The trustees present their annual report and financial statements for the year ended 31 March 2026.
The Trustees present their annual report together with the financial statements of the Charity for the year ended 31 March 2026. The Annual Report serves the purposes of both a Trustees' Report and a Directors' Report under company law. The Trustees confirm that the Annual Report and financial statements of the charitable company comply with current statutory requirements, the requirements of the charitable company's governing document and the provisions of the Statement of Recommended Practice (SORP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).
Since the Charity qualifies as small under section 382 of the Companies Act 2006, the Strategic report required of medium and large companies under the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 has been omitted.
Vision and purpose
The charity's vision is to be:
A powerhouse for developing local creative talent.
A vibrant community hub dedicated to improving the wellbeing of residents, bringing affordable live performance to the community.
Strategies for achieving vision
Creativity as a catalyst for personal and social change
Chelsea Theatre occupies a distinctive position as both an arts venue and a community centre. The quality of the building, its location at the heart of World's End and Cremorne, and its relationship with local residents give the charity the opportunity to use creativity, culture and community activity to improve wellbeing, strengthen social connection and open up new pathways for local talent.
The Chelsea Theatre seeks out creative voices and helps them flourish by:
Combining the charity's dual roles as community centre and arts venue so that each strengthens the other and maximises public benefit.
Creating accessible entry points into creativity, culture and performance, particularly for people who may otherwise face barriers to participation.
Offering children and young people opportunities to learn creative skills, build confidence, develop their talents and progress towards further creative opportunities.
Developing a distinctive role within the local and wider creative landscape while keeping the needs and aspirations of our community at the centre of our work.
The trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the charity should undertake and how its resources should be applied.
Main activities undertaken to achieve objectives
Chelsea Theatre provides a broad range of community, cultural and wellbeing activity, both directly and in partnership with third-sector organisations, NHS services and the Council. These partnerships bring people into the building, connect residents with useful services and help to build trust. The Community Café, free weekly activities and community events provide welcoming entry points into the wider creative and cultural offer.
As a community venue, the charity provides room hire, theatre hire, performance and exhibition space alongside a year-round creative and cultural programme. Commercial and private hires are an important source of earned income and help to support the building's wider charitable use.
The charity runs creative workshops for children and young people, including acting, music and visual arts, with opportunities to rehearse and perform on stage, and exhibit work. A free hot meal is provided at youth workshops and rehearsals, recognising the importance of removing practical barriers to participation.
Other activities undertaken to further the Charity's purposes for the public benefit
Alongside the Community Champions programme, the venue has hosted or supported Citizen’s Advice, Alcoholics Anonymous, Narcotics Anonymous, NHS cooking workshop, and multiple community events and celebrations.
Throughout the year, subsidised, reduced-cost and, where appropriate, free space was offered to third-sector and community organisations. This supports the charity's aim of strengthening Chelsea Theatre's role as a key community hub for the south of the borough.
During 2025/26 Chelsea Theatre entered a new phase of organisational development, with renewed focus on the two interconnected strands at the heart of its charitable purpose: strengthening community wellbeing and connection, and developing creative opportunity and local talent.
Youth development became a major area of activity. In 2025 we launched a free performing arts programme for ages 11-25, with weekly two-hour workshops and a hot meal. Beatbox, Vocals and Songwriting sessions and Acting sessions are complemented by holiday workshops, rehearsals and performances, helping young people develop skills, confidence and friendships.
Community activity developed in parallel. The Chelsea Theatre strengthened its role as a neighbourhood hub for World's End and Cremorne through our first Community Assembly, free weekly activities, community events, signposting and services delivered with trusted partners. The Community Champions programme supports participation, listens to residents and connects people with health, wellbeing and community opportunities.
Review of activities
During the year we hosted a range of free and low-cost community events, including the Chelsea Muslims Celebration, a fashion show for Chelsea Arts Festival and Sudanese Nile Fest 2025. These events brought different parts of the community together and enabled local residents to experience the building as a place for celebration, culture and connection.
The weekly programme of free community activities grew to include Yoga, Community Choir, Knitting for Charity and Traditional African Dance; Chair & Balance for people aged 50+; a Baby & Parent Group; Musical Theatre for ages 4-7; and Community Football for ages 7-12. The programme supports wellbeing, reduces isolation and creates opportunities for residents to connect.
We developed a community hub on the website setting out free weekly activities for all ages and, with Chelsea Youth Club, delivered information directly to households across the World's End and Cremorne estates. The venue also continued to host third-sector, NHS and Council services, helping residents access support in a familiar local setting.
Key performance indicators
Engagement in activities presented by the charity and by organisations using the building increased over the year. Alongside participation levels, the trustees consider feedback, repeat engagement, strength of partnerships, earned income and fundraising progress when assessing performance.
Chelsea Theatre's relationship with its immediate community strengthened significantly during the year. Regular free activity, the Community Café and trusted local partnerships have helped to rebuild confidence in the venue as an accessible neighbourhood resource. Participant feedback highlights the value of activities that reduce isolation and improve wellbeing. Community partners have also highlighted the value of events in strengthening cohesion.
The youth programme has demonstrated similarly strong individual impact. Parent feedback has described increased confidence, motivation and social engagement. The longer-term ambition is to build on these foundations so young people, particularly those facing barriers to arts participation, can develop their talents and progress towards further study or work in the creative industries.
Fundraising activities and income generation
The charity is grateful to the Royal Borough of Kensington and Chelsea and Westminster City Council for their continued support, including annual funding, and to the trusts, foundations, donors and partners that supported our work during the year.
Fundraising and income diversification have been major priorities. During the year the charity secured £253,343 (2025: £203,308) of grant funding and donations, supporting investment in operations, community programmes and organisational resilience. Alongside grant fundraising, the charity has strengthened its focus on venue and room hire as a source of unrestricted earned income. The longer-term objective is to increase sustainable unrestricted income and rebuild free reserves to a level equivalent to three months' operating expenditure by 2028.
The trustees monitor financial performance with particular focus on unrestricted income, operating cash flow, liquidity and progress towards a sustainable operating position. Cash absorbed by operations was £62,482 in 2025/26, compared with £41,924 in the previous year. Although the charity continued to report a deficit, steps taken during the year to strengthen fundraising, develop earned income and control costs form part of a wider financial recovery strategy. The overall deficit has reduced by £42,270 and has continued to decrease into 2026, with a planned operating surplus at the end of the 2026/27 financial year.
After making appropriate enquiries, the Trustees have a reasonable expectation that the Charity has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Further details regarding the adoption of the going concern basis can be found in the accounting policies.
It is the policy of the charity that unrestricted funds not designated for a specific use should, over time, be maintained at a level equivalent to three months' operating expenditure. The trustees consider this an appropriate target to provide resilience in the event of a significant reduction or delay in funding. At 31 March 2026 the charity had negative unrestricted reserves of £336,021. The trustees recognise that this remains a significant concern and have adopted a financial recovery strategy focused on increasing unrestricted fundraising, improving earned income and operating performance, and rebuilding free reserves. The goal remains to achieve unrestricted reserves equivalent to three months' running costs by 2028.
Principal risks and uncertainties
The trustees regularly assess the principal risks facing the charity. These include financial sustainability and liquidity, reliance on grant funding, the performance of earned-income activity, health and safety, safeguarding, staffing capacity and the operational risks associated with running a busy public building. The Board is satisfied that systems are in place to identify, monitor and, where possible, mitigate these risks.
Risk assessments are undertaken for theatre productions, events and activities as appropriate. The charity also receives professional advice and support, including retained HR and Health & Safety expertise, and keeps its operational policies and procedures under review.
Financial risk management objectives and policies
The Board uses its annual business-planning process and regular management reporting to maintain oversight of the risks to which the charity is exposed. Board agendas include an 'Opportunities & Risks' item so that emerging issues can be considered and actions agreed.
A detailed financial controls and policies document is reviewed and approved annually by the Board. Regular Finance Committee meetings are held in addition to Board meetings, supporting close monitoring of cash flow, forecasts, funding and the charity's overall financial position.
Principal funding
During the year to 31 March 2026, The Chelsea Centre Ltd t/a The Chelsea Theatre held assets for the purposes of achieving its charitable objectives. Fixed assets were added as indicated in the notes to the financial statements. No assets were held by anyone other than The Chelsea Centre Ltd. No Trustees acted as custodian Trustees.
The Chelsea Centre Ltd has no subsidiary or associated undertakings. All restricted fund assets are held either on current account or instant access deposit accounts. There are sufficient resources to meet all commitments undertaken as a result of a grants from Kensington and Chelsea Council and Westminster City Council, together with that of key donations and additional grant-in-aid.
The Chelsea Theatre showed a deficit for the year of £193,198 (2025: £235,468) giving an unrestricted funds deficit of £336,021 (2025: £302,499) and a restricted funds balance of £1,861,065 (2025: £2,020,741) as at 31 March 2026.
The Chelsea Centre holds a tax-free deposit account operated by CCLA known as the COIF Charities Deposit Account, the balance of which at 31 March 2026 was £632 (2025: £609).
Constitution
The Chelsea Community Association was founded as an unincorporated association on 19 February 1953 and registered with the Charity Commission in January 1961, with the object of promoting the wellbeing of residents of what is now the Royal Borough of Kensington and Chelsea and, in furtherance of that object, managing a community centre.
On 1 April 1997 its affairs were transferred to a company without share capital limited by guarantee. In October 2001, prior to the relaunch of its refurbished auditorium, the Board of Trustees of The Chelsea Centre Ltd approved 'The Chelsea Theatre' as the name under which the company operates.
The charity is a charitable company limited by guarantee. It is established under a Memorandum of Association, which sets out its objects and powers, and is governed by its Articles of Association. In the event of the company being wound up, members are required to contribute an amount not exceeding £10.
The Board underwent a period of significant transition during 2024 and 2025. Steven Medway was appointed Chair in September 2024 and formally became a Trustee in December 2024. Steven Parker and Victoria Jacobsen joined the Board at the same time, supporting the development of a refreshed strategic direction for the theatre.
Gabin Sinclair-Constance and Verena Cornwall, who had joined the Board in June 2024 to support the rebuilding of governance arrangements, stepped down during 2025. The Board records its thanks for their contribution during a period of organisational change.
Trustee recruitment continued as the charity sought to strengthen the range of skills and experience represented on the Board. Suman Pal was appointed as a Trustee on 23 April 2026, after the year end and before approval of these financial statements.
The Board continues to review its composition, skills and governance arrangements to ensure that it is equipped to support the charity's strategic development, financial recovery and community mission.
The management of the Charity is the responsibility of the Trustees who are elected and co-opted under the terms of the Trust deed.
The Trustees, who are also the directors for the purpose of company law, and who served and resigned during the year and up to the date of signature of the financial statements were:
Gabin Sinclair-Constance Resigned 16 June 2025
Verena Cornwall Resigned 4 September 2025
Steven Medway Appointed 1 December 2024
Steven Parker Appointed 1 December 2024
Victoria Jacobsen Appointed 1 December 2024
Suman Pal Appointed 23 April 2026
New Trustees are appointed by selection by the current Trustees of the charity by a simple majority vote. New Trustees are selected to add their expertise or knowledge to the board of Trustees. A skills audit is conducted to ensure critical skills are covered. Training is provided to ensure Trustees are kept up to date with their responsibilities.
Leadership and organisational development
A significant milestone was the appointment of Katie Elston as Chief Executive Officer. During the year the organisation began to move from a period of instability towards a clearer strategic and operational footing, with renewed attention to community impact, creative development, income generation, organisational processes and financial sustainability.
Community and programme development
Community development and youth development are both central to Chelsea Theatre's renewed direction. The community programme is intended to make the building a trusted neighbourhood hub where residents can take part in free and affordable activity, connect with one another, access health and wellbeing support and help shape future provision. In parallel, the youth programme is being developed as a pathway through which young people can discover and strengthen creative skills, perform and showcase their work, gain experience of backstage and technical roles and, over time, progress towards further study or employment in the creative industries.
The relaunch of the Community Café through the partnership with Community Cook Off has further strengthened the building's everyday community role. The café offers affordable food and social connection, while future community-led activity, cooking sessions and takeovers are intended to create further routes into participation. Across the organisation, the next phase will also place greater emphasis on collecting feedback, case studies and participation data so that the charity can demonstrate impact, learn from residents and strengthen future funding applications.
Fundraising and future development
The charity's immediate priorities are to consolidate the progress made during 2025/26; deepen its community and youth development work; grow unrestricted fundraising and earned income; strengthen the hires business and public programme; improve the accessibility, safety and quality of the building; and rebuild unrestricted reserves. Department business plans for 2026-29 translate these priorities into measurable actions while keeping the charity's vision and public benefit at the centre of decision-making. The Board will continue to monitor delivery alongside the financial recovery plan.
The trustees' report was approved by the Board of Trustees.
The trustees, who are also the directors of The Chelsea Centre Ltd for the purpose of company law, are responsible for preparing the Trustees' Report and the 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 charity and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.
In preparing these financial statements, the trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.
The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity 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 charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
I report to the trustees on my examination of the financial statements of The Chelsea Centre Ltd (the charity) for the year ended 31 March 2026.
Having satisfied myself that the financial statements of the charity are not required to be audited under Part 16 of the Companies Act 2006 and are eligible for independent examination, I report in respect of my examination of the charity’s financial statements carried out under section 145 of the Charities Act 2011. In carrying out my examination I have followed the Directions given by the Charity Commission under section 145(5)(b) of the Charities Act 2011.
Since the charity’s gross income exceeded £250,000, the independent examiner must be a member of a body listed in section 145 of the Charities Act 2011. I confirm that I am qualified to undertake the examination because I am a member of The Institute of Chartered Accountants in England and Wales, which is one of the listed bodies.
I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
accounting records were not kept in respect of the charity as required by section 386 of the Companies Act 2006
the financial statements do not accord with those records; or
the financial statements do not comply with the accounting requirements of section 396 of the Companies Act 2006 other than any requirement that the financial statements give a true and fair view, which is not a matter considered as part of an independent examination; or
the financial statements have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities applicable to charities preparing their financial statements in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the financial statements to be reached.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
The Chelsea Centre Ltd is a private company limited by guarantee incorporated in England and Wales. The registered office is The Chelsea Theatre, 7 World's End Place, London, SW10 0DR, UK.
The financial statements have been prepared in accordance with the charity's governing document, the Companies Act 2006, FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)". The charity is a Public Benefit Entity as defined by FRS 102.
The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared on the going concern basis. The trustees have considered the charity’s cash flow, budgets and funding plans for a period of at least twelve months from the date of approval of these financial statements, together with the level of reserves and the timing of expected income. The trustees acknowledge that, at the reporting date, the charity held negative unrestricted reserves. Subsequent to the year end, the charity has received local government funding and grants. Having considered these post year end funding, the trustees are satisfied that the charity has adequate resources to meet its liabilities as they fall due and to continue its activities for the foreseeable future (being not less than twelve months from the date of approval). Accordingly, the trustees consider the adoption of the going concern basis to be appropriate in preparing these financial statements.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
Restricted funds are subject to specific conditions by donors or grantors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Legacies are recognised on receipt or otherwise if the charity has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.
Donated goods and services are recognised as income where the benefit to the charity can be reliably measured and the charity has control over the item or service received. Such income is recognised at the fair value of the goods or services provided to the charity.Donated services and facilities are included within income from donations and gifts and are recognised when received, provided that the value of the service can be measured reliably. The corresponding expenditure is recognised in the same period as the donated goods or services are consumed. The charity occupies premises made available at below market value. The value of this donated facility is recognised based on the estimated market rental value of the accommodation provided.
Government grants are recognised when there is reasonable assurance that the charity will comply with the conditions attaching to the grant and that the grant will be received. Grants relating to revenue expenditure are recognised as income on a systematic basis over the periods in which the charity recognises the related costs for which the grants are intended to compensate. Grants received in advance of the charity satisfying the related conditions or incurring the related expenditure are deferred and recognised within creditors. Such amounts are released to income in the period in which the related conditions are met and expenditure is incurred.
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably.
Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Concessionary loans
Concessionary loans are loans received by the charity at below market rates of interest. The charity has elected to apply the provisions of the Charities SORP (FRS 102) for concessionary loans. Such loans are initially recognised at the amount received and subsequently measured at the amount repayable to the lender.
Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
In the application of the charity’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The trustees have concluded that it is appropriate to prepare the financial statements on a going concern basis. In reaching this conclusion, the trustees have considered the charity's current financial position, forecast cash flows, available funding facilities and future operational plans.
Judgement is also exercised in determining the classification of income and expenditure between restricted and unrestricted funds and the allocation of assets and liabilities to the relevant funds.
The charity depreciates its leasehold property over the remaining term of the lease. The useful economic life adopted is based on management's assessment of the period over which the property is expected to provide economic benefit to the charity.
The carrying value of trade debtors is reviewed at each reporting date. Provision is made where there is evidence that amounts due may not be recoverable. The recoverability assessment requires management to estimate the likelihood and timing of receipt of outstanding balances.
The trustees do not consider there to be any other significant estimates or assumptions at the reporting date that have a material risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
The average monthly number of employees during the year was:
The remuneration of key management personnel was as follows:
The key management personnel of the charity comprise the Chief Executive Officer, who is responsible for directing, controlling and managing the charity's activities on a day-to-day basis.
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
During the year, the charity entered into an unsecured loan facility agreement with The Mayor and Burgesses of the Royal Borough of Kensington and Chelsea for a maximum principal amount of £100,000. The facility is interest-free and was provided to support the charity's working capital and operational activities. The outstanding balance is repayable in instalments of £50,000 on 30 April 2027 and the remaining balance on 31 March 2029. The loan is unsecured and contains certain covenants and default provisions customary for this type of arrangement.
The loan has been accounted for as a concessionary loan and is carried at the amount repayable to the lender.
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
Deferred income comprises of local government grant funding received in advance of the charity satisfying the related funding conditions or incurring the expenditure to which the funding relates. The balance will be recognised as income in future periods as the associated conditions are fulfilled.
At 31 March 2026, deferred income amounted to £93,321 (2025: £102,488). The deferred balance relates to grants received for activities and expenditure to be undertaken after the year end. No grants were repayable at the year end and the trustees expect all conditions attached to the grants to be satisfied.
Deferred income is included in the financial statements as follows:
Restricted funds comprise grants, donations and assets which are subject to specific donor-imposed restrictions. The charity's principal restricted fund relates to its leasehold theatre property and associated capital funding received for the acquisition, refurbishment and ongoing preservation of the theatre for charitable purposes. These funds may only be applied in accordance with the conditions attached by the original funders and are therefore not available for general expenditure.
Income recognised during the year represents grants and donations received for restricted purposes. Expenditure represents costs incurred in accordance with the requirements of the respective funding agreements and includes depreciation charged on restricted fixed assets.
The movements on restricted funds during the year were as follows:
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used.
The deficit reflects the charity's historic funding position and the continued use of unrestricted resources to support the delivery of its charitable objectives. The trustees have adopted a financial recovery strategy aimed at increasing unrestricted income, improving operating surpluses and rebuilding free reserves over time. The trustees keep the position under regular review and are satisfied that the charity remains able to meet its obligations as they fall due. Further information regarding the trustees' reserves target and the actions being taken to eliminate the deficit is included within the Reserves Policy in the Trustees' Report.
There were no disclosable related party transactions during the year (2025 - none).