2020-08-31-accounts

Company Number: 03093684 Charity Number: 1048805

LORENDEN SCHOOL

ANNUAL REPORT FOR THE YEAR ENDED 31 AUGUST 2020

LORENDEN SCHOOL

ANNUAL REPORT FOR THE YEAR ENDED 31 AUGUST 2020

CONTENTS

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|||||||| |---|---|---|---|---|---|---| |Page| |Reference|and|administrative|details|2-3| |Report of the|trustees|4-11| |Statement of|trustees’|responsibilities|12| |Auditor’s|report|13-15| |Financial|statements:| |Statement|of|financial|activities|16| |Balance|sheet|17| |Statement|of|cash|flows|18| |Notes|to the|financial|statements|19|—|30|

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LORENDEN SCHOOL

ANNUAL REPORT FOR THE YEAR ENDED 31 AUGUST 2020

REFERENCE AND ADMINISTRATIVE DETAILS

Name	Lorenden School
Company number	03093684
Charitynumber	1048805
Registered office	Lorenden PreparatorySchool
	Painter’s Forstal
	Faversham
	Kent
	ME13 OEN
Keymanagement	Mrs K Uttley, Headteacher
Personnel	Mr A Collings, Bursar and Clerk tothe Governors
Bankers	Barclays BankPLC
	9 St Georges Street
	Canterbury
	Kent CT12J)X
Solicitor	PothecaryWithamWeld
	70 St George’s Square
	London
	SW1V 3RD
Auditor	RSM UK Audit LLP
	25 Farringdon Street
	London
	EC4A4AB

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LORENDEN SCHOOL

ANNUAL REPORT FOR THE YEAR ENDED 31 AUGUST 2020

REFERENCE AND ADMINISTRATIVE DETAILS (Continued)

Governors

The directors of Lorenden School are also the governors.

Those who served as governors during the year and up to the date of signature of the annual report were as follows:

Mrs LJ Cocking LC and Chair Mrs SA Adley Resigned 31.08.2020 Mrs G Baker Appointed 01.09.2019 Mrs S Barrett LC Resigned 31.12.2019 DrC L Bounds LC Mr R Boyd-Howell LC (Chair) Mrs P C Edgar Resigned 31.08.2020 Mrs AL Fontanelli LC Mr M P Godden Mr AJ Gough MrsJ LGray LC Mr P Harland LC Appointed 01.09.2019 RevJ Hellyer Mr D Hinchliffe Appointed 01.09.2019 Mr P T GHobbs Mr K Jones Resigned 31.12.2019 Mr L Leslie LC Appointed 01.09.2019 M J Moore LC Rev M Moul Resigned 31.08.2020 Mr J Sotillo Mrs C Woodley Appointed 01.01.2021

Members of the Lorenden Committee are designated by LC.

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LORENDEN SCHOOL

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2020

The trustees present their report and the financial statements of Lorenden School (the charitable company) for the year ended 31 August 2020.

The financial statements have been prepared in accordance with the accounting policies set out in the notes to the financial statements and comply with the Charities Act 2011, the Companies Act 2006, the Memorandum and Articles of Association of the charitable company, and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019).

REFERENCE AND ADMINISTRATIVE DETAILS

Lorenden School runs Lorenden Preparatory School (the School) which was founded in 1993. The charitable company’s reference and administrative details are presented on pages 2 and 3 of this annual report.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document

The charitable company is governed by its Memorandum and Articles of Association last updated on 31 August 2017.

Governing body and organisational structure

The School has a close connection to Kent College Canterbury which is part of the Methodist Independent Schools Trust (registered charity no. 1142794) (MIST). MIST is the sole member of Lorenden School. The Governors of Kent College Canterbury, who are also the directors of Lorenden School, delegate operational governance to a body of Governors the, Lorenden Committee who operate under terms of reference set by the Trustees. The members of the Lorenden Committee are shown on page 3.

The day to day management of the School is delegated to the Headteacher, supported by the Bursar.

The remuneration of key management personnel is set by the Governors, with the policy objective of providing appropriate incentives to encourage enhanced performance and rewarding them fairly and responsibly for their individual contributions to the School’s success.

A pay scale for Headteachers is in place for all schools administered by Methodist Independent Schools Trust, whichis benchmarked against the AGBIS salary survey ona regular basis. This provides guidance for Governors when setting the pay of the Headteacher.

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LORENDEN SCHOOL

REPORT OF THE TRUSTEES (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

For other staffa number of criteria are used in setting pay including:

• nature of the role and responsibilities

• competitor salaries inthe area

• the sector average salary for comparable positions

• trends in pay

This is kept under annual review.

Recruitment and training of trustees

Trustees are appointed by the Methodist Independent Schools Trust (MIST). Appointments are for a period of three years which is renewable. The induction of new Trustees is the responsibility of the Chair and the Clerk; an information pack of relevant documents is provided. All Trustees undertake annual safeguarding training.

Group structure and relationships

The School operates in close conjunction with the Methodist Independent Schools Trust (MIST), which is its sole member. Consolidated accounts are prepared by MIST for all the schools andthe other funds under its control. The School also works in association with a number of other independent schools in England and Wales with a Methodist foundation on anumber of projects.

The School is in membership of The Independent Association of Prep Schools (IAPS).

Auditor

RSM UK Audit LLP has indicated its willingness to continue in office.

Statement as to disclosure of information to the auditor

So far as the trustees are aware, there is no relevant audit information of which the charitable company's auditor is unaware. Additionally, the trustees have taken all the necessary steps that they ought to have taken as trustees in order to make themselves aware of all relevant audit information and to establish that the charitable company's auditor is aware ofthat information.

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LORENDEN SCHOOL

REPORT OF THE TRUSTEES (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

OBJECTIVES AND ACTIVITIES

Charitable objects

The Methodist Church is engaged in education as part of its Christian mission in the world. Its schools will look to extend the Methodist ethos and characterand contribute to diversityin education.

Aims and intended impact

The School educates and prepares pupils of the age three to eleven years for their move into secondary education. The School aims to ensure that pupils receive a broad education so as to allow them to maximise the opportunities presented in future life. This education is based on the belief that individuals can only enjoy their rights in a democratic community while discharging their responsibilities.

At Lorenden the children are made aware oftheir[heritage] and[ their][responsibility][ for] the care[ of][ their] environment. They are taught torespect adults, one another and their school. Self- discipline and selfreliance are considered essential. The value of tradition is deemed to give a sense of continuity and stability. The children are taught the role that faith can play in their lives without giving emphasis to any particular faith.

Objectives and strategies for the year

Key objectives for 2019-20:

• e Tocontinue toprovide a high quality education and wide ranging opportunities for all pupils. e Maintaina high level of pastoral care and enable the children to learn in a safe and secure environment.

• e Continue to ensure that staff morale and wellbeing is maintained ata high level.

• e Build on the relationships with Kent College Canterbury and The Methodist Independent Schools Trust.

These and other objectives have been successfully met during the year in part as a result of the following strategies:

• e Effective recruitment of staff.

• e Supporting stafftraining needs.

• e Identifying and supplying appropriate teaching resources.

• e Supporting and encouraging pupil’s behaviour by a variety of rewardschemes.

• e Maintaina robust and effective attitude towards child protection.

• e Identify areas of potential collaboration with Kent College Canterbury.

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LORENDEN SCHOOL

REPORT OF THE TRUSTEES (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

Bursary and grant making policy

Access to the education we offer should not be restricted to those who can afford our fees. Prior to joining the Methodist Independent Schools Trust in 2015 the School had provided a limited number of Bursary Awards to families who otherwise would not be able to afford the fees. Due to the restricted funding available these Bursaries were limited both in value and quantity awarded.

In 2016 the School extended the scheme to provide a means tested Bursary of up to 100% ofthe fee cost for entry at Year 3. The first pupil to benefit from this Bursary joined the School in September 2017.

Volunteers

Parents help at the School, particularly by fundraising for specific projects via the Friends of Lorenden (Preparatory School) a separately registered charity (1098259).

Public benefit

The Trustees have given careful consideration to the Charity Commission’s guidance on public benefit and confirm that they have given due regardto this guidance. The School provides public benefit by:

• e Providing education to 102 Year R to Year 6 children during the year, an estimated saving to the public purse of approximately £346,000 (calculated on the basis of the 2019-20 Dfe minimum funding level per primary pupils of £3,400).

• e Offering assistance with fees for pupils under the age of five via the local authority Early Years Funding Scheme; this benefits pupils attending Kindergarten.

• e Operating schemes that provide discounted fees for siblings of existing pupils and children of staff. These schemes enable a number of children to attend Lorenden without which they might not have the opportunity to do so.

• e Assisting local schools, charitable organisations and residents with resources such as transport, sports facilities anda variety of entertainment.

• e Activities undertaken by the School during the year enabled donations to be made to six separate charities.

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LORENDEN SCHOOL

REPORT OF THE TRUSTEES (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

ACHIEVEMENTS AND PERFORMANCE

The School provides education for children aged 3 to 11 and is limited in its planning consent to a maximum of 120 pupils.

The School provides a well-rounded education based on a wide curriculum which includes modern languages and forest school activities. This prepares children for the schools most suited to their individual needs and to that end this has again been a most successful year.

Sport has continued to have high priority. Excellent coaching for both boys and girls has ensured that we are able to hold our own against much bigger schools. Sports and craft clubs take place at lunchtime and after school. Children also have the opportunity for swimming, dance, drama and archery. Music continues to feature strongly within the School with over half the children having individual instrumental and singing lessons.

Children are also able to benefit from individual speech and drama tuition and class based musical movement and dance tuition. A school poetry competition is run in which every child in the School is encouraged to participate.

There have been concerts, visits by theatre companies, science, art and music workshops, along with a varietyof outings to museums, the theatre and historic buildings.

A wide range of prizes was awarded reflecting the School's commitment to encouraging effort and success inall areas of school life.

Our parents’ association "Friends of Lorenden (Preparatory School)" (Registered charity no. 1098259) has continued to provide valuable support for the School's activities. The funds raised were used to purchase various resources for the School including books for the refurbished library.

We continue to build on the links we have established with the local secondary and primary schools and are continuing to make a concerted effort to share resources whenever possible.

Community links

During the year pupils, parents and staff raised funds for the following causes:

Children in Need Comic Relief Sports Relief Demelsa House Children’s Hospice Catching Lives Wildwood

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LORENDEN SCHOOL

REPORT OF THE TRUSTEES (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

Produce gathered at the time of the Harvest Festival was distributed to senior citizens in the parish and Faversham Food Bank; a nativity play and tea was held for the local community.

FINANCIAL REVIEW

The School’s principal source of income is fee income. All of the School’s expenditure was spent in advancement of its charitable objectives.

Reserves policy

The reserves policy of the group has been reviewed by Methodist Independent Schools Trust and that of the charity by its governors during the year. Free reserves are regarded as those unrestricted funds that have not been designated for any specific purpose and total £488,205 (2019: £498,979) at the yearend. The value of land and buildings are excluded except tothe extent that they have been used as collateral for loans, and are shown as designated property funds. The property fund totalled £427,807 (2019: £405,113) at the year end.

Methodist Independent Schools Trust and the Governors have carefully considered the level of reserves appropriate to be held at Group and School level, necessary for contingencies and movements in working capital. Having regardtothe likelihood of financial risks and mitigating factors including its group structure, it considers the target level of free reserves required to be the equivalent of six week’s costs, approximately 10% of income. In advising schools of the level required to be held locally, the Trust has also considered its ability to borrow against the security of property assets and the level of reserves held centrally. After taking these into account, schools are advised to operate within a range of 0% - 10%. The level of free reserves at the year-end was £10, 764 (2019: £39,509), being 0.9% (2019: 3.4%) of income.

Principal risks and uncertainties

The Governing Body is responsible for the managementofthe risks faced by the School, and a formal review of the Charity’s risk management processes is undertaken on an annual basis.

The main risks that the Governors have identified and the plans to manage those risks are:

• Reputation—the School’s success is built on its reputation for the education and wellbeing of our pupils.

• Wemanage this risk though safeguarding policies, staff recruitment policies, pastoral support for both pupils and staff and active identification and resolution of health and safety related issues.

• Money-our ability to continue is reliant on pupil fees and effectively managing costs.

• • We manage this risk by marketing activityto maintain pupil numbers, having a reputation for academic excellence and active cashflow management.

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LORENDEN SCHOOL

REPORT OF THE TRUSTEES (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

• Curriculum — academic excellence requires the most able teachers with state of the art facilities delivering the curriculum to able students.

• We manage this risk by combining competitive salaries, on-going investment in our estate and an approach to enrolment that works with supportive parents whose children have an appetite for learning.

Through the risk management processes established for the School, the Governors are satisfied that the major risks identified have been adequately mitigated where necessary. It is recognised that systems can only provide reasonable but not absolute assurance that major risks have been adequately mitigated.

Coronavirus Pandemic

During the period under review the Coronavirus disease (COVID-19) was declareda pandemic with strict controls imposed to contain the virus. Along with all schools in the UK Lorenden was unable to teach pupils on site from 23" March 2020 through to 1*t June 2020 when a number of year groups were able to return to the school. During the period of closure the school provided a comprehensive online offering which was well received by both parents and pupils. For the last two weeks of the summer term were able to open fully to all year groups.

This unforeseen event impacted on the financial performance for the year. In recognition of the change to online teaching the school provided a discount on the fees for the summer term. A proportion of this cost was offset by funds received from the Governments Job Retention Scheme and saving we were able to achieve through not operating on site.

Despite the issues caused by the pandemic the school has continued to successfully recruit new pupils and is able to move into the next academic year with confidence.

Going Concern

The Methodist Independent School's Trust (MIST) is ultimately responsible for the control and management of Lorenden School. Notwithstanding the net current liabilities of £48,137, the trustees consider that there are no material uncertainties about the charity's ability to continue as a going concern. The trustees have considered the ongoing impact of Covid-19 on the School with forecasts revised to reflect the impact and the future risks arising from the pandemic. The Trustees' review of the financial position, funds levels and future plans gives them confidence that the charitable company remains a going concern for the foreseeable future.

Therefore, at the date of approval of these financial statements, the trustees have a reasonable expectation that the charitable company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the trustees continue to adopt the going concern basis in preparation of the financial statements.

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LORENDEN SCHOOL

REPORT OF THE TRUSTEES (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

PLANS FOR FUTURE PERIODS

The School's Strategic Plan, as drawn up by the Senior Management Team, after consultation with the key stakeholders, and as approved by the Governors, provides the focus for the future development of the School. In particular, the Plan embraces the aspirations of the School for curriculum developments, the growth of marketing, pupil numbers, enhanced staffing and the development of the facilities.

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This report was approved by the trustees on Msg 2S 2021 and is signed on their behalf by:
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Mrs L Cocking wey
Chair of Governors
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LORENDEN SCHOOL

STATEMENT OF TRUSTEES’ RESPONSIBILITIES FOR THE YEAR ENDED 31 AUGUST 2020

The trustees (who are alsothe directors for the purposes of company law) are responsible for preparing the report of the trustees and the financial statements in accordance with applicable law and regulations.

Company law requires the trustees to prepare financial statements for each financial year. Under that law, the trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 the income and expenditure of the charitable company for that period. In preparing these financial statements, the trusteesare required to:

• e select suitable accounting policies and then apply them consistently;

• e observe the methods and principles in the Charities SORP;

• e make judgements and accounting estimates that are reasonable and prudent;

• e state whether applicable UK Accounting Standards have been followed subjectto any material departures disclosed and explained in the financial statements; and

• e prepare the financial statements onthe 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 2006. They are also responsible for safeguarding the assets ofthe charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF LORENDEN SCHOOL

Opinion onfinancial statements

We have audited the financial statements of Lorenden School (the charitable company) for the year ended 31 August 2020 which comprise the Statement of Financial Activities, the Balance Sheet, the Statement of Cashflows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).

• In our opinion, the financial statements:

• e give atrue and fair view of the state of the charitable company’s affairs as at 31 August 2020 and of its income and expenditure for the year then ended;

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

• e have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements inthe UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to goingconcern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

• e the trustees’ use of the going concern basis of accounting in the presentation of the financial statements is not appropriate; or

• e the trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the charitable company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorized for issue.

Other information

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

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF LORENDEN SCHOOL (Continued)

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

• e the information given in the report of the trustees for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• e the report of the trustees has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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

We have nothing to report in respect of the following matters inrelation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• e adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• e the financial statements are not in agreement withthe accounting records and returns; or

• e certain disclosures of trustees’ remuneration specified by law are not made; or

• e we have not received all the information and explanations we require for our audit; or

• e the trustees were not entitled to prepare the financial statements in accordance with the small companies’ regime and take advantage of the small companies’ exemption from the requirement to prepare a strategic report or in preparing the report of the trustees.

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement set out on page 12, the trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company, or to cease operations, or have no realistic alternative but to do so.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF LORENDEN SCHOOL (Continued)

Auditor’s responsibilities for the audit of the financial statements

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

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

{ f. dWiw Nicholas Sladden (Senior Statutory Auditor) For and on behalf of RSM UK AUDIT LLP, Statutory Auditor Chartered Accountants

25 Farrington Street London EC4A 4AB

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LORENDEN SCHOOL

STATEMENT OF FINANCIAL ACTIVITIES

(including an income and expenditure account)

FOR THE YEAR ENDED 31 AUGUST 2020

		Unrestricted	funds
		2020	2019
	Notes	£	£
INCOME AND ENDOWMENTS FROM:
Grants and Donations		3:120	3,413
Charitable activities:
School fees	S	1,153,543	1,126,628
Other educational income	4	12,060	13,568
Other Income	5	32,593	-
TOTAL		1,201,316	1,143,609
EXPENDITURE ON:
Charitable activities	6	(1,189,396)	(1,086,414)
TOTAL		(1,189,396)	(1,086,414)
NETMOVEMENT IN FUNDS		11,920	57,195
RECONCILIATION OF FUNDS:
Total funds brought forward		904,092	846,897
TOTALFUNDSCARRIEDFORWARD	16	916,012	904,092

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Company Number: 03093684

LORENDEN SCHOOL

BALANCE SHEET AS AT 31 AUGUST 2020

		2020	2019
	Notes	£	£
FIXED ASSETS:
Tangible assets	10	1,312,089	1,335,659
CURRENT ASSETS:
Stocks		2,975	4,529
Debtors	11	26,807	22,398
Cash at bank and in hand		139,829	202,925
		169,611	229,852
LIABILITIES:
Creditors: Amounts falling due within one year	12	(217,748)	(250,744)
NETCURRENT LIABILITIES		(48,137)	(20,892)
TOTALASSETS LESS CURRENT LIABILITIES		1,263,952	1,314,767
Creditors: Amounts falling due after more than one year	13	(347,940)	(410,675)
NET ASSETS		916,012	904,092
THE FUNDS OF THE CHARITY:
Unrestricted funds:
Property fund		427,807	405,113
General fund		488,205	498,979
TOTALCHARITYFUNDS		916,012	904,092

The financial statements were approved by the board of trustees and authorised for issue on Ticheamiy, ie.. 2021 and are signed on its behalf by:

Mrs Lorna Cocking Chair of Governors

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LORENDEN SCHOOL

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 AUGUST 2020

	2020	2019
	£	£
CASH FLOW FROM OPERATING ACTIVITIES:
Net income from the reporting period (as per statement of financial
activities)	11,920	57,195
Adjustments for:
Depreciation charges	55,212	53,117
Interest payable	11,929	14,812
(Increase)/Decrease in stocks	1,554	(4,529)
(Increase)/Decrease in debtors	(4,409)	(10,601)
(Decrease)/Increase in creditors	(31,496)	(12,364)
NETCASH PROVIDED BY OPERATING ACTIVITIES	44,710	97,630
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plantand equipment	(31,642)	(38,537)
NETCASH USED IN OPERATING ACTIVITIES	(31,642)	(38,537)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of borrowings	(64,235)	(42,823)
Interest payable	(11,929)	(14,812)
NETCASH USED IN FINANCING ACTIVITIES	(76,164)	(57,635)
CHANGE IN CASHAND CASH EQUIVALENTS INTHE REPORTING PERIOD	(63,096)	1,458
Cash and cash equivalents at the beginning ofthe reporting period	202,925	201,467
CASH AND CASH EQUIVALENTS ATTHE ENDOFTHE REPORTING PERIOD	139,829	202,925
ANALYSIS OFCASH AND CASH EQUIVALENTS
Cashatbankandinhand	139,829	202,925

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LORENDEN SCHOOL

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2020

at Accounting policies

Company information

Lorenden School is a charity incorporated in Enland and Wales. The registered office is Lorenden Preparatory School, Painter's Forstal Road, Painter's Forstal, Faversham, Kent, ME13 OEN.

The company's principal activity is disclosed in the report of the trustees.

Accounting convention

The financial statements have been prepared in accordance with the accounting policies set out below, under the historical cost convention and comply with the Charities Act 2011 the Companies Act 2006, the Memorandum and Articles of Association of the charitable company, and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019). The charitable company meets the definition of a public benefit entity under FRS 102.

The financial statements are prepared in Sterling, which is the functional currency of the charitable company. Monetary amounts in these financial statements are rounded to the nearest £.

The principal accounting policies are set out below.

Going concern

The Methodist Independent School's Trust (MIST) is ultimately responsible for the control and management of Lorenden School. Notwithstanding the net current liabilities of £48,137, the trustees consider that there are no material uncertainties about the charity's ability to continue as a going concern. The trustees have considered the ongoing impact of Covid-19 on the School with forecasts revised to reflect the impact and the future risks arising from the pandemic. The Trustees' review of the financial position, funds levels and future plans gives them confidence that the charitable company remains a going concern for the foreseeable future.

Therefore, at the date of approval of these financial statements, the trustees have a reasonable expectation that the charitable company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the trustees continue to adopt the going concern basis in preparation of the financial statements.

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LORENDEN SCHOOL

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

q Accounting policies (Continued)

Income

School fees and other educational income receivable are accounted for in the period in which the service is provided. Fees receivable are stated after deducting allowances and other remissions allowed by the school. Other educational income consists of extras, optional subjects and ancillaries charged to pupils.

Scholarship and bursary awards from restricted and designated funds are included as expenditure in the period for which they are given. Scholarships, bursaries and allowances from the general fund towards school fees are treated as a reduction in the fees.

All other types of income are accounted for on an accruals basis and recognised in the statement of financial activities when earned by the charitable company.

Donations and legacies are accounted for as and when the charitable company has entitlement, the amount involved can be reliably quantified and a transfer of economic benefit to the charitable company is probable.

Expenditure

Expenditure is recognised as soon as a liability is considered probable, discounted to present value for longer-term liabilities. Expenditure is accounted for on an accruals basis, inclusive of irrecoverable VAT.

Charitable activities comprise expenditure associated with teaching and school activities and include both direct and support costs.

Governance costs are those incurred in the governance of the charitable company and its assets and are mainly associated with constitutional and statutory requirements.

Lease rentals payable in respect of assets held under operating leases are charged to the statement of financial activities as they fall due.

NN

= 20

LORENDEN SCHOOL

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

1 Accounting policies (Continued)

Employee benefits - Pensions

Retirement benefits to employees of the charitable company are provided by the Teachers’ Pension Scheme (TPS) in respect of teaching staff and a defined contribution scheme in respect of all other staff.

The TPS is an unfunded scheme and contributions are calculated so as to spread the cost of pensions over employees’ working lives with the charitable company 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 quadrennial valuations using a projected unit method. The TPS is a multi-employer scheme but there is insufficient information available to use defined benefit accounting.

The TPS and the TPTGP are therefore treated as defined contribution schemes for accounting purposes and the contributions are recognised in the period to which they relate. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments.

Employee benefits - Other

Short term employment benefits including holiday pay are recognised as an expense in the period in which the services are received from the employee involved. Termination benefits are accounted for on an accruals basis as and when employment ceases.

Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost net of depreciation and any impairment losses. Depreciation is recognised so as to write off the cost of assets, other than land, less their residual values over their useful lives on the following basis:

New buildings 2% on cost Building improvements 2% on net book value Fixtures and equipment 5% to 33.33% on net book value

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to the statement of financial activities.

m2

LORENDEN SCHOOL

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

1 Accounting policies (Continued)

Fund accounting

The general fund comprises the accumulated surpluses of unrestricted income over expenditure, which are available for use in furtherance of the general objectives of the charitable company.

Designated funds are a particular form of unrestricted funds consisting of amounts, whic have been allocated or designated for specific purposes by the trustees. The use of designated funds remains at the discretion of the trustees.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other and bank

overdrafts.

Financial instruments

The charitable company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised when the charitable company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the financial asset is measured at the present value of the future receipts discounted at a market rate of interest.

~ 29)

LORENDEN SCHOOL

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

1 Accounting policies (Continued)

Classification offinancial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the charitable company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including trade and other payables, and loans from group undertakings, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest method.

2 Critical accounting estimates and areas of judgement

In the application of the charitable company’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Critical areas of judgement

In addition to the trustees’ assessment of the going concern status of the charitable company, the following other specific judgements, estimates and assumptions were critical to the preparation of these financial statements:

Useful economic lives of tangible fixed assets

The annual depreciation charge for tangible fixed assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. Useful economic lives and residual values are reviewed annually and reassessed where necessary to better reflect the actual usage of the assets involved.

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LORENDEN SCHOOL

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

3	School fees	2020	2019
		£	£
	Gross school fees chargeable	1,292,925	1,157,787
	Less:	Bursaries awarded to pupils	(44,687)
	Staff, sibling and other discounts and allowances	(94,695)	(13,759)
		1,153,543	1,126,628
4	Other educational income	2020	2019
		£	£
	Fees charged for optional subjects and pupils’ extras	12,060	13,568
	Other ancillary income	-	-
		12,060	13,568
5	Other Income	2020	2020
		£	£
	CoronavirusJobRetentionSchemegrant	32,593	-

The School has been eligible to claim additional funding in year from government support schemes in response to the coronavirus outbreak. The School furloughed some of its staff under the government's Coronavirus Job Retention Scheme. The funding received of £32,593 relates to staff costs in respect of staff which are included within note 9 below as appropriate.

6 Analysis of expenditure

6	Analysis of expenditure
					2020	2019
		Staffcosts	Depreciation	Other	Total	Total
		£	£	£	£	£
	Charitable activities:
	Teaching costs	738,514	.	40,733	779,247	709,190
	Welfare costs	37,351	-	56,741	94,092	96,031
	Premises costs	59,156	20,127	58,823	138,106	117,060
	Support costs	61,371	35,085	30,673	127,129	120,158
	Governance costs	-	.	19,177	19,177	17,440
	Charitable publicity costs	-	-	5,377	5,377	9,349
	Finance costs	-	-	26,268	26,268	17,186
		896,392	55,212	237,792	1,189,396	1,086,414
7	Governance costs				2020	2019
					£	£
	MIST fees				11,535	9,963
	Auditor's remuneration				5,040	5,040
	Other costs				2,602	2,437
					19,177	17,440

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LORENDEN SCHOOL

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

8	Net income
		2020	2019
		£	£
	Net income for the year is stated after charging:
	Amounts payable under operating leases	1,320	1,320
	Depreciation on tangible fixed assets	55,212	53,117
	Interest payable on loans	11,929	14,812
	Auditor's remuneration:
	Audit ofthe financial statements	5,040	5,040
9	Staff costs	2020	2019
		£	£
	The aggregate staff costs during the year comprised:
	Wages and salaries	723,166	646,832
	Social security costs	60,612	55,702
	Pension costs	112,614	75,131
	Termination payments	-	5,000
		896,392	782,665
		2020	2019
		No.	No.
	The average number ofemployees during the year comprised:
	Teaching staff	26	25
	Other staff	10	6
		36	31
		2020	2019
		No.	No.
	The average number of employees during the year on the full
	time equivalent basis comprised:
	Teaching staff	17	16
	Other staff	6	5
		23	2A.
	No ofemployees across the SchoolGroup in bandsshown:
	£60,001 - £70,000	-	dL.
	£70,001-£80,000	1	-

The key management personnel of the charitable company are the governors and the senior management team of the school. The governors received no remuneration for their services in the current or previous year. The aggregate remuneration of the other key management personnel, including employer's national insurance contributions, was £208,419 (2019: £196,331).

Neen ne nn

hE nc

LORENDEN SCHOOL

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

ee	ee	ee	ee	ee	ee
10	Tangible assets	Land and	Fixturesand	Vehicles	Total
		buildings	equipment
		£	£		£
	Cost:
	As at 1September 2019	1,135,686	739,611	48,961	1,924,258
	Additions	-	31,642	-	31,642
	As at 31 August 2020	1,135,686	771,253	48,961	1,955,900
	Depreciation:
	As at 1 September 2019	280,911	274,490	33,198	588,599
	Charged forthe year	20,127	30,794	4,291	55,212
	As at 31 August 2020	301,038	305,284	37,489	643,811
	Net book value:
	As at 31 August 2020	834,648	465,969	11,472	1,312,089
	As at 31 August 2019	854,775	465,121	15,763	1,335,659
11	Debtors			2020	2019
				£	£
	Amounts falling due within one year:
	Fee debtors			20,520	13,752
	Other debtors			6,287	8,646
				26,807	22,398
12	Creditors: Amounts falling due within	one year		2020	2019
				£	£
	Trade Creditors			7,419	9,843
	Deposits			3,650	4,050
	Prepaid fees (note 14)			74,072	103,237
	Loans (note 15)			85,651	85,651
	Taxation and social security costs			15,438	13,812
	Other creditors			13,351	11,752
	Accruals			14,322	18,544
	Amounts owed to group undertakings			3,845	3,855
				217,748	250,744

RS

«26=

LORENDEN SCHOOL

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

1. Creditors: Amounts falling due after more than one year

		Due within	Due within	Due within	Due after	2020	2019
		1to2years	2to5 years		5 years	Total	Total
		£		£	£	£	£
	Deposits	4,250		9,000	13,500	26,750	25,250
	Loans (note 15)	64,238		192,714	64,238	321,190	385,425
		68,488		201,714	77,738	347,940	410,675
14	~=Deferred income
	Prepaid fees
	Parents pay for fees in advance for pupils. Movements during the year were as follows:
						2020	2019
						£	£
	Balance brought forward at 1 September					103,237	89,643
	Amounts received during the year					74,072	103,237
	Amounts recognised as income during the year					(103,237)	(89,643)
	Balance carried forward	at 31 August				74,072	103,237
15	Loans
	The charitable company	has been provided with loan funding from the Methodist Independent
	Schools Trust (MIST). The loan accrued interest			at a rate of2.25% above the base rate ofthe group's
	bankers.
16	The funds ofthe charity	Balance at					Balance at
		1 September					31 August
		2019		Income	Expenditure	Transfer	2020
		£		£	£		£
	Unrestricted funds:
	Propertyfund	405,113		-	-	22,694	427,807
	General fund	498,979	1,201,316		(1,189,396)	(22,694)	488,205
		904,092	1,201,316		(1,189,396)	-	916,012
		Balance at					Balance at
		1 September					31 August
		2018		Income	Expenditure	Transfer	2019
		£		£	£		£
	Unrestricted funds:
	Propertyfund	361,002		-	-	44,111	405,113
	General fund	485,895	1,143,609		(1,086,414)	(44,111)	498,979
		846,897	1,143,609		(1,086,414)	-	904,092

During the year a transfer of £22,694 (2019: £44,111) between the Property fund and General fund for depreciation on the land and buildings and repayment of the loan

« 27 =

LORENDEN SCHOOL NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

aa

17 Operating lease commitments

Lessee

The charitable company has entered into operating leases in respect of certain items of school equipment. At the balance sheet date, the charitable company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

	2020		2019
		£	£
Within one year	318		1272
Between one and two years	-		318
Between two and five	.		.
	318		1590

18 Pensions

Retirement benefits to employees of the charitable company are provided by the Teachers' Pension Scheme (TPS) in respect of teaching staff. The school contributes to the pensions of it's non teaching support staff through an auto-enrolment arrangement. These contributions are part of a defined contributions scheme administered by the Pension Trust.

The TPS is an unfunded multi-employer defined benefits pension scheme governed by The Teachers’ Pensions Regulations 2010 (as amended) and The Teachers’ Pension Scheme Regulations 2014 (as amended). Members contribute on a “pay as you go” basis with contributions from members and the employer being credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament.

by the Government Actuary’s Department. The most recent actuarial valuation of the TPS was prepared as at 31 March 2016 and the Valuation Report, which was published in March 2019, confirmed that the employer contribution rate for the TPS would increase from 16.4% to 23.6% from 1 September 2019. Employers are also required to pay a scheme administration levy of 0.08% giving a total employer contribution rate of 23.68%.

The 31 March 2016 Valuation Report was prepared in accordance with the benefits set out in the scheme regulations and under the approach specified in the Directions, as they applied at 5 March 2019. However, the assumptions were considered and set by the Department for Education prior to the ruling in the ‘McCloud/Sargeant case’. This case has required the courts to consider cases regarding the implementation of the 2015 reforms to Public Service Pensions including the Teachers’ Pensions

On 27 June 2019 the Supreme Court denied the government permission to appeal the Court of Appeal’s judgment that transitional provisions introduced to the reformed pension schemes in 2015 gave rise to unlawful age discrimination. The government is respecting the Court’s decision and has said it will engage fully with the Employment Tribunal as well as employer and member representatives to agree how the discriminations will be remedied. A consultation was launched by the government on 16 July 2020, and closed to responses on 11 October 2020.

i

JR's

LORENDEN SCHOOL NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

18 Pensions (Continued)

The TPS is subject to a cost cap mechanism which was put in place to protect taxpayers against unforeseen changes in scheme costs. The Chief Secretary to the Treasury, having in 2018 announced that there would be a review of this cost cap mechanism, in January 2019 announced a pause to the cost cap mechanism following the Court of Appeal’s ruling in the McCloud/Sargeant case and until there is certainty about the value of pensions to employees from April 2015 onwards. The pause was lifted in July 2020 and the government is preparing to complete the cost control element of the 2016 valuations, which is expected to be completed in 2021.

In view of the above rulings and decisions the assumptions used in the 31 March 2016 Actuarial Valuation may become inappropriate. In this scenario, a valuation prepared in accordance with revised benefits and suitably revised assumptions would yield different results than those contained in the Actuarial Valuation.

Until the consultation and the cost cap mechanism review are completed it is not possible to conclude on any financial impact or future changes to the contribution rates of the TPS. Accordingly no provision for any additional past benefit pension costs is included in these financial statements.

Contributions to pension schemes were made for all of the charitable company's employees at the standard rates applicable to the schemes involved. Contributions to the TPS amounted to £106,546 (2019: £71,010) during the year and contributions to the TPTGP amounted to £6,124 (2019: £4,121) during the year. At the balance sheet date, normal monthly pension contributions were outstanding and included in creditors of £13,050 (2019: £5,808) relating to the TPS and fnil (2019: fnil) relating to the TPTGP

19 Control

The charitable company's immediate and ultimate parent undertaking and controlling party is the Methodist Independent Schools Trust (MIST), a charitable company incorporated and registered in England and Wales. The company number for MIST is 07649422 and the charity number is 1142794.

The smallest and largest group in which the results of the charitable company are consolidated is that headed by MIST. Copies of the group financial statements may be obtained from the charitable company's registered office address.

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LORENDEN SCHOOL

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 AUGUST 2020

20 ~Related party transactions

During the year, the charitable company borrowed an additional £nil (2019: Enil) from the Methodist Independent Schools Trust (MIST). Total interest payable on the loans from MIST for the year amounted to £11,929 (2019: £14,812) and the total amount of loans outstanding at the balance sheet date was £406,837 (2019: £471,076).

During the year, MIST continued to provide a range of services to the charitable company, which are recharged on a termly basis. These charges cover management. The total amount recharged in the year was £11,535 (2019: £9,963). At the end of the year £3,845 was outstanding (2019 NIL).

MIST has purchased insurance to protect trustees from claims arising from negligent acts errors or omissions occuring while on charity business. The cost for the period ended 31 August 2020 was £560 (2019 £288).

None of the Trustees (or any person connected with them)received any gifts (2019,1- £35) or were reinbursed any expenses (2019, 1- £42).

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