Equitas Academies Trust

Transcription

1 Equitas Academies Trust (A Company Limited by Guarantee) Annual Report and Financial Statements Year Ended 31 August Company Registration Number: (England and Wales) Page 1 of 41

2 Equitas Academies Trust Contents Reference and Administrative Details... 3 Trustees Report... 4 Governance Statement Statement on Regularity, Propriety and Compliance Statement of Trustees Responsibilities Independent Auditor s Report to the Trustees of Equitas Academies Trust Independent Reporting Accountant s Assurance Report on Regularity Statement of Financial Activities for the year ended 31 August Balance Sheet as at 31 August Cash Flow Statement for the year ended 31 August Notes to the Financial Statements, incorporating: Statement of Accounting Policies Other Notes to the Financial Statements Page 2 of 41

3 REFERENCE AND ADMINISTRATIVE DETAILS Trustees R Linforth - Chair S Spencer Vice Chair H Roberts* - Principal and Accounting Officer C Davis Head Teacher Chilwell Croft (Resigned ) K Davis - Vice Chair (Resigned ) A Lofthouse Z Khan* (Appointed ) R Jesson* (Appointed ) D Carey (Appointed ) J Moore (Appointed ) M Bartley* (Appointed ) D Jones (Appointed ) V Camfield* (Appointed ) * members of the Finance and General Purposes Committee Members R Linforth S Spencer H Roberts A Lofthouse Senior Management Team: Principal and Registered Office Company Registration Number Independent Auditor Bankers Solicitors H Roberts Executive Principal C Salt Headteacher (Appointed ) N Lambert Headteacher (Appointed ) J Sweeney Deputy Headteacher (Appointed ) C Page Deputy Headteacher (Resigned ) C Simmons Deputy Headteacher (Appointed ) Phillips Street Aston Birmingham B6 4PZ (England and Wales) Chantrey Vellacott DFK LLP 35 Calthorpe Road Edgbaston Birmingham B15 1TS HSBC 130 New Street Birmingham B2 4JU Winkworth Sherwood Minerva House 5 Montigue Close London SE1 9BB Page 3 of 41

4 Trustees Report The Trustees present their annual report together with the financial statements and auditors report of the charitable company for the year ended 31 August. The annual report serves the purpose of both a trustees report, and a directors reports under company law. The trust operates 1 primary and 1 secondary academy in Birmingham. Its academies have a combined pupil capacity of 1370 and had a roll of 1291 in the school census on 16 June. Structure, Governance and Management Constitution The Academy Trust is a 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 Trustees of Equitas Academies Trust and are also the directors of the Charitable Company for the purposes of company law. The Charitable Company is known as Equitas Academies Trust. The Trust comprises the following academy schools: Aston Manor Academy Chilwell Croft Academy Details of the Trustees who served throughout the year, except as noted, are included in the Reference and Administrative Details on page 3. 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. Trustees Indemnities The Trust has purchased insurance to cover Governors and officers from claims arising from negligent acts, errors or omissions occurring whilst on Trust business. Details of the costs can be found in note 10 of the accounts. Method of Recruitment and Appointment or Election of Trustees The members of the Trust are responsible for the appointment of Governors except two parent Governors and two staff members who will be appointed through an election process directed by the Governing Body. In the event that these are not filled, the members of the trust are able to appoint to these positions. Policies and Procedures Adopted for the Induction and Training of Trustees Trustees are appointed based on the skills that they will bring to the Governing Body or based on a proposal to the Governing Body by representative groups. On appointment, Governors receive information relating to the Trust and attend a briefing and receive an induction pack on the role and responsibilities of Governors. Newly appointed Governors are also given a buddy governor. Page 4 of 41

5 Trustees Report (continued) During the year, Governors are offered all necessary training. Organisational Structure The governance of the Trust is defined in the Memorandum and Articles of Association together with the funding agreement with the Department for Education. All Governors are members of the full Governing Body. In addition Governors are members of committees who report to the full Governing Body. The sub-committees of the Governing Body are the: School Development Finance and General Purposes Audit Premises and Health & Safety Connected Organisations, including Related Party Relationships During the year, the Trust continued to work with the Titan Partnership, which included training our own teachers through the Initial Teacher Training Programme. Objectives and Activities Objects and Aims The Trust s object is to advance, for the public benefit, education for children aged 4 to 19 by establishing and maintaining, Academies which offer a broad and balanced curriculum. The Trustees vision is to create a culture of success to extend lifetime opportunities for young people and to do everything possible to encourage this. Aston Manor Academy is recognised by Ofsted as good with outstanding features. Students are offered a supportive, positive and dynamic learning environment that enables them to focus on their studies and extra-curricular activities. As a result, students achieve academic and technological advancement and extend their sporting, artistic and musical accomplishments. The Trust fosters personal development that helps students to find meaning in their lives and respond with creativity and determination to the challenges that arise through the rapid pace of social change. Objectives, Strategies and Activities The Trusts objectives for the year ending 31 st August were to raise the attainment level of all students through care and well-being, curriculum structure, teaching and learning, and leadership development. Student roll the total number on roll for the year to 31 st August was 911 for Aston Manor Academy and 383 for Chilwell Croft Academy. Admissions Aston Manor Academy is currently over-subscribed with a waiting list for each year group. Attendance the attendance level achieved for the period was 95.29% for Aston Manor Academy and 94.69% for Chilwell Croft Academy. Page 5 of 41

6 Trustees Report (continued) Permanent exclusions the aim is to have permanent exclusions only in exceptional circumstances. Aston Manor Academy had no permanent exclusions during the year to 31 st August and Chilwell Croft Academy has 1. Staffing the average number of (full time equivalent) staff employed during the year to 31 August was 160. Public Benefit The Trust will promote for the benefit of community members of Aston/Newtown and the surrounding area the provision of facilities for recreation or other leisure time activities. The Academy already works in partnership with Phoenix United and Mount Zion Church in enabling them to use their facilities. The Multi Academy Trust Governors have complied with their duty to have due regard to the guidance on public benefit published by the Charity Commission in exercising their powers of duties. STRATEGIC REPORT Achievements and Performance Tables 1, 2 and 3 below provide a summary of the Academy s performance in the summer examination season. Table 1. Summary of KS2 SAT examination results KS2 SAT results Achieving Level 4 or above in Reading/Writing/Maths 74% Achieving Level 4 or above in Reading 82% Achieving Level 4 or above in Writing 82% Achieving Level 4 or above in Maths 82% Making expected progress in Reading 94% Making expected progress in Writing 97% Making expected progress in Maths 89% Please note These figures are provisional Table 2. Summary of GCSE examination results GCSE 5A*-C 72% 5A*-C Inc. English and Maths 56% 5A*-G 100% 5A*-G Inc. English and Maths 59% 1A*-G 100% Page 6 of 41

7 Trustees Report (continued) Table 2. Summary of A-Level and equivalent study examination results A Level Average points score per candidate Average points score per entry % of students achieving 3 A*- E grades 78% % of students achieving 2 A* - E grades 98% % of students achieving 1 A* - E grades 100% Please note These figures are provisional Key Performance Indicators The key set of data that is used for Key Stage 4 performance and target setting is pupils Key Stage 2 attainment. The Key Stage 2 levels which the pupils have achieved prior to joining the Academy and we base our Key Stage 4 targets on four levels of progress from pupils Key Stage 2 levels. Our Key Stage 5 target setting process is based on the ALPS tool, which generates aspirational targets for AS/A2 subjects based on the students Key Stage 4 average points score. The ALPS tool also compares our actual and forecasted performance against averages. Going Concern After making appropriate enquiries, the Board of Trustees 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 Statement of Accounting Policies. Financial Review The Trust s financial position demonstrates total income of 10,050,691 with a surplus at the 31 August of 682,885. The surplus has been allocated to reserves. The reserves will be utilised for continuous improvement and for projects for the repair and replacement of educational equipment and materials. Reserves will also be allocated to the repair, replacement and updating of the Trust s buildings its plant, equipment and contents. The principal source of funding is derived from the EFA under the General Annual Grant. This totaled 7,540,890 across the Trust. A strategic school improvement plan is prepared and reviewed each year by the Governors in order that reserves can be prioritised and spent according to the needs of the Trust. The principal financial management policies adopted in the year are: Conducting regular financial reviews of income and expenditure versus planned budgets at the Governors Finance Committee meetings. Consideration as to whether the financial income demonstrates a robust and stable position enabling the provision of sufficient quality resources to fulfill the Trust s educational obligations. Reserves carried forward at 31 August will be utilised as part of the medium and long term plans of the Trust to improve and update its educational resources, materials and equipment, and additionally provide a continuous improvement plan to maintain and repair the site and facilities. Page 7 of 41

8 Trustees Report (continued) Reserves Policy The level of reserves held at 31 August is 17,040,293. The value of free reserves held at 31 August is 563,285. The reserves will be allocated and spent as part of the Academy Improvement Plan to update, improve and maintain its facilities and resources. This reserve has been built up in order to provide sufficient working capital and to provide a cushion to deal with unexpected emergencies. In future years budgets are due to be decreased, we will use some of this reserve to support staff costs and avoid redundancies as far as possible. We also will endeavour to keep class sizes as small as possible in order to support the quality of learning. Investment Policy The Governors have decided that funds that the Trust does not immediately need to cover anticipated expenditure are invested in such a way as to maximise the Academy s income but with minimal risk. The Academy does not consider the investment of surplus funds as a primary activity, rather as a result of good stewardship and as and when circumstances allow. The Trust had invested the sum of 500,540 in a HSBC Money Market account as at 31 August. This is a short term investment. The object of this account is to hold the reserves at low risk. The Trust does not have any endowment funds. Principal Risks and Uncertainties The Trust has implemented a risk register and a risk review process that is reviewed termly. The objectives will be determined, and where it is considered necessary, measures of control and mitigation in order to manage risk will be put in place. The principal risks are the loss of reputation through falling standards, falling student rolls and failure to safeguard the students of the Trust. Key controls in place are: An organised structure with defined roles, responsibilities and authorisation levels Terms of Reference for the committees of the Governing Body Financial planning, budgeting and regular management reporting highlighting areas of financial risk Formal written and published policies for employees Vetting procedures as required by law for the protection of the vulnerable. The Trust has recognised its share of the Local Government Pension Scheme (LGPS) assets and liabilities in accordance with Financial Reporting Standards no.17. A deficit has been recognised at 31 August. Future contribution rates are adjusted so as to reduce this deficit. Risk Management The Governors have assessed the major risks to which the Trust is exposed, in particular those related to the operations and finances of the Trust, and are satisfied that systems are in place to mitigate any exposure to major risks. Page 8 of 41

9 Trustees Report (continued) A formal review of the Trust s risk management process is undertaken on an annual basis and key controls in place include: Formal agendas for all committee activity Terms of reference for all Governing Body delegated committees under the direction of the Governing Body Pecuniary interests of Governors reviewed at each meeting Comprehensive budgeting and management reporting Established organisational structure and clear lines of reporting Formal written policies Clear authorisation and approval levels Vetting procedures as required by law for the protection of the vulnerable It is recognised that systems can only provide reasonable but not absolute assurance that major risks have been adequately managed. Plans for Future Periods The Trust strives to continually improve levels of attainment for all students, equipping them with the qualifications, skills and character to follow their chosen pathway, whether it be into further and higher education or employment. The curriculum, the quality of teaching and learning and informed interventions are consistently reviewed to help every child achieve their full potential. The Trust believes that developing the whole child is critical to improving levels of attainment and in developing broader skills and character that will develop students commitment to lifelong learning and enrich their quality of life. To this extent, the Academy strives to provide exceptional behaviour and attendance management support to its students and to offer a broad range of extra-curricular activities. Funds held as Custodian Trustee on behalf of others Neither Equitas Academies Trust nor the Board of Directors/Trustees is acting as third party custodial trustees. Auditor 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 auditors, Chantrey Vellacott DFK LLP, are willing to continue in office and a resolution to appoint them will be proposed at the Annual General Meeting. Trustees report, incorporating a strategic report, approved by order of the board of trustees, as the company directors, on 08 December and signed on the boards behalf by: Professor R.Linforth Chair of Governors Page 9 of 41

10 Governance Statement Scope of Responsibility As Trustees, we acknowledge we have overall responsibility for ensuring that Equitas Academies Trust 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 Executive Principal, 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 the Trust and the Secretary of State for Education. They are 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 Trustees Report and in the Statement of Governors/Trustees responsibilities. The Trust boards for both schools merged into one board on 24 March. This resulted in a number of existing Trustees resigning and new Trustees appointed within the new Trust Board. Details of the significant changes are summarised in the tables below. The new Full Trust Board has formally met 2 times during the period. Attendance during the year at meetings of the Governing Body was as follows: Full Trust Board meetings Governor Meetings attended Out of a possible R Linforth 2 2 S Spencer 2 2 A Lofthouse 2 2 Z Khan (Appointed ) 2 2 R Jesson (Appointed ) 2 2 D Carey (Appointed ) 1 2 J Moore (Appointed ) 0 2 M Bartley (Appointed ) 2 2 D Jones (Appointed ) 1 2 V Camfield (Appointed ) 1 2 E Lawson (Appointed ) 0 2 Aston Manor Full Governor meetings Governor Meetings attended Out of a possible R Linforth 3 3 H Roberts 3 3 S Spencer 3 3 K Davies 1 3 A Lofthouse 3 3 K Osayande (Resigned ) 0 3 B French (Resigned ) 0 3 L Wickett (Resigned ) 0 3 S Clarke (Resigned ) 0 3 R Mahey (Resigned ) 0 3 Page 10 of 41

11 Governance Statement Scope of Responsibility (Continued) Chilwell Croft Full Governor meetings Governor Meetings attended Out of a possible H Hector 1 2 M James (Resigned ) 2 2 J Bennion (Resigned ) 2 2 C Davis (Resigned ) 1 2 K Davies (Resigned ) 1 2 C Page (Resigned ) 2 2 F Nwolisa (Resigned ) 1 2 H Roberts 2 2 L Sula (Resigned ) 1 2 J Young 2 2 D Carey 1 2 S Butt (Resigned ) 0 2 Changes in the board of the trustees is detailed on page 3. Finance and General Purposes Committee Equitas Academies Trust Governor Meetings attended Out of a possible Z Khan 2 2 R Jesson 2 2 M Bartley 2 2 V Camfield 1 2 Finance and General Purposes Committee Aston Manor Academy Governor Meetings attended Out of a possible R Linforth 1 1 H Roberts 1 1 The clerk and Marion Lower (company secretary) were also present at every meeting. Finance and General Purposes Committee- Chilwell Croft Academy Governor Meetings attended Out of a possible H Hector 0 1 C Davis (Resigned ) 0 1 K Davies (Resigned ) 0 1 F Nwolisa (Resigned ) 1 1 H Roberts 1 1 D Carey 1 1 The Finance and General Purposes Committees are subcommittees of the main board of Trustees whose purpose is monitor the financial performance of the Academies in the Trust. Page 11 of 41

12 Statement of Internal Control 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 ongoing process designed to identify and prioritise the risks to the achievement of the academy trust 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 Equitas Academies Trust for the year ended 31 August 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 Academy 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 ongoing process for identifying, evaluating and managing the Trust's significant risks that has been in place for the year ending 31 August 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 Academy Trust 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 Finance 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. 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 J. McCullough and D Field, Schools Financial Services employees, as Responsible Officers. This role includes giving advice on financial matters and performing a range of checks on the Academy Trust s financial systems. On a quarterly basis, the Responsible Officers (RO) report to the Governing Body on the operation of the systems of control and on the discharge of the Governing Body s financial responsibilities. Both Responsible Officers delivered their schedule of work as planned and no material control issues were noted. Review of Effectiveness As Accounting Officer, the Principal 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 Responsible Officers; the work of the external auditor; the financial management and governance self-assessment process; the work of the executive managers within the Academy who have responsibility for the development and maintenance of the internal control framework. Page 12 of 41

13 Statement of Internal Control (continued) The Accounting Officer has been advised of the implications of the result of their review of the system of internal control by the Finance and General Purpose Committees and a plan to address weaknesses and ensure continuous improvement of the system is in place. Approved by order of the members of the Governing Body on 08 December and signed on its behalf by: Professor R. Linforth Mrs. H. Roberts Chair of Governors Accounting Officer Page 13 of 41

14 Statement on Regularity, Propriety and Compliance As accounting officer of Equitas Academies Trust I have considered my responsibility to notify the academy trust board of trustees and the Education Funding Agency (EFA) 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. I confirm that I and the academy trust board 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. I 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 board of trustees and EFA. Mrs. H Roberts Accounting Officer 08 December Page 14 of 41

15 EQUITAS ACADMIES TRUST Statement of Trustees Responsibilities The Trustees (who act as Governors of Equitas Academies Trust and are also the directors of the charitable company for the purposes of company law) are responsible for preparing the Trustees report and the financial statements in accordance with the Annual Accounts Direction published by the Education Funding Agency (EFA), United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and applicable law and regulations. Company law requires the trustees to prepare financial statements for each financial year. Under company law the trustees 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 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 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 trustees 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 disseminations of financial statements may differ from legislation in other jurisdictions. Approved by order of the members of the board of trustees on 08 December and signed on its behalf by: Professor R. Linforth Chair of Governors Page 15 of 41

16 Independent Auditor s Report to the Trustees of Equitas Academies Trust We have audited the financial statements of Equitas Academies Trust for the year ended 31 August set out on pages 20 to 41. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the charitable company s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act Our audit work has been undertaken so that we might state to the charitable company s members those matters we are required to state to them in an auditors report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and its members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of Governors and auditors As explained more fully in the Governors' Responsibilities Statement, the Governors (who are also the directors of the 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. 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 charitable company'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 nonfinancial 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. In our opinion the financial statements: give a true and fair view of the state of the company's affairs as at 31 August 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; have been prepared in accordance with the requirements of the Companies Act 2006; and have been prepared in accordance with the Academies: Accounts Direction issued by the Education Funding Agency Page 16 of 41

17 Independent Auditor s Report to the Trustees of Equitas Academies Trust (continued) Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Governors' Report for the financial period 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. WILLIAM DEVITT FCA (Senior Statutory Auditor) for and on behalf of CHANTREY VELLACOTT DFK LLP Chartered Accountants and Statutory Auditor Birmingham 08 December Page 17 of 41

18 Independent Reporting Accountant s Assurance Report on Regularity to Equitas Academies Trust and the Education Funding Agency In accordance with the terms of our engagement letter dated 28 June and further to the requirements of the Education Funding Agency (EFA) as included in the Academies: Accounts Direction to, we have carried out an engagement to obtain limited assurance about whether the expenditure disbursed and income received by Equitas Academies Trust during the period 1 September to 31 August 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 Equitas Academies Trust and the EFA in accordance with the terms of our engagement letter. Our work has been undertaken so that we might state to Equitas Academies Trust and the 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 Equitas Academies Trust and the EFA, for our work, for this report, or for the conclusion we have formed. Respective responsibilities of Equitas Academies Trust s accounting officer and the reporting accountant The accounting officer is responsible, under the requirements of Equitas Academies Trust s funding agreement with the Secretary of State for Education dated 4 September 2012 and the Academies Financial Handbook, extant from 1 September, 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 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 period 1 September to 31 August 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 to issued by the 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 academy trust s income and expenditure. We have undertaken testing as appropriate in accordance with the Academies Accounts Direction to. This includes an evaluation of the control environment of the school, enquiry, analytical review and substantive testing. Page 18 of 41

19 Independent Reporting Accountant s Assurance Report on Regularity to Equitas Academies Trust and the Education Funding Agency (continued) 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 period 1 September to 31 August has not been applied to purposes intended by Parliament and the financial transactions do not conform to the authorities which govern them. Reporting Accountant Chantrey Vellacott DFK LLP Chartered Accountants Birmingham 08 December Page 19 of 41

20 Statement of Financial Activities for the year ended 31 August (including Income and Expenditure Account and Statement of Total Recognised Gains and Losses) Note Unrestricted Funds Restricted General Funds Restricted Fixed Asset Funds Total Total Incoming resources Incoming resources from generated funds: Voluntary income Transfer from Local Authority on conversion ,026,928 Activities for generating funds 2 198,292 17, , ,855 Investment income 3 2, , Incoming resources from charitable activities: Funding for the Academy's educational operations 4-8,802,743 1,028,896 9,831,639 8,707,594 Total incoming resources 201,224 8,820,571 1,028,896 10,050,691 11,926,650 Resources expended Cost of generating funds: Costs of generating voluntary income Fundraising trading 5 104, , ,242 Charitable activities: Academy s educational operations 5-8,374, ,651 9,105,557 8,169,324 Governance costs 7-158, , ,479 Total resources expended 5 104,091 8,533, ,651 9,367,806 8,533,045 Net incoming / (outgoing) resources before transfers 97, , , ,885 3,393,605 Gross transfers between funds 15 - (410,210) 410, Net income/(expenditure) for the year 97,133 (122,703) 708, ,885 3,393,605 Other recognised gains and losses Actuarial gains/(losses) on defined benefit pension schemes 24-65,000-65,000 53,000 Net movement in funds 97,133 (57,703) 708, ,885 3,446,605 Reconciliation of funds Total funds brought forward at 1 September Total funds carried forward at 31 August 466,152 (349,959) 16,176,215 16,292,408 12,845, ,285 (407,662) 16,884,670 17,040,293 16,292,408 The Trust s activities derive from acquisitions and continuing operations in the above two financial periods. Further analysis is provided in note 26. A Statement of Total Recognised Gains and Losses is not required as all gains and losses are included in the Statement of Financial Activities. Page 20 of 41

21 Balance Sheet as at 31 August Notes Fixed assets Tangible assets 11 16,807,560 16,127,372 Current assets Debtors , ,781 Cash at bank and in hand 1,574,187 1,487,067 2,176,518 1,765,848 Creditors: Amounts falling 13 (671,785) (291,812) due within one year Net current assets 1,504,733 1,474,036 Total assets less current liabilities 18,312,293 17,601,408 Long term liabilities 14 (40,000) (80,000) Net assets excluding pension liability 18,272,293 17,521,408 Pension scheme liability 24 (1,232,000) (1,229,000) Net assets including pension liability 17,040,293 16,292,408 Funds of the academy: Restricted funds Fixed asset fund(s) 15 16,884,670 16,176,215 General fund(s) , ,041 Pension Reserve 15 (1,232,000) (1,229,000) Total restricted funds 16,477,008 15,826,256 Unrestricted funds General fund(s) , ,152 Total unrestricted funds 563, ,152 Total funds 17,040,293 16,292,408 The financial statements on pages 20 to 41 were approved by the Governors, and authorised for issue on 08 December and are signed on their behalf by: Professor R Linforth Chair Company Number Page 21 of 41

22 Cash Flow Statement for the year ended 31 August Net cash inflow from operating activities Notes , ,605 Returns on investments and servicing of finance 20 2, Capital expenditure 21 (381,943) (116,133) Cash inherited on conversion 27 - (119,411) Increase in cash in the year 22 87, ,334 Reconciliation of net cash flow to movement in net funds Increase in cash in the year Net funds at 1 September 87,120 1,487, , ,733 Net funds at 31 August 1,574,187 1,487,067 All of the cash flows are derived from continuing activities in the current period, and continuing activities and acquisitions in the previous financial period. Page 22 of 41

23 Notes to the Financial Statements for the Year Ended 31 August 1. Statement of Accounting Policies Basis of Preparation The financial statements have been prepared under the historical cost convention in accordance with applicable United Kingdom Accounting Standards, the Charity Commission Statement of Recommended Practice: Accounting and Reporting by Charities ( SORP 2005 ), the Academies Accounts Direction to issued by the EFA and the Companies Act A summary of the principal accounting policies, which have been applied consistently, except where noted, is set out below. Going Concern The Trustees 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 company to continue as a going concern. The Trustees make this assessment in respect of a period of one year from the date of approval of the financial statements. Incoming Resources All incoming resources are recognised when the Academy Trust 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 Academy Trust 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. Donations Donations are recognised on a receivable basis where there is certainty of receipt and the amount can be reliably measured. Page 23 of 41

24 Notes to the Financial Statements for the Year Ended 31 August 1. Statement of Accounting Policies (continued) Other income Other income, including the hire of facilities, is recognised in the period it is receivable and to the extent the goods have been provided or on completion of the service. Donated Services and gifts in kind The value of donated services and gifts in kind provided to the Academy Trust are recognised at their open market value in the period in which they are receivable as incoming resources, where the benefit to the Academy Trust 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 Academy Trust s policies. Interest Receivable Interest receivable is included in the Statement of Financial Activities on an accruals basis. 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 that is 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 These are costs incurred in attracting voluntary income, and those incurred in trading activities that raise funds. Charitable activities These are costs incurred on the academy trust s educational operations. Governance Costs Governance costs include the costs attributable to the Academy s compliance with constitutional and statutory requirements, including audit, strategic management and Governors meetings and reimbursed expenses. All resources expended are inclusive of irrecoverable VAT. Tangible Fixed Assets Assets costing 1,000 or more are capitalised as tangible fixed assets and are carried at cost, net of depreciation and any provision for impairment. The assets acquired on conversion to academy status have been capitalised at their net book value brought forward and depreciation has continued to be provided over the original estimated life on the original cost price. Page 24 of 41

25 Notes to the Financial Statements for the Year Ended 31 August 1. Statement of Accounting Policies (continued) 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 Academy Trust s depreciation policy. Where tangible fixed assets have been acquired with unrestricted funds, depreciation on such assets is charged to the unrestricted fund. Depreciation is provided on all tangible fixed assets other than freehold land, at rates calculated to write off the cost of each asset on a straight-line basis over its expected useful economic life, as follows: Freehold Buildings 4.75% Leasehold Land and Buildings Term of lease Fixtures, fittings and equipment 10% ICT equipment 33% Motor Vehicles 20% Depreciation is charged to the academy s profit and loss account on an annual basis and a full year s depreciation is charged in the year of acquisition, regardless of the timing of acquisition. Assets in the course of construction are included at cost. Depreciation on these assets is not charged until they are brought into use. 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. Leased Assets Rentals applicable to operating leases where substantially all the benefits and risks of ownership remain with the lessor are charged to the Statement of Financial Activities on a straight line basis over the lease term. Taxation The Academy is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the Academy is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. Pensions Benefits Retirement benefits to employees of the Academy Trust are provided by the Teachers Pension scheme ( TPS ) and the Local Government Pension Scheme ( LGPS ). These are defined benefit schemes, are contracted out of the State Earnings-Related Pension Scheme ( SERPS ), and the assets are held separately from those of the Academy Trust. Page 25 of 41

26 Notes to the Financial Statements for the Year Ended 31 August 1. Statement of Accounting Policies (continued) The TPS is an unfunded scheme and contributions are calculated so as to spread the cost of pensions over employees working lives with the Academy Trust in such a way that the pension cost is a substantially level percentage of current and future pensionable payroll. The contributions are determined by the Government Actuary on the basis of quinquennial valuations using a prospective benefit method. As stated in Note 24, the TPS is a multi employer scheme and the Academy Trust is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis. The TPS is therefore treated as a defined contribution scheme and the contributions recognised as they are paid each year. The LGPS is a funded scheme and the assets are held separately from those of the Academy Trust in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a high quality corporate bond of equivalent term and currency to the liabilities. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date. The amounts charged to operating surplus are the current service costs and gains and losses on settlements and curtailments. They are included as part of staff costs. Past service costs are recognised immediately in the Statement of Financial Activities if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until vesting occurs. The expected return on assets and the interest cost are shown as a net finance amount of other finance costs or credits adjacent to interest. Actuarial gains and losses are recognised immediately in other gains and losses. Fund Accounting Unrestricted income funds represent those resources which may be used towards meeting any of the charitable objects of the Academy Trust at the discretion of the governors. Restricted fixed asset funds are resources which are to be applied to specific capital purposes imposed by the Education Funding Agency/Department for Education where the asset acquired or created is held for a specific purpose. Restricted general funds comprise all other restricted funds received and include grants from the Education Funding Agency/Department for Education. Page 26 of 41