LANGLEY GRAMMAR SCHOOL

Transcription

1 s I Registered number: GOVERNORS' REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2014

2 ok t r CONTENTS Page Reference and administrative details of the academy, its governors and advisers 1-2 Governors' report 3-9 Governors' statement Statement on regularity, propriety and compliance 13 Governors' responsibilities statement 14 Independent auditor's report Independent reporting accountant's assurance report on regularity Statement of financial activities (incorporating Income and Expenditure Account) Balance sheet 21 Cash flow statement 22 Notes to the financial statements 23-44

3 REFERENCE AND ADMINISTRATIVE DETAILS OF THE ACADEMY, ITS GOVERNORS AND ADVISERS FOR THE YEAR ENDED 31 AUGUST 2014 Members and Governors Mr K Richardson, Chair * Mr M Maydell, Vice Chair Ms C Brackenbury Mrs S Branquinho Mr J Kirk Governors Mr J Constable, Headteacher Mrs M Francis Mrs R Garrett Mrs F Grant * Mr R Kakaiya Ms H Makowski Mrs C McKenna (resigned 22 March 2014) Mr K Nagra Mr I Neta * Mr A Verma (resigned 18 July 2014) Miss V Jain (appointed 2 September 2014) * member of the Resources Committee Company registered number Principal and registered office Reddington Drive, Slough, Berkshire, SL3 7QS Company secretary Mr G Trigg * Senior management team Mr J Constable, Headteacher Mr B Mitchell, Deputy Headteacher Mrs R Smith, Deputy Headteacher Mr P Adams, Assistant Headteacher Mr S Cook, Assistant Headteacher Mr G Trigg, Business Manager Page 1

4 REFERENCE AND ADMINISTRATIVE DETAILS OF THE ACADEMY, ITS GOVERNORS AND ADVISERS FOR THE YEAR ENDED 31 AUGUST 2014 Independent Auditor Moore Stephens LLP, 150 Aldersgate Street, London, EC1A 4AB Bankers Natwest Bank Plc, 11 Harrow Market, Langley, SL3 8HJ Solicitors Winckworth Sherwood, Minerva House, 5 Montague Close, London, SE1 9BB Page 2

5 GOVERNORS' REPORT FOR THE YEAR ENDED 31 AUGUST 2014 The Governors (who are also directors of the charity for the purposes of the Companies Act) present their annual report together with the financial statements and auditor's report of Langley Grammar School ('the School') for the year ended 31 August The Governors confirm that the annual report and financial statements of the School comply with the current statutory requirements, the requirements of the School's governing document and the provisions of the Statement of Recommended Practice (SORP) 'Accounting and Reporting by Charities' issued in March STRUCTURE, GOVERNANCE AND MANAGEMENT Constitution The Academy Trust known as Langley Grammar School is a charitable company limited by guarantee and an exempt charity. The charitable company's memorandum and articles of association are the primary governing documents of the academy trust. The Governors are the directors for the purposes of the Companies Act 2006 and are also the trustees for the purposes of charity law. The Members delegate the management of operations of the School to the Board of Governors. The Members of the School comprise: a) the signatories to the Memorandum or their successors; b) 1 person appointed by the Secretary of State, in the event that the Secretary of State appoints a person for this purpose; c) the chairman of Governors; and d) any person appointed where the Members may agree unanimously in writing to appoint such additional members as they think fit and may unanimously in writing agree to remove such additional members. Details of the Governors who served throughout the period to the date of this report, except as noted, are included in the Reference and Administrative Details on page 1. Members' Liability Each member of the charitable company undertakes to contribute to the assets of the charitable company in the event of it being wound up while they are a member, or within one year after they cease to be a member, such amount as may be required, not exceeding 10, for the debts and liabilities contracted before they ceased to be a member. Governors' Indemnities The School's insurers indemnify against any claims in respect of any civil liability and which arises out of the conduct of the insured in their personal capacity as a Director, Governor, Trustee or officer of the School. Method of Recruitment and Appointment or Election of Governors The management of the School is the responsibility of the Governors who are elected and co-opted under the terms of the Trust deed. Page 3

6 GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2014 The School has the following governors and methods of appointment: a) up to 12 Community Governors appointed by the Governing Body; b) up to 7 (provided there are not less than 2) Parent Governors elected by parents of registered students at the Academy; c) up to 3 (provided there is not less than 1) Staff Governors appointed through such process as the Governors' determine; d) any Co-opted Governors, if appointed by the Governors; e) the Headteacher (ex officio); f) any Additional Governors, if appointed by the Secretary of State; and g) any Further Governors, if appointed by the Secretary of State. Term of office The term of office for any governor shall be four years, save that this time limit shall not apply to the Headteacher. Policies and Procedures Adopted for the Induction and Training of Governors All new Governors are given an induction by the School and the Governing Body. All Governors are provided with copies of policies, procedures, minutes, accounts, budgets, plans and other documents that they will need to undertake their role as Governors. As there are normally only two or three new Governors a year, induction tends to be done informally and is tailored specifically to the individual. Organisational Structure The structure of the organisation has three levels; the Governors, five of whom are statutory directors, the Headteacher and the Senior Leadership Team, and the Middle Leaders (Curriculum Leaders and Phase Leaders). The aim of the management structure is to devolve responsibility and encourage involvement in decision making at all levels. The Governors are responsible for the strategic direction of the School, adopting an annual plan and budget, monitoring the School's use of budgets and making major decisions about the direction of the School, capital expenditure and senior staff appointments. The School Leadership Team comprises the Headteacher, two Deputy Headteachers, two Assistant Headteachers and the Business Manager. These managers control the School at an executive level implementing the policies laid down by the Governors and reporting back to them. As a group, the Senior Leadership Team is responsible for authorising spending within the agreed budgets and the appointment of staff. The Governors devolve responsibility for staff appointments, other than those of the Headteacher, Deputy Headteachers and the Business Manager. Senior and Middle Leaders are responsible for the day to day operation of the School departments, in particular organising staff, facilities and students. Connected Organisations, Including Related Party Relationships The'School is a member of an Umbrella Trust. The Kedermister Education Trust which acts as a strategic body helping to promote and assist education to those schools that are part of its membership. The Kedermister Education Trust does not have any control over the operation of the School. There are no connected organisations or related party relationships other than those noted in note 25 to the Financial Statements. i Page 4

7 GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2014 OBJECTIVES AND ACTIVITIES Principal Activities The Principal object and activity of the School is to provide education for students between the ages of 11 and 18, who are selected on merit which is assessed through a competitive entrance examination. In accordance with the Articles of Association the School has adopted a funding agreement approved by the Secretary of State for Education. The funding agreement specifies amongst other things, the basis for admitting pupils to the School and that the School will provide a broad and balanced curriculum. The aims and values of the School are to help students to: understand their potential by acquiring knowledge, skills and practical abilities and the will to use them; value and desire the highest levels of academic achievement across a wide range of subjects complemented by cultural, creative, practical, physical and social awareness; acquire a reasoned set of values and beliefs, and to gain an understanding of the social, economic and political environment; increase their self-confidence, self-esteem and to develop their decision making, teamwork and leadership skills; promote the principles of respect for others irrespective of race, creed, gender, age or culture; prepare for their adult lives at work, social relationships and responsibilities and; live effectively both as individuals and members of the community. Objects and Aims The principal object of the School is specifically restricted to the following: to advance for the public benefit education in the United Kingdom, in particular, but without prejudice to the generality of the foregoing, by establishing, maintaining, carrying on, managing and developing a school offering a broad and balanced curriculum. Objectives, Strategies and Activities The School is committed to creating an outstanding academic environment that inspires and challenges students and allows them to fulfil their potential and achieve high standards in a welcoming and caring stimulating environment. The current improvement priorities are set out in the School Development Plan which lists five key aims: develop our students as high achieving, motivated and independent learners; develop the professional effectiveness of staff; develop a creative, innovative and inspiring curriculum; increase the impact of the School's community focus and outreach; provide a high quality environment and resources for learning Page 5

8 r GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2014 Public Benefit The Governors acknowledge the duty in Section 4 of the Charities Act 2011 to have due regard to the Charity Commission's published general and relevant sub-sector guidance on public benefit. We have referred to this guidance when reviewing our aims, strategy and in planning future activities. All activities undertaken by the School are for the public benefit. The School is specifically restricted to advance the public benefit education in the United Kingdom and reports annually on ways in which it has successfully delivered in this regard. STRATEGIC REPORT Achievements and Performance Langley Grammar School was founded in 1956 and converted to an Academy on 1 April The total pupil numbers in the year ended 31 August 2014 were 1,060 (2013: 1,052). Students achieved excellent results in the 2014 public examinations. At 'A' level, 64.4% of the grades awarded were A*- B. GCSE results were also impressive with 100.0% of students achieving five or more A*- C grades including English and Mathematics. The School was placed 104th in the Sunday Times Top 200 State Secondary Schools. A comprehensive rolling three year development plan has guided the development of the School during the period under review. Key Performance Indicators The key financial performance indicators are: The School set a balanced budget and showed a surplus on restricted general funds (before restricted fixed assets fund and pension reserve) of 53,000 (2013: 82,000). The School will continue to trade with sufficient balances so as to continue to improve the infrastructure of the School and to ensure the continuity of education of students. Non-financial performance indicators are: pupil numbers, exam results and maintaining facilities to a high standard. The School has a full complement in all year groups and details of exam results and facilities are explained within this report. Going Concern After making appropriate enquiries, the Governing Body has a reasonable expectation that the Academy Trust has adequate resources to continue in operational existence for the foreseeable future. For this reason it continues 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. Financial Review The School's principal income is from the Department for Education ('DfE') in the form of recurrent, restricted grants. The grants received during the year ended 31 August 2014 and the associated expenditure are shown in the Statement of Financial Activities. The School also receives grants for fixed assets from the DfE and other agencies. In accordance with the Page 6

9 GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2014 Charities Statement of Recommended Practice, 'Accounting and Reporting by Charities' (SORP 2005), such grants are shown in the Statement of Financial Activities as restricted income in the fixed asset fund. The restricted fixed asset fund balance is reduced by annual depreciation charges over the expected useful life of the assets concerned. During the year ended 31 August 2014 total expenditure of 6,858,000 (2013: 11,741,000) was covered by recurrent grant funding from the DfE together with other incoming resources. The net assets of 16,826,000 (2013: 17,434,000) was made up of restricted fixed asset funds of 17,310,000 (2013: 17,793,000); restricted general funds of 53,000 (before pension reserve), (2013: 82,000); pension reserve of (1,048,000), (2013: (906,000) and unrestricted funds of 511,000 (2013: 465,000). Expenditure was used to provide a stimulating education for students and to improve the infrastructure of the school in order to improve learning. As at 31 August 2014, the net book value of fixed assets was 17,310,000 (2013: 17,793,000) and movements in tangible assets are shown in note 13 to the financial statements. The land and buildings are owned by the School. Any alterations or improvements incurred by the School are shown as fixed assets. The assets were used exclusively for providing education and the associated support services to the students at the School. The deficit in the Local Government Pension Scheme (LGPS) ('the Scheme') is recognised on the balance sheet in accordance with FRS17. At 31 August 2014, the deficit stood at 1,048,000 (2013: 906,000). The existence of the pension scheme deficit does not mean an immediate liability crystallises and is addressed over a series of years through pension contributions recommended by the pension scheme actuaries during subsequent triennial valuations of the scheme. Note 23 details the assumptions and movements during the year on the Scheme. Reserves Policy The School has a rolling programme of improvements both to its physical and technological infrastructure. The School endeavours to manage the flow and efficiency of these capital projects through careful financial planning and considers that there is a need to maintain a level of reserves sufficient to meet these commitments. At 31 August 2014, the School had free reserves of 511,000 (2013: 465,000). Investment Policy and Performance The School adopts a low risk policy with regard to investments, and accounts are held across a small number of banks. Balances in current accounts are transferred to special interest bearing accounts overnight. Restricted and unrestricted funds are held in separate accounts. The Resources Committee monitors the School balances and accounts on a quarterly basis. Principal Risks and Uncertainties The principal goal for the School is to safeguard its long-term ability to continue to attract the high-calibre staff required to deliver an excellent education to academically able students, and to maintain and renew its physical facilities. The original 1956 buildings which comprise approximately half of the School's teaching space have been subject to on-going structural inspections that have identified a number of areas where the structure requires strengthening. These have been addressed and further annual inspections are planned. There is a likelihood that this pattern of having to strengthen the structure will continue as the building reaches the end of its useful life, with significant costs being incurred. The DfE was informed of the current position and has awarded the School grants totalling 448,184 from the Academies Capital Maintenance Fund to cover the known works. A further 22,699 has also been awarded in the current year. Page 7

10 GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2014 In May 2014 the Government announced that it would fund a further phase of the Priority School Building Programme ('PSBP2'). PSP132 will be a five year programme operating between 2015 to 2021 and will undertake major rebuilding and refurbishment projects in schools and sixth form colleges in the very worst condition. The School submitted an Expression of Interest with the EFA in July 2014 for a phased replacement of the 1956 buildings. The EFA anticipates that it will be able to inform applicants by the end of the calendar year whether their application has been successful. The key uncertainty is the impact of changes to.government funding and an uncertain economic climate and financial environment that puts pressure on education and capital projects. Further uncertainty exists in the education sector around the outcome and subsequent implications of the general election that will take place in Risk Management The School recognises that it has a responsibility to minimise risks. All the major risks to which the Academy Trust is exposed as identified by the Governors have been reviewed and systems or procedures have been established to manage those risks. Financial and Risk Management Objectives and Policies In accordance with the School's statutes, the Governors and Senior Leadership Team are responsible for the administration and management of the School's affairs. They are responsible for ensuring that: there is an effective system of internal control and that the accounting records are properly kept; there are appropriate financial and management controls in place to safeguard the assets of the School and prevent and detect fraud; and the School secures economical, efficient and effective management of its resources and expenditure. Plans for the future The School will continue striving to uphold and build upon its successes and the achievement of its students at all levels. it endeavours to ensure that all students are in a position to take up a place at a leading university or to pursue an alternative appropriate pathway when they leave, and that they are well equipped to make a substantial contribution to society. The School Development Plan sets out the School's improvement priorities. Page 8

11 GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2014 Disclosure of Information to Auditor Each of the persons who are Governors at the time when this Governors' report is approved has confirmed that: so far as that Governor is aware, there is no relevant audit information of which the charitable company's auditor is unaware; and that Governor has taken all the steps that ought to have been taken as a Governor in order to be aware of any relevant audit information and to establish that the charitable company's auditor is aware of that information. Governors' report, incorporating a strategic report, approved by order of the board of governors, as the company's directors, on 11 December 2014 and signed on the board's behalf by: Kenpetkr"fiichardson Chair of Governors Page 9

12 r GOVERNANCE STATEMENT SCOPE OF RESPONSIBILITY As governors, we acknowledge we have overall responsibility for ensuring that Langley Grammar School has an effective and appropriate system of control, financial and otherwise. However such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss. The Governing Body has delegated the day-to-day responsibility to the Headteacher, as Accounting Officer, for ensuring financial controls conform with the requirements of both propriety and good financial management and in accordance with the requirements and responsibilities assigned to it in the funding agreement between Langley Grammar School and the Secretary of State for Education. The Accounting Officer is also responsible for reporting to the Governing Body any material weaknesses or breakdowns in internal control. GOVERNANCE The information on governance included here supplements that described in the Governors' Report and in the Governors' responsibilities statement. The Governing Body has formally met 6 times during the year. Attendance during the year at meetings of the Governing Body was as follows: Governor Meetings attended Out of a possible Mr K Richardson, Chair 6 6 Mr M Maydell, Vice Chair 6 6 Ms C Brackenbury 5 6 Mrs S Branquinho 5 6 Mr J Constable, Headteacher 6 6 Mrs M Francis 5 6 Mrs R Garrett 6 6 Mrs F Grant 4 6 Mr R Kakaiya 5 6 Mr J Kirk 6 6 Ms H Makowski 5 6 Mrs C McKenna 2 3 Mr K Nagra 6 6 Mr I Neta 5 6 Mr A Verma 4 6 Changes in composition of the Governing Body can be found in the administrative details section on page 1. When recruiting governors to fill vacancies, the Governing Body identifies which skills and competencies are required in order for the Governing Body to have a broad balance of the relevant skills and knowledge desired for the role. A comprehensive training programme is provided for both new and existing governors via a range of courses face-to-face and online courses, and many of the Governors participate in these. The Resources Committee is a sub-committee of the main Governing Body. Its terms of reference include financial management, risk management, management of physical resources, and management of health and safety issues. The members of this committee have abroad range of commercial experience, including finance and property. They are also attended by the School Business Manager. The Resources Committee has reviewed the Schedule of Requirements in the Academies Financial Handbook 2013 Appendix C: Schedule of requirements (the 'musts') and is satisfied that the School complies with the requirements. Page 10

13 GOVERNANCE STATEMENT (continued) Attendance at Resources Committee meetings during the year was as follows: Governor Meetings attended Out of a possible Mr M Maydell (Chair) 6 6 Mr J Constable 4 6 Mrs F Grant 5 6 Mr K Nagra 4 6 Mr I Neta 2 6 Mr K Richardson 4 6 Mr G Trigg (Business Manager) 6 6 Other Governing Body committees that meet regularly to advance the business of the School are Admissions, Teaching & Learning, Personnel, Students & Community and Chairs. THE PURPOSE OF THE SYSTEM OF INTERNAL CONTROL The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an on-going process designed to identify and prioritise the risks to the achievement of academy policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. The system of internal control has been in place in Langley Grammar School for the year 1 September 2013 to 31 August 2014 and up to the date of approval of the annual report and financial statements. CAPACITY TO HANDLE RISK The Governing Body has reviewed the key risks to which the School is exposed together with the operating, financial and compliance controls that have been implemented to mitigate those risks. The Governing Body is of the view that there is a formal on-going process for identifying, evaluating and managing the School's significant risks, that have been in place for the year 1 September 2013 to 31 August 2014 and up to the date of approval of the annual report and financial statements. This process is regularly reviewed by the Governing Body. THE RISK AND CONTROL FRAMEWORK The School's system of internal financial control is based on a framework of regular management information and administrative procedures including the segregation of duties and a system of delegation and accountability In particular, it includes: comprehensive budgeting and monitoring systems with an annual budget and periodic financial reports which are reviewed and agreed by the Governing Body; regular reviews by the Resources Committee of reports which indicate financial performance against the forecasts and of major purchase plans, capital works and expenditure programmes; setting targets to measure financial and other performance; clearly defined purchasing (asset purchase or capital investment) guidelines. delegation of authority and segregation of duties; identification and management of risks. Page 11

14 GOVERNANCE STATEMENT (continued) The Governing Body has considered the need for a specific internal audit function and has decided not to appoint an internal auditor. However, the Governors have appointed a governor as Responsible Officer ('RO'). The RO's role includes giving advice on financial matters and performing a range of checks on the School's financial systems. On a termly basis, the RO reports to the Governing Body on the operation of the systems of control and on the discharge of the Governing Body's financial responsibilities. There were no material control issues arising from the work of the RO REVIEW OF EFFECTIVENESS As Accounting Officer, the Headteacher has responsibility for reviewing the effectiveness of the system of internal control. During the year in question the review has been informed by: the work of the R0; the work of the external auditor; the financial management and governance self-assessment process; the work of the executive managers within the School who have responsibility for the development and maintenance of the internal control framework. The Accounting Officer is advised of the implications of the result of their review of the system of internal control by the Resources Committee and addresses weaknesses to ensure continuous improvement of the system is in place. Approved by order of the members of the Governing Body on 11 December 2014 and signed on their behalf, by: y7 Kenneth..Richar'dson Chair of Trustees John Constable Accounting Officer Page 12

15 STATEMENT ON REGULARITY, PROPRIETY AND COMPLIANCE As Accounting Officer of Langley Grammar School I have considered my responsibility to notify the Academy Trust Governing Body and the Education Funding Agency of material irregularity, impropriety and non-compliance with EFA terms and conditions of funding, under the funding agreement in place between the academy trust and the Secretary of State. As part of my consideration I have had due regard to the requirements of the Academies Financial Handbook (2013). 1 confirm that I and the Academy Trust Governing Body are able to identify any material, irregular or improper use of funds by the Academy Trust, or material non-compliance with the terms and conditions of funding under the Academy Trust's funding agreement and the Academies Financial Handbook (2013). 1 confirm that no instances of material irregularity, impropriety or funding non-compliance have been discovered to date. If any instances are identified after the date of this statement, these will be notified to the Governing Body and EFA. John Constable Accounting Officer 11 December 2014 Page 13

16 GOVERNORS' RESPONSIBILITIES STATEMENT FOR THE YEAR ENDED 31 AUGUST 2014 The Governors (who act as trustees for the purposes of charity law and directors of the charitable company for the purposes of company law) are responsible for preparing the Governors' report ( incorporating the Strategic report) and the financial statements in accordance with the Annual Accounts Direction issued by the Education Funding Agency, United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and applicable law and regulations. Company law requires the Governors to prepare financial statements for each financial year. Under company law the Governors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of its incoming resources and application of resources, including its income and expenditure, for that period. In preparing these financial statements, the Governors are required to: select suitable accounting policies and then apply them consistently; observe the methods and principles of the Charities SORP; make judgments and accounting 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 Governors are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company's transactions and 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 They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Governors are responsible for ensuring that in its conduct and operation the charitable company applies financial and other controls, which conform with the requirements both of propriety and of good financial management. They are also responsible for ensuring grants received from the EFA/DfE have been applied for the purposes intended. The Governors 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. Approved by order of the members of the Governing Body on 11 December 2014 and signed on its behalf by: Kennettti Richardson Chair of Trustees Page 14

17 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF We have audited the financial statements of Langley Grammar School for the year ended 31 August 2014 which comprise the Statement of Financial Activities, the Balance sheet, the Cash flow statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law, United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and the Academies Accounts Direction 2013 to 2014 issued by the Education Funding Agency. This report is made solely to the academy's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act Our audit work has been undertaken so that we might state to the academy's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the academy and its members, as a body, for our audit work, for this report, or for the opinion we have formed. RESPECTIVE RESPONSIBILITIES OF GOVERNORS AND AUDITOR As explained more fully in the Governors' responsibilities statement, the Governors (who are also the directors of the academy for the purposes of company law and trustees for the purposes of charity 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 (APB's) Ethical Standards for Auditors. 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 academy's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Governors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Governors' report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. 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 charitable company's affairs as at 31 August 2014 and of its incoming resources and application of resources, including its income and expenditure, 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 and the Academies Accounts Direction 2013 to 2014 issued by the Education Funding Agency. Page 15

18 INDEPENDENT AUDITOR 'S REPORT TO THE MEMBERS OF (continued) OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion the information given in the Governors' report, incorporating the Strategic 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 requires us to report to you if, in our opinion: adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of Governors' remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. lgna #41&64 Ann Mathias (Senior statutory auditor) for and on behalf of Moore Stephens LLP, Statutory Auditor 150 Aldersgate Street London EC1 A 4AB Date: q 2 2 IDeceft~ 01 ~F- Page 16

19 INDEPENDENT REPORTING ACCOUNTANT'S ASSURANCE REPORT ON REGULARITY TO LANGLEY GRAMMAR SCHOOL AND THE EDUCATION FUNDING AGENCY In accordance with the terms of our engagement letter dated 14 October 2011 and updated at 11 December 2012 and further to the requirements of the Education Funding Agency (EFA) as included in the Academies Accounts Direction 2013 to 2014, we have carried out an engagement to obtain limited assurance about whether the expenditure disbursed and income received by Langley Grammar School during the year 1 September 2013 to 31 August 2014 have been applied to the purposes identified by Parliament and the financial transactions conform to the authorities which govern them. This report is made solely to Langley Grammar School and EFA in accordance with the terms of our engagement letter. Our work has been undertaken so that we might state to Langley Grammar School and EFA those matters we are required to state in a report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Langley Grammar School and EFA, for our work, for this report, or for the conclusion we have formed. RESPECTIVE RESPONSIBILITIES OF 'S ACCOUNTING OFFICER AND THE REPORTING ACCOUNTANT The accounting officer is responsible, under the requirements of Langley Grammar School's funding agreement with the Secretary of State for Education dated 24 March 2011, and the Academies Financial Handbook extant from 1 September 2013, for ensuring that expenditure disbursed and income received is applied for the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. Our responsibilities for this engagement are established in the United Kingdom by our profession's ethical guidance and are to obtain limited assurance and report in accordance with our engagement letter and the requirements of the Academies Accounts Direction 2013 to We report to you whether anything has come to our attention in carrying out our work which suggests that in all material respects, expenditure disbursed and income received during the year 1 September 2013 to 31 August 2014 have not been applied to purposes intended by Parliament or that the financial transactions do not conform to the authorities which govern them. APPROACH We conducted our engagement in accordance with the Academies Accounts Direction 2013 to 2014 issued by EFA. We performed a limited assurance engagement as defined in our engagement letter. The objective of a limited assurance engagement is to perform such procedures as to obtain information and explanations in order to provide us with sufficient appropriate evidence to express a negative conclusion on regularity. A limited assurance engagement is more limited in scope than a reasonable assurance engagement and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in a reasonable assurance engagement. Accordingly, we do not express a positive opinion. Our engagement includes examination, on a test basis, of evidence relevant to the regularity and propriety of the School's income and expenditure. Our procedures included, but not limited to the following: Reviewing minutes of meetings, management accounts and making enquiries of management; Performing sample testing of expenditure ensuring items are for the School's purposes and are appropriately authorised; Sample testing on credit card expenditure, review for any indication of purchase for personal use by Page 17

20 INDEPENDENT REPORTING ACCOUNTANT ' S ASSURANCE REPORT ON REGULARITY TO LANGLEY GRAMMAR SCHOOL AND THE EDUCATION FUNDING AGENCY (continued) staff, Headteacher or Governors; Reviewing the procedures for identifying and declaring related parties and other business interests; Obtaining formal representation from the governing body and accounting officer acknowledging their responsibilities; Scrutinising journals, and other adjustments posted during the year for evidence of unusual entries and making further enquiries into any such items where relevant; Taking a selection of nominal ledger accounts for evidence of unusual entries and making further enquiries into any such items where relevant; Performing an evaluation of the general control environment of the School; Reviewing nominal ledger accounts for any large or unusual entries and obtaining supporting documentation. CONCLUSION In the course of our work, nothing has come to our attention which suggests that in all material respects the expenditure disbursed and income received during the year 1 September 2013 to 31 August 2014 have not been applied to purposes intended by Parliament and the financial transactions do not conform to the authorities which govern them. 112ou,~-e -~ ns Moore Stephens LLP Chartered Accountants and Registered Auditor 150 Aldersgate Street London EC1A 4AB Date:,Z 2 0eCe'" bp-r 0/ 1+ Page 18

21 STATEMENT OF FINANCIAL ACTIVITIES (incorporating Income and Expenditure Account and Statement of Total Recognised Gains and Losses) FOR THE YEAR ENDED 31 AUGUST 2014 INCOMING RESOURCES Restricted Unrestricted Restricted fixed asset Total Total funds funds funds funds funds Note E000 Incoming resources from generated funds: Voluntary income Activities for generating funds Investment income Incoming resources from charitable activities: Funding for the school's educational operations 5 5, ,720 5,952 TOTAL INCOMING RESOURCES 249 6, ,285 6,470 RESOURCES EXPENDED Costs of generating funds: Costs of generating funds from activities 6, Charitable activities: School's educational operations 6,8-5, ,389 6,480 Charitable activities: School's educational operations exceptional item 6, ,802 Governance costs TOTAL RESOURCES EXPENDED , ,858 11,741 NET RESOURCES EXPENDED BEFORE TRANSFERS 46 (31) (588) (573) (5,271) Page 19 4

22 a, STATEMENT OF FINANCIAL ACTIVITIES (continued) (incorporating Income and Expenditure Account and Statement of Total Recognised Gains and Losses) FOR THE YEAR ENDED 31 AUGUST 2014 Restricted Unrestricted Restricted fixed asset Total Total funds funds funds funds funds Note Gross transfers between funds 16 - (105) Net expenditure for the year Other recognised gains and losses 46 (136) (483) (573) (5,271) Actuarial losses on defined benefit pension schemes 16,23 (35) (35). (74) NET MOVEMENT IN FUNDS FOR THE YEAR 46 (171) (483) (608) (5,345) Reconciliation of funds Total funds at 1 September (824) ,779 TOTAL FUNDS AT 31 AUGUST ( ,310 16, All of the School's activities derive from continuing operations during the above two financial periods. A Statement of Total Recognised Gains and Losses is not required as all gains and losses are included in the Statement of Financial Activities. The notes on pages 23 to 44 form part of these financial statements. Page 20

23 I Company Number: BALANCE SHEET AS AT 31 AUGUST Note FIXED ASSETS Tangible assets CURRENT ASSETS Debtors Cash at bank 13 17, ,793 1,069 1,101 CREDITORS: amounts failing due within one year 15 (505) (554, NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES 17,874 18,340 Defined benefit pension scheme liability 23 (1,048) (906) NET ASSETS INCLUDING PENSION SCHEME LIABILITIES _17,414 FUNDS OF THE ACADEMY TRUST: Restricted funds: Restricted general funds Restricted fixed asset funds 16 17; Restricted funds excluding pension liability 17,363 17,875 Pension reserve 16 (1,048) (906) Total restricted funds 16,315 16,969 Unrestricted funds: Unrestricted general funds TOTAL FUNDS 16, The financial statements were approved by the Governors, and authorised for issue, on 11 December 2014 and are signed on their behalf, by: Kenneth Richardson!%~ Chair of Trustees 1 " The notes on pages 23 to 44 form part of these financial statements. w Page 21

24 CASH FLOW STATEMENT FOR THE YEAR ENDED 31 AUGUST Note Net cash inflow from operating activities Returns on investments and servicing of finance Capital expenditure and financial investment 19 (105) (116) DECREASE IN CASH IN THE YEAR RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS FOR THE YEAR ENDED 31 AUGUST oao Net funds at 1 September NET FUNDS AT 31 AUGUST The notes on pages 23 to 44 form part of these financial statements. Page 22

25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST ACCOUNTING POLICIES 1.1 Basis of preparation of financial statements The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at market value. The financial statements have been prepared in accordance with the Statement of Recommended Practice (SORP), 'Accounting and Reporting by Charities' published in March 2005, the Academies Accounts Direction 2013 to 2014 issued by the EFA, applicable accounting standards and the Companies Act Fund accounting Unrestricted income funds represent those resources which may be used towards meeting any of the charitable objects of the academy at the discretion of the Governors. Restricted fixed asset funds are resources which are to be applied to specific capital purposes imposed by the EFA, Department for Education and other donors where the asset acquired or created is held for a specific purpose. Restricted general funds comprise grants from the EFA and other donors which are to be used for specific purposes, imposed by the donors. Investment income, gains and losses are allocated to the appropriate fund. 1.3 Incoming resources All incoming resources are included in the Statement of Financial Activities when the School has entitlement to the funds, certainty of receipt and the amount can be measured with sufficient reliability. Grants Receivable Grants are included in the Statement of Financial Activities on a receivable basis. The balance of income received for specific purposes but not expended during the period is shown in the relevant funds on the Balance sheet. Where income is received in advance of entitlement of receipt, its recognition is deferred and included in creditors as deferred income. Where entitlement occurs before income is received, the income is accrued. General Annual Grant is recognised in full in the year for which it is receivable and any unspent amount is reflected as a balance in the restricted general fund. Capital grants are recognised when receivable and are not deferred over the life of the asset on which they are expended. Unspent amounts of capital grant are reflected in the balance in the restricted fixed asset fund. Sponsorship Income Sponsorship income provided to the School which amounts to a donation is recognised in the Statement of Financial Activities in the period in which it is receivable, where there is certainty of receipt and it is measurable. Page 23

26 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2014 (continued) ACCOUNTING POLICIES (continued) Donated services and gifts in kind The value of donated services and gifts in kind provided to the School are recognised at their open market value in the period in which they are receivable as incoming resources, where the benefit to the academy can be reliably measured. An equivalent amount is included as expenditure under the relevant heading in the Statement of Financial Activities, except where the gift in kind was a fixed asset in which case the amount is included in the appropriate fixed asset category and depreciated over the useful economic life in accordance with the School's accounting policies. For properties donated to the School, the value on transfer is estimated on a depreciated replacement cost basis. Donations Donations are recognised on a receivable basis where there is certainty of receipt and the amount can be reliably measured. Other Income Other income, including the hire of facilities, is recognised in the period in which it is receivable and to the extent the goods have been provided or on completion of the service. School trips and activities These transactions are included in the restricted funds. Income is recognised when received and expenditure is recognised when paid, any surpluses being carried forward within restricted funds until the trip or activity is completed. Interest receivable Interest receivable is included within the Statement of Financial Activities on a receivable basis. 1.4 Resources expended All expenditure is recognised in the period in which a liability is incurred and has been classified under headings that aggregate all costs related to that category. Where costs cannot be directly attributed to particular headings they have been allocated on a basis consistent with the use of resources, with central staff costs allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset's use. Other support costs are allocated based on the spread of staff costs. Costs of generating funds Costs of generating funds are costs incurred in attracting voluntary income, and those incurred in trading activities that raise funds. Charitable activities Charitable activities are costs incurred in the School's educational operations. Governance costs Governance costs include the costs attributable to the School's compliance with constitutional and statutory requirements, including audit, strategic management and Governors' meetings and reimbursed expenses. Such costs include both direct and allocated support costs. All resources expended are inclusive of irrecoverable VAT. Page 24

27 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2014 (continued) ACCOUNTING POLICIES (continued) 1.5 Going concern The Governors assess whether the use of going concern is appropriate, i.e. whether there are any material uncertainties related to events or conditions that may cast significant doubt on the ability of the School to continue as a going concern. The Governors make this assessment in respect of a period of one year from the date of approval of the financial statements. 1.6 Tangible fixed assets and depreciation All assets costing more than 1,000 are capitalised and with an expected useful life exceeding one year are capitalised. They are carried at cost net of depreciation and any provision for impairment. Where tangible fixed assets have been acquired with the aid of specific grants, either from the government or from the private sector, they are included in.the Balance Sheet at cost and depreciated over their expected useful economic life. The related grants are credited to a restricted fixed asset fund in the Statement of Financial Activities and carried forward in the Balance Sheet. Depreciation on such assets is charged to the restricted fixed asset fund in the Statement of Financial Activities so as to reduce the fund over the useful economic life of the related asset on a basis consistent with the school's depreciation policy. Where tangible fixed assets have been acquired with unrestricted funds, depreciation on such assets is charged to unrestricted funds. Grants provided to acquire fixed assets may be paid either to the School or directly to meet the cost of the fixed asset. Where costs have been paid directly and are part of the capital project, they have been recognised as restricted fixed asset funding. A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that the carrying value of any fixed asset may not be recoverable. Shortfalls between the carrying value of fixed assets and their recoverable amounts are recognised as impairments. Impairment losses are recognised in the Statement of Financial Activities. Depreciation is provided on all tangible assets, other than freehold land, at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases: Freehold property - 10 to 45 years Building Improvements - 4% straight line Fixtures, fittings and equipment - 25% straight line Computer equipment - 33% straight line Assets in the course of construction are included at cost. Depreciation on these assets is not charged until they are brought into use. 1.7 Leased Asset Rentals under operating leases are charged to the Statement of Financial Activities on a straight line basis over the lease term. Page 25