signed financial statements websitev 2012-13

of 42 The Royal National Theatre Financial Statements 2012-13

Financial Statements 2012-2013

The Royal National Theatre


National Theatre

Financial Statements

The Royal National Theatre is a company limited by guarantee and a registered charity. It was established in 1963 for the advancement of education and, in particular, to procure and increase the appreciation and understanding of the dramatic art in all its forms as a memorial to William Shakespeare. These objects are set out in the governing document, which is its Memorandum and Articles of Association, and have been developed into a set of aims and objectives as described in the Annual Report document on pages 5 and 10-11.

Public Benefit Statement In developing the objectives for the year, and in planning activities, the Trustees have considered the Charity Commission’s general guidance on public benefit including the guidance on public benefit and fee charging. The repertoire is planned so that across a full year it will cover a wide range of theatre, appealing to a broad audience. Particular regard is given to ticket-pricing, affordability, access and audience development, both through the Travelex £12 season and more generally in the provision of £12 tickets for all performances. Careful consideration is given to the accessibility of the National to those on low incomes, through concessions, free exhibitions, foyer music and performances of Watch This Space. Geographical reach is achieved through touring and NT Live broadcasts to cinemas in the UK and overseas. The NT also seeks to develop new audiences and deepen engagement through its NT Learning programme and other activities, both on-site and via the website.

The Annual Report and Financial Statements are both available to download at www.nationaltheatre.org.uk/annualreport If you would like to receive it in large print, or you are visually impaired and would like a member of staff to talk through the publication with you, please contact the Board Secretary at the National Theatre. The Royal National Theatre, Upper Ground, London. SE1 9PX +44 (0)20 7452 3333 Company registration number 749504. Registered charity number 224223. Registered in England.


FINANCIAL STATEMENTS FOR THE 52 WEEKS ENDED 31 MARCH 2013

2 Public Benefit Statement 4 Financial Review 13 Structure, Governance and Management 17 Independent Auditors’ Report 18 Financial Statements 22 Notes to the Financial Statements

In this document The Royal National Theatre is referred to as “the NT”, “the National”, and “the National Theatre”. The Annual Report is a separate document from these Financial Statements. The Trustees’ Report comprises those items on pages 2-16 of these Financial Statements and pages 1-5 and 10-64 of the Annual Report.


FINANCIAL REVIEW 2012-13

The National had a strong financial year with significant box office income at its theatres on the South Bank, in the West End and internationally. At the three theatres on the South Bank, the National achieved an average 90% attendance. It has also seen the continued success of War Horse at the New London Theatre and One Man Two Guvnors at the Theatre Royal Haymarket, as well as the transfer of The Curious Incident of the Dog in the Night-Time from the Cottesloe Theatre to the Apollo Theatre in March 2013. In addition four international productions of War Horse ran during 2012-13. Current levels of activity are dependent on the funding received from the Arts Council (£17.5m in 2012-13). The NT saw its Arts Council funding cut in the year by 4.4% (£0.8m) but was able to use its income from commercial productions to offset this reduction; finance the construction of The Shed, a temporary theatre, which will be open in 2013-14 whilst the Cottesloe Theatre is redeveloped as part of the NT Future programme; and run Inside Out, an extended 2012 summer festival programme. The Trustees have reviewed the financial outlook and, whilst acknowledging the risk surrounding box office income, consider the recent financial performance and level of reserves to indicate that the National will be able to sustain current activity levels.


Set out below is a summary statement of income and expenditure. It combines the National’s unrestricted income and expenditure with short term project expenditure funded by earmarked donations (restricted funds) and the element of the regular ACE grant which has been restricted to capital expenditure (£1.4m). It excludes NT Future income and expenditure which is treated as a long term project, as well as movements in any other long term restricted funds.

2013

2012

£m

£m Income

Box office at NT 22.5 26%

20.0 25% UK Commercial Productions 25.1 29%

22.2 28%

International Commercial Productions 3.8 4%

2.6 3% Trading and other income 11.9 14%

10.8 13%

Fundraising 6.3 7%

6.6 8% ACE grants 17.5 20% 18.3 23% 87.1 100% 80.5 100%

Expenditure Production costs 36.0 43%

34.9 48%

UK Commercial Productions 23.6 28%

18.8 26% International Commercial Productions 4.1 5%

1.7 2%

NT Learning & Public Engagement 6.8 8%

5.5 7% Research 1.6 2%

1.7 2%

Trading 9.4 11%

8.1 11% Fundraising 1.5 2%

1.5 2%

Irrecoverable VAT 1.0 1%

1.1 2% Governance 0.2 0% 0.2 0% 84.2 100% 73.5 100% Transfers

Use of restricted project funds 0.1

(0.1) Designation of funds:

Capital (2.7)

(3.5) The Shed (1.7)

0.0

War Horse International 1.4

(1.4) NT Future 0.0

(1.7)

Net surplus on unrestricted funds 0.0 0.3


PRINCIPAL FUNDING SOURCES The National maintains a balance between self generated income – box office, fundraising, exploitation of National Theatre productions in UK and internationally, catering and front of house trading – and public subsidy from Arts Council England (ACE).

Box Office Income Box office income at the National, on tour and from the run of War Horse at the New London Theatre and One Man, Two Guvnors at the Theatre Royal Haymarket as well as other UK transfers represented 55% of the National’s total income. In addition 4% was generated by War Horse and One Man, Two Guvnors internationally.

Box office at NT, 26%

UK Commercial Productions,

29%

International Commercial

Productions, 4%

Trading and other income,

14%

Fundraising, 7%

ACE grants, 20%


The table below shows the five year trend of attendances. 28% were first time bookers in 2012-13. National Theatre paid attendances (thousands) 2008/09 2009/10 2010/11 2011/12 2012/13 Olivier 402 364 355 353 342 Lyttelton 310 322 285 286 314 Cottesloe 105 98 104 108 103 War Horse

398 408 422 404

One Man Two Guvnors

208 278 Curious Incident of the Dog in the Night-Time

23

Other

8 16 Total 817 1,182 1,152 1,385 1,480

Attendance as % of capacity 93% 90% 90% 92% 90%

Number of performances: 2008/09 2009/10 2010/11 2011/12 2012/13 Olivier 383 384 343 357 339 Lyttelton 376 393 373 391 394 Cottesloe 347 355 373 368 325 War Horse

414 414 421 409

One Man Two Guvnors

159 400 Curious Incident of the Dog in the Night-Time

31

Other

50 61 Total 1,106 1,546 1,503 1,746 1,959

A total of 102,000 under-18s and college groups attended performances at the NT, the New London, the Theatre Royal Haymarket and the Apollo Theatre. Half-price tickets for under-18s continued to be available for all productions outside the Travelex season and the tickets sold represented a discount of £1.8m against average ticket price. Membership of the Entry Pass scheme providing discounted tickets for under-25s grew to 42,433 people. The major access initiative continued to be the Travelex scheme making £12 tickets available to all. The NT continued to reach wider audiences who cannot come to the theatre in London through live broadcast into cinemas, touring and its overseas productions. NT Live broadcast seven productions to audiences of 277,000 in the UK and 204,000 overseas. A further audience of 129,000 saw NT touring performances of One Man Two Guvnors and Travelling Light. Total audiences for productions of War Horse in New York, Toronto, Australia and the US tour were 1.4m and for the New York production of One Man, Two Guvnors was 140,000. This brings total paying audiences for NT productions to 3.6m people (compared to 2.3m in 2011-12). The Cottesloe Theatre closed in February 2013 and will reopen as the Dorfman Theatre in 2014 as part of the NT Future works. The Shed, a temporary theatre, opened in April 2013 for an 11 month period. War Horse War Horse in the New London Theatre in the West End continued to have significant success generating £15.1m box office income. The production is now booking until February 2014. The War Horse US tour opened in June 2012 and the first leg of the tour will run until June 2013, playing to 29 cities across USA. The second leg of the tour will open in September 2013.


The Australian production opened on 31 December 2012 in Melbourne. It will play in three cities in Australia over its run and the run will end in September 2013. The production of War Horse at the Lincoln Center New York opened in April 2011 and closed after 757 performances in January 2013. The production in Toronto also closed in January 2013 after 368 performances. One Man Two Guvnors The production continued to run at the Theatre Royal Haymarket throughout the year. It is now booking to March 2014. In addition the production opened at The Music Box theatre, New York on 18 April 2012 for a 26 week run and it also toured in UK for 11 weeks followed by an international tour to Hong Kong and Australia for four weeks. The international tour will complete in 2013. Other West End Transfers Following an extremely successful run in the Cottesloe Theatre, The Curious Incident of the Dog in the Night-Time transferred to the Apollo Theatre, opening on 12 March 2013 and now booking until January 2014. The full capitalisation costs have been recognised in 2012-13 in line with the NT’s accounting policy, and these costs will be recouped in 2013. During 2012-13 the NT presented two short plays by Alan Bennett (Hymn and Cocktail Sticks) in the Lyttelton theatre. These plays transferred as a double bill titled Untold Stories. The production opened at the Duchess Theatre on 2 April 2013, post year end, and will run for 12 weeks. Arts Council England Funding The core revenue grant for 2012-13 was £16.1m and in addition £1.4m of core grant was received in the form of a capital grant. This element was therefore restricted as long term income and has been fully utilised for capital expenditure in the year. The total grant of £17.5m was a decrease of 4.4% on 2011-12, bringing the cash cut since 2010-11 to £2.2m (11%). In addition the NT was granted £17.5m from the Arts Council’s new Capital Lottery Fund towards NT Future building works, and £1.9m was received in 2012-13. The grant represented a fall from 23% to 20% of total income due to the increase in income from other sources, primarily ticket sales. We were advised of a change to the previously announced 2013-14 and 2014-15 Arts Council funding and there will now be no increase in 2013-14 and a 1.7% increase in 2014-15 (£0.3m) taking the core grant to £17.8m in April 2014. Fundraising The development department had a strong year raising £10.5m for NT Future (including £1.9m from Arts Council England) as well as £6.3m for revenue activity, and a further £0.8m in relation to commercial promotion within trading operations. Fundraising income included another strong year for individual giving and corporate sponsorships. Trading and Other Income Trading operations, including catering, bookshop, programmes, car park, costume hire and commercial promotion, are conducted through the National’s wholly owned subsidiary Royal National Theatre Enterprises Limited. The car park is operated under a franchise but the other businesses are operated directly by the National. Trading benefited from high theatre attendance figures and total profit before the management charge payable to the National was £2.8m, down £0.3m compared to last year, reflecting an increase in costs charged directly to the trading operations rather than allocated through the


management charge. Other income included bank interest receivable and income from education activities. The National Theatre continues to benefit from its culturally exempt VAT status, which means that there is no VAT on ticket income at the National Theatre but that a proportion of VAT on expenditure is irrecoverable. REVENUE EXPENDITURE Production Costs Production expenditure at the National Theatre and on tour represented 43% of total expenditure for the year which can be analysed as follows:

A further 33% of expenditure was for UK and international commercial productions. There were 26 productions in repertoire at the National during the year. The Cottesloe closed in February 2013 and as a result had fewer productions than previous years.

Performance Running, 29%

Actors and Musicians, 20% Production

Build, 21%

Planning and Direction, 14%

Writers, Directors and

Designers, 8% Touring, 8%


Number of productions (new in brackets): 2008/09 2009/10 2010/11 2011/12 2012/13

Olivier 7 (6) 7 (5) 7 (6) 8 (7) 9 (6) Lyttelton 11 (4) 10 (8) 9 (6) 11 (9) 10 (7) Cottesloe 8 (7) 9 (7) 9 (9) 8 (7) 7 (5)

26 (17) 26 (20) 25 (21) 27 (23) 26 (18) In addition to the 18 new productions built and staged at the National there were 52 weeks of War Horse at the New London (2011-12 53 weeks), 52 weeks of One Man Two Guvnors at the Theatre Royal Haymarket (2011-12 21 weeks at the Adelphi Theatre and the Theatre Royal Haymarket), four weeks of Curious Incident of the Dog in the Night-Time at the Apollo Theatre, 14 weeks of UK touring (2011-12 10 weeks) and seven weeks of international touring (2011-12 two weeks). NT Learning and Public Engagement Total spend for the year for the NT Learning (Education) programme was £1.7m. In 2011-12 there was additionally £0.5m legacy income allocated to the NT Foundation Education Endowment Fund which was not repeated in 2012-13. £0.4m was covered by fundraising, £0.3m generated through ticket and fee income and the remainder covered by core funding. Spend for other public engagement activities was £5.1m. This included £2.3m for NT Live, £0.4m for Digital Projects and £1.8m for the 14 week summer festival programme, Inside Out. Research and Development Expenditure on research and development totalled £1.6m, including £1.0m expenditure in the NT Studio. Support Costs Support costs cover expenditure on front of house staff responsible for contact with the audience; marketing, box office and press; management and maintenance of the building including insurance and energy costs; and finance, HR and IT. These costs are allocated against the activities listed above. Costs increased by £1.1m to £15.0m in the year primarily due to increased IT costs (£0.5m) and box office and marketing costs (£0.4m). Capital Expenditure Total capital expenditure for the year (excluding NT Future) was £2.8m. Major capital projects in the period included the website upgrade, replacement of loudspeakers and radio microphones and the installation of sub-metering. Capital expenditure in relation to NT Future Architectural Master Plan totalled £12.3m in 2012-13 (2011-12 £4.7m). Phase A is now underway with Phase B due to start on site in autumn 2013. In addition works in relation to the Technical and Environmental Master Plans continued (£0.6m expenditure in the year). Pledged donations and grant awards of £29.1m were made in 2012-13 and brought total pledges to £67.7m. Of these £21.1m has been received to date including £10.5m in 2012-13 and reflected as restricted or designated income. In the year £0.9m of operating costs associated with the project were written off. The annual transfer from the operations fund to the designated funds for capital and NT Future was £2.7m compared with £5.2m in 2011-12. Irrecoverable VAT capitalised in the year was £0.8m (2011-12 £0.6m).


RESERVES AND OTHER FINANCIAL POLICIES Unrestricted Operations Fund The policy for budgeting annual income and expenditure is, taking account of the level of grant receivable from the Arts Council, to seek each year to match income and expenditure, and to avoid accumulating a deficit, so that the National is able to continue successfully its present level and quality of activity. The unrestricted reserves target is held at £2.8m to reflect the impact from cuts in public funding on the National’s sources of income. £1.8m is held to recognise the volatility in box office revenue as between budget and actual out-turn. A further £0.5m reflects the knock-on impact of a reduction in box office attendance on catering profits and £0.5m for the effect on fundraising. Buildings and Equipment Designated Fund The policy is to ensure that sufficient money is set aside in the reserve so that over a three-year period the National is able to maintain and renew the building in accordance with its rolling capital plan. Expenditure planned beyond 2012-13 is in excess of the sum which could be reasonably anticipated to be covered from recurring surpluses and fundraising sources; however this is being addressed within NT Future. NT Future Designated Fund In addition to the new building and refurbishment works, NT Future project includes two strands to address the essential technical and infrastructure works to be completed in the next five years - the Technical Master Plan and Environmental and Engineering Master Plan. NT Future capital project work will generate irrecoverable VAT which will be covered by the VAT repayments received in 2010-11 and designated to offset this cost. The Shed Designated Fund £1.7m has been designated in 2012-13 to provide funds for The Shed, a temporary theatre which will be open between April 2013 and February 2014, whilst the Cottesloe Theatre is redeveloped. In the year £1.6m has been spent and the remainder will be spent during 2013-14. War Horse International Designated Fund In 2011-12 £1.4m was designated to provide funds for the US War Horse tour which opened in June 2012. The funds were utilised in the year by National Theatre North America LLC to invest in the production in return for royalties and profit share and as a result were transferred back to the operations fund during 2012-13. Restricted Funds These are funds which have been earmarked by the donor for specific purposes within the overall aims of the organisation. The funds are analysed between long-term and short-term – long-term being mostly for capital purposes, including NT Future, and short-term for project activity, as set out in note 18 of the accounts. Short term funds will be spent in full in the next 18 months and, where there is a deficit, this will be covered by future restricted income. The balance on the long-term capital funds represents funds received from donors to purchase fixed assets less the depreciation charged on an annual basis. Over time these reserves will reduce to zero as the assets are fully depreciated. Investment Policy The policy is to hold investments in liquid funds so they are available to meet predicted cash-flow needs. In selecting suitable cash deposits the policy is to maximise the return and maintain low transaction costs whilst ensuring high levels of capital security by minimising credit risk, and minimising interest rate risk. The policy was reviewed by the Finance and Audit Committee during the year and deposits and interest rates are reviewed each time the Finance and Audit Committee meets. At 31 March 2013 the cash deposits were spread between five major


clearing banks and CCLA. The bank interest earned for the year was £0.5m (2011-12 £0.4m). Creditor Payment Policy It is the National’s policy to pay creditors in accordance with terms of payment agreed at the start of business with each supplier. Financial Risk Management The following statements summarise the Board’s policy in managing identified forms of financial risk. Price risk: Payments to employees or individuals represent 50% of total expenditure at the National and higher levels of inflation represent a risk as 20% of the National’s income, which comes from the Arts Council, has fallen for the past three years and is not expected to reach 2010-11 levels in the next two years. The National has freedom over its ticket pricing, and ticket income represents 55% of revenue. However the aim is to limit ticket price increases to no more than inflation and hold the lowest ticket price at an accessible level as this has been found to be the best way of maximising revenue and increasing access. Credit risk: Risk on amounts owed to the charity by its customers is low as payment for ticket sales and operations through the trading subsidiary are mostly settled at point of purchase. Liquidity risk: The National has no long-term borrowings. Interest rate cash flow risks: The National places surplus funds on short-term deposit split between five major clearing banks and CCLA. Interest rates available on longer term deposits are kept under review but longer term deposits will only be made for specific major project funds where the term of the deposit matches the anticipated cash flow requirement. Property Interests The National has a lease of its building on the South Bank site from Arts Council England for a term expiring in March 2138. The Building is Grade 2* listed. The freehold of the Old Vic Annexe (the Studio), The Cut, London SE1 is owned by the National and this building was listed in March 2006. The Studio building has been provided as security in the form of a 30 year legal mortgage in relation to a grant for refurbishment of the Studio. In 2012 a fixed and floating charge lasting 30 years was provided as security for the potential repayment obligations under a grant of £17.5m from Arts Council England for the NT Future project. In addition in 2013 a fixed and floating charge lasting 25 years will be provided as security for the potential repayment obligations under a grant of £2.5m from Heritage Lottery Fund for the NT Future project.


STRUCTURE, GOVERNANCE AND MANAGEMENT Management of the National Theatre The Board The Board is the non-executive and unpaid governing body of the National. Board members are both directors of the company and charity trustees and under company and charity law are responsible for policy, administration and general control. The Board works with the Executive to ensure that the National’s remit is fulfilled, its work remains of the highest quality, and it is managed efficiently and cost effectively. The Board delegates to the Director the selection and staging of all productions and does not interfere in repertoire decisions. Following its normal practice an annual review of the year’s artistic output was held in June 2013 with the Director, to reflect on the effectiveness of the artistic programme as against the National’s remit. During 2012-13 the Board met six times, with the Executive present, to ensure it was maintaining effective control over strategic, financial, organisational and compliance issues. The Board received and considered regular reports from its Committees and subsidiary companies. The Executive The Director*, Nicholas Hytner, is formally responsible for furthering the artistic reputation of the National and ensuring its efficient and effective management. He works closely with the Executive Director Nick Starr, Chief Operating Officer Lisa Burger and Deputy Executive Director, Kate Horton. The Board appoints the Director and is directly involved in the appointment of the Executive. During the year Nicholas Hytner announced he would retire as Director of the National Theatre in March 2015. The Board has formed a Succession Committee to manage the appointment of the new Director. The members of the committee are: John Makinson (Chair), Peter Bennett-Jones, Neil MacGregor, Kate Mosse, and Tessa Ross. Associate Directors* and NT Associates Nicholas Hytner is supported in making repertoire decisions by the National’s Associate Directors (listed on page 2 of the Annual Report), and NT Associates comprising actors, directors, designers, writers and producers (listed on page 64). *The term “Director” is a traditional title used at the National. Neither the Director, the Associate Directors nor other members of the Executive, are directors under the Companies Act 2006. Board Membership The Board is chaired by John Makinson and a list of Board members at the date of this Report is listed on page 2 of the Annual Report. Board members are appointed for an initial term of four years. Members may be appointed for a second term of up to four years which is extended only in exceptional circumstances. Board Committees and Subsidiary Companies The membership of the Committees is listed on page 64 of the Annual Report and details of the subsidiaries are set out in Note 23 to the financial statements Finance and Audit Committee Members of the Finance and Audit Committee are appointed by and from the Board. Key responsibilities are for Finance and Control, Audit and Risk. The Committee met five times during the year and also met as the Remuneration Committee to set the remuneration of the Executive.


NT Future Fundraising and NT Future Project Committees The Committees have responsibility for fundraising for the NT Future project and delivery of the building works. The Committees comprise members of the Board, co-opted external members with particular expertise, the Executive and members of Senior Management. The Nominations Committee The Nominations Committee is appointed by and from the Board and reviews the structure, size and composition of the Board and, in the light of that review, makes recommendations to the Board with regard to the appointment of new members. Development Council The Development Council assists in fundraising for the National. Its members, who are mainly co-opted onto the Council, are appointed by the Board for a specified term. It meets at least three times a year and reports regularly to the Board through its Chair who is a member of the main Board. Royal National Theatre Enterprises Limited (“RNTE”) RNTE is a wholly owned trading subsidiary responsible for the National’s trading activities. The National’s Board appoints the directors of RNTE which comprise Board members, external experts and senior members of staff responsible for the trading areas. National Theatre Productions Limited (“NTPL”) NTPL is a wholly owned trading subsidiary of the National Theatre whose primary remit is responsibility for the commercial exploitation of NT productions and the exploitation of rights in any production via digital, broadcast or other media. The National’s Board appoints the directors of NTPL which comprise Board members, external experts, and senior members of staff. The commercial activities have necessitated the creation of two additional subsidiaries National Theatre North America LLC (formerly named War Horse US LLC) and National Theatre Productions Overseas Limited which were both active during the year. Connected Charities Details of Connected Charities are set out in Note 21 to the Financial Statements. Executive Management at the National The review of activities shows that the National has many facets. Each area has a Head of Department who reports to a member of the Executive. In addition to a weekly meeting of the Executive and all the Heads of Department, efficient cross-departmental working is managed through a series of groups meeting on a regular basis. The key decision-making groups include repertoire planning, capital projects, digital and IT projects, NT Future, Enterprises and Health and Safety. Communication is key and the National aims to engage all its employees and others working at the National in its activities and achievements. All staff are invited to a weekly company meeting led by Nicholas Hytner and information from these meetings and other new developments and policies are available on the National’s intranet. The National has a diversity action plan. All staff are required to cooperate with the National’s policies and procedures to promote inclusivity and diversity but particular focus has been given to understanding why the National’s workforce is not better representative of the UK population, what barriers if any there might be and what measures might be taken. The Health and Safety team is closely involved in the key risk areas of the organisation and advises and assists with health and safety aspects of productions, special events, accident investigations and training.


Other Matters Trustees’ Transactions The trustees are not remunerated for their work as Trustees of the National Theatre. From time to time, members of the Board or persons connected with them enter into transactions with the National in the normal course of business of both parties. Such transactions are conducted on an arm’s length basis, on normal commercial terms, and are in accordance with the specific provisions of clause 5 of the Memorandum of Association. It is the Board’s policy that they should be disclosed to and approved by the Board.


STATEMENT OF TRUSTEES’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS The trustees (who are also directors of The Royal National Theatre for the purposes of company law) are responsible for preparing the Trustees’ Annual 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 charitable company and the group and of the incoming resources and application of resources, including the income and expenditure, of the charitable group for that period. 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 judgments 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 charitable company will continue in business. 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Trustees Indemnities As permitted by the Articles of Association, the Trustees have the benefit of an indemnity which is a qualifying third party indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last financial year and is currently in force. The Company also purchased and maintained throughout the financial year Trustees’ and Officers’ liability insurance in respect of itself and its Trustees. Statement on disclosure of information to the auditors In so far as the trustees are aware:

• there is no relevant audit information of which the charitable company’s auditor is unaware; and • the trustees have taken all steps that they ought to have taken to make themselves aware of any

relevant audit information and to establish that the auditor is aware of that information. 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. Auditors PricewaterhouseCoopers LLP will continue in office as auditors of the Charity for the next financial year. The Trustees’ Report for the Royal National Theatre for the 52 weeks ended 31 March 2013 comprises pages 2-16 of these Financial Statements and pages 1-5 and 10- 64 of the Annual Report. By order of the Board John Makinson Chairman 24 September 2013


INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS AND TRUSTEES OF THE ROYAL NATIONAL THEATRE We have audited the financial statements of The Royal National Theatre for the year ended 31 March 2013 which comprise Group Statement of Financial Activities, Group and Charity Balance Sheets, Group Cash Flow Statement and the related notes. Respective responsibilities of trustees and auditors As explained more fully in the Trustees’ Responsibilities Statement set out on page 16, 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. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. This report, including the opinions, has been prepared for and only for the charity’s members and trustees as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group’s and charitable company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the trustees; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on financial statements In our opinion the financial statements:

• give a true and fair view of the state of the group’s and the parent charitable company’s affairs as at 31 March 2013, and of the group’s incoming resources and application of resources, including its income and expenditure and group’s cash flows, for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006. Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Trustees’ Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 require us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent charitable company or returns adequate for our audit have not been received from branches not visited by us; or

• the parent charitable company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of trustees’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit.

Jill Halford (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP, Chartered Accountants and Statutory Auditors, London


GROUP STATEMENT OF FINANCIAL ACTIVITIES (INCLUDING AN INCOME AND EXPENDITURE ACCOUNT) for the 52 weeks ended 31 March 2013

52

Weeks to 53

Weeks to 31 March 1 April 2013 2012 Unrestricted Funds Restricted Funds

Operations Designated Projects Long Term Total Total

£m £m £m £m £m £m Incoming resources Note Incoming resources from generated funds:

Voluntary income 2(a)/(b) 20.8 - 1.6 11.9 34.3 30.9 Activities for generating funds 23 12.7 - - - 12.7 11.1 Investment income 0.5 - - - 0.5 0.4

Incoming resources from charitable activities 2(c) 50.1 - - - 50.1 44.1

TOTAL incoming resources 18 84.1 - 1.6 11.9 97.6 86.5

Resources expended Costs of generating funds:

Costs of generating voluntary income (1.5) - - - (1.5) (1.5) Costs of commercial activities 23 (11.6) - - - (11.6) (8.8)

Charitable activities 3(a) (69.2) (5.6) (1.7) (1.8) (78.3) (66.3) Governance costs 3(b) (0.2) - - - (0.2) (0.2)

TOTAL resources expended 18 (82.5) (5.6) (1.7) (1.8) (91.6) (76.8)

Net incoming / (outgoing) resources before transfers 1.6 (5.6) (0.1) 10.1 6.0 9.7 Transfers 18 (1.6) 3.0 - (1.4) - -

Net movement in funds - (2.6) (0.1) 8.7 6.0 9.7 Reconciliation of funds Fund balances brought forward at 1 April 18 2.6 22.1 0.3 16.5 41.5 31.8

Fund balances carried forward at 31 March 18 2.6 19.5 0.2 25.2 47.5 41.5

All incoming resources and resources expended are derived from continuing activities. A Statement of Total Recognised Gains and Losses is not required as all gains and losses are included in the Statement of Financial Activities. There is no difference between the net income for the period and its historical cost equivalent. Accordingly no separate income and expenditure statement has been presented.

BALANCE SHEETS Company Registration Number: 749504


Group Company Group Company

as at 31

March as at 31

March as at 1

April as at 1

April 2013 2013 2012 2012 Note £m £m £m £m Fixed assets Tangible fixed assets 11 32.9 32.9 21.4 21.4 Investments 12 0.2 0.2 0.2 0.2

Total fixed assets 33.1 33.1 21.6 21.6

Current assets Stocks 13 0.8 0.2 0.5 0.1 Cost of productions not yet opened 14 1.1 1.1 0.5 0.5 Debtors 15 6.9 9.1 6.5 8.4 Cash at bank and in hand 16 21.8 19.7 26.4 23.9

Total current assets 30.6 30.1 33.9 32.9

Creditors: amounts falling due within one year 17 (16.2) (15.7) (14.0) (13.0)

Net current assets 14.4 14.4 19.9 19.9

NET ASSETS 18/19 47.5 47.5 41.5 41.5

Represented by: Operations fund 18/19 2.6 2.6 2.6 2.6 Designated funds 18/19 19.5 19.5 22.1 22.1

Total unrestricted funds 22.1 22.1 24.7 24.7

Restricted funds 18/19 25.4 25.4 16.8 16.8

TOTAL FUNDS 18/19 47.5 47.5 41.5 41.5

The Notes on pages 22 to 42 constitute part of the financial statements. The financial statements were approved by the Board of Trustees on 24 September 2013 and signed on its behalf by:

John Makinson Neil MacGregor Trustee

GROUP CASH FLOW STATEMENT


Group Group

52 Weeks to 53 Weeks to

31 March 1 April

2013 2012

Note £m £m

Net cash inflow from operating activities i 7.4 12.7 Returns on investments

Interest received 0.6 0.3 Capital expenditure and financial investment

Purchase of tangible fixed assets 11 (12.6) (11.8)

Management of liquid resources* Decrease /(increase) in short term deposits 16 4.0 (8.7)

Decrease in cash in the period ii (0.6) (7.5)

i NET CASH INFLOW FROM OPERATING ACTIVITIES

2013 2012 £m £m Net incoming resources before transfers 6.0 9.7

Depreciation and amortisation charge 4.0 3.2 Investment income (0.5) (0.4)

Net operating income 9.5 12.5

Increase in stock (0.3) (0.1) Increase in work in progress (0.6) (0.1) Increase in debtors (0.3) (1.5) Decrease in creditors (less capital accruals) (0.9) 1.9

Net cash inflow from operating activities 7.4 12.7

GROUP CASH FLOW STATEMENT


ii ANALYSIS OF NET CASH RESOURCES As at 1 As at 31 April 2012 Cashflow March 2013 £m £m £m Cash 16 9.4 (0.6) 8.8 Short term deposits 16 17.0 (4.0) 13.0

TOTAL 26.4 (4.6) 21.8

iii RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET FUNDS 2013 2012 £m £m Decrease in cash in the period 16 (0.6) (7.5) Cash (outflow)/ inflow from increase in liquid resources 16 (4.0) 8.7

Movement in net funds in the period (4.6) 1.2

Net funds at 1 April 2012 26.4 25.2

Net funds at 31 March 2013 21.8 26.4

Notes to the Financial Statements


1 PRINCIPAL ACCOUNTING POLICIES The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial statements.

A BASIS OF PREPARATION

The financial statements have been prepared on the going concern basis, under the historical cost convention and in accordance with applicable United Kingdom accounting standards, the Companies Act 2006, the Charities Act 2011, and the recommendations of the Statement of Recommended Practice "Accounting and Reporting by Charities" (“the SORP”) issued in March 2005. The Charity has adapted the Companies Act formats to reflect the Charities SORP and the special nature of its activities. A separate statement of financial activities and income and expenditure account are not presented for the Charity itself as permitted by Section 408 of the Companies Act 2006 and paragraph 397 of SORP 2005. The net income of the company for the period was £4.1m (2012: £6.7m). The principal accounting policies adopted in the preparation of the financial statements are set out below. B BASIS OF CONSOLIDATION

The Group financial statements consolidate those of The Royal National Theatre (“the National” or “the NT”) and its wholly owned non-charitable subsidiaries (as set out in note 23) on a line by line basis in accordance with FRS 2. The results of Royal National Theatre Enterprises Limited, National Theatre Productions Limited, National Theatre Productions Overseas Ltd and National Theatre North America LLC (formally War Horse US LLC) have been included in the group statement of financial activities throughout the period. NTPL Overseas Limited is a wholly owned subsidiary of National Theatre Productions Limited incorporated on 16 December 2011. There was no material activity in this company in the period to 1 April 2012 and therefore a set of long period financial statements has been prepared to March 2013. No further activity is anticipated in 2013/14. National Theatre North America LLC has a contractual agreement in the form of NT War Horse LP, to engage in joint activities that do not create an entity carrying trade and business of its own. National Theatre North America LLC, as the sole General Partner, has a 55.35% interest in the arrangement with the remaining interest of 44.65% held by National Angels. The group consolidates its share of assets, liabilities and cash flows in the arrangement, which is in line with the group’s interest in the joint arrangement in accordance with FRS 9 (as set out in note 23). Transactions and balances outstanding between the entities are eliminated on consolidation.

The National Theatre has taken advantage of the exemption given by Financial Reporting Standard 8, Related Party Disclosures, from disclosing transactions with its wholly owned subsidiaries. C FUND ACCOUNTING Unrestricted funds are those funds which can be used for any charitable purpose at the discretion of the trustees; designated funds are those funds which have been set aside by the trustees for particular purposes; restricted funds may only be used in accordance with the specific wishes of donors. The expendable endowment fund is held in long term restricted funds. Under the terms of donation this will be converted at the trustees’ discretion into expendable income at the end of the 20 year term. D INCOMING RESOURCES

All incoming resources are included in the Statement of Financial Activities when the Charity has legal entitlement, there is reasonable certainty over receipt and the amount of income can be quantified with reasonable accuracy.



Voluntary Income Voluntary income comprises all incoming resources from sponsorships, donations, legacies, grants and membership subscriptions. Voluntary income is recognised in the appropriate fund on a receivable basis and when any conditions for receipt are met. Income in respect to the NT Future project is recognised on a cash basis.

Where the donor imposed conditions require that the resource is expended in a future accounting period, income is recorded as deferred income at the balance sheet date. Income from individual membership schemes eligible for Gift Aid is recognised in full on receipt. Corporate and Advance Membership income is apportioned over the period of the subscription and the element relating to a future period is recorded as deferred income at the balance sheet date. Gift Aid is included in the financial statements based on amounts recoverable at the balance sheet date.

Goods and services received in kind, where material, are included within ‘Voluntary Income’ and under the appropriate expenditure heading, depending on the nature of goods and services provided. These are recognised at an estimated value to the charity at the time of receipt. Activities for Generating Funds Activities for generating funds comprise:

• income generated by Royal National Theatre Enterprises Limited from trading activities • royalty and profit share income generated by other National Theatre subsidiaries from the commercial

exploitation of the NT’s productions overseas

Income is recognised on a receivable basis. Incoming Resources from Charitable Activities Incoming resources from charitable activities comprises: Box office income:

• income from performances at the South Bank • income from touring activities (excluding grants) • ticket sales for productions which have transferred to the West End under direct NT management

All other income:

• income from NT Learning performances, NT Live ticket income, events and workshops • exploitations and rights, advance members subscription and other sundry income

Box office income and income generated by NT Learning projects and NT Live is recognised in the Statement of Financial Activities on maturity of the performance or event. Advance bookings comprise ticket sales for future performances. Income from exploitations and rights, and other income, is recognised on a receivable basis. Income from advance members is recognised on a straight line basis over the period of subscription.

Investment Income Investment income comprises interest receivable on cash balances and short-term deposits. E RESOURCES EXPENDED All expenditure is accounted for on an accruals basis and is classified under the relevant activity within the Statement of Financial Activities. Resources expended which relate directly to the National’s charitable objectives are analysed between:

• performances at the South Bank or elsewhere under direct management • performances on tour • NT Learning (education and participation work) and Public Engagement (including Archive, NT Live,

Inside Out, Platforms, Foyer Music and Digital)



• research and development (including the NT Studio and commissioning costs)

Resources expended which form part of the Group’s trading activities and commercial exploitations are separately disclosed as costs of commercial activities. The costs of generating voluntary income represent the costs of securing sponsorship and donations including the costs of providing membership benefits. Governance costs include the costs of the Legal Counsel and their support, board expenses, internal audit and external audit fees. Support costs relating to a single activity are allocated directly to that activity. Where support costs relate to several activities, they have been apportioned as set out in note 3(c). Staff canteen costs are shown net of contributions. Provision has been made, where appropriate, for expenses where a present obligation exists at the balance sheet date in accordance with the requirements of FRS 12. F LEASE OF THE NATIONAL

The National holds a lease on its building from its freeholder, Arts Council England, at a peppercorn rent. This lease expires in 2138. Under the terms of the lease, the National is responsible for maintaining the fabric of the building and its mechanical and electrical equipment. In order to meet this obligation, funds are transferred from the National’s own resources, namely the operations fund, to a building and equipment fund (see note 18). G FIXED ASSETS AND DEPRECIATION

Fixed assets are held at cost less accumulated depreciation within the relevant fund. Only assets over £2,000 are capitalised. Depreciation is provided on a straight line basis to write off the assets over their anticipated useful economic lives and is charged to the relevant fund as follows:

Freehold land & buildings 50 years (excluding land, which is not depreciated) Leasehold improvements 10 years Equipment 3 years

Donated assets are stated at the value to the National Theatre. The carrying values of tangible fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Assets within work in progress are not depreciated until they are brought into use. H STOCKS

Stocks held by the National’s trading subsidiary comprises catering, bookshop and programme supplies for resale. Other stock (“production stock”) comprises consumables for use in the making of sets and costumes. All stock is valued at the lower of cost and net realisable value. Cost is based on the latest purchase price for catering, bookshop and programme stock, and on actual cost for production stock.

I COSTS OF NEW PRODUCTIONS NOT YET OPENED

The cost of materials for new productions and associated creative team fees are carried forward on the balance sheet until they are expensed on the date of the press night performance. Internal labour and rehearsal costs are expensed as incurred.



J OPERATING LEASES Rentals payable under operating leases are charged to the Statement of Financial Activities on a straight line basis over the term of the lease. K PENSIONS The National offers a stakeholder scheme to its employees and contributes to defined contribution schemes for certain of its other employees (see note 9). These costs are expensed in the Statement of Financial Activities as they become payable. L TAXATION The National is a culturally exempt organisation under Schedule 9 of the VAT Act 1994 and during the period VAT returns have been submitted on a culturally exempt basis. Irrecoverable VAT is charged against the cost of charitable activities, where it is incurred. Irrecoverable VAT on capital expenditure has been capitalised and will be written off over the life of the assets. The National is a registered charity and therefore is not liable to income tax and corporation tax on income and gains derived from its charitable activities as it falls within the various exemptions available to registered charities. The National’s UK subsidiaries pay any taxable profits to the charity under Gift Aid. National Theatre North America LLC pays a profit distribution to the Charity. The National is awaiting confirmation for the relevant dispensations in the US that the profit distributions received by National Theatre North America LLC can be paid to the NT without being liable to income tax and corporation tax. Management believe that such dispensations will be granted and no provision for tax has been made.

M FOREIGN CURRENCIES Transactions in foreign currencies undertaken during the period have been translated at the prevailing rate of exchange at the date of the transaction. Non-monetary assets are recorded at the prevailing rate of exchange at the date of the original transaction. Monetary assets and liabilities in foreign currencies are translated at rates of exchange prevailing at the balance sheet date. Foreign exchange differences incurred in respect of overseas operations are recorded in the Statement of Financial Activities within the charitable activity income or expenditure for the period in which they are incurred. The results of foreign operations consolidated within the Group financial statements are translated using the temporal method described above. Any exchange gains or losses are accounted for in the Statement of Financial Activities.



2 INCOMING RESOURCES

(a) Voluntary income – analysis by fund type

52 Weeks to

53 Weeks to

31 March

1 April

Unrestricted Funds Restricted Funds 2013 2012

Operations Designated Projects Long Term Total Total £m £m £m £m £m £m

Arts Council England: Revenue grant 15.6 - - - 15.6

16.8

Capital and other grants (including Lottery)

- - 0.5 3.3 3.8

1.5

Total Arts Council 15.6 - 0.5 3.3 19.4

18.3

Performances 0.6 - 0.2 - 0.8

1.0 NT Learning - - 0.4 - 0.4

0.2

Public Engagement - - 0.4 - 0.4

0.2 Research & development - - 0.1 - 0.1

0.1

NT Future - - - 8.6 8.6

6.0

General activity 4.6 - - - 4.6

5.1

Total other 5.2 - 1.1 8.6 14.9

12.6

TOTAL voluntary income 20.8 - 1.6 11.9 34.3

30.9

(b) Voluntary income – analysis by income type 2013 2012 Sponsorship Donations, Grants Total Total subscriptions & legacies £m £m £m £m £m Arts Council England - - 19.4 19.4 18.3

Performances 0.8 - - 0.8 1.0 NT Learning - - 0.4 0.4 0.2 Public Engagement 0.3 - 0.1 0.4 0.2 Research & development - - 0.1 0.1 0.1 NT Future - 8.6 8.6 6.0 General activity 1.5 3.1 - 4.6 5.1

TOTAL other 2.6 3.1 9.2 14.9 12.6

TOTAL voluntary income 2.6 3.1 28.6 34.3 30.9



Income of £0.8m (2012: £0.8m) in relation to commercial promotion is recognised in Activities for Generating Funds. In total, the fundraising department raised £7.1m in annual giving and £10.5m for NT Future. (c) Total incoming resources from charitable activities

2013 2012 Total Total £m £m National Theatre box office Olivier 7.8 8.0 Lyttelton 8.4 6.9 Cottesloe 2.1 2.6 War Horse - New London 15.1 15.3 One Man Two Guvnors – Adelphi Theatre - 5.9 – Theatre Royal Haymarket 9.2 0.9 Curious Incident of the Dog in the Night Time – Apollo Theatre 0.6 - Other Commercial Transfers 0.3 -

43.5 39.6

NT Live 2.3 1.6 Touring – England & Wales 1.1 0.7 Touring – other countries 0.7 0.1 Other box office 0.1 0.1

4.2 2.5

War Horse International 1.0 0.9 One Man Two Guvnors International 0.2 - NT Learning 0.3 0.3 Exploitation and rights 0.1 0.2 Other income 0.8 0.6

2.4 2.0

TOTAL incoming resources from charitable activities 50.1 44.1

All income from charitable activities is unrestricted. Touring income includes co-production and touring fees where appropriate.



3 RESOURCES EXPENDED (a) Costs of charitable activities

2013 2012 Unrestricted Unrestricted Unrestricted Restricted Total Total Operations Operations Designated Direct Support Total Project Long term

£m £m £m £m £m £m £m

Performances: National Theatre 24.5 9.1 33.6 1.6 0.2 - 35.4 33.9 War Horse - New London 12.5 1.4 13.9 - - - 13.9 12.6 War Horse - International 1.5 0.1 1.6 - - - 1.6 1.1 One Man Two Guvnors – Adelphi - - - - - - - 4.5 One Man Two Guvnors – Theatre Royal Haymarket and International 7.5 0.8 8.3 - - - 8.3 1.6 The Curious Incident of the Dog in the Night Time - Apollo 1.3 0.2 1.5 - - - 1.5 - Other Commercial Transfers 0.2 - 0.2 - - - 0.2 - Touring 1.6 0.1 1.7 - 0.5 - 2.2 1.0

49.1 11.7 60.8 1.6 0.7 - 63.1 54.7

NT Learning & Public Engagement 4.8 1.1 5.9 - 0.9 - 6.8 5.5 NT Future - - - 0.9 - - 0.9 - Research & development 1.2 0.3 1.5 - 0.1 - 1.6 1.8

55.1 13.1 68.2 2.5 1.7 - 72.4 62.0

Depreciation - - - 2.2 - 1.8 4.0 3.2 Asset disposals and other charges to the buildings and equipment fund - - - 0.9 - - 0.9 - Non recoverable VAT * 1.0 - 1.0 - - - 1.0 1.1

1.0 - 1.0 3.1 - 1.8 5.9 4.3

TOTAL costs of charitable activities 56.1 13.1 69.2 5.6 1.7 1.8 78.3 66.3

Further analysis of expenditure by fund type is given in Notes 4, 5 and 6. * Under cultural exemption, the National is not able to fully recover input VAT. (b) Governance costs

Unrestricted Unrestricted Unrestricted Operations Operations Designated Restricted 2013 2012 Direct Support Total Project Long term Total Total

£m £m £m £m £m £m £m £m

Governance Costs 0.2 - 0.2 - - - 0.2 0.2

Included within Governance costs are the auditors’ remuneration which consists of the group audit fee £51,000 (2012: £47,200) and tax and other fees due to PricewaterhouseCoopers of £11,000 (2012: £15,000).



(c) Analysis of support costs

2013 2012 Promotion Theatre Support Total Total

operations services £m £m £m £m £m

Trading operations 0.2 0.6 1.1 1.9 1.8

Charitable activities: Performances:

National Theatre 2.2 4.7 2.2 9.1 9.3 War Horse New London 0.7 - 0.7 1.4 1.1 War Horse International - - 0.1 0.1 - One Man Two Guvnors – Adelphi - - - - 0.3 One Man Two Guvnors – Theatre Royal Haymarket and International 0.4 - 0.4 0.8 0.1 The Curious Incident of the Dog in the Night Time – Apollo 0.1 - 0.1 0.2 - Touring - - 0.1 0.1 -

NT Learning & Public Engagement 0.3 0.5 0.3 1.1 1.1 Research & development 0.1 0.1 0.1 0.3 0.2

3.8 5.3 4.0 13.1 12.1

Total support costs 4.0 5.9 5.1 15.0 13.9

Promotion comprises Marketing and Press. Theatre Operations comprises Front of House, Building Services, Insurance, Cleaning and Security. Support Services comprises Finance, IT, HR, Pensions, and Staff Canteen net of cost recoveries of £0.6m (2012: £0.5m). Support costs relating to trading activities are included in costs of trading operations (Note 23). Support costs are allocated using the following bases: For Marketing, Front of House, Finance, and IT – Management review of estimated usage Human Resources – Headcount Building Services – Management review of estimated space usage



4 ANALYSIS OF EXPENDITURE ON PERFORMANCES BY FUND TYPE 2013 2012 Unrestricted Designated Restricted Total Total Operations Direct Costs Projects £m £m £m £m £m National Theatre:

Capitalisation & running costs 14.6 - 0.2 14.8 16.0 Workshops & stages 12.6 - - 12.6 11.5 Producing & direction 6.4 - - 6.4 6.4 The Shed - 1.6 - 1.6

33.6 1.6 0.2 35.4 33.9

War Horse New London 13.9 - - 13.9 12.6 War Horse International 1.6 - - 1.6 1.1 One Man Two Guvnors – Adelphi - - - - 4.5 One Man Two Guvnors – Theatre Royal Haymarket and International 8.3 - - 8.3 1.6 The Curious Incident of the Dog in the Night Time – Apollo 1.5 - - 1.5 - Other Commercial Transfers 0.2 - - 0.2 - Touring - England & Wales 0.9 - 0.5 1.4 0.9 Touring - other countries 0.8 - - 0.8 0.1

27.2 - 0.5 27.7 20.8

TOTAL expenditure 60.8 1.6 0.7 63.1 54.7

5 ANALYSIS OF EXPENDITURE ON NT LEARNING AND PUBLIC ENGAGEMENT BY FUND TYPE 2013 2012 Unrestricted Designated Restricted Total Total Operations Direct Costs Projects £m £m £m £m £m Connections 0.4 - 0.1 0.5 0.4 Primary education & early years - - 0.2 0.2 0.2 Secondary & further education 0.1 - 0.1 0.2 0.2 Training & development 0.1 - - 0.1 0.1 Education Endowment Fund - - - - 0.5 Digital & other (including department costs) 0.6 - 0.1 0.7 0.7

TOTAL NT Learning expenditure 1.2 - 0.5 1.7 2.1 NT Live 2.3 - - 2.3 1.9 Inside Out (including Watch This Space) 1.5 - 0.3 1.8 0.4 Platforms & Foyer Music 0.3 - - 0.3 0.3 Archive 0.1 - - 0.1 0.1 Access 0.1 - - 0.1 0.1 Digital & other initiatives 0.4 - 0.1 0.5 0.6

TOTAL Public Engagement 4.7 - 0.4 5.1 3.4

TOTAL NT Learning & Public Engagement expenditure 5.9 - 0.9 6.8 5.5



6 ANALYSIS OF EXPENDITURE ON RESEARCH AND DEVELOPMENT BY FUND TYPE

2013 2012 Unrestricted Restricted Total Total Operations Projects Long Term £m £m £m £m £m NT Studio 0.9 0.1 - 1.0 1.2 Commissioning new scripts 0.4 - - 0.4 0.4 Associates and other 0.2 - - 0.2 0.2

TOTAL expenditure 1.5 0.1 - 1.6 1.8

7 STAFF COSTS AND NUMBERS

Group 2013 2012 £m £m Wages and salaries 37.3 33.6 Social security costs 3.8 3.4 Other pension costs 0.9 0.7

42.0 37.7

Average monthly full time equivalents employed in the period: * 2013 2012 Number Number Artistic 221 205 Technical and production 377 371 Trading and front of house 250 250 Education, touring, NT Studio and other projects 40 39 Marketing and box office 58 52 Support services 58 50 Engineering 24 24 Fundraising 28 23

1,056 1,014

* All staff are employed by the National Theatre and the cost of their employment is recharged to the NT’s subsidiaries where relevant.



7 STAFF COSTS AND NUMBERS (cont’d) The number of employees with emoluments greater than £60,000 was as follows:

2013 2012 Number Number £60,001-£70,000 24 29 £70,001-£80,000 3 1 £80,001-£90,000 5 2 £90,001-£100,000 - - £100,001-£110,000 - 1 £110,001-£120,000 1 2 £120,001-£130,000 1 - £130,001-£140,000 1 2 £140,001-£150,000 1 1 £150,001-£160,000 - - £160,001-£170,000 - 1 £170,001-£180,000 1 -

37 39

Pension contributions of £0.1m (2012: £0.1m) were made to defined contribution schemes for the above members of staff during the period. 8 TRUSTEES’ EMOLUMENTS

No trustees of the company received any remuneration during the period or in the previous period. Expenses for travel and entertainment totalling £152 (2012: £367) were incurred by one trustee wholly and necessarily on the National's business and were reimbursed during the period. Trustees are offered two tickets for each production to enable them to carry out their duties. 9 PENSION CONTRIBUTIONS The National makes payments to defined contribution schemes which are available to all permanent employees on completion of their probationary period. The charge for the period was £0.9m (2012: £0.7m) with £0.1m (2012: £0.1m) payable at the balance sheet date.

10 TAXATION

The National's charitable activities fall within the exemptions afforded by Part 11 Corporation Taxes Act 2010. The trading and commercial subsidiaries, RNTE, NTPL and NTPL Overseas, passes profits on which tax would be payable to the National under a Gift Aid arrangement. Accordingly, there is no corporation tax charge in these financial statements. Similarly, because of the Gift Aid, there is no difference in the net movement in funds for the National and the Group as a whole. National Theatre North America LLC pays a profit distribution to the National. The National is awaiting the relevant dispensations in the US to be treated as a charity. Management believe such dispensations will be granted and as such, there is no corporation tax charge on the distribution.



11 TANGIBLE FIXED ASSETS Group and Company

Freehold Land &

Buildings Leasehold

Improvements Equipment

Work in Progress

(NT Future)

Work in Progress

(Other) Total

£m £m £m £m £m

£m

Cost

As at 1 April 2012 6.6 35.4 26.2 9.7 1.6 79.5

Additions - - 0.3 12.8 2.6 15.7

Disposals - (0.7) (0.1) - - (0.8)

Transfers from work in progress - 0.6 6.1 (3.2) (3.5) -

As at 31 March 2013 6.6 35.3 32.5 19.3 0.7 94.4

Accumulated Depreciation

As at 1 April 2012 0.6 33.1 24.4 - - 58.1

Charge for period 0.1 0.6 3.3 - - 4.0

Disposals - (0.4) (0.2) - - (0.6)

As at 31 March 2013 0.7 33.3 27.5 - - 61.5

Net book value As at 31 March 2013 5.9 2.0 5.0 19.3 0.7 32.9

As at 1 April 2012 6.0 2.3 1.8 9.7 1.6 21.4

Freehold land and buildings include NT Studio land at a cost of £0.7m (2012: £0.7m) and the NT Studio building refurbishment at a cost of £5.7m (2012: £5.7m). The Studio building has been provided as security in the form of a 30 year legal mortgage in relation to a grant for refurbishment of the Studio, of £0.9m from Arts Council England in 2010. The mortgage is 14% of the cost of the NT Studio land and building (excluding the NT Studio car park land). In 2012 a fixed and floating charge lasting 30 years was provided as security for the potential repayment obligations under a grant of £17.5m from Arts Council England for the NT Future project.



12 INVESTMENTS

Group Company Group Company 2013 2013 2012 2012 £m £m £m £m

Expendable endowment (20-year gilt) 0.2 0.2 0.2 0.2

In 2008, the Charity invested £200,000 into a 20-year gilt in accordance with the terms of a donation received from a long-term benefactor. At the end of the 20-year term, the capital sum (£166,000) will become available for use by the National Theatre. Interest on the gilt accrues to the Theatre on a received basis. The initial premium on the gilt is amortised over the life of the gilt. The trustees believe that the carrying value of the investments is supported by their underlying net assets. See Note 23 for details of investments in subsidiary undertakings. 13 STOCKS

Group Company Group Company 2013 2013 2012 2012 £m £m £m £m Goods for resale 0.6 - 0.4 - Consumable items 0.2 0.2 0.1 0.1

0.8 0.2 0.5 0.1

14 COST OF PRODUCTIONS NOT YET OPENED

Group Company Group Company 2013 2013 2012 2012 £m £m £m £m War Horse – UK Tour 0.3 0.3 - - War Horse – International 0.3 0.3 - - Other Commercial Transfers 0.2 0.2 0.2 0.2 National Theatre 0.3 0.3 0.3 0.3

1.1 1.1 0.5 0.5



15 DEBTORS

Group Company Group Company 2013 2013 2012 2012 £m £m £m £m Trade debtors 1.9 1.8 1.5 1.4 Amounts owed by group undertakings - 2.9 - 2.6 Other debtors 0.8 0.8 1.1 1.1 Prepayments and accrued income 4.2 3.6 3.9 3.3

6.9 9.1 6.5 8.4

16 CASH AT BANK AND IN HAND

Group Company Group Company 2013 2013 2012 2012 £m £m £m £m Cash and bank balances 8.8 6.7 9.4 7.7 Short-term deposit 13.0 13.0 17.0 16.2

21.8 19.7 26.4 23.9

17 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company Group Company 2013 2013 2012 2012 £m £m £m £m Trade creditors 2.0 1.7 0.6 0.5 Taxation and social security 1.4 1.4 1.5 1.5 Advance bookings 2.4 2.4 2.1 2.1 Other creditors and accruals 8.5 8.4 7.8 7.5 Deferred income – all utilised in the year 1.9 1.8 1.9 1.3 Provisions - - 0.1 0.1

16.2 15.7 14.0 13.0



18 FUNDS Balance as Balance as

at 1 April

2012 Income Expenditure Transfers at 31 March

2013 £m £m £m £m £m UNRESTRICTED: Operations fund * 2.6 84.1 82.5 (1.6) 2.6 Designated: NT Future 12.4 - 0.9 - 11.5 Building and equipment fund 8.1 - 3.0 2.7 7.8 Front of house capital fund 0.2 - 0.1 - 0.1 The Shed - - 1.6 1.7 0.1 Other designated funds 1.4 - - (1.4) - TOTAL Designated funds 22.1 - 5.6 3.0 19.5

TOTAL Unrestricted funds 24.7 84.1 88.1 1.4 22.1

RESTRICTED: Project funds NT LEARNING Connections 0.1 - 0.1 - - Primary & Early Years - 0.2 0.2 - - Secondary & Further Education - 0.1 0.1 - - Other - 0.1 0.1 - - PUBLIC ENGAGEMENT Inside Out - 0.3 0.3 - - Other 0.1 0.1 0.1 - 0.1 PERFORMANCE Productions - 0.2 0.2 - - Touring - 0.5 0.5 - - RESEARCH & DEVELOPMENT Studio projects 0.1 0.1 0.1 - 0.1

TOTAL Project funds 0.3 1.6 1.7 - 0.2

RESTRICTED: Long term funds NT Future fund 9.0 8.6 1.1 - 16.5 ACE NT Future fund - 1.9 - - 1.9 ACE Lottery fund 2.2 - 0.6 - 1.6 ACE Capital fund - 1.4 - (1.4) - Studio refurbishment fund 5.1 - 0.1 - 5.0 Expendable endowment 0.2 - - - 0.2

TOTAL Long term funds 16.5 11.9 1.8 (1.4) 25.2

TOTAL Restricted funds 16.8 13.5 3.5 (1.4) 25.4

TOTAL FUNDS 41.5 97.6 91.6 - 47.5



£m * Analysis of unrestricted funds held between parent and subsidiaries: Unrestricted retained surplus held by the Charity 2.7 Unrestricted retained deficit held by trading subsidiaries (0.1)

Group unrestricted operations fund 2.6 DESIGNATED FUNDS

NT Future Fund Expenditure against this fund in the year was costs associated with the NT Future project which were not capitalised, primarily the costs of transferring the workshop operations offsite during the construction of the new workshops. £nil (2012: £1.7m) was transferred from the operations fund for the development of the NT Future project. Buildings and Equipment Fund The buildings and equipment fund is a designated fund set aside by the Board in order to enable monies to be made available over a three year period for the renewal and maintenance of the National's buildings and mechanical and electrical equipment in accordance with its lease and obligations under Lottery funding. £1.3m (2012: £2.0m) was transferred from the operations fund and £1.4m (2012: £1.5m) was transferred from the ACE Capital Fund into the buildings and equipment fund during the period. The expenditure for the current period represents depreciation on assets acquired through this fund, the write off of assets being replaced as part of the NT Future project (£0.3m) and major asbestos removal work carried out in the year (£0.6m). Front of House Capital Fund The expenditure in the period represents depreciation on assets acquired through this fund. The Shed £1.7m (2012: £nil) was transferred from the operations fund in the year to cover total expenditure for the construction of The Shed, a temporary theatre operating during the closure of the Cottesloe Theatre in 2013/14. £1.6m was spent in the year. Other Designated Funds In 2012 £1.4m was transferred from the Operations fund to provide funds for the US War Horse tour to open in June 2012. In 2013 the funds were transferred back to the operations fund and utilised for the tour which opened in June 2012. RESTRICTED FUNDS: PROJECT FUNDS These represent funds made available for projects generally completed within two years or activities funded on an annual basis. NT Learning and Public Engagement Projects The NT Learning and Public Engagement Project Fund represents restricted funding and related expenditure, for participation projects and training initiatives, along with funds received in support of activities in the external public spaces at the NT and various access, archive and digital initiatives.

NT Studio Projects The NT Studio projects fund represents restricted funding for activity at the NT Studio, including new writing and directing initiatives.



RESTRICTED FUNDS: LONG-TERM FUNDS:

Long-term funds represent funds used for capital or where there is an expectation that the fund will be used over the longer term. NT Future Fund £8.6m was received in the year as grants and donations for the NT Future project. Expenditure was £1.1m and represents depreciation on NT Future assets. ACE NT Future Fund £1.9m was received in the year from Arts Council England for the NT Future project. ACE Lottery Fund The expenditure in the period represents depreciation on assets acquired through this fund. ACE Capital Fund A £1.4m (2012: £1.5m) grant was received in the period for capital expenditure from Arts Council England. This was fully spent during the period on fixed assets which have an unrestricted use and as such is transferred to the Buildings and Equipment Fund. Studio Refurbishment Fund This fund was created to support a major refurbishment of the NT Studio, completed in 2008. The balance reflects future depreciation on the assets acquired through this fund.



19 ANALYSIS OF NET ASSETS BETWEEN FUNDS

Tangible fixed

assets Cash

Other net assets /

(liabilities)

Total net assets at 31 March

2013

Total net assets at

1 April 2012

£m £m £m £m £m UNRESTRICTED:

Operations fund - 10.0 (7.4) 2.6 2.6

Designated: NT Future 9.8 1.7 - 11.5 12.4 Building and equipment fund 4.5 3.3 - 7.8 8.1 Front of house capital fund 0.1 - - 0.1 0.2 The Shed - 0.1 - 0.1 - Other designated funds - - - - 1.4

TOTAL Designated funds 14.4 5.1 - 19.5 22.1

TOTAL Unrestricted funds 14.4 15.1 (7.4) 22.1 24.7

RESTRICTED: Project funds NT LEARNING & PUBLIC ENGAGEMENT

Connections - - - - 0.1 Other NT Learning & Public Engagement - 0.1 - 0.1 0.1 RESEARCH & DEVELOPMENT Studio projects - 0.1 - 0.1 0.1

TOTAL Project funds - 0.2 - 0.2 0.3

RESTRICTED: Long term funds NT Future fund 11.9 4.6 - 16.5 9.0 ACE NT Future fund - 1.9 - 1.9 - ACE Lottery fund 1.6 - - 1.6 2.2 Studio refurbishment fund 5.0 - - 5.0 5.1 Expendable endowment - - 0.2 0.2 0.2

TOTAL Long term funds 18.5 6.5 0.2 25.2 16.5

TOTAL Restricted funds 18.5 6.7 0.2 25.4 16.8

TOTAL FUNDS 32.9 21.8 (7.2) 47.5 41.5



20 CAPITAL COMMITMENTS: GROUP AND COMPANY 2013 2012 £m £m NT Future related commitments: Fitting out 3.8 - Mechanical and Electrical services 3.7 - Building work 1.5 - Cladding 1.4 - Steelwork 0.7 - Roofing work 0.6 - Logistics 0.5 - Metalwork 0.5 - Other NT Future 0.9 3.8 Olivier Bridge 5 replacement - 0.2 Other commitments: Cooling Tower safe access 0.1 LAN improvement 0.1 -

Approved and contracted 13.8 4.0

The amount payable within one year is £13.8m (2012: £1.5m). 21 CONNECTED CHARITIES AND OTHER RELATED PARTY TRANSACTIONS Connected Charities Royal National Theatre Foundation The Royal National Theatre Foundation has objects related to those of the National and makes grants to the NT from time to time. The foundation has 11 trustees, two of whom have a direct connection to the NT. The National Theatre entered into a joint arrangement in March 2012 to create a new Education endowment fund within the Royal National Theatre Foundation to further the NT’s national remit in terms of education. A legacy campaign has been launched by the NT and all unrestricted legacies directed to the NT will in future go to the Royal National Theatre Foundation. The Foundation is structured so that a regular income will come to the NT to finance both its Education work and programmes for the development of the profession for example bursaries, apprenticeships and training. During the period, the NT received legacy income of £11,000 (2012: £0.5m) which will be paid to the Royal National Theatre Foundation. A pledge of £2m was made in 2011 for the NT Future project. £1m was received in May 2013, post year end. During the period the Foundation made benevolent grants to members and former members of the staff and company. American Associates of the Royal National Theatre The American Associates of the Royal National Theatre is an independent s.501c3 not-for-profit charity registered in New York. In the period, $2.6m (2012: $2.5m) was due to the NT. Other Related Party Transactions Lloyd Dorfman is a trustee of the Dorfman Foundation and a trustee of the National Theatre. In 2010/11, the Foundation pledged a leadership gift of £10m for the NT Future project. During the period £2.7m (2012: £2m) was paid to the National Theatre. Lloyd Dorfman is also the Founder, Chairman and a major shareholder of Travelex, sponsors of the National Theatre £12 Travelex season. The National has a limited power to enter into transactions with its Trustees. This power is in its governing document, the Memorandum of Association, and it is limited by conditions which protect the interests of the National as a charity. See Note 23 for details of transactions with subsidiaries.

BALANCE SHEETS Company Registration Number: 749504

Page 19 of 42 The Royal National Theatre Financial Statements 2012-13

Group Company Group Company

as at 31

March as at 31

March as at 1

April as at 1

April 2013 2013 2012 2012 Note £m £m £m £m Fixed assets Tangible fixed assets 11 32.9 32.9 21.4 21.4 Investments 12 0.2 0.2 0.2 0.2

Total fixed assets 33.1 33.1 21.6 21.6

Current assets Stocks 13 0.8 0.2 0.5 0.1 Cost of productions not yet opened 14 1.1 1.1 0.5 0.5 Debtors 15 6.9 9.1 6.5 8.4 Cash at bank and in hand 16 21.8 19.7 26.4 23.9

Total current assets 30.6 30.1 33.9 32.9

Creditors: amounts falling due within one year 17 (16.2) (15.7) (14.0) (13.0)

Net current assets 14.4 14.4 19.9 19.9

NET ASSETS 18/19 47.5 47.5 41.5 41.5

Represented by: Operations fund 18/19 2.6 2.6 2.6 2.6 Designated funds 18/19 19.5 19.5 22.1 22.1

Total unrestricted funds 22.1 22.1 24.7 24.7

Restricted funds 18/19 25.4 25.4 16.8 16.8

TOTAL FUNDS 18/19 47.5 47.5 41.5 41.5

The Notes on pages 22 to 42 constitute part of the financial statements. The financial statements were approved by the Board of Trustees on 24 September 2013 and signed on its behalf by:

John Makinson Neil MacGregor Trustee



23 SUBSIDIARIES & JOINT ARRANGEMENTS (cont’d) The financial results for the period were:

Royal National Theatre

Enterprises Limited

National Theatre

Productions Limited

NTPL Overseas Limited

National Theatre North America

LLC Total** Total**

2013 2012 2013 2012 2013 2012 2013 2012 2013 2012

£m £m £m £m £m £m £m £m £m £m

Activities for generating funds: Trading operations 10.2 9.3 0.8 1.0 0.1 - 1.6 0.8 12.7 11.1

Cost of trading operations+ (9.4) (8.1) (0.5) (0.4) - - (1.7) (0.3) (11.6) (8.8)

Net Surplus 0.8 1.2 0.3 0.6 0.1 - (0.1) 0.5 1.1 2.3

Add back consolidation adjustments 0.8 0.7 - - - - - - 0.8 0.7

Net Surplus for the period 1.6 1.9 0.3 0.6 0.1 - (0.1) 0.5 1.9 3.0

Gift aid/Profit distribution due to parent company (1.6) (1.9) (0.3) (0.6) (0.1) - - (0.5) (2.0) (3.0)

Retained in the subsidiary - - - - - - (0.1) - (0.1) -

Net Assets / (Liabilities) - - - - - - - - - - ** The financial results for NT War Horse LP are immaterial and have therefore not been detailed above. +Include in cost of trading operations are administration expenses charged by the National Theatre as follows:

Entity Basis Payments to National Theatre 2013 (£m) 2012 (£m)

Royal National Theatre Enterprises Limited Turnover (11%) 1.2 1.2

National Theatre Productions Limited Usage 0.5 0.3

National Theatre North America LLC Usage 0.2 0.3

NTPL Overseas Ltd Usage - -

1.9 1.8

signed financial statements websitev 2012-13

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