk/government/publications/chari ty-commission-annual-return-data/annual-returndata-january-to-december-2022

Trustee Quiz

The Charity Commission has released a new Trustee Quiz to enable trustees to test their knowledge of their roles and responsibilities. It is aimed to engage trustees with questions based on everyday scenarios in a bid to identify any knowledge gaps and to act as a refresher for all trustees. The quiz takes three minutes to complete with feedback provided for each question and a score out of 10.

The quiz can be found at:

UK employment law

A number of employment law regulatory changes have taken place in recent months including increases in statutory sick pay, updated redundancy pay calculations and national minimum wage increases which can impact organisations and their HR processes and documentation. The following insight provides detailed commentary on the changes and information on how Buzzacott can

A further development in 2024 was confirmed by the UK government who will be tripling the penalties for employing illegal workers from a minimum of £15,000 to £45,000 per worker: https://www.buzzacott.co.uk/news/penalties-foremploying-illegal-workers-in-the-uk-are-set-to-triple

Artificial Intelligence (AI)

Over the past year, the transformative potential of AI has become a major discussion point within the charity sector. The Charity Commission emphasise the importance of using AI responsibly to further charitable purposes. AI is increasingly being adopted by charities for resource-intensive tasks. The 2023 Charity Digital Skills report found that 35% of charities already use AI, with another 26% planning to adopt it. However, there are risks, such as data security, GDPR compliance, and the potential for AI to produce inaccurate or biased results. Charities should consider developing an internal AI policy, ensure human oversight and remain mindful of legal obligations to mitigate these risks. The

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Commission is actively learning about AI’s potential and risks, engaging with the sector and other regulators, but does not currently plan to issue specific new guidance.

For further reading please see: https://charitycommission.blog.gov.uk/2024/04/02/ charities-and-artificial-intelligence/

Following on from the Charity Commission blog, other sector bodies have been heavily involved in supporting charities in gearing up for AI. A checklist, created by Zoe Amar Digital, has been developed which aims to help charities build AI understanding, make informed decisions, and track progress. Recognising the varied knowledge on technology, the checklist offers guidance for beginners and advanced users alike, encouraging a tailored approach to integrating AI and fostering strategic discussions at the board level. It can be found at: - - https://zoeamar.com/artificial intelligence/ai checklist-for-charity-trustees-and-leaders/

Reputational damage and financial loss from Deepfake AI incident

In July 2024, Arup Group suffered a significant setback when a deepfake video was falsely circulated which ordered staff to make significant bank transfers. The sophisticated AI-generated deepfake digitally cloned the CFO and resulted in significant reputational and financial losses. Companies and charities should be cautious of such digital misinformation by ensuring all communications are verified and aligned with official channels.

The Financial Times article reporting this incident can be read at:

https://www.ft.com/content/b977e8d4-664c-4ae48a8e-eb93bdf785ea

Accounting and Auditing Matters

New Ethical Standard

The FRC has updated its Ethical Standard for auditors, effective from 15 December 2024. The update simplifies existing standards, aligns with the

latest international ethics codes, and introduces restrictions on fees from entities controlled by a single party. These changes aim to strengthen governance and enhance market confidence.

The full standard can be read at: https://www.frc.org.uk/news-andevents/news/2024/01/frc-updates-the-ethicalstandard-for-auditors/

IAASB proposes major revisions to fraud auditing standards

The IAASB has proposed significant revisions to its standard of auditors’ responsibilities regarding fraud, aiming to enhance public trust in financial reporting. The updated standard, ISA 240, outlines clearer auditor responsibilities, emphasises professional scepticism, and strengthens procedures for identifying and responding to fraud. Key changes include improved risk assessment, more detailed responses to suspected fraud, and greater transparency in auditors’ reports. The IAASB will release a video series to explain the revisions.

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The detail behind the changes can be read at: - - - https://www.iaasb.org/news events/2024 02/iaasb moves-strengthen-auditors-efforts-related-fraud

FRC’s focus for 2024/25

In 2024/25, the FRC’s reporting reviews and audit quality inspections will focus on risks tied to the current economic environment, such as going concern, impairments, and tax asset/liability recoverability. There will also be a focus on climate related risks, and the implementation of IFRS 17 for insurance contracts. Attention will also be given to the accuracy and completeness of cash flow statements.

The FRC’s full announcement can be read at: https://www.frc.org.uk/news-andevents/news/2023/12/frc-announces-areas-ofsupervisory-focus-for-202425/

Enhancing auditor requirements for detecting and reporting non-compliance

The FRC’s consultation to enhance auditor requirements for detecting and reporting material

misstatements due to non-compliance with laws and regulations ended in January 2024. The FRC intends to strengthen ISA 250 Sections A and B, improving risk assessments and ensuring significant matters are reported to regulators, even if not explicitly require by law. Revisions seek to provide greater assurance to users of the financial statements and improve confidence in auditors’ management and reporting of compliance risks. Changes are set to take effect for audits of financial statements for period beginning on or after 15 December 2024.

The proposed revisions can be read at: https://www.frc.org.uk/news-andevents/news/2023/10/proposed-revisions-to-isa-uk250-section-a-and-isa-uk-250-section-b/

Tax

Charity tax returns – why are they so important?

Whilst it is not compulsory for charities to file a tax return, HMRC is able to perform random checks on charities to ensure exemptions are being claimed correctly. There is no blanket exemption on income

generated by a charity because of their charitable status. If a charity receives income that does not fall under the available exemptions, then the profit element of the income will be subject to tax. The main forms of exempt charitable income are:

If there is non-charitable trading income that does not fall under the above exemptions, the small-scale taxable trades exemption can be applied whereby a tax liability will not be applied if the non-charitable trading income is less than 25% of the charity’s total income, subject to a cap of £80,000. If £80,000 is breached, the total non-charitable trading income will be taxable.

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Further information can be found at: https://www.buzzacott.co.uk/insights/charity-taxreturns-why-are-they-so-important

Charity Commission tax guidance

The Charity Commission has published guidance on direct tax obligations of charities and reliefs available. It is designed to allow charities access to relevant resources in one place with the guidance being available at:

https://www.gov.uk/government/publications/chari ties-detailed-guidance-notes

Reformed IR35 guidance

Off-payroll working legislation governs how organisations handle tax for workers providing services through intermediaries, such as personal service companies. The reformed rules, introduced in 2017 and expanded in 2021, shift the responsibility of determining employment status from the worker’s intermediary to the client engaging them. The reformed guidelines assist clients and deemed employers in applying these

rules, ensuring correct tax and National Insurance contributions are paid. They also provide examples of best practices to minimise errors and potential penalties. Organisations should use these guidelines alongside existing resources to make informed decisions based on their specific circumstances.

Detailed guidance can be found at:

Navigating the Employment Allowance and Apprenticeship Levy

HMRC is warning certain clubs and associations that they may be liable to pay the Apprenticeship Levy (AL) and are also no longer eligible for Employment Allowance (EA) relief.

The complexity of understanding eligibility for both the EA and the AL is the requirement to look beyond the payroll of the immediate employer and add the value of total payroll or the secondary Class 1 NIC liability of any connected employers. These rules are

applicable whether an organisation is assessing eligibility for EA or AL.

Many unincorporated associations such as clubs, societies, religious bodies, amateur sporting bodies, and political parties, should be aware of these rules.

Further information can be found at: - https://www.buzzacott.co.uk/insights/navigating the-employment-allowance-and-apprenticeship-levy

Working from home overseas – tax, social security, and payroll considerations

There are a number of tax, social security and compliance issues that both employees and employers should consider before allowing overseas working. Employers should seek professional advice as to whether they will have social security and workplace pension scheme obligations in the country in question. Consideration will also need to be given whether an employee working abroad would create a fixed permanent establishment, resulting in potential overseas tax liabilities.

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For further information, please see: - https://www.buzzacott.co.uk/insights/working from-home-overseas-the-tax-social-security-andpayroll-considerations

Charity tax compliance consultation

HMRC are seeking views on several areas of concern (mainly in relation to abuse) in a consultation process which came to an end on 20 July 2023. The four areas that came under review were on charitable investments, non-charitable expenditure, tainted charity donations and filing obligations. HMRC do not intend to change the purpose of existing rules but want to ensure that they continue to be fit for purpose.

The results of the consultation have not yet been published but information on the process can be found at:

Benefits in kind

On 16 January 2024 the government announced that it will mandate employers to report and collect Income Tax and Class 1A National Insurance contributions on employment benefits through payroll software from 6 April 2026. This means that the 2025 to 2026 tax year will be the last year that employers will be able to file P11Ds and P11D(b)s with HMRC in most cases. From this date, tax on employment benefits will be collected in real time and not through tax codes in arrears. Class 1A National Insurance contributions will also be collected in real time for each pay period rather than at the end of the year. These changes aim is to reduce the administrative burden for employers with draft legislation due to be published later this year.

https://www.gov.uk/government/consultations/cha rities-tax-compliance/consultation-charities-taxcompliance

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