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2024-03-31-accounts

AQA Education

A company limited by guarantee

ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024

Registered company number 03644723

Registered charity number 1073334

www.aqa.org.uk

AQA Education Directors’ and Trustees’ Report including Strategic Report

Contents

Who we are ......................................................................................................................................................................................... 3 Our purpose ........................................................................................................................................................................................ 3 Public benefit ..................................................................................................................................................................................... 3 Our aims, activities and strategy ....................................................................................................................................................... 3 Achievements and Performance ....................................................................................................................................................... 4 Qualifications and assessment ..................................................................................................................................................... 5 Supporting students and teachers ............................................................................................................................................... 6 Research and Innovation .............................................................................................................................................................. 7 Supporting our colleagues ............................................................................................................................................................ 8 Wider community .......................................................................................................................................................................... 9 Looking ahead .................................................................................................................................................................................... 9 Structure, governance and management ......................................................................................................................................... 9 Legal Status ................................................................................................................................................................................... 9 Group structure ............................................................................................................................................................................. 9 Governance and leadership ........................................................................................................................................................ 10 Trustee recruitment and induction ............................................................................................................................................ 12 Pay and Renumeration ................................................................................................................................................................ 12 Other Relationships ..................................................................................................................................................................... 12 Reference and administrative details .............................................................................................................................................. 13 The Charity Code of Governance – what it means to us ................................................................................................................. 14 Section 172(1) reporting .................................................................................................................................................................. 16 Stakeholder engagement............................................................................................................................................................ 16 Decision making .......................................................................................................................................................................... 17 Environmental policy ...................................................................................................................................................................... 18 Risk management ............................................................................................................................................................................ 21 Financial review ............................................................................................................................................................................... 22 Statement of Trustee’s responsibilities .......................................................................................................................................... 26 Independent auditors report ........................................................................................................................................................... 28 Statement of financial activities ...................................................................................................................................................... 32 Balance sheet ................................................................................................................................................................................... 33 Statement of cash flows................................................................................................................................................................... 35 Notes to the financial statements ................................................................................................................................................... 36 Legal and administrative details ..................................................................................................................................................... 83

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AQA Education Directors’ and Trustees’ Report including Strategic Report

Who we are

The Trustees of AQA Education present their annual report (incorporating the Strategic Report) and the audited financial statements for the year ended 31 March 2024. AQA is an education charity with more than 120 years of assessment expertise and knowledge. We are the most chosen general qualifications (GQ) awarding body in England.

We design and deliver rigorous and fair assessment to more than one million learners every year and believe that fair and inclusive assessment is at the heart of learning.

Our purpose

AQA exists solely to help learners succeed. This is reflected in our charitable purpose:

To advance education by enabling teachers and students to realise their potential

Our charitable objects as described in our Governing Document is to advance education for the benefit of the public including, without limitation, by the preparation, validation, accreditation, conduct and administration of: a) examinations for the award of general certificate of education, general certificate of secondary education and general national vocational qualification or such other certificates as may be substituted for them; and b) any other tests, examinations or other systems.

Public benefit

We are confident in our role as a charity. We deliver services to the public and meet the Charity Commission’s public benefit requirements, with specific attention to ensuring that our services benefit society through advancing education, increasing social mobility and promoting learning. We have complied with the duty in section 4 of the Charities Act 2011 to have due regard to public benefit guidance published by the Charity Commission.

Our aims, activities and strategy

We believe that everyone has a fundamental right to learn, and that’s why we aim never to let a learner down .

We care about education as a vehicle for social mobility and aim to equip learners with the knowledge and skills they require for the future, regardless of background or ability, through the provision of qualifications and assessments. This is underpinned by two of our strategic objectives:

To be successful, we need to cater to a diverse range of learners. We do this by offering a broad range of qualifications – including those that aren’t profitable – because we believe they have educational value. We pride ourselves in delivering fair and rigorous assessments, delivered on time to allow learners to progress on their journey. We cater for a breadth of learners, offering vocational courses through TQUK, a range of international qualifications through OxfordAQA and by conducting a range of research to make sure exams are accessible to all.

As well as using our world-class research to inform the accessibility of our exams, we use our expertise to contribute to the development of assessment policy and practice both in the UK and around the world. This is underpinned by two of our strategic objectives:

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Our aims, activities and strategies (continued)

To be successful, we not only need to stay relevant in the assessment world; we must help define it. We do this by working closely with the regulator and policymakers, feeding in the views of our customers and the young people who sit on our Student Advisory Group. Through our AQA Assessment Services function, we work in partnership with education ministries, exam boards, and education providers, to understand their needs and develop bespoke end-to-end assessment solutions to benefit learners and teachers both at home and abroad.

We are genuinely independent – none of our income goes to shareholders or a parent company – which means we always make decisions based on what’s best for schools, colleges, teachers, and learners. It also means any surplus we make goes back into improving education, our primary charitable purpose. This is underpinned by our strategic objective:

To be successful, we must address the needs of teachers so that they’re able to support learners effectively. By placing teachers – our customers – front and centre, we gain valuable insights into their needs allowing us to develop the right learning tools and CPD opportunities to further their understanding of assessment and enable them to prepare their students for exams.

We understand that to deliver quality assessment, research and services, we need a high-performing, expert workforce. This is underpinned by our strategic objective:

To be successful, we need to support colleagues’ professional development. We do this by offering in-house training and sponsored qualifications to provide opportunities and support them in their progression.

By offering diverse qualifications and reinvesting surplus into research and learning tools, we advance global education and empower teachers and students worldwide to realise their potential.

Achievements and Performance

Criteria for Success – Informed by the advice contained in the Charity Commission’s guidance on public benefit, we keep our educational aims, objectives and activities under continuous review, consider our achievements and the outcomes of our work and evaluate the successes and benefits. In addition, we consider how future activities will contribute to the agreed aims and objectives and help to equip learners with the knowledge and skills they require for the future.

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Achievements and Performance (continued)

Qualifications and assessment

Achievements at a glance:

As the leading UK exam board, issuing more than 4 million certificates* this year alone, we understand the importance of results for students with each one looking to take their next steps in their lives. That’s why our commitment to delivering the right results to students, on-time, remains paramount.

Our qualifications and assessments are closely linked to our strategic objective to secure our core which is targeted at optimising our core business processes and enhancing our ability to deliver exceptional service to our customers. We’re positioning ourselves for sustained excellence in the education sector with a renewed focus on assessment quality through various Continuous Improvement programmes.

Our Associates – often teachers – are integral to the work we do, completing a range of tasks and activities, such as writing assessment materials, and marking and moderating students work, so that we’re able to deliver assessments and results to students on time. As part of our Associates Programme, significant outcomes have been achieved, including streamlining of Associate roles so that they are simpler to understand, and enhanced terms for some roles. Elsewhere, we’re piloting changes to examiner standardisation, refining awarding and moderation processes, and streamlining data use for operational excellence. We’re prioritising assessment quality through targeted initiatives, including the establishment of a Head of Assessment Quality role and a zero-tolerance approach to assessment material errors (AMEs).

The start of 2024 also saw the 40th anniversary of our Unit Award Scheme which aims to build students’ confidence. Annually, the scheme awards over 40,000 students of all ages and abilities, giving them a clear path towards success, no matter what achievement looks like to them.

By securing our core operations, optimising customer delivery mechanisms, and maintaining a focus on assessment quality, we’re poised to sustain our position as a leader in the education sector, driving positive change for teachers, schools, and students nationwide.

Our qualifications and assessments are also closely linked to our strategic objective to diversify and grow. That’s why we’re exploring alternative markets for our assessment platforms and expertise, in order to serve more learners. AQA Assessment Services Ltd (AASL) has made notable strides in expanding our global assessment services. Collaborating with our subsidiaries like AlphaPlus, AASL has devised a comprehensive business plan to introduce the Global Assessment Services (GAS) offer to the market. Participation in major conferences like the Education World Forum and BETT have bolstered our international reputation, attracting interest from education ministries and stakeholders worldwide.

TQUK has continued on its growth trajectory. It has recently refined its strategy to ensure it is well placed to deliver future developments to benefit the vocational qualification and apprenticeship markets. Through TQUK, we’ve collaborated with learners, employers, and universities to create a new Level 6 Advanced Diploma in Applied Innovative Practice in Early Childhood Pedagogy and Care to aid learners’ progression. The qualification has been recognised by the DfE Early Years

*including general and vocational qualifications

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Achievements and Performance (continued)

Review Team and approved for funding by the ESFA (DfE) and enables application for Early Years Teacher Status (EYTS) and Qualified Teacher Status (QTS) programs, meeting the standard entry requirements for learners advancing to universities.

Through OxfordAQA, our international presence has been significantly augmented through the development of products tailored for specific regions like Pakistan and Egypt. Strategic partnerships with educational institutions in Pakistan and Indonesia underscore our commitment to expanding access to quality education globally. Additionally, the launch of new specifications and adaptations demonstrates our agility in catering to diverse educational needs across different markets, as does our work through AlphaPlus, working in collaboration with Talemia to produce 17 training modules for Early Childhood teachers in Saudi Arabia. This project will help to improve the outcomes of public and private school education by providing information on internationally recognised teaching methods and pedagogical approaches.

AlphaPlus is also working with the Organisation for Economic Co-operation and Development (OECD) to deliver the International Early Learning Child Well-being Study (IELS) in England on behalf of the Department for Education. IELS is an international survey that collects detailed information on key competencies of children across eight countries. It aims to help countries improve children’s early learning experiences in order to better support their development and overall well-being.

Through acquisitions, strategic partnerships, innovative product development, and active engagement in international forums, we continue to empower teachers, schools, and learners worldwide, thereby advancing our core charitable purpose.

Supporting students and teachers Achievements at a glance:

Activities to support students are closely linked to our strategic objective to be closer to our customers , making sure we’re working closely with teachers and students to ensure we provide what they want and need.

A significant focus of our customer engagement strategy is delivering new technology solutions for schools and colleges, such as AQA Stride, our fully funded GCSE Maths readiness diagnostic tool. Unlike any other adaptive assessment, these revolutionary tests rapidly identify what learners don’t know, saving teachers time and supporting them in closing the gaps. The test was made available to all schools and colleges in England from June 2024, whether or not they’re AQA customers. This represents a significant investment and dedication to our commitment to make assessment better, be it through sector leading research or innovative new products like this one.

Our Exampro products also support students preparing for exams and help minimise the burden on teachers. Exampro provides thousands of questions, mark schemes and examiner comments, aligned with 36 AQA qualifications allowing teachers to search for GCSE and A-level materials to create homework assignments, revision aids, topic tests, customised mocks and in-class teaching which build students' confidence alongside mock exam analysis and reporting for schools and Multi-Academy Trusts.

Testbase supports primary teachers in creating customised assessments and teaching materials in Maths and English, suitable for individuals, small groups, and entire classes, further enriched by Year 1 - 6 termly tests, reporting, and insights.

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Achievements and Performance (continued)

As well as connecting teachers to the right tools, we’re connecting them to their own teaching communities with our Curriculum Connect sessions, where teachers are able to join our curriculum experts who share updates, tips and resources to help them support their students. We’ve increased the number of sessions by 220% this year and they continue to be popular with an average booking per term of 6,544 teachers, a 204% increase on previous years.

We’ve improved our support offer for customers with more than 300 new or updated subject matter resources and a new ondemand assessment training programme, Inside Assessment, which includes 18 new video-based modules to help upskill teachers. We’ve also launched a new senior leadership team community which has delivered four webinars over the last year.

We’ve implemented a virtual assistant and live chat trial, designed to help customers quickly find what they need as well as offering immediate access to our trained colleagues for personalised support. This initiative not only improves the efficiency of customer service, but also enhances the overall customer experience by providing timely and relevant assistance.

Our Student Advisory Group (SAG) plays a huge role in shaping the work we do to support teachers and students and we continue to amplify their voice on topics that are critical to learners. This year, they’ve joined us at the British Educational Suppliers Association Conference, the Festival of Education and Associate Conferences, to take part in panel discussions where they have shared their perspectives on inclusivity in our GCSE English literature texts, Artificial Intelligence and internal projects. We also held a Parliamentary Reception at the Palace of Westminster, sponsored by Ben Everitt, former MP for Milton Keynes North, where alumni were invited to share their experience of the Group and our new Student Chair delivered a speech to senior education stakeholders. Members of the SAG also fed into our response to the Government’s consultation on the Advanced British Standard, giving us their insights and perspective on the consultation, which we presented to the Government.

By increasing the tools and training available to teachers and giving voice to students, we’re able to ensure we address their needs and support them effectively.

Research and Innovation

Achievements at a glance:

Our work in research and innovation is closely linked to our strategic objective to lead digital change. Through this objective we aim to be at the forefront of digital transformation within the education sector, spearheading initiatives aimed at leveraging technology to enhance assessment practices and support educators.

Our ‘AI for Assessment’ programme is exploring the potential of AI (alongside humans) to improve the quality and efficiency of assessment processes. Through initiatives such as automated marking of short-text responses and question paper error detection, we’ve identified opportunities to enhance marking quality assurance and streamline assessment procedures. Our focus on ethical AI development frameworks underscores our commitment to responsible technology integration in assessment practices.

By offering benchmarking tools and comparative analyses, we aim to empower educators with the resources needed to drive educational excellence and equity at both centre and MAT levels, and ultimately improve learner outcomes.

Our research and innovation is also closely linked to our strategic objective to shape the future targeted at influencing the educational landscape, particularly in service to teachers and students.

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Achievements and Performance (continued)

Our emphasis on digital innovation, specifically in digital exams, has garnered significant media coverage and attention. Through publications such as our Making it Click report and engagements at events like the Bett UK Conference, we’ve showcased the potential of digital exams to revolutionise assessment methods and improve educational outcomes for students.

We have worked with centres who offer GCSE Italian and GCSE Polish to gain greater insight into the teaching and learning practices of the two subjects and how students and teachers engage with digital technologies in the taught languages, both in and out of the classroom. We are using the findings to make recommendations regarding the support that we can offer to teachers and students to facilitate the transition to digital exams. We presented these findings at the Ofqual assessment seminar in March 2024 to raise awareness across the sector.

We are leading the development of a new, digital, on-demand assessment in numeracy, which is focused on the fundamental skills and knowledge that every young person needs to thrive in their adult life. After launching a new numeracy expert steering group, we were delighted to be invited to a meeting of the National Numeracy Council, chaired by Andy Haldane (former Chief Economist at the Bank of England). We presented our plans to the Council, which included top executives from Barclays, Capital One and Experian, and returned with many offers of support from its members.

Finally, in support of our commitment to Equality, Diversity and Inclusion, our research team held focus groups and interviews with special educational needs coordinators and exams officers. Participants in this study shared their views on access arrangements and how the future of accessibility might look, especially in relation to a shift from paper to digital exams. These findings informed our contribution to the Inclusive Educational Assessment Symposium in Cambridge in October 2023, where we engaged with other academics in the field of social exclusion, autism, dyslexia, and neurodivergent diagnoses, with the aim of linking academic studies to operational delivery of exams.

Our active involvement in consultations, such as the Department for Education's Advanced British Standard consultation, highlights our commitment to gathering diverse perspectives, including those of students through our Student Advisory Group. This engagement ensures that our responses to policy consultations are well-informed and representative of the educational community's needs.

Supporting our colleagues

Achievements:

Our commitment to colleagues is linked to our strategic objective to be AQA in all we do , in which we aim to create and deliver an environment where AQA and its people thrive.

Over the past year, we have completed the first phase of the Culture Programme, identifying current cultural attributes and defining future aspirations. Positive aspects such as purpose-driven work were acknowledged, alongside areas needing improvement like accountability deficits. We have initiated actions to bridge this gap, focusing on senior leadership behaviours and introducing initiatives like 90-day goals for all colleagues and embedding the Smart-Working approach.

We have recommitted to our Equality, Diversity and Inclusion (ED&I) People strategy and appointing an ED&I Lead to accelerate progress. We continue to have a variety of networks, including our LGBTQ+, Empowering Women, Ethnic Minority, disability and Neurodiversity networks. These allow colleagues to find support, raise awareness and have a voice in business decisions that affect the varied and diverse community we’re proud to have at AQA.

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Achievements and Performance (continued)

Our passion and commitment to the advancement of education extends to our colleagues who we continue to support with development and progression through sponsored qualifications and manager training.

Wider community

Our commitment to the wider community is also closely linked to our strategic objective to be AQA in all we do , which recognises and embraces our responsibility to positively impact our environment.

We have made significant strides in sustainability, engaging suppliers for emissions reduction strategies and exploring alternative packaging options to minimise environmental impact. New roles, such as the Sustainability Coordinator, demonstrate our commitment to sustainability reporting and initiatives. Our Net Zero pre-strategy was approved by our Board of Trustees in December 2023, which outlined proposals for us to achieve net zero carbon emissions along with the associated risks and challenges.

With fundraising initiatives and the allowance for each colleague to take five days off per year for charitable activities, we continue positively to contribute to our wider communities as well as our environment.

Looking ahead

In the coming year, we aim to continue optimising our operational processes in support of the best outcomes for learners and teachers and broadening our portfolio to ensure we meet the needs of learners and of society as a whole. In our research, we’ll be exploring the opportunities for AI to support learners and to give an additional layer of assurance across our key business processes.

For customers, we’ll be working to enhance the insights and data we provide to support them and plan to continue improving our digital offering and their experience. This includes launching a new website with improved support features, to provide customers with greater accessibility and convenience while accessing our services and resources. We will continue to focus on the development of formative assessment tools to improve learner outcomes and support teacher workload.

For our colleagues, we’ll continue working towards creating an inclusive work environment, where everyone can learn and thrive, and where all our people feel valued and a sense of belonging. We do this not only for our colleagues, but because we believe this is how we will best serve our customers and learners.

Sustainability continues to be a priority and will remain one in the coming years as we commit to the long-term objective of achieving net zero before 2050.

Structure, governance and management

Legal Status

AQA’s legal status is as a UK company limited by guarantee (Number: 3644723) and registered as a charity with the Charity Commission for England and Wales (Number 1073334). The role and duties of the trustees are therefore governed by Charity law and Company law. As a charitable company, AQA is regulated by the Charity Commission for England and Wales and Companies House and therefore must comply with the policies and guidance of both regulators. AQA operates under a set of Articles and a Memorandum of Association. The Articles of Association are the rules which deal with the charity’s status and regulate its internal management.

Group structure

AQA is an education charity and a leading provider of qualifications and support services for teachers and students. We also provide services through seven (2023: six) wholly-owned trading subsidiary companies: Doublestruck Limited (Doublestruck), AQA Assessment Services Limited (AASL), AlphaPlus Consultancy Ltd (AlphaPlus), Blutick Limited (Blutick), AC3 Solutions Limited (AC3), Training Qualifications UK Limited (TQUK) and GradeMaker Limited (GradeMaker), which along with AQA and AQA Commercial Services Limited (ACSL) make up the Group and are detailed below.

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Structure, governance and management (continued)

The financial statements of these subsidiaries are consolidated into this set of financial statements.

Governance and leadership

AQA is governed by the Board of Trustees who are responsible for our overall strategy, policy, educational initiatives and development, and for steering AQA to fulfil its educational and charitable objectives. The Chief Executive Officer is also a Trustee and member of the Board. Trustees meet at least five times a year. Each meeting agenda includes progress reports on major programmes, critical activities and strategy.

AQA's Executive Team is made up of ten individuals and led by the Chief Executive Officer. They are senior directors responsible for the day-to-day leadership and running of AQA, and the execution of its strategy and policies. Executive Team members may be invited to attend and present at Board meetings but do not have a vote in any decisions.

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Structure, governance and management (continued)

The Board of Trustees is led by a Chair, supported by Vice Chair, and has established governance and advisory committees. These committees include Trustee members that carry out work on behalf of the Board of Trustees and report back on their activities, including any recommendations. All the committees, except the Research Committee and Irregularities and Appeals Committee, are chaired by trustees and, except for the Committee Chairs Group, Awarding Standards Committee, Nominations Committee, Commercial Oversight Committee and Remuneration Committee, include both trustees and independent members within their membership.

Governance committees;

Advisory committees;

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Structure, governance and management (continued)

Trustee recruitment and induction

Our Trustees are volunteers with distinguished careers in education and a wide variety of other fields, who want to give time to support AQA’s work for teachers, students and the field of education. The Board of Trustees includes the Chief Executive Officer as a Trustee. They are aware of their legal responsibilities and take great care in their decision making and ensuring the organisation is operating to a high standard.

We regularly review board effectiveness to identify any skills gaps within the overall membership of the Board of Trustees and when a term of office comes to an end. When these are identified, vacancies are advertised and applicants are shortlisted via our internal recruitment team and interviewed by a panel with representatives from our Executive Directors and current Trustees who will make a recommendation to the Nominations Committee. This Committee will then make an endorsement to the Board of Trustees for approval.

Collectively, members must represent and be able to advise on the education sector, as well as the running of AQA and meeting our charitable objectives. With the aim of ensuring a representative Board of Trustees, we have been partnering with a search firm who specialise in identifying diverse talent for Trustee level positions. This has led to some great success over recent years, with several appointments made to the Board of Trustees and our various Committees who reflect the broad base of teachers and students we represent.

The Trustees engage in ongoing training and learning, with annual induction sessions for new joiners – existing Trustees are encouraged to attend this too for networking and refreshing knowledge. Trustees have open dialogue with Executive Team members on areas they wish to have deeper understanding of, and information sessions are scheduled appropriately.

Pay and Renumeration

The Board of Trustees and the Executive Team comprise the key management of AQA in charge of directing, controlling, running and operating the organisation. Details of trustees’ expenses, related party transactions and remuneration paid to the Chair of the Board of Trustees are disclosed in Note 10 to the financial statements.

We have a Remuneration Committee, established as a governance committee of the Board of Trustees, to advise the latter on the appropriate remuneration and terms of service for the CEO and the Executive Team, and trustees when required. Specifically, this Committee determines annually what increase, if any, should be applied to the CEO’s remuneration and agrees the Executive Team’s remuneration, based on specific data provided to the Committee.

The CEO is remunerated for his services in his role as CEO, and it is confirmed that no additional remuneration is payable or has been paid as a result of his appointment as a trustee.

Other Relationships

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Reference and administrative details

The Board of Trustees is, for company law purposes, also the Board of Directors and has ultimate responsibility for the Charity’s activities. It exercises its powers through the Chief Executive Officer (CEO) who is also a Trustee. AQA’s directors during the reporting year and up to the date of this report were:

Mr M Allen Mr J Dahl Dr A Hadawi Mr T Hall Mr C Hughes (CEO) Ms E Kitcatt Professor J Knowles Ms L Martini (term concluded 1 January 2024) Mr M Nicholson (term concluded June 2023, re-appointed 3 November 2023) Ms D O’Donoghue Mr M Ojja Mr M Orr Ms V Rhodes Ms P Smith Ms A Spackman (Chair) (tenure began 1 April 2024) Ms I Sutcliffe Mr M Turner Mr T Jackson (tenure began on 1 May 2024) Dr H A Ewing (tenure began on 1 April 2024) Ms A Frost (tenure began on 1 April 2024) Mr J van Wijngaarden (Chair) (tenure ended 31 March 2024)

A number of the trustees also served as chairs of governance and advisory committees during the reporting year, as follows:

Governance committees; Committee Chairs Group Mr J van Wijngaarden (to 31 March 2024) Ms A Spackman (from 1 April 2024) Finance Committee Ms P Smith Audit, Risk and Compliance Committee Mr M Turner Awarding Standards Committee Mr J van Wijngaarden (to 31 March 2024) Ms A Spackman (from 1 April 2024) Nominations Committee Mr J van Wijngaarden (to 31 March 2024) Ms A Spackman (from 1 April 2024) Remuneration Committee Mr M Allen Commercial Oversight Committee Mr J van Wijngaarden (to 12 October 2023) Mr M Orr (from 13 October 2023) Advisory committees; Curriculum and Assessment Quality Committee Ms E Kitcatt Research Committee Dr A Ahmed (non-trustee, Acting Chair) Student Advisory Group Ms E Kitcatt Irregularities and Appeals Committee Dame Joan McVittie (non-trustee) Higher Education Advisory Group Mr M Nicholson Disbanded 18 July 2024

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Reference and administrative details (continued)

All trustees are required to complete a Register of Interests and to declare any potential conflicts of interest annually and declare conflicts of interest at the start of each meeting. This also applies to governance and advisory committee members who are not trustees.

AQA’s day-to-day business is carried out by the CEO, Colin Hughes, and the Executive Team: Mark Bedlow (Chief Operating Officer) Isabelle Perrett (Executive Director of People) Alex Scharaschkin (Executive Director of Assessment Research & Innovation) Nick Stevens (Chief Finance and Corporate Services Officer) Michael Turner (Executive Director of Customer and Product) Claire Thomson (Responsible Officer and Executive Director of Regulation and Compliance) Derek Richardson (appointed 1 December 2023, Managing Director, AQA Assessment Services Ltd) Anna Trethewey (appointed 15 January 2024, Executive Director of Corporate Affairs and Strategy) Justin Coombs (appointed 1 February 2024, Executive Director of Assessment Technology)

Information on our external advisors can be found at the end of this report.

The Charity Code of Governance – what it means to us

AQA takes its governance responsibilities seriously and, as a large charity, aims to have a governance framework that is fit for purpose, compliant and efficient. In 2017, the Charity Code of Governance (the Code) was launched, with a recommendation that charities review the extent to which they apply the Code and explain any aspects of the Code they are not applying. In our review we carried out a detailed examination of each element of the Code:

AQA operates a conflict-of-interest policy for all employees, Trustees and independent members, subcontractors and all third parties who work with us and act on our behalf. Conflicts of interest are collated at the start of each exam series. Declarations of interest are made and recorded at the start of every formal meeting.

We ensure that we report any issues or problems in a timely and transparent way as needed (whether to Ofqual or the Charity Commission) and work hard to put things right for our stakeholders.

We have a Modern Slavery Statement which is available on our website. We are committed to making ethical choices in our supply chain and we conduct full due diligence checks when onboarding new suppliers. Key strategic and critical suppliers are monitored on a continual basis for commercial, financial and supply chain risk, including compliance with regulatory, policy and legal requirements.

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The Charity Code of Governance – what it means to us (continued)

We continue to look at our recruitment practices and employment policies to support diversity and inclusion. We have an Equal Opportunities Policy in place and welcome applications for employment from appropriately qualified individuals regardless of race, gender, religion/belief, sexual orientation or disability. Where existing employees become disabled, our policy is to provide continued employment, training and occupational assistance where needed.

We voluntarily publish our ethnicity pay gap report alongside our gender pay gap report because it’s the right thing to do. We recognise that we have much work to do to close our pay gaps and to be more diverse within the senior levels of the organisation. In line with our values, we are committing to ‘stepping up’ and to holding ourselves accountable for making meaningful progress through our actions and words.

Information on our gender and ethnicity pay gaps can be found in our 2023 pay gap report, published in 2024.

We recognise the value and importance of having engaged and enquiring employees. We know high levels of engagement have a positive influence on the performance of our teams as they engage with the teachers, students and others in the field of education.

During the year we have held a wide range of staff engagement sessions for colleagues to hear updates from the Executive Team and others on how organisational and strategic programmes are progressing.

We also encourage openness with all our colleagues, and AQA associates and examiners, through our ‘Speak Out’ facility. This is designed to encourage people (anonymously if they prefer) to give feedback or raise an issue, including anything that does not ‘feel right’. We have ‘Speak Out’ representatives that can be approached directly, a webpage for submitting anonymous comments, and a designated email mailbox. This scheme is operated alongside a formal Whistleblowing process.

Corporately, we engage fully with our regulators to report incidents when they occur, and to update the regulators on the progress of putting these right. We have a dedicated Incident Management process to examine any incidents that occur in day-to-day business, with decision making functions sitting independently from operational areas. All colleagues involved work together to ensure that our focus remains on our stakeholders and getting the best results for them.

AQA has a designated Safeguarding Lead who sits within our Exams Integrity Team and holds responsibility for all safeguarding activity across the organisation. A Safeguarding Strategy is regularly updated and presented to our trustees for approval; this strategy shapes the organisation’s response to safeguarding issues, including training for trustees, staff, associates and examiners who may undertake visits to schools, training on dealing with safeguarding issues presented in students’ exam responses, and being responsible for the organisation’s safeguarding policy and procedures.

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Section 172(1) statement

Section 172 of the Companies Act 2006 requires a director of a charitable company limited by guarantee to act in the way they consider, in good faith, would be most likely to promote the success of the Charity. In doing this, section 172 requires a director to think ahead to numerous factors including:

Below we outline our consideration of the above.

Stakeholder engagement

Our stakeholders are our customers, the students we support, the people who work with us, those people and organisations that help us deliver our key service, and our regulators.

The Board of Trustees is committed to effective engagement with all of its stakeholders and recognises that building strong relationships with our stakeholders will help us to deliver our strategy in line with our purpose and our values.

For the majority of instances, the Board of Trustees delegate this responsibility to the CEO and the Executive Team as part of the Charity’s day-to-day business.

The Board of Trustees receives updates from the Executive Team on issues concerning employees, customers, associates, students, suppliers, Ofqual, Government and the wider community. Some of the ways in which the Executive Team has engaged with stakeholders over the year are shown below.

This year, we’ve launched our Customer Centricity campaign, where all colleagues can sign-up to spend time in our Customer Services department, engaging all areas of the business with our customers and their needs. Senior Leaders have taken part in a buddy scheme, meeting regularly with a Customer Services colleagues to share expertise and provide advice to customer-facing colleagues. This helps us to better understand, serve and support our customers in everything we do.

You can find out more about how we’ve supported customers in our Achievements and Performance section.

In response to feedback received from our associate community, a programme was established to review how we engage with associates to help improve their experience. You can find out more about some of the successes of this programme in our Achievements and Performance section.

You can find out more about some of the successes of our Student Advisory Group in our Achievements and Performance section.

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Section 172(1) statement (continued)

To ensure continued performance, we review supplier performance against KPIs and agree on priorities and action to be taken when performance falls below expectations. We have also introduced a Supplier Code of Conduct with which suppliers must be fully compliant. We have obligations to fulfil and we encourage feedback from our key suppliers by both formal and informal channels. Details on our payment practices and performance are found at GOV.UK.

Decision making

AQA recognises the importance of engaging with stakeholders to help inform our strategy and Board of Trustees decision making. Relevant stakeholder interests, including those of employees, suppliers, customers, regulators and others are considered when it makes decisions.

We define principal decisions as those that are material or of strategic importance to AQA, and also those that are significant to any of its key stakeholder groups. In making its decisions, the Board of Trustees considers the outcomes of relevant stakeholder engagement as well as the need to maintain a reputation for high standards of business conduct, and to consider the long-term consequences of its decisions.

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AQA Education Directors’ and Trustees’ Report including Strategic Report

Section 172(1) statement (continued)

The following provide examples of how stakeholder interests were considered in a principal decision made by the Board of Trustees.

While having greater cost and resource implication than aligning to a Carbon Neutral approach, it was decided that a sustainability strategy aligned to Net Zero was the right thing to do, not only for AQA, but for the wider community.

Environmental policy

Sustainability is important to us and will remain a priority in the future, having committed to the ambitious target of reaching net zero before 2050.

The Companies Act 2006 requires large charities to include Greenhouse Gas (GHG) emissions and energy consumption disclosures in their Directors’ Report. Charities that consume more than 40,000kWh of energy annually must:

We take our environmental responsibilities very seriously. We recognise our part to play in contributing to the resolution of global and local environmental issues by reducing our impact on the environment and by taking a leading role in promoting environmental best practice. During the year, we have achieved an 83% reduction in our emissions per £m of non-investment income compared to our baseline year 2018/19.

We have continued to initiate improvements and to promote our environmental message throughout the organisation. Achievements have been accelerated due to the introduction of Smart Working and the completion of our building refurbishment programme, resulting in optimised building occupancy and business travel compared to the baseline year. Although the rate of GHG emission reduction is not sustainable upon full return to operational norms, we have committed to significant changes to our operating model to enhance future GHG reductions.

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AQA Education Directors’ and Trustees’ Report including Strategic Report

Environmental policy (continued)

In the past 12 months our main achievements are:

*Reductions compared to GHG reporting baseline year 2018/19

As part of our sustainability strategy, we have commenced a project to record and analyse scope 3 GHG emissions which is due for completion by mid-2024. Upon completion we will agree and publish a milestone plan to reduce emissions in accordance with our net zero strategy and Science Based Target Initiative application.

Whilst our detailed plans are not yet available, we will continue with the work described below over the coming financial year to further reduce our impacts and associated CO2e emissions:

Emissions for Scope 1 (direct) and scope 2-3 (indirect) sources are continually monitored at source (i.e. energy consumption and waste production) as well estimated (i.e. fuel consumption through transport) by applying the relevant conversion factors.

The annual quantity of emissions in tonnes of carbon dioxide for the Group for the year was 451.94 tonne CO2e, which is an increase of 170.67 tonnes CO2e from the prior year. This equates to 1.82 tonnes per £m non-investment income, which is a 29% increase compared to the prior year and 83% reduction compared to the 2018/19 baseline year. The emissions in 2018/19 baseline year were 1,884.27 tonnes CO2e which equates to 10.45 tonnes per £m sales.

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AQA Education Directors’ and Trustees’ Report including Strategic Report

Environmental policy (continued)

Full year on year breakdowns of direct and indirect emission are summarised below:

Year Sales
Revenue £m		 GHG Emissions
(T CO2e)		 Intensity
Measurement Ratio
(IMR)*		 Difference (IMR)
2018/19 180.3 1884.27 10.45 n/a
2019/20 183.8 1759.16 9.57 -8%
2020/21 133.9 900.03 6.72 -38%
2021/22 146.8 448.89 3.05 -74%
2022/23 215.9 281.27 1.30 -90%
2023/24 249.0 451.94 1.82 -83%

The total emissions for 2021/22 and 2022/23 have been restated due to an omission where solar PV generation had been captured as an off-set rather than reduction. Subsequent intensity measurement has been updated to reflect the correction.

The total Group energy consumption for the year was:

The total Group transport fuel use for the year was:

Our overall target to reduce our greenhouse gas emissions by 60% or 4 tonnes CO2e per £m of revenue between 2018/19 to 2025/26 has been exceeded. However, the emissions target will not be revised until our full return to operational norms in 2025/26 but a new intensity measurement ratio of less than 2 tonnes CO2e per £m revenue has been agreed.

The methodologies used to collect and assess emissions data varied throughout the inventory. The primary methodology used was multiplying GHG activity data by appropriate GHG emission factors. All methodologies used were selected based on their ability to provide accurate and consistent results. The use of activity data and emission factors was feasible due to the availability of both accurate activity data for the majority of sources and standard emission factors from Department for Environment 2023 (DEFRA) and the Greenhouse Gas Protocol Initiative (where DEFRA factors are not supplied).

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AQA Education Directors’ and Trustees’ Report including Strategic Report

Risk management

Risk management at AQA is underpinned by an established risk policy and process including the setting of risk appetite which is reviewed annually by the Executive Team, the Audit, Risk and Compliance Committee (ARCC) and ultimately approved by the Board of Trustees.

Strategic and operational risks are identified in the context of our overall objectives and defined risk appetite. Our overall risk appetite is generally low, reflecting the nature of what we are delivering for students, and the highly regulated environment in which exam boards operate.

Operational risks are regularly reviewed by department managers and group subsidiaries management teams, with any significant operational risks escalated to the Executive Team. On a monthly basis, the Executive Team reviews the strategic risk register and top operational risks. A risk report is presented to each meeting of the ARCC to ensure effective oversight of risk management activities and the overall AQA risk profile. Regular updates are provided to the Board of Trustees by the ARCC Chair.

Our Group Risk Manager facilitates risk management activities across the business, ensuring that the process is communicated and managed effectively. Appropriate training mechanisms are in place, with risk awareness and guidance provided to managers and their teams to promote the effectiveness of our risk management framework.

Our outsourced internal auditors (Deloitte during 2023/24) conduct a risk-based assurance programme of work throughout the year. The audit programme focuses on areas assessed as being at significant internal risk, as identified by the Executive Team and by Trustees. The ARCC approves the annual internal audit plan and reviews the individual reports and recommendations. The output provides assurance across the business areas within AQA and where weaknesses in controls are identified, actions are taken to address these. The ARCC monitors progress on any agreed actions from internal audit reviews to ensure these are addressed appropriately and in a timely manner.

Further, the ARCC reviews our internal controls and procedures (financial and non-financial) and considers the results of our audit reviews. It also approves our internal Regulatory Compliance team’s annual plan of review activity, receives and challenges reports on compliance, and oversees the process for producing the annual Statement of Compliance to the independent exam regulators. The Committee reports directly to the Board of Trustees.

The following is a summary of the main risks facing AQA, which are represented in our strategic risk register and are kept under review as part of the established process of risk management.

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AQA Education Directors’ and Trustees’ Report including Strategic Report

Financial review

AQA is in a strong and stable financial position. We continue to focus on our long term financial strategy and have an appropriate level of reserves.

These financial statements cover the year to 31 March 2024. The key highlights from the year are as follows;

Net Income / (expenditure) before tax
Non-operational (income) / expenditure:
Profit on disposal of tangible fixed assets
Software impairment (Note 11)
Goodwill impairment
GMPF pension settlement cost (Note 27)
Net non-operational (income) / expenditure
Underlying performance		 31 March 2024
31 March 2023
£000
£000
15,416
(32,096)
(14,605)
-
396
-
4,715
-
-
33,576
(9,494)
33,576
5,922
1,480

AQA participated in one principal defined benefit pension scheme, the AQA Pension Scheme, as well as having smaller participation in two national defined benefit schemes, Teacher Pension Scheme (TPS) and University Superannuation Scheme (USS). In accordance with section 28 of FRS 102, unfunded pension liabilities are included in the defined benefit pension schemes liability for the two principle schemes. In the prior year, participation in the Greater Manchester Pension Fund (GMPF) was ceased.

USS and TPS are multi-employer defined benefit schemes where it is not possible to separately identify the assets and liabilities for each participating employer. Accordingly, contributions are treated as defined contribution schemes for accounting purposes.

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AQA Education Directors’ and Trustees’ Report including Strategic Report

Financial review (continued)

The net balance sheet asset for the aggregation of the schemes is detailed as follows:

Fair value of scheme assets
Present value of defined benefit obligation
Net pension asset
The net pension asset is made up as follows:
Unfunded pension liability
University Superannuation Scheme pension liability
AQA Pension Scheme asset
Net pension asset		 31 March 2024
31 March 2023
£000
£000
129,682
139,325
(113,302)
(114,822)
16,380
24,503
31 March 2024
31 March 2023
£000
£000
(2,360)
(2,567)
(237)
(384)
18,977
27,454
16,380
24,503

Financial risk management

Financial risks are identified by the Executive Team and all managers as part of the business planning process which is continually updated and monitored throughout the year. Financial performance is reported to the Finance Committee for further scrutiny as delegated by the Board of Trustees. Key areas of risk that impact the Group’s operations include managing working capital and long-term funding required to support its investment plans and pension commitments and liabilities.

The Group’s risk and financial management framework has the primary aim of protecting it from events that hinder achieving performance objectives and protects against reputational impact and regulatory scrutiny and potential fines. The objectives are to ensure sufficient working capital exists and risk is managed at a Group level and a business unit level.

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AQA Education Directors’ and Trustees’ Report including Strategic Report

___________

Financial review (continued)

Exposure to price, credit, liquidity and cash flow risk

Price risk – In normal circumstances, the risk is considered to be low based on the business model for the delivery of regulated assessments in the UK market. As well as the business price risk, price risk also arises on financial instruments because of changes in listed investment prices. Listed investments with a fair value of £53,359,000 are exposed to price risk but this exposure is within the Group’s risk appetite embedded in the mandate provided to our investment advisors.

Credit risk – Group policies are aimed at minimising such losses and that credit terms are only granted to customers who demonstrate an appropriate payment history and satisfy creditworthiness procedures. Details of the Group’s debtors are shown in note 17 to the financial statements. The Group mitigates credit risk on investments by spreading our risk across different asset classes. Please refer to the Group’s investment powers and policy details on page 25.

Liquidity risk – The Group mitigates liquidity risk by managing cash generated by its operations and applying cash collection targets throughout the Group.

Cash flow risk – The Group mitigates this risk by preparing and monitoring cash flow forecasts monthly to ensure that funds are available to meet our liabilities as they fall due.

Reserves policy

The target level of reserves enables us to achieve our primary charitable purpose of advancing education for the benefit of the public. To continue to provide high quality qualifications, assessment, and support to schools and colleges, we must invest in strategic areas including new products and systems. Some of these incur upfront expenditure that is not recovered for several years.

At the end of the year, we had funds of £164,601,000. They are held for a variety of purposes, to ensure that the Charity can operate as a going concern in the future and also fulfil its legal obligations. The funds are summarised below:

The remainder of our funds are our general funds:

When setting our free reserves target range we follow Charity Commission’s guidance and consider our cash flow requirements and perform an assessment of the risks and obligations facing the organisation. Based on our assessment, our policy is to maintain free reserves in the range of £60 million to £70 million and as at year end we are within the target range. We continue to review the free reserves target, to ensure that the policy continues to reflect changes in the organisation.

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AQA Education Directors’ and Trustees’ Report including Strategic Report

Financial review (continued)

Going concern

The Board of Trustees has reviewed the financial position, considering the level of reserves and cash, and the system of financial control and risk management. They have undertaken sensitivity analysis and considered the potential impact of the cost of living crisis and changing political climate. Accordingly, we have a reasonable expectation that the Charity and the Group have adequate resources to continue in operational existence for the foreseeable future.

As a consequence, these financial statements are prepared on the going concern basis. The trustees consider that there are no material uncertainties about the Charity’s and the Group’s ability to continue as a going concern.

Investment powers and policy

AQA’s investments are predominately held in UK and overseas equities, bonds and multi asset funds. The Investment Policy was reviewed during the year and is reviewed at least on a triennial basis.

We seek to adopt a well-diversified investment approach that balances potential return with appropriate risk. At the same time the trustees are aware that some level of volatility is inevitable with a good investment strategy and endeavour to spread the risk across different asset classes. The assets of the Charity are invested with a mandate to target an overall rate of return of 3% per annum above CPI but recognise the likely volatility and challenge in Global Markets for the foreseeable future. The results for the year show an overall net gain on investments of £4,411,000 (2023: loss £1,420,000). The results for the year are due to the favourable global market conditions. AQA’s Investment Advisor is Cazenove Capital Management. Our long-term reserves are held in Cazenove’s Responsible Multi-Asset Fund. This is a fund designed to enhance our ESG (Environmental, Social and Governance) standards.

The Trustees encourage their Investment Advisor to exercise, where feasible, the voting rights attached to the Charity’s investments.

The Investment Advisor has regard to each investee company’s approach to corporate governance and ethical and environmental issues when assessing the long-term financial merits of investing in each company's shares, and encourages companies to adhere to the UK Corporate Governance Code or equivalent other governance code. The Trustees believe that this approach to socially responsible investment is in the best financial interests of the Charity and does not place additional constraints on the Investment Advisor’s freedom to choose investments. Some of the investments are held in pooled funds, some of which are index tracking funds and not actively managed and therefore the Investment Advisors have little scope to influence the investment direction of such funds. The Finance Committee may occasionally advise the Investment Advisor of entities or industries which they consider are not aligned with the objects of the Charity and therefore do not consider appropriate to invest in.

Our cash flow is highly seasonal, allowing us to strategically place excess working capital into high-interest savings accounts and liquidity funds. To diversify risk, we limit holdings to a maximum of £40 million per institution.

Fundraising

Given the nature of the Charity, there is no external fundraising, and no use of professional fundraisers, commercial participators or volunteers. As such, the requirements of the Charities Act 2011 in relation to statements on fundraising are not deemed to be applicable. The Charity does not hold any social investments and does not make grants. The expenditure heading “Expenditure on raising funds” in the Consolidated Statement of Financial Activities relates solely to investment management costs.

Events after the reporting date

The directors have not identified any adjusting events. FRS 102 requires, for non-adjusting events, disclosure of the nature of the event, and either an estimate of its financial effect or a statement that such an estimate cannot be made.

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AQA Education Directors’ and Trustees’ Report including Strategic Report

Financial review (continued)

Additional information

Our website, aqa.org.uk, contains up-to-date information on qualification specifications, exam timetables, events, teacher support, examiner recruitment, publications and other areas of the organisation’s activities.

Statement of Trustees’ responsibilities

The Trustees, who are also directors of AQA Education (Charitable Company) for the purposes of company law, are responsible for preparing the Directors’ and Trustees’ Report (including the Strategic Report) and the financial statements in accordance with applicable law and regulation.

Company law requires the Trustees to prepare financial statements for each financial year 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 Group and Charitable Company and of the incoming resources and application of resources, including the income and expenditure, of the Group and Charitable Company for that period.

In preparing these financial statements, the trustees are required to:

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 the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Charitable Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Financial statements are published on the Charitable Company’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Charitable Company’s website is the responsibility of the Trustees. The Trustees’ responsibility also extends to the ongoing integrity of the financial statements contained therein.

Statement of disclosure of information to auditors

In so far as the Trustees are aware:

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AQA Education Directors’ and Trustees’ Report including Strategic Report

___________

Statement of Trustees’ responsibilities (continued)

APPOINTMENT OF AUDITORS

A resolution for the appointment of BDO LLP will be proposed at the Annual General Meeting for the ensuing year.

This report, including the Strategic Report, was approved by the Board of Trustees on 26 September 2024 and signed on its behalf by:

Anne Spackman Director and Chair of the Board of Trustees

Paula Smith Director and Trustee

Colin Hughes Director and Trustee

27

AQA Education Independent auditors’ report to the members of AQA Education

___________

Opinion on the financial statements

In our opinion, the financial statements:

We have audited the financial statements of AQA Education (“the Parent Charitable Company”) and its subsidiaries (“the Group”) for the year ended 31 March 2024 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Charitable Parent Statement of Financial Position, the Consolidated Statement of Cash Flows 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remain independent of the Group and the Parent Charitable Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions related to going concern

In auditing the financial statements, we have concluded that the Trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group and the Parent Charitable Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.

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. 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 course of 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 this gives rise to a material misstatement in the financial statements

28

AQA Education Independent auditors’ report to the members of AQA Education (continued)

___________

themselves. 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.

Other Companies Act 2006 reporting

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

In the light of the knowledge and understanding of the Group and the Parent Charitable Company and its environment obtained in the course of the audit, we have not identified material misstatement in the Strategic report or the Trustees’ report.

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

Responsibilities of Trustees

As explained more fully in the Statement of Trustees’ Responsibilities, the Trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, 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 Group’s and the Parent 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 Group or the Parent Charitable Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

We have been appointed as auditor under the Companies Act 2006 and report in accordance with the Act and relevant regulations made or having effect thereunder.

Our objectives are to obtain reasonable assurance about whether the financial statements as a 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 misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,

29

AQA Education

Independent auditors’ report to the members of AQA Education (continued)

___________

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.

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Non-compliance with laws and regulations

Based on our understanding of the Group and the sector in which it operates; discussion with management, the Audit & Risk Compliance Committee, and those charged with governance; and obtaining an understanding of the Group’s policies and procedures regarding compliance with laws and regulations; we considered the significant laws and regulations to be the applicable accounting framework, being the Charities Act, Companies Act, Financial Reporting Standard 102, Charity Commission for England and Wales (Charity Commission) regulations and UK tax legislation.

Our procedures in respect of the above included:

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

Based on our risk assessment, we considered the areas most susceptible to fraud to be management override of controls and the recognition of income.

Our procedures in respect of the above included:

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

30

AQA Education

Independent auditors’ report to the members of AQA Education (continued)

___________

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities for the audit of the financial statements is located at the Financial Reporting Council’s (“FRC’s”) website at:

https://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.

911B7AE40D374FC... Sarah Anderson (Senior Statutory Auditor) For and on behalf of BDO LLP, statutory auditor Manchester, UK 15 October 2024

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

31

AQA Education Consolidated Statement of Financial Activities for the year ended 31 March 2024

Note
Income:
Income from charitable activities:
Educational services
4
Income from other trading activities:
Digital and consultancy services
4
Investment income
5
Profit on disposal of fixed assets
Total income
Expenditure:
Expenditure on charitable activities:
Educational services
6
Expenditure on other trading activities:
Digital and consultancy services
6
Expenditure on raising funds:
Investment management costs
5
Share of loss in joint venture
13
Total expenditure
Net Income / (expenditure) before tax
Deferred tax (charge) / credit
8
Net income / (expenditure) before actuarial and investment
(losses)/ gains
Actuarial and investment (losses) / gains
Net realised gains on investments
15
Net unrealised gains / (losses) on investments
15
Actuarial (losses) / gains on defined benefit pension schemes
27
Total actuarial and investment (losses) / gains
Net income and net movement in funds for the year
Reconciliation of funds
Total funds brought forward
Total funds carried forward
22		 Unrestricted funds
2024
2023
£000
£000
241,701
208,227
7,274
7,628
5,222
2,564
14,605
-
268,802
218,419
245,148
241,725
7,028
8,055
73
131
1,137
604
253,386
250,515
15,416
(32,096)
(1,600)
1,600
13,816
(30,496)
2,173
1,973
2,238
(3,393)
(9,822)
31,943
(5,411)
30,523
8,405
27
156,196
156,169
164,601
156,196

The notes on pages 36 to 82 form part of these financial statements.

32

AQA Education Consolidated and Charitable Parent Statement of Financial Position as at 31 March 2024

Fixed Assets
Note
Intangible assets
11
Tangible assets
12
Investment in subsidiary undertakings
13
Other fixed asset investments
15
Total Fixed Assets
Current Assets
Stocks and work in progress
16
Debtors
17
Investments
18
Cash at bank and in hand
Total Current Assets
Liabilities
Creditors: Amounts falling due within one year
19
Net Current Assets
Total Assets less Current Liabilities
Provisions for Liabilities and Charges
21
Net Assets Excluding Pension
Asset and Liability
Defined benefit pension scheme asset
27
Defined benefit pension scheme liability
27
Total Net Assets
The Funds for the Group and Charity:
Unrestricted Funds
Designated funds
General funds
Pension fund
Total Funds
22		 Group
Charity
Group
Charity
2024
2024
2023
2023
£000
£000
£000
£000
48,184
13,271
65,001
21,830
26,518
19,264
26,226
17,721
-
22,421
-
26,449
53,359
53,359
48,687
48,687
128,061
108,315
139,914
114,687
1,420
891
2,172
859
114,288
142,576
114,152
157,697
56,662
56,662
58,771
58,771
95,556
88,526
55,212
44,744
267,926
288,655
230,307
262,071
(240,641)
(234,581)
(225,961)
(219,254)
27,285
54,074
4,346
42,817
155,346
162,389
144,260
157,504
(7,125)
(2,398)
(12,567)
(7,389)
148,221
159,991
131,693
150,115
18,977
18,977
27,454
27,454
(2,597)
(2,597)
(2,951)
(2,951)
164,601
176,371
156,196
174,618
6,386
6,386
6,244
6,244
141,835
153,605
125,449
143,871
16,380
16,380
24,503
24,503
164,601
176,371
156,196
174,618

33

AQA Education Consolidated and Charitable Parent Statement of Financial Position (continued) as at 31 March 2024

___________

The Consolidated Statement of Financial Activities incorporates the Summary Income and Expenditure Account. Income is derived from continuing operations. Net income and net movement in funds represents the surplus for the year for Companies Act 2006 purposes and includes a surplus of £1,793,000 relating to the parent (2023: deficit £252,000).

The notes on pages 36 to 82 form part of these financial statements. The company registration number is 3644723. The financial statements on pages 32 to 82 were approved and authorised for issue by the Board of Trustees on 26 September 2024 and signed on its behalf by:

Anne Spackman

Director and Chair of the Board of Trustees

Paula Smith Director and Trustee

Colin Hughes Director and Trustee

34

AQA Education Consolidated Statement of Cash Flows for the year ended 31 March 2024

___________

Note
Cash flows from operating activities:
Net cash generated from operating activities
23
Cash flows from investing activities:
Investment income
5
Purchase of tangible fixed assets
12
Proceeds from sale of fixed assets
Purchase of intangible fixed assets
11
Purchase of subsidiaries, net of cash acquired
14
Purchase of fixed assets investments
15
Proceeds from sale of fixed asset investments
15
Proceeds from redemption of current asset investments
18
Purchase of current asset investments
18
Investment in joint venture
13
Net cash used in investing activities
Increase / (decrease) in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Analysis of cash and cash equivalents movements during the year
Decrease in cash held with fund managers
15
Increase / (decrease) in cash at bank and in hand
Total cash and cash equivalents movements during the year
Cash in fixed asset investments at the beginning of the year
Decrease in cash held with fund managers
15
Cash in fixed asset investments at the end of the year
15
Cash at bank and in hand at the beginning of the year
Increase/ (decrease) in cash at bank and in hand
Cash at bank and in hand at the end of the year
Analysis of cash and cash equivalents
Cash in fixed asset investments at the end of the year
15
Cash at bank and in hand at the end of the year
Total cash and cash equivalents		 Group
Group
2024
2023
£000
£000
Restated
53,492
91,672
3,600
1,402
(10,703)
(10,323)
4,277
-
(4,778)
(7,319)
(6,042)
(30,595)
(20,470)
(25,365)
19,783
20,859
75,310
17,500
(73,201)
(75,450)
(1,350)
(350)
(13,574)
(109,641)
39,918
(17,969)
55,936
73,905
95,854
55,936
(426)
(4,083)
40,344
(13,886)
39,918
(17,969)
724
4,807
(426)
(4,083)
298
724
55,212
69,098
40,344
(13,886)
95,556
55,212
298
724
95,556
55,212
95,854
55,936

Cash is higher in the current year due to early billing and therefore receipt of cash. Current asset investments are £56,662,000 compared to £58,771,000 last year.

Proceeds from sale of fixed assets has been adjusted for cash received in the prior and subsequent financial years.

The notes on pages 36 to 82 form part of these financial statements.

35

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

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1 General information

AQA Education (AQA) is a company limited by guarantee (registered company number 3644723 in England and Wales) and a registered charity (registered charity number 1073334 in England and Wales). It is incorporated under the Memorandum and Articles of Association and is incorporated and domiciled in England. The address of its registered office is Devas Street, Manchester, M15 6EX.

In the event of the Company being wound up, every Trustee undertakes to contribute to the assets of the company while such a person is a Trustee, or within one year afterwards, for payment of debts and liabilities of the company contracted before that Trustee ceases to be a trustee, and the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding one pound.

2 Statement of compliance

These financial statements have been prepared in accordance with the Statement of Recommended Practice “Accounting and Reporting by Charities” (Charities SORP (FRS 102)) applicable to charities preparing their financial statements in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective January 2019), Companies Act 2006 and the Charities Act 2011.

AQA meets the definition of a public benefit entity under FRS 102.

3 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a) Basis of preparation

These financial statements are prepared on a going concern basis, under the historical cost convention, as modified by the recognition of certain financial assets and liabilities measured at fair value.

The Charity has adapted the Companies Act 2006 formats to reflect the Charities SORP (FRS 102) and the special nature of the Charity’s activities.

The Charity has taken advantage of the exemption in section 408 of the Companies Act 2006 from presenting its individual Statement of Financial Activities. They have also taken advantage of the exemption in paragraph 1.12b of FRS 102 from preparing an individual Statement of Cash Flows, on the basis that it is a qualifying entity and the Consolidated Statement of Cash Flows, included in these financial statements, includes the Charity’s cash flows.

(b) Going concern

The Charity’s and the Group’s business activities, its current financial position and factors likely to affect its future development are set out in the Strategic Report. The Charity and the Group have in place healthy liquidity which provides adequate resources to finance committed reinvestment and educational programmes, along with the Group’s and the Charity’s day to day operations.

The Board of Trustees have assessed the future funding requirements of the Charity and the Group and compared it to the level of cash resources. The assessment included a review of the financial forecasts and the preparation of sensitivity analysis on the key factors which could affect future cash flow.

36

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

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3 Summary of significant accounting policies (continued)

Having undertaken the review, the Board of Trustees has a reasonable expectation that the Charity and the Group have adequate resources to continue in operational existence for at least 12 months from the date of approval of the financial statements. For this reason, it continues to adopt the going concern basis in the financial statements.

The Trustees consider that there are no material uncertainties about the Charity’s and the Group’s ability to continue as a going concern.

(c) Basis of consolidation

The Group consolidated financial statements include the financial statements of AQA and its subsidiary undertakings: AQA Assessment Services Limited, Doublestruck Limited, AlphaPlus Consultancy Limited, AC3 Solutions Limited, Blutick Limited, AQA Commercial Services Limited, Training Qualifications UK Limited and GradeMaker Limited. The consolidated accounts only include the period from acquisition to 31 March for entities acquired during the year.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of financial activities from the date on which control is obtained. They are deconsolidated from the date control ceases.

The net income and net movement in funds for the year for the Charity were £1,793,000 surplus (2023: £252,000 deficit) and total funds at the year-end were £176,371,000 (2023: £174,618,000).

(i) Subsidiaries

A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Investments in subsidiary undertakings are stated at cost, including those costs associated with the acquisitions, less provision for any impairment in value. Where events or changes in circumstances indicate that the carrying amount of an investment may not be recoverable, an impairment review is performed. An impairment write down is recognised to the extent that the carrying amount of the asset exceeds the higher of the fair value less costs to sell or value in use.

Where a subsidiary has different accounting policies to the Group, adjustments are made to those subsidiary financial statements to apply the Group’s accounting policies when preparing the consolidated financial statements.

Any subsidiary undertakings sold or acquired during the year are included up to, or from, the dates of change of control. Where control of a subsidiary is lost, the gain or loss is recognised in the consolidated statement of financial activities.

All intra-Group transactions, balances, income and expenses are eliminated on consolidation. All of the subsidiaries have a year end of 31 March with the exception of AlphaPlus Consultancy Limited with a year end of 30 September, Blutick Limited with a year end of 30 April and GradeMaker with a year end of 31 December. However, for the purpose of the Group accounts the figures cover the period from 1 April 2023 (ore date of acquisition) to 31 March 2024.

37

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

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3 Summary of significant accounting policies (continued)

(ii) Joint ventures

Investments in joint arrangements can take the form of jointly controlled operations, jointly controlled assets, or jointly controlled entities. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. AQA has a joint venture classified as a jointly controlled entity.

AQA has invested in a jointly controlled entity (Oxford International AQA Examinations Limited). AQA owns 50% of the issued share capital. A joint venture agreement has been signed by both parties.

Interests in jointly controlled entities are accounted for using the equity method (mentioned below) after initially being recognised at cost in the consolidated statement of financial position.

Under the equity method of accounting, the investments are initially recognised at cost (including transaction costs) and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses of the investee in the consolidated statement of financial activities. Dividends received or receivable from joint ventures are recognised as a reduction in the carrying amount of the investment.

When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity.

Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The carrying amount of equity-accounted investments is tested for impairment in accordance with the policy “Impairment of non-financial assets” mentioned later in this note.

AQA’s share of the loss of the joint venture is recognised in the consolidated statement of financial activities.

Revenue is measured at the fair value of the consideration received or receivable and represents the amount for goods supplied or services rendered, net of value added tax.

The Group recognises revenue when (a) it obtains entitlement to the income; (b) the Group retains no continuing involvement or control over the goods or services; c) the amount of revenue can be measured reliably; d) it is probable that future economic benefits will flow to the entity and; e) when the specific criteria relating to each of the sales channels have been met, as described below.

Income for the provision of examination services is recognised when all services associated with the qualification are substantially completed. Income received in advance of the examination series is deferred and recognised when the examination series takes place.

For post results services income is recognised when the amount of the revenue and the stage of completion can be measured reliably.

38

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

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3 Summary of significant accounting policies (continued)

(d) Income recognition (continued)

(ii) Events

Income for the provision of events is recognised when the event takes place.

(iii) Centre inspection services

Income is recognised for centre inspection services on a straight line basis over the period of the contract. Invoices are raised quarterly in arrears.

(iv) Provision of teacher support materials

Revenue from the sale of digital courseware products is recognised on straight line basis over the period of the subscription. For individual sales, the revenue is recognised when control is passed to the customer when the digital product is made available.

(v) Digital services

Revenue from services such as scanning are recognised in the accounting period in which the work on the services is performed and the obligations have been satisfied in accordance with the customers’ agreed requirements.

Sales of scanning machines and associated equipment are recognised when the products have been delivered to the customer and it is probable that economic benefits associated with the transaction will flow to the Company. Maintenance service contracts are recognised on a straight-line basis over the period of the contract.

(vi) Educational consultancy services

Revenue for educational consultancy services is recognised when the services are complete, with revenue for services ongoing over the year end shown as work in progress on the balance sheet. Profit on work in progress contracts is recognised when the outcome of the contracts can be assessed with reasonable certainty, the stage of completion can be measured reliably and the costs incurred and costs to complete can be measured reliably. The amount recognised is that which is estimated to reflect fairly the profit arising up to the reporting date. Profit on work in progress contracts is recognised as the difference between the reported revenue and related costs. When a contract is expected to be loss making the expected loss is recognised as an expense immediately.

(vii) Subscription services

Subscription income is received in advance of the period to which it relates and is deferred on a straight line basis over the subscription period.

(viii) Awarding and assessment services

Revenue from contracts for the provision of educational services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised and it is probable they will be recovered. Depending on commercial billing terms agreed with each customer, income will need to be accrued or deferred, such amounts are recorded within accrued income within trade and other receivables or deferred income within trade and other payables.

39

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

3 Summary of significant accounting policies (continued)

(e) Fund accounting

General funds are available to spend on activities that further any of the purposes of the Charity. Designated funds are unrestricted funds of the Charity which the trustees have decided at their discretion to set aside to use for a specific purpose.

(f) Expenditure recognition and irrecoverable value added tax

Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably.

The majority of AQA’s supplies are exempt for value added tax purposes. As a result, AQA is only able to recover a small percentage of its input tax. The amount not recoverable is charged in the consolidated statement of financial activities under the appropriate cost category or added to the cost of fixed assets.

Expenditure is classified under the following activity headings:

These costs relate to services provided centrally and identified as wholly or mainly in delivery of direct charitable activities, together with an appropriate proportion of management and office overheads undertaken to further the purposes of the Charity and their associated support costs.

(ii) Governance and support costs

Allocation of support and governance costs

Support costs have been allocated between governance costs and other support costs. Support costs are those functions that assist the work of the Charity but do not directly undertake charitable activities. Support costs include back office costs, finance, IT, personnel and payroll. Governance costs comprise all costs involving the public accountability of the Charity and its compliance with regulation and good practice. These costs include costs related to statutory audit and legal fees together with an apportionment of overhead and support costs. These costs all relate to expenditure on charitable activities. The bases on which support costs have been allocated are set out in note 9.

Governance costs relate to the corporate management of the organisation itself. They include expenses of Trustees’ meetings, audit fees, office relocation costs and other corporate management costs.

(iii) Other trading activities

These costs relate to non-charitable services provided by subsidiary undertakings, AQA Assessment Services Limited and AlphaPlus Consultancy Limited. It includes direct costs as well as overhead costs.

(iv) Raising funds

Costs for raising funds relate to the management of other fixed asset investments by the investment advisors and fund managers.

40

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

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3 Summary of significant accounting policies (continued)

(g) Income and expenditure on examinations

Examination fees and training course fees received in advance are deferred and recognised in the year the examinations and meetings take place. Expenditure on question papers and on fees and expenses of examiners are expensed when they are incurred.

(h) Employee benefits

The Group provides a range of benefits to employees, including holiday pay, defined benefit and defined contribution pension plans.

(i) Short-term benefits

Short-term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the year in which the service is received.

(ii) Defined contribution pension plans

A defined contribution plan is a pension plan under which the employee and Group pays fixed contributions into a separate entity. Once the contributions have been paid, the Group has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts due but not paid are shown in accruals in the statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.

(iii) Defined benefit pension plans

The Charity operates defined benefit plans for employees. During the year, the principal defined benefit scheme for AQA’s staff was the AQA Pension Scheme. AQA also has unfunded pension liabilities which represent augmented pensions for members of staff who are no longer employees of AQA. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.

The defined benefit section of the AQA Pension Scheme and the unfunded augmented pension liabilities are accounted for as defined benefit schemes under section 28 of FRS 102. The defined benefit section of the AQA Pension Scheme was closed to new entrants from July 2006 and to future accruals from January 2011. In the prior year AQA also participated in the Greater Manchester Pension Fund (GMPF), which is an externally funded defined benefit pension scheme, where AQA’s share of the total scheme’s underlying assets and liabilities can be separately identified. On 28 February 2023, AQA ceased participation in the scheme and settled the scheme for an amount of £33,576,000 which is the net of loss on scheme assets of £107,314,000 and gain on defined benefit obligations of £73,738,000. Unfunded pension liabilities represent the liability of unfunded pensions for former employees of AQA.

The USS is a multi-employer scheme for which it is not possible to identify the assets and liabilities of individual members due to the mutual nature of the scheme and therefore this scheme is accounted for as a defined contribution retirement benefit scheme. A liability is recorded within provisions for any contractual commitment to fund past deficits within the USS scheme. AQA has also contributed to the Teacher’s Pension Scheme which is a multi-employer defined benefit scheme where it is not possible to separately identify the assets and liabilities for each participating employer. Accordingly, contributions are treated as defined contribution schemes for accounting purposes.

41

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

3 Summary of significant accounting policies (continued)

A liability recognised in the statement of financial position in respect of the defined benefit plan is the present value of the defined benefit obligation at the reporting date less the fair value of the plan assets at the reporting date. A defined benefit asset is recognised where there is a plan surplus which can be recovered in future through a refund to AQA.

The defined benefit obligation is calculated using the projected unit credit method. Annually the Group engages independent actuaries to calculate the obligation. The present value is determined by applying an appropriate discount rate to the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments.

The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy. This includes the use of appropriate valuation techniques.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are credited or charged respectively to the consolidated statement of financial activities. Full actuarial valuations of pension schemes are performed every three years. The last completed full actuarial valuation of the AQA Pension Scheme was at 30 September 2021.

The net interest cost or credit is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. A cost is recognised within expenditure on charitable activities while a credit is recognised within ‘Net investment income’.

(i) Business combinations and goodwill

Business combinations are accounted for by applying the purchase method. The cost of a business combination is aggregate of the fair value of the consideration given, liabilities incurred or assumed and of equity instruments issued plus the costs directly attributable to the business combination. Where control is achieved in stages the cost is the consideration at the date of each transaction.

Contingent consideration is recognised where the payment of consideration is probable and can be measured reliably. Where (i) the contingent consideration is not considered probable or cannot be reliably measured but subsequently becomes probable and measurable or (ii) contingent consideration previously measured is adjusted, the amounts are recognised as an adjustment to the cost of the business combination.

On acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities unless the fair value cannot be measured reliably in which case the value is incorporated in goodwill. Where the fair value of contingent liabilities cannot be reliably measured they are disclosed on the same basis as other contingent liabilities.

42

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

3 Summary of significant accounting policies (continued)

(i) Business combinations and goodwill (continued)

Goodwill recognised represents the excess of the fair value and directly attributable costs of the purchase consideration over the fair values of the Group’s interest in the identifiable net assets, liabilities and contingent liabilities acquired.

Goodwill is amortised over its expected useful life which is estimated to be between 3 to 10 years. At the time of acquisition management perform an assessment of expected useful life in order to determine the most appropriate expected useful life. As part of this assessment management consider probability of the entity achieving its KPI’s, forecasts and any fair value adjustments identified. Goodwill is assessed for impairment when there are indicators of impairment and any impairment is charged to the consolidated statement of financial activities.

In accordance with Section 35.10(a) of FRS 102, Section 19 of FRS 102 has not been applied in these financial statements in respect of business combinations affected prior to the date of transition.

(j) Intangible assets

Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation commences when the software or development project is ready for use. Amortisation is calculated, using the straight-line method, to allocate the depreciable amount of the assets to their residual values over their estimated useful lives, as follows:

Software – 3 years Development costs – up to 5 years

Amortisation is charged to expenditure on charitable activities in the consolidated statement of financial activities.

The assets are reviewed for indicators of impairment and if these are present, the asset will be impaired to the recoverable amount.

Intangible assets acquired as part of a business combination are measured at fair value at the acquisition date.

Costs associated with maintaining computer software are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met:

43

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

3 Summary of significant accounting policies (continued)

(j) Intangible assets (continued)

(i) Specification development

Expenditure on the development of specifications and related teacher support materials is charged to the consolidated statement of financial activities in the year in which the expenditure is incurred.

(ii) Systems development

Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets.

(iii) Research and development expenditure

Research expenditure is charged to the consolidated statement of financial activities in the year in which the expenditure is incurred.

Costs incurred on development projects are recognised as intangible assets when it is probable that the project will be a success, considering its commercial and technological feasibility, costs can be measured reliably and resources are available to complete the project. Other development expenditure that does not meet these criteria is recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent year.

(k) Tangible fixed assets and depreciation

Tangible fixed assets are stated at cost less accumulated depreciation. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.

The useful economic lives and residual value of fixed assets are periodically reviewed. The effect of any change is accounted for prospectively.

Depreciation commences from the date an asset is brought into service. The charge for depreciation is calculated so as to write off the cost, less estimated realisable value, of each asset on a straight line basis over its expected useful life.

Freehold buildings 25 - 40 years
Leasehold land and buildings Term of the lease
Assets under construction Not depreciated
Furniture, equipment and vehicles:
Office fixtures & fittings and equipment 3 - 10 years
Motor vehicles 4 years
IT equipment 3 years
Freehold land is not depreciated.

44

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

3 Summary of significant accounting policies (continued)

(k) Tangible fixed assets and depreciation (continued)

For the purposes of the Charities SORP (FRS102), all tangible fixed assets of AQA Education are considered to be functional assets of the Charity. Tangible assets costing more than £10,000 per individual item or Group of related items are capitalised in the year of acquisition. Items costing less than £10,000 are charged to the consolidated statement of financial activities when incurred.

Tangible fixed assets are derecognised on disposal or when no future economic benefits are expected. On disposal, the difference between the net disposal proceeds and the carrying amount is recognised in the consolidated statement of financial activities.

(l) Leased assets

At inception the Group assesses agreements that transfer the right to use assets. The assessment considers whether the arrangement is, or contains, a lease based on the substance of the arrangement.

(i) Operating lease

Leases that do not transfer substantially all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the consolidated statement of financial activities on a straight-line basis over the period of the lease.

(ii) Lease incentive

Incentives received to enter into an operating lease are credited to the consolidated statement of financial activities, to reduce the lease expense, on a straight-line basis over the period of the lease.

The Group and Charity have taken advantage of the exemption in respect of lease incentives on leases in existence on the date of transition to FRS 102 (1 October 2014) and continue to credit such lease incentives to the consolidated statement of financial activities over the period to the first review date on which the rent is adjusted to market rates.

(m) Impairment of non-financial assets

At each reporting date non-financial assets not carried at fair value are assessed to determine whether there is an indication that the asset may be impaired. If there is such an indication the recoverable amount of the asset is compared to the carrying amount of the asset.

The recoverable amount of the asset is the higher of the fair value less costs to sell and value in use. Value in use is defined as the present value of the future cash flows before interest and tax, obtainable as a result of the asset’s continued use. These cash flows are discounted using a pre-tax discount rate that represents the current market riskfree rate and the risks inherent in the asset.

If the recoverable amount of the asset is estimated to be lower than the carrying amount, the carrying amount is reduced to its recoverable amount and an impairment loss is recognised in the consolidated statement of financial activities.

If an impairment loss is subsequently reversed, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the revised carrying amount does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised in prior periods. A reversal of an impairment loss is recognised in the consolidated statement of financial activities.

45

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

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3 Summary of significant accounting policies (continued)

The purchase of materials, goods and examination materials are written off in the year of examination. Printing stocks and consumables are valued at the lower of cost and estimated selling price less cost to complete and sell.

Cost is determined on the first-in, first-out (FIFO) method. Cost includes the purchase price, including irrecoverable taxes and duties and transport and handling directly attributable to bringing the stock to its present location and condition.

At the end of each reporting year stocks are assessed for impairment. If an item of stock is impaired, the identified stock is reduced to its selling price less costs to complete and sell and an impairment charge is recognised in the consolidated statement of financial activities. Where a reversal of the impairment is required the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit in the consolidated statement of financial activities.

Cash and cash equivalents includes cash at bank, deposits held with banks and cash held by investment managers (presented within other fixed asset investments on the balance sheet). Investments balances that are liquid but are not used to fund short term commitments are held in current investments.

(p) Fixed asset investments

In the charity's individual accounts, investments in subsidiary undertakings are measured at cost less accumulated impairment.

(ii) Investments in quoted company shares, bonds, investment funds, unit trusts and open-ended investment companies

Investments in quoted company shares, bonds, investment funds, unit trusts and open-ended investment companies are stated at market value. Please see note 15 for further details.

Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event and it is probable that a transfer of economic benefit will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The timing or the amount of the future expenditure required to settle the obligation is uncertain.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations might be small.

46

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

3 Summary of significant accounting policies (continued)

(q) Provisions (continued)

Provisions are measured at the present value of the expenditure expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as a finance cost.

(r) Donations received under gift aid

Donations received under gift aid from Group entities are recognised when the funds are received by the Charity. Subsidiaries will remit charitable donations to the Charity based on the previous reporting period's financial performance, however they have no legal obligation to do so.

(s) Financial instruments

The Group has adopted Sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other debtors, amounts owed by fellow undertakings and cash and bank balances are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting year financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the consolidated statement of financial activities.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in the consolidated statement of financial activities.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value as at the reporting date using the closing quoted market price. The consolidated statement of financial activities includes the changes in fair value, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment. These long term investments, whilst highly liquid, are included in fixed assets, as there is no intention to draw down on them in the next year or indeed in the near future.

47

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

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3 Summary of significant accounting policies (continued)

(s) Financial instruments (continued)

(i) Financial assets (continued)

All gains and losses are taken to the consolidated statement of financial activities as they arise. Realised gains and losses on investments are calculated as the difference between sales proceeds and their original purchase cost. Unrealised gains and losses are calculated as the difference between the fair value at the year end and their original purchase cost.

The main form of financial risk faced by the Charity is that of volatility in equity markets and investment markets due to wider economic conditions, the attitude of investors to investment risk, and changes in sentiment concerning equities and within particular sectors or sub sectors.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

(ii) Financial liabilities

Basic financial liabilities, including trade and other creditors and amounts owed to fellow Group companies that are classified as debt, are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

Basic financial liabilities including debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

The Group does not currently use derivatives to manage its financial risks.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

48

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

3 Summary of significant accounting policies (continued)

(t) Critical accounting judgements and key source of estimation uncertainty (continued)

Critical judgements in applying the entity’s accounting policies:

(i) Share of loss in joint venture

The Charity has invested in a jointly controlled entity (Oxford International AQA Examinations Limited) in which it owns 50% of the issued share capital. The Charity’s share of losses is in excess of its interest in the entity. Management have elected to recognise the excess amount within provisions for liabilities as they consider they have a continuing commitment to those students studying for their exams if the jointly controlled entity were to cease trading.

(ii) Intangible assets - software

The capitalisation of software development costs on the balance sheet depends on the assessment of future economic benefit arising from future use and is accordingly a matter of judgement.

(iii) Fixed asset useful economic lives

Depreciation and amortisation charges are recognised to write down assets to their residual values over their useful economic lives. The determination of these residual values and estimated lives requires the exercise of management judgement.

49

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

3 Summary of significant accounting policies (continued)

(u) Key accounting estimates and assumptions

(i) Carrying value of goodwill

The Group reviews the indicators of impairment annually to identify whether goodwill has suffered any impairment, in accordance with the accounting policy stated. The recoverable amounts of cash generating units have been determined based on value-in-use calculations.

(ii) Retirement benefit obligations

The Group has obligations to pay pension benefits to certain employees. The cost of these benefits and the present value of the obligation depends on a number of factors, including: life expectancy, salary increases, and the discount rate on corporate bonds. Management estimates these factors in determining the pension obligations in the balance sheet. The assumptions reflect historical experience and current trends.

Note 27 details the actuarial assumptions used in determining the carrying amount at 31 March 2024.

(iii) Provisions

Provisions made for share of loss in Joint Venture, reorganisation costs, withdrawn learners and dilapidations require management’s best estimate of the costs that will be incurred based on legislative and contractual requirements. In addition, the timing of the cash flows and the discount rates used to establish net present value of the obligations require management’s judgement.

Also included within provisions is contingent consideration, this is additional consideration that could be due to the previous shareholders of the group's acquisitions. The amounts are based on profit and other qualitative targets placed on the business in the years following acquisition. Consequently, management must estimate the businesses performance against such targets in order to estimate the additional consideration payable.

50

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

4 Income from charitable and other trading activities

Educational Services - United Kingdom fee income
Educational Services – Overseas fee income
Total income from charitable activities
Digital and Consultancy Services – United Kingdom
Digital and Consultancy Services – Overseas
Total income from other trading activities
nvestment income and management costs
Interest – UK deposits
Dividends
Net credit to other finance income on defined pension
scheme assets and liabilities (note 27)
Total investment income
Investment manager fees
Total investment management costs
Net investment income		 Unrestricted funds
2024
2023
£000
£000
239,709
206,276
1,992
1,951
241,701
208,227
7,274
7,394
-
234
7,274
7,628
Unrestricted funds
2024
2023
£000
£000
3,255
844
345
558
3,600
1,402
1,623
1,162
5,223
2,564
(73)
(131)
(73)
(131)
5,150
2,433

5 Investment income and management costs

51

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

6 Charitable and other trading expenditure

Operational costs:
Examiner costs
Printing postage and other
examination costs
Premises costs
Direct staff costs
Operating lease rentals
Non-capital IT costs
Depreciation
Amortisation of goodwill
Amortisation of intangibles
Loss on disposal
Overheads
Restructuring costs
Consultancy
Governance costs (note 9)
Other support costs (note 9)
Non-operational costs:
GMPF Pension Settlement cost
(note 27)
Software impairment
Goodwill impairment
Total		 2024
2024
2024
2023
2023
2023
Educational
services
Digital and
consultancy
services
Total
Educational
services
Digital and
consultancy
services
Total
£000
£000
£000
£000
£000
£000
64,188
-
64,188
60,552
-
60,552
7,543
-
7,543
7,259
-
7,259
2,838
-
2,838
3,387
27
3,414
76,446
3,678
80,124
62,055
2,919
64,974
1,582
-
1,582
1,706
9
1,715
25,429
-
25,429
21,633
1
21,634
2,207
32
2,239
1,623
36
1,659
5,822
-
5,822
2,460
-
2,460
13,878
-
13,878
16,247
3
16,250
-
-
-
51
5
56
10,952
365
11,317
6,493
1,076
7,569
716
-
716
236
-
236
11,585
2,922
14,507
4,348
3,952
8,300
705
31
736
682
27
709
16,146
-
16,146
19,417
-
19,417
240,037
7,028
247,065
208,149
8,055
216,204
-
-
-
33,576
-
33,576
396
-
396
-
-
-
4,715
-
4,715
-
-
-
245,148
7,028
252,176
241,725
8,055
249,780

7 Summary analysis of expenditure and related income for charitable activities

Income from charitable activities:
Fees and charges
Total income
Expenditure on charitable activities:
Staff costs
Operational costs
Non-operational costs
Total expenditure
Total deficit from charitable activities		 2024
2023
Total
Total
£000
£000
241,701
208,227
241,701
208,227
(92,604)
(81,487)
(147,433)
(126,662)
(5,111)
(33,576)
(245,148)
(241,725)
(3,447)
(33,498)

52

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

8 Taxation

AQA is a charity and therefore claims exemption from corporation tax. Subsidiary trading companies make donations under gift aid to the Charity, equal to taxable profits, within 9 months of the balance sheet date, and thus do not have corporation tax charges or liabilities.

In the previous year, a deferred tax asset of £1,600,000 was recognised for the expected utilisation of tax losses against future taxable profits. In the current year, no deferred tax asset has been recognised and the £1,600,000 has been charged to the Consolidated Income Statement. It is now estimated that no tax losses will be utilised. The deferred tax asset unprovided at the year-end is £2,032,000 (2023: £922,000).

9 Analysis of governance and support costs

The Group initially identifies the costs of its support functions. It then identifies those costs which relate to the governance function. Having identified its governance costs, the remaining support costs together with the governance costs are apportioned between the charitable activities undertaken (see note 6) in the year. The basis of allocation between education and digital and consultancy services depends on the nature of services provided by the entity in which the costs arise. Refer to the table below for the basis for apportionment and the analysis of support and governance costs.

Employment costs
Trustee expenses
Internal audit services
External auditor – audit services:
Audit of consolidated and Charity financial
statements
Audit of the subsidiary financial statements
Other services
Total		 Other
support
costs
Governance
costs
2024
Total
Basis of allocation
£000
£000
£000
16,146
15
16,161
Staff time
-
8
8
Invoiced events
-
373
373
Governance
-
162
162
Governance
-
175
175
Governance
-
3
3
Governance
16,146
736
16,882

53

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

9 Analysis of governance and support costs (continued)

Employment costs
Trustee expenses
Internal audit services
External auditor – audit services:
Audit of consolidated and Charity financial
statements
Audit of the subsidiary financial statements
Other services
Total		 Support
costs
Governance
costs
2023
Total
Basis of allocation
£000
£000
£000
19,417
15
19,432
Staff time
-
2
2
Invoiced events
-
432
432
Governance
-
125
125
Governance
-
131
131
Governance
-
4
4
Governance
19,417
709
20,126

As the Charity is unable to recover input VAT, the fee for the audit of consolidated and Charity financial statements includes VAT. External audit fee net of VAT for audit of consolidated and Charity financial statements was £135,200 (2023: £104,500). External audit fee net of VAT for audit of the subsidiary financial statements financial statements was £143,800 (2023: £115,140). Fee net of VAT for assurance in relation to Certification of teacher’s pension scheme £2,175 (2023: £3,400).

10 Analysis of staff costs, trustee remuneration and expenses, and the cost of key management personnel

Wages and salaries
Social security costs
Pension costs
-
Defined benefit employer contributions
-
Defined contribution pension costs
Other staff related costs		 2024
2023
£000
£000
75,496
65,097
7,123
6,287
735
1,756
7,059
7,455
90,413
80,595
5,872
3,811
96,285
84,406

54

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

10 Analysis of staff costs, trustee remuneration and expenses, and the cost of key management personnel (continued)

Termination payments of £678,000 (2023: £649,000) were made in the year, due to a change in the staffing structure.

Average monthly number of employees and temporary staff (all of whom
are directly or indirectly employed in the administration of examinations).
By activity:
Educational services
Support and administration
Digital and consultancy services		 2024
2023
Number
Number
1,270
1,168
442
458
132
48
1,844
1,674

Having received Charity Commission permission £15,000 (2023: £15,000) was paid to Mr van Wijngaarden in his role as Chair of the Trustees. The Trustees have been reimbursed for all expenses incurred by them in connection with their attendance at meetings of the Board, other committees or general meeting of the Charity or otherwise in connection with their discharge of their duties as Trustees. Travelling and subsistence expenses amounting to £8,101 (2023: £2,321) , were reimbursed to 12 (2023: 6) trustees.

The key management personnel of the parent Charity comprise the Executive Team alongside the Trustees of the Charity. The total remuneration of the key management personnel of the Charity over the full year was £1,876,000 (2023: £1,995,000) . The remuneration of the Chief Executive Officer, who is also a Trustee, was £373,000 (2023: £348,000 ). Remuneration for key management personnel and Chief Executive Officer includes employer pension contributions, employers’ national insurance, termination payments and benefits in kind. During the year a termination payment of £125,000 was paid to one member of key management personnel.

The key management personnel of the Group comprise those of the Charity and the key management personnel of its wholly owned subsidiaries. The remuneration of the key management personnel of the subsidiaries totalled £1,649,000 (2023: £1,276,000). The increase year on year is due to acquisitions of subsidiaries during the year. The total remuneration of the key management personnel for the Group was £3,525,000 (2023: £3,271,000).

55

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

10 Analysis of staff costs, trustee remuneration and expenses, and the cost of key management personnel (continued)

There were 273 (2023: 200) employees whose emoluments, excluding pension contributions and employers’ national insurance, but including benefits in kind and termination payments, were in excess of £60,000.

Group

Group
Year ended Year ended
31 March 2024 31 March 2023
Number Number
Higher paid employees fell within the following bands:
£60,001 to £70,000 125 97
£70,001 to £80,000 66 45
£80,001 to £90,000 35 16
£90,001 to £100,000 15 15
£100,001 to £110,000 12 9
£110,001 to £120,000 7 5
£120,001 to £130,000 2 1
£130,001 to £140,000 2 3
£140,001 to £150,000 2 1
£150,001 to £160,000 2 1
£160,001 to £170,000 1 1
£170,001 to £180,000 - 2
£180,001 to £190,000 - 2
£190,001 to £200,000 2 -
£210,001 to £220,000 - 1
£280,001 to £290,000 1 -
£300,001 to £310,000 - 1
£330,001 to £340,000 1 -

The number of employees whose emoluments exceeded £60,000 have increased year on year due to a combination of factors including an increase in headcount and annual salary pay rises.

Contributions by the employer were made to defined benefit pension schemes for 29 (2023: 31) higher paid employees. Contributions amounting to £1,661,000 (2023: £1,456,000) were made to defined contribution schemes for 261 (2023: 193) higher paid employees. Pension contributions have increased in line with the number of higher paid employees. The AQA Pension scheme includes both defined benefit and defined contribution elements.

56

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

11 Intangible assets

Group
COST
At 1 April 2023
Additions from acquisitions
Additions
Transfer
Reduction in contingent consideration
At 31 March 2024
ACCUMULATED AMORTISATION
At 1 April 2023
Amortisation charge for the year
Impairment
At 31 March 2024
NET BOOK VALUE
At 31 March 2024
At 31 March 2023		 Goodwill
Software
Development
expenditure
Assets under
development
Total
£000
£000
£000
£000
£000
51,138
68,633
15,099
8,913
143,783
-
1,744
-
-
1,744
4,498
1,099
-
3,679
9,276
-
12,592
-
(12,592)
-
(3,026)
-
-
-
(3,026)
52,610
84,068
15,099
-
151,777
9,130
54,553
15,099
-
78,782
5,822
13,878
-
-
19,700
4,715
396
-
-
5,111
19,667
68,827
15,099
-
103,593
32,943
15,241
-
-
48,184
42,008
14,080
-
8,913
65,001

Goodwill and Software impairments reflect the unexpected loss of customer contracts during the year which resulted in a decrease to subsidiary revenues and cash flows. Additionally, a review of subsidiary’s business and software performance concluded that it did not meet expectations due to inadequate technology. Consequently, we decided to decommission the asset and invest in an alternative solution.

Goodwill Software Assets under Total
Charity development
£000 £000 £000 £000
COST
At 1 April 2023 - 65,912 8,913 74,825
Additions from Hive up 171 500 - 671
Additions - 143 3,679 3,822
Transfer - 12,592 (12,592) -
At 31 March 2024 171 79,147 - 79,318
ACCUMULATED AMORTISATION
At 1 April 2023 - 52,995 - 52,995
Accumulated amortisation from Hive up 6 28 - 34
Amortisation charge for the year 34 12,984 - 13,018
At 31 March 2024 40 66,007 - 66,047
NET BOOK VALUE
At 31 March 2024 131 13,140 - 13,271
At 31 March 2023 - 12,917 8,913 21,830
57

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

11 Intangible assets (continued)

Software includes £nil (2023: £8,964,000) relating to the net book value for Nexus, our bespoke exam processing system. This was fully amortised during the year. It also includes £10,635,000 (2023: included in assets under development £8,913,000) relating to our new ERP system. Amortisation is due to finish in the 2026/27 financial year.

12 Tangible fixed assets

Group
Freehold
Land &
Buildings
£000
COST
At 1 April 2023
2,534
Additions
-
Transfer
-
Disposals
(2,084)
At 31 March 2024
450
ACCUMULATED DEPRECIATION
At 1 April 2023
901
Charge for the year
28
On disposals
(929)
At 31 March 2024
-
NET BOOK VALUE
At 31 March 2024
450
At 31 March 2023
1,633
Charity
COST
At 1 April 2023
Additions
Transfer
Disposals
At 31 March 2024
ACCUMULATED DEPRECIATION
At 1 April 2023
Charge for the year
On disposals
At 31 March 2024
NET BOOK VALUE
At 31 March 2024
At 31 March 2023		 Freehold
Land &
Buildings
£000
2,534
-
-
(2,084)		 Leasehold
Land &
Buildings
IT
Equipment
Furniture,
Equipment
and Vehicles
Assets under
construction
Total
£000
£000
£000
£000
£000
17,634
3,220
14,547
9,307
47,242
1,647
306
3,056
5,694
10,703
15,001
-
-
(15,001)
-
(15,107)
(2)
(2,464)
-
(19,657)
450
19,175
3,524
15,139
-
38,288
9,389
2,982
7,744
-
21,016
828
169
1,214
-
2,239
(8,090)
(2)
(2,464)
-
(11,485)
- 2,127
3,149
6,494
-
11,770
450
17,048
375
8,645
-
26,518
1,633 8,245
238
6,803
9,307
26,226
Leasehold
Land &
Buildings
IT
Equipment
Furniture,
Equipment
and Vehicles
Assets under
construction
Total
£000
£000
£000
£000
£000
17,634
2,348
2,472
9,307
31,761
1,647
243
2,134
5,694
9,718
15,001
-
-
(15,001)
-
(15,106)
(39)
(2,282)
-
(17,427)
19,176
2,552
2,324
-
24,052
9,389
2,348
2,303
-
14,040
828
47
188
-
1,063
(8,093)
(39)
(2,183)
-
(10,315)
2,124
2,356
308
-
4,788
17,052
196
2,016
-
19,264
8,245
-
169
9,307
17,721

58

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

13 Investment in subsidiary undertakings and joint ventures

(a) Cost of investment in subsidiary undertakings
At 1 April 2023
Additions
AlphaPlus Consultancy Limited
Blutick Limited
AC3 Solutions Limited
GradeMaker Limited
Group reorganisation - share for share exchange (see below)*
Blutick Limited
Doublestruck Limited
AlphaPlus Consultancy Limited
AQA Assessment Services Limited
GradeMaker Limited
AQA Commercial Services Limited
Other Movements
AQA Commercial Services Limited (Blutick impairment)
AQA Commercial Services Limited (GradeMaker impairment)
AQA Commercial Services Limited (AlphaPlus impairment)
AC3 Solutions Limited (Hive Up)
At 31 March 2024
AQA Assessment Services Limited
AC3 Solutions Limited
AQA Commercial Services Limited		 2024
2023
£000
£000
26,449
24,432
-
1
-
1,339
-
677
6,128
-
6,128
2,017
-
(1,339)
-
(5,826)
-
(11,299)
(7,308)
-
(6,128)
-
13,436
18,464
-
-
(1,339)
-
(6,128)
-
(2,012)
-
(677)
-
(10,156)
-
-
7,308
-
677
22,421
18,464
22,421
26,449

The impairments above are the impacts to the Charity of the same impairments described in note 11, Intangible Assets of the Group.

59

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

13 Investment in subsidiary undertakings and joint ventures (continued)

A list of the subsidiary undertakings is provided below:

Name of the entity Company Registered Office Address Parent Entity % of
Number ownership
interest
AQA Assessment 05568337 Devas Street, Manchester, AQA Commercial 100%
Services Limited M15 6EX Services Limited
AC3 Solutions Limited 08453864 Devas Street, Manchester, AQA Education 100%
M15 6EX
AQA Commercial 14299239 Devas Street, Manchester, AQA Education 100%
Services Limited M15 6EX
AlphaPlus Consultancy 04801609 Devas Street, Manchester, AQA Commercial 100%
Limited M15 6EX Services Limited
Training Qualifications 07827508 Crossgate House, Cross AQA Commercial 100%
UK Limited Street, Sale, M33 7FT Services Limited
Doublestruck Limited 02373295 Devas Street, Manchester, AQA Commercial 100%
M15 6EX Services Limited
Blutick Limited 11318113 Devas Street, Manchester, Doublestruck 100%
M15 6EX Limited
GradeMaker Limited* 08936673 Devas Street, Manchester, AQA Assessment 100%
M15 6EX Services Limited

*On 1 December 2023, the shares of GradeMaker Limited were transferred from AQA Education to AQA Assessment Services Limited. AQA Assessment Services Limited was then transferred to AQA Commercial Services Limited on 31 March 2024. The remaining transfers were made in exchange for shares in AQA Commercial Services Limited on 31 March 2024. This has been done as part of a reorganisation of the Group structure, and has been accounted for in the relevant entities financial statements in accordance with merger accounting.

60

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

13 Investment in subsidiary undertakings and joint ventures (continued)

The summarised financial information of the subsidiary information of the subsidiary undertakings is provided below: undertakings is provided below:
Gross Expenditure Profit/(loss) Assets Liabilities Funds /
Income for the year Reserves
2024 2024 2024 2024 2024 2024
£000 £000 £000 £000 £000 £000
AQA Assessment 27,513 (13,048) 14,465 12,366 (2,646) 9,720
Services Limited
AC3 Solutions Limited 113 (56) 57 - - -
AQA Commercial 6,132 (3,579) 2,553 62,576 (38,541) 24,035
Services Limited
AlphaPlus Consultancy 7,274 (7,028) 246 4,196 (762) 3,434
Limited
Training Qualifications 11,638 (8,998) 2,640 6,872 (2,237) 4,635
UK Limited
Doublestruck Limited 5,892 (4,020) 1,872 3,695 (3,509) 186
Blutick Limited 41 (143) (102) - - -
GradeMaker Limited 336 (1,183) (847) - - -

Figures for GradeMaker Limited represent the period from acquisition to 31 March 2024. AC3 Solutions Limited, Blutick Limited and GradeMaker Limited have nil assets and liabilities as they have been hived up into their respective parent.

Gross Expenditure Profit/(loss) Assets Liabilities Funds /
Income for the year Reserves
2023 2023 2023 2023 2023 2023
£000 £000 £000 £000 £000 £000
AQA Assessment 23,136 U(21,873) 1,263 11,806 (16,552) (4,746)
Services Limited
AC3 Solutions Limited 68 (13) 55 184 (111) 73
AQA Commercial - (941) (941) 59,429 (41,905) 17,524
Services Limited
AlphaPlus Consultancy 7,422 (7,093) 329 4,983 (1,409) 3,574
Limited
Training Qualifications 2,348 (1,864) 484 9,559 (1,863) 7,696
UK Limited
Doublestruck Limited 5,130 (5,063) 67 5,228 (3,289) 1,939
Blutick Limited 2 (68) (66) 7 (54) (47)

Figures for Blutick Limited (acquired 8 November 2022), AC3 Solutions Limited (acquired 4 December 2022), AQA Commercial Services Limited (incorporated 16 August 2022) and Training Qualifications UK Limited (acquired 14 December 2022) represent the period from acquisition to 31 March 2023.

61

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

13 Investment in subsidiary undertakings and joint ventures (continued)

(b) Cost of investment in joint venture

b) Cost of investment in joint venture
At 1 April 2023
Funding payments
Share of loss
At 31 March 2024		 2024
2023
£000
£000
(733)
(479)
1,350
350
(1,137)
(604)
(520)
(733)

AQA’s share of the accumulated losses of the joint venture which exceeds the amount invested is included within provisions for liabilities and charges on the balance sheet and is stated at cost less impairment. During the year, an addition of £1,350,000 (2023: £350,000) was made to the cost of the investment.

The joint venture listed below has share capital consisting solely of ordinary shares, which is held directly by the Group.

Place of % of Nature of the Measurement
business/country ownership **relationship ** method
Name of the entity **of incorporation ** interest
Oxford International AQA
Examinations Limited United Kingdom 50 See below Equity

Oxford International AQA Examinations Limited offers a suite of international GCSE, AS and A-level qualifications to schools outside the UK that teach a British curriculum. The qualifications are designed and delivered by AQA and externally validated to ensure they are comparable to UK qualifications.

The business made a loss in the year, in line with expectations at this stage of its growth and the AQA Trustees remain positive about future trading. AQA remains committed to funding its share of the jointly controlled entity.

62

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

14 Acquisition of subsidiaries

On 1 April 2023, AQA acquired 100% of the share capital of GradeMaker Limited, a private limited company registered in England and Wales which is an assessment-authoring and item-banking software used to develop exams.

In calculating the goodwill arising on acquisition, we reviewed the financial information and nature of the business and confirm that there are no fair value adjustments however there was a need to recognise an intangible asset for Intellectual Property. The goodwill balance is attributed to the support the software will provide to the current operations of the AQA Group.

Book value
Fair value
adjustments
£’000
£’000
Assets
Intangible fixed assets
-
1,744
Debtors
198
-
Cash at bank and in hand
86
-
Total assets
284
1,744
Creditors
Due within one year
(398)
-
Net assets
(114)
1,744
Goodwill (note 11)
Total purchase consideration (including expenses of £286,000)
Purchase consideration settled in cash
Total consideration
Purchase consideration settled in cash
Cash and cash equivalents in subsidiary acquired
Cash outflow on acquisition		 Book value
Fair value
adjustments
£’000
£’000
-
1,744
198
-
86
-		 Fair value
£’000
1,744
198
86
284
1,744
(398)
-		 2,028
(398)
(114)
1,744		 1,630
4,498
6,128
6,128
6,128
6,128
(86)
6,042

The useful economic life of goodwill was estimated to be 5 years when purchased during the year but was fully impaired by the year end.

Since the acquisition date, GradeMaker Limited has contributed £336,000 to Group turnover and a deficit of £847,000 to Group net income.

63

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

15 Other fixed asset investments

Investments

Market value at 1 April 2023
Additions at cost
Disposals at market value (i.e. sales proceeds)
Net movements in cash held with fund managers
Net investment gains/(losses)
Market value at 31 March 2024
Cost at 31 March 2024
Balance on net unrealised gain reserve		 Group
& Charity
Group
& Charity
2024
2023
£000
£000
48,687
49,685
20,470
25,365
(19,783)
(20,859)
(426)
(4,083)
4,411
(1,420)
53,359
48,687
50,472
48,038
2,887
649

64

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

15 Other fixed asset investments (continued)

Analysis of market value of investments held

Equities
United Kingdom
Overseas
Bonds
United Kingdom
Overseas
Multi asset funds
Alternatives
Hedge funds
Property
Commodities
Other
Cash held with fund managers		 Group &
Charity
% of
total
Group &
Charity
% of
total
2024
2023
£000
£000
79
0.1
543
1.1
1,930
3.6
11,178
23.0
453
0.8
2,070
4.2
702
1.3
1,938
4.0
48,743
91.4
26,995
55.4
109
0.2
371
0.8
459
0.9
1,366
2.8
167
0.3
998
2.1
419
0.8
2,504
5.1
298
0.6
724
1.5
53,359
100
48,687
100

All investments are carried at their fair value. Investment in equities and bonds are all traded in quoted public markets, such as the London Stock Exchange. Holdings in multi asset funds and other investments are as advised by the fund managers. The basis of fair value for quoted investments is equivalent to the market value, using the bid price. Asset sales and purchases are recognised at the date of trade at cost (that is their transaction value).

65

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

16 Stocks and work in progress

Raw materials
Finished goods		 Group
Charity
Group
Charity
2024
2024
2023
2023
£000
£000
£000
£000
-
-
1,172
-
1,420
891
1,000
859
1,420
891
2,172
859

The balances above are shown net of a provision amounting to £nil (2023: £119,000) .

17 Debtors

Trade debtors
Amounts owed by Group undertakings
Amount due from related party
Deferred tax asset
Other debtors
Prepayments and accrued income		 Group
Charity
Group
Charity
2024
2024
2023
2023
£000
£000
£000
£000
90,821
85,933
99,134
95,418
-
35,856
-
51,350
462
462
274
274
-
-
1,600
-
15,529
15,518
6,287
6,208
7,476
4,807
6,857
4,447
114,288
142,576
114,152
157,697

Trade debtors are lower year on year due to billing for the summer 2024 series being issued earlier compared to prior year for the summer 2023 series, resulting in more cash being received before the financial year end.

Prepayments and accrued income includes £484,000 (2023: £582,000) falling due after more than one year.

Other debtors includes £15,349,000 (2023: £2,500,000) in relation to the surrender proceeds for the property in Guildford. It also includes £169,000 (2023: £185,000) falling due after more than one year.

Amounts due from Group undertakings are unsecured. Loans are repayable on demand with twelve months’ notice and interest is charged at an annual commercial rate of 4.75% over the base rate. Loans arranged before 31 March 2022 use the Royal Bank of Scotland base rate, those arranged afterwards use the Bank of England base rate.

18 Current investments

Investments totalling £56,662,000 (2023: £58,771,000) shown under current assets for the Group and Charity are represented by shares in the BlackRock Institutional Sterling Liquidity Fund and Goldman Sachs Sterling Liquid Reserves Fund. These are deemed to be highly liquid funds. It is management’s intention that these funds are held for investment purposes and as such do not form part of cash and cash equivalents.

66

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

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19 Creditors: amounts falling due within one year

Trade creditors
Amounts owed to Group undertakings
Taxation and social security costs
Other creditors
Accruals and deferred income		 Group
Charity
Group
Charity
2024
2024
2023
2023
£000
£000
£000
£000
4,655
3,983
7,104
6,377
-
1,462
-
2,221
2,779
2,001
2,493
1,507
1,199
790
2,100
621
232,008
226,345
214,264
208,528
240,641
234,581
225,961
219,254

Amounts due to Group undertakings are unsecured. Loans are repayable on demand with twelve months’ notice and interest is charged at an annual commercial rate of 4.75% over the Royal Bank of Scotland base rate.

The movement on deferred income during the year was:

Balance at 1 April 2023
Amount deferred in the year
Amount released in the year
Balance at 31 March 2024		 Group
Charity
Group
Charity
2024
2024
2023
2023
£000
£000
£000
£000
206,134
202,350
180,727
178,215
221,625
217,699
206,057
202,350
(206,134)
(202,350)
(180,650)
(178,215)
221,625
217,699
206,134
202,350

Income for the provision of examination services is recognised when all services associated with the qualification are substantially completed. Income received in advance of the examination series is deferred and recognised when the examination series takes place.

67

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

20 Financial instruments

The Group and Charity have the following financial instruments:

Note
Financial assets measured at fair value
through consolidated statement of financial
activities:
Investment in securities
Equities
15
Bonds
15
Multi asset funds
15
Alternatives
15
Cash held with fund managers
15
Short-term deposits
18		 Group
Charity
Group
Charity
2024
2024
2023
2023
£000
£000
£000
£000
2,009
2,009
11,721
11,721
1,115
1,115
4,008
4,008
48,744
48,744
26,995
26,995
1,154
1,154
5,239
5,239
297
297
724
724
138,253
138,253
58,771
58,771
191,572
191,572
107,458
107,458

The Group’s activities expose it to a variety of financial risks: market risk (including price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. Details on the Group’s exposure to each type of risk and how it manages those risks are detailed in ‘Financial risk management’ section of the Strategic Report.

68

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

21 Provisions for liabilities and charges

Group
Balance at 1 April 2023
Provided in the year
Utilised in the year
Reduction in estimate
Released to SOFA
Balance at 31 March 2024
Charity
Balance at 1 April 2023
Provided in the year
Utilised in the year
Reduction in estimate
Released to SOFA
Balance at 31 March 2024		 Contingent
consideration
Leasehold
dilapidations
Share of loss in
joint venture
Other
provisions
Total
£000
£000
£000
£000
£000
8,962
2,593
733
279
12,567
-
161
1,137
283
1,581
(1,362)
-
(1,350)
-
(2,712)
(3,026)
-
-
-
(3.026)
-
(1,285)
-
-
(1,285)
4,574
1,469
520
562
7,125
Contingent
consideration
Leasehold
dilapidations
Share of loss in
joint venture
Other
provisions
Total
£000
£000
£000
£000
£000
4,933
1,721
733
2
7,389
-
85
1,137
-
1,222
(1,362)
-
(1,350)
-
(2,712)
(2,216)
-
-
-
(2,216)
-
(1,285)
-
-
(1,285)
1,355
521
520
2
2,398

Contingent consideration

This provision relates to future consideration due for the acquisition of AlphaPlus Consultancy Limited and Training Qualifications UK Limited. Actual consideration will be calculated based on performance of the entities in the postacquisition period. The provision represents management’s forecasts for these companies.

Other provisions

Other provisions includes £560,000 (2023: £277,000) relating to potential withdrawing learners, that have registered on qualifications. Other provisions also includes £2,000 (2023: £2,000) relating to estimated costs of changes to staffing structures.

Leasehold dilapidations

As part of the property leasing arrangements there is an obligation to repair damages and make good leasehold properties when they are vacated. The provision is expected to be utilised between 2023 and 2108 as the leases terminate.

Share of loss in joint venture

The share of loss in the joint venture relates to AQA's share of the loss in the Oxford International AQA Examinations Limited entity which is jointly held with Oxford University Press. The provision will be offset against future profits of the joint venture.

69

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

22 Total Charity Funds

Analysis of movements in unrestricted funds
1 April Net Income / Investment and Transfers 31 March
2023 (expenditure) actuarial 2024
Group gains / (losses)
£000 £000 £000 £000 £000
Designated funds
Pension fund 6,244 - - 142 6,386
Total designated funds 6,244 - - 142 6,386
Unrestricted general funds
General unrestricted funds 75,583 29,933 2,173 (43,443) 64,246
Fixed asset fund 49,217 (16,117) - 41,602 74,702
Investment revaluation reserve 649 - 2,238 - 2,887
Total unrestricted general funds 125,449 13,816 4,411 (1,841) 141,835
Unrestricted funds before
pension asset 131,693 13,816 4,411 (1,699) 148,221
Net pension asset 24,503 - (9,822) 1,699 16,380
Total Group funds 156,196 13,816 (5,411) - 164,601

The pension fund is a designated fund which has been created to help fund a buy-out of the pension scheme with an insurance company at some time in the future.

Analysis of net assets between funds 2024

Group
Intangible assets
Tangible assets
Investments
Current assets
Liabilities
Provisions
Pension reserve
Total net assets		 Designated
fund
General
fund
Pension
fund
Total unrestricted
funds
-
48,184
-
48,184
-
26,518
-
26,518
-
53,359
-
53,359
6,386
261,540
-
267,926
-
(240,641)
-
(240,641)
-
(7,125)
-
(7,125)
-
-
16,380
16,380
6,386
141,835
16,380
164,601

70

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

22 Total Charity Funds (continued)

Analysis of movements in unrestricted funds Analysis of movements in unrestricted funds Analysis of movements in unrestricted funds
1 April Movement on Net income / Investment and
Transfers		 31 March
2023 reserves (expenditure) actuarial 2024
Charity gains/(losses)
£000 £000 £000 £000
£000		 £000
Designated funds
Pension fund 6,244 - - -
142		 6,386
Total designated funds 6,244 - - -
142		 6,386
Unrestricted general funds
General unrestricted funds 103,672 (40) 21,251 2,173
(8,872)		 118,184
Fixed asset fund 39,550 - (14,047) -
7,031		 32,534
Investment revaluation reserve 649 - - 2,238
-		 2,887
Total unrestricted general funds 143,871 (40) 7,204 4,411
(1,841)		 153,605
Unrestricted funds before
pension asset 150,115 (40) 7,204 4,411
(1,699)		 159,991
Net pension asset 24,503 - - (9,822)
1,699		 16,380
Total charity funds 174,618 (40) 7,204 (5,411) - 176,371

The pension fund is a designated fund which has been created to help fund a buy-out of the pension scheme with an insurance company at some time in the future.

The movement on reserves relates to the brought forward amortisation of goodwill on hive up of AC3 solutions Limited to AQA Education.

Analysis of net assets between funds 2024

Charity
Intangible assets
Tangible assets
Investment in subsidiary undertakings
Investments
Current assets
Liabilities
Provisions
Pension reserve
Total net assets		 Designated
fund
General
fund
Pension
fund
Total unrestricted
funds
-
13,271
-
13,271
-
19,264
-
19,264
-
22,421
-
22,421
-
53,359
-
53,359
6,386
282,269
-
288,655
-
(234,581)
-
(234,581)
-
(2,398)
-
(2,398)
-
-
16,380
16,380
6,386
153,605
16,380
176,371

71

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

22 Total Charity Funds (continued)

Analysis of movements in unrestricted funds
1 April Net income / Investment Transfers 31 March
2022 (expenditure) and actuarial 2023
Group gains/(losses)
£000 £000 £000 £000 £000
Designated funds
Pension fund 4,501 - - 1,743 6,244
Total designated funds 4,501 - - 1,743 6,244
Unrestricted general funds
General unrestricted funds 73,548 (12,587) 1,973 12,649 75,583
Fixed asset fund 48,365 (17,909) - 18,761 49,217
Investment revaluation reserve 4,042 - (3,393) - 649
Total unrestricted general
funds 125,955 (30,496) (1,420) 31,410 125,449
Unrestricted funds before
pension asset 130,456 (30,496) (1,420) 33,153 131,693
Net pension asset 25,713 - 31,943 (33,153) 24,503
Total Group funds 156,169 (30,496) 30,523 - 156,196

The pension fund is a designated fund which has been created to help fund a buy-out of the pension scheme with an insurance company at some time in the future.

Analysis of net assets between funds 2023

Group
Intangible assets
Tangible assets
Investments
Current assets
Liabilities
Provisions
Pension reserve
Total net assets		 Designated
fund
General
fund
Pension fund
Total
unrestricted
funds
-
65,001
-
65,001
-
26,226
-
26,226
-
48,687
-
48,687
6,244
224,063
-
230,307
-
(225,961)
-
(225,961)
-
(12,567)
-
(12,567)
-
-
24,503
24,503
6,244
125,449
24,503
156,196

72

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

22 Total Charity Funds (continued)

Analysis of movements in unrestricted funds Analysis of movements in unrestricted funds
1 April 2022 Net Income Investment and Transfers 31 March
actuarial gains / 2023
Charity (losses)
£000 £000 £000 £000 £000
Designated funds
Pension fund 4,501 - - 1,743 6,244
Total designated funds 4,501 - - 1,743 6,244
Unrestricted general funds
General unrestricted funds 101,026 (14,339) 1,973 15,012 103,672
Fixed asset fund 39,588 (16,436) - 16,398 39,550
Investment revaluation reserve 4,042 - (3,393) - 649
Total unrestricted general
funds 144,656 (30,775) (1,420) 31,410 143,871
Unrestricted funds before
pension asset 149,157 (30,775) (1,420) 33,153 150,115
Net pension asset 25,713 - 31,943 (33,153) 24,503
Total charity funds 174,870 (30,775) 30,523 - 174,618

The pension charge fund accounts is a designated fund which has been created to help fund a buy-out of the pension scheme with an insurance company at some time in the future.

Analysis of net assets between funds 2023

Charity
Intangible assets
Tangible assets
Investment in subsidiary undertakings
Investments
Current assets
Liabilities
Provisions
Pension reserve
Total net assets		 Designated
fund
General fund
Pension fund
Total
unrestricted
funds
-
21,830
-
21,830
-
17,721
-
17,721
-
26,449
-
26,449
-
48,687
-
48,687
6,244
255,827
-
262,071
-
(219,254)
-
(219,254)
-
(7,389)
-
(7,389)
-
-
24,503
24,503
6,244
143,871
24,503
174,618

73

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

22 Total Charity Funds (continued)

Transfer of funds from general unrestricted funds to fixed asset fund and pension charged accounts is to reallocate resources received to further invest in our fixed assets and contribute to our pension escrow account to fund a buyout of the pension scheme.

23 Net cash generated from operations

Reconciliation of net income to net cash generated from operations

Net income/(expenditure) after tax
Net investment income excluding net finance income on defined benefit pension
schemes
Depreciation
(Profit)/ loss on disposal of tangible fixed assets
Amortisation of intangibles
Impairment of intangibles
Decrease in stocks
Decrease in debtors
Increase in creditors
Decrease in provisions
Post-employment benefits cost less payments
Net cash generated from operations		 Group
2024
2023
£000
£000
13,816
(30,496)
(3,600)
(1,402)
2,239
1,659
(14,605)
56
19,700
18,710
8,138
-
752
102
15,411
43,567
17,432
27,718
(4,092)
(1,395)
(1,699)
33,153
53,492
91,672

Movement on debtors and creditors has been adjusted for sale proceeds received in the prior and subsequent years.

Analysis of changes in net debt

Other fixed asset investments cash
Cash at bank and in hand
Total cash and cash equivalents		 At 1 April
2023
Cash flows
Purchase
of subsidiaries, net
of cash acquired
At 31 March
2024
£000
£000
£000
£000
724
(426)
-
298
55,212
46,386
(6,042)
95,556
55,936
45,960
(6,042)
95,854

Included in the cash at bank and in hand balance at 31 March 2024 is £6,386,000 (2023: £6,243,000) relating to a pension fund account to help fund a buy-out of the AQA Pension Scheme with an insurance company at some time in the future.

74

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

24 Operating lease commitments

At 31 March AQA had the following future minimum lease payments under non-cancellable operating leases, for each of the following years:

Not later than one year
Later than one year and not later than five years
Later than five years		 Group
2024
Charity
2024
Group
2023
Charity
2023
£000
£000
£000
£000
1,634
873
1,926
1,056
5,424
3,166
6,073
3,328
5,987
3,735
6,868
4,145
13,045
7,774
14,867
8,529

25 Capital commitments

There were £nil capital commitments contracted for at 31 March 2024 but not provided for (2023: £1,850,000) in relation to contracts for software systems.

75

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

26 Related party transactions

In the prior year AQA provided ACSL, a loan facility of up to £40,000,000 with drawdowns charged at 4.75% above the Bank of England base rate. At the year-end, the loan balance was £33,910,000 (2023: £36,507,000), including £3,536,000 in interest charged to the SOFA (2023: £911,000) and a repayment of £6,133,000 (2023: Nil). The loan is repayable on demand and secured by a fixed and floating charge against all company assets. In addition, £1,369,000 (2023: £361,000) was owed to AQA Education relating to other expenses paid on behalf of ACSL.

During the year, AQA charged Doublestruck £503,000 (2023: £420,000) for royalty fees, Doublestruck charged AQA £150,000 (2023: £75,000) for loan interest and Doublestruck paid Gift Aid of £1,985,000 (2023: £1,933,000) to AQA. At the year-end, Doublestruck owed AQA £132,000 (2023: £114,000) in respect of unpaid royalties and the balance on the loan owed to Doublestruck was £825,000 (2023: £1,916,000), £25,000 (2023: £16,000) of which relates to unpaid interest. Interest is charged at 4.75% above the Royal Bank of Scotland base rate, and the balance is repayable on demand with 12 months’ notice.

During the year, AASL charged AQA £22,718,000 (2023: £19,703,000) for digital and IT services, AQA charged AASL £1,169,000 (2023: £729,000) for loan interest and £886,000 (2023: £449,000) for management charges. At the year-end AASL owed AQA £445,000 (2023: £95,000) for services performed and £nil (2023: £13,977,000) in respect of the loan and accrued interest which was written off AASL’s transfer from AQA to ACSL. The total loan facility available to AASL from AQA is £20,000,000, with interest charged at 4.75% above the Royal Bank of Scotland base rate, repayable on demand with 12 months’ notice.

During the year, AQA provided funding to Blutick of £250,000 (2023: £50,000), the amounts were fully repaid in the year. AlphaPlus performed consultancy services for AQA during the year and charged £54,000 (2023: £94,000), at the yearend, £nil (2023: £59,000) was owed by AQA.

There have been no related party transactions to disclose with AC3 Solutions in the reporting year, and there are no outstanding balances at the year-end date.

During the year, Training Qualifications UK paid £6,133,000 dividend to AQA Commercial Services Limited. There are no outstanding balances with related parties as at the year-end date.

The amounts recharged to the joint venture, Oxford International AQA Examinations Limited, in the year were £2,751,000 (2023: £1,468,000). As at the year-end, the balance due to AQA was £274,000 (2023: £274,000). During the year an addition of £1,350,000 (2023: £350,000) was made to the cost of investment by a 0% interest loan. Total cost of investment was £7,650,000 (2023: £6,300,000). AQA's share of the accumulated losses of the joint venture, which exceeds the amount invested, is included within provisions for liabilities and charges on the balance sheet and is stated at cost less impairment resulting in a provision of £520,000 (2023: £733,000).

During the year, the shares of GradeMaker Limited were transferred from AQA to AQA Assessment Services and shares of AQA Assessment Services were transferred from AQA to AQA Commercial Services. The shares were transferred in exchange for additional shares in the company. This was done as part of a group structure reorganisation and has been accounted for in the relevant entities financial statements in accordance with merger accounting. Please see note 13 for further details.

Trustee and key management remuneration are disclosed in Note 10.

76

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

27 Retirement benefits

AQA participated in a defined benefit pension scheme, the AQA Pension Scheme, as well as two national, Teacher Pension Scheme (TPS) and University Superannuation Scheme (USS), defined benefit schemes. In accordance with section 28 of FRS 102, unfunded pension liabilities are included in the defined benefit pension schemes liability for the two principal schemes.

USS and TPS are multi-employer defined benefit schemes where it is not possible to separately identify the assets and liabilities for each participating employer. Accordingly, contributions are treated as defined contribution schemes for accounting purposes. The net balance sheet asset for the aggregation of the schemes is detailed as follows:

Total AQA employer contributions
The defined benefit pension scheme asset is made up as follows:
The AQA Pension Scheme
The defined benefit pension schemes’ liability is made up as follows:
Unfunded pension liabilities
USS		 2024
2023
£000
£000
735
1,756
2024
2023
£000
£000
18,977
27,454
2024
2023
£000
£000
2,360
2,567
237
384
2,597
2,951

During the year, AQA operated the AQA Pension Scheme which incorporates a defined benefit section providing benefits based on pensionable salary. The assets of the scheme were held separately from those of AQA being invested in trustee administered funds. The defined benefit section of the scheme was closed to new entrants from July 2006 and to future accruals from January 2011.

The plan is administered by independent trustees, who are responsible for ensuring that the plan is sufficiently funded to meet current and future obligations. The last completed full actuarial valuation of the Pension Scheme was at 30 September 2021.

On 28 February 2023, AQA ceased participation in the Greater Manchester Pension Fund (GMPF), an externally funded defined benefit pension scheme and settled the scheme.

Unfunded pension liabilities represent the liability of unfunded pensions for former employees of AQA.

AQA continues to review its pension scheme offering and is committed to providing a high-quality, fair and consistent employee offer to all colleagues.

77

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

27 Retirement benefits (continued)

AQA has recognised the surplus on the AQA Pensions Scheme as the rules of the scheme mean the Pension Trustees do not have a unilateral right to trigger a wind-up, thereby allowing the scheme, to be run-off until the death of the final beneficiary, with a refund of the surplus then being available to the company.

Principal actuarial assumptions

The principal actuarial assumptions at the reporting date (expressed as a range where applicable) are:

2024 2023
% per annum % per annum
Price increases 2.85 – 3.25 2.90 – 3.30
Pension increases - in payment 2.15 – 3.00 2.15 – 2.95
Pension increases - deferred 2.85 2.80
Salary increases 3.35 3.40
Discount rate 4.80 4.70

The figures presented in these disclosures are based on the mortality assumptions adopted for the latest funding valuation with additional margins for prudence removed. For the AQA scheme the tables used are 95.1 % (2023: 95.1%) of S2PxA (96.6% (2023: 96.6%) of S2PxA) tables for males (females); future improvements are in line with the CMI 2022 projections subject to a long term trend rate of 1.25% (2023: 1.25%) . %) . Example life expectancies from age 65 are: 21.5 (2023: 21.9) years for males and 24.0 (2023: 24.3) years for females, currently aged 65; and 22.8 (2023: 23.2) years for males and 25.4 (2023: 25.7) years for females, currently aged 45.

For the unfunded arrangements the same tables as the AQA liabilities are used but these are adjusted to reflect the assumed higher life expectancy of these members, specifically 95.1% (2023: 95.1%) of S3PxA for males and 96.6% (2023: 96.6%) S2PxA for females; future improvements are in line with the CMI 2022 projections subject to a long term trend rate of 1.25% (2023: 1.25%) . Example life expectancies from age 65 are: 24.2 (2023: 24.6) years for males and 26.7 (2023: 27.0) years for females, currently aged 65; and 25.4 (2023: 25.8) years for males and 28.0 (2023: 28.3) years for females, currently aged 45.

Statement of financial position disclosures

The amounts recognised in the statement of financial position are as follows:

Fair value of scheme
assets
Present value of
liabilities
Net pension
asset/(liability)		 Net Pension Asset
Net Pension Liabilities
Total
2024
2023
2024
2023
2024
2023
£000
£000
£000
£000
£000
£000
129,682
139,325
-
-
129,682
139,325
(110,705)
(111,871)
(2,597)
(2,951)
(113,302)
(114,822)
18,977
27,454
(2,597)
(2,951)
16,380
24,503

78

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

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27 Retirement benefits (continued)

The major categories of scheme assets as a percentage of total scheme assets are as follows:

Equities
Property
Bonds
Hedge Funds
Cash and other
Total		 2024
2023
%
%
20.3
18.5
-
3.4
34.9
36.7
2.3
6.1
42.5
35.3
100.0
100.0

Consolidated statement of financial activities disclosures

Amounts recognised in the consolidated statement of financial activities before net expenditure

Current service cost
Past service cost
Scheme administration expenses
Net interest on asset
Loss on settlement of GMPF Scheme
Total
ctual loss on scheme assets
he actual loss on plan assets was:
Interest income
Loss on plan assets excluding interest income
Actual loss on scheme assets		 2024
2023
£000
£000
174
1,272
(1,096)
-
1,580
1,223
(1,623)
(1,162)
-
33,576
(965)
34,909
2024
2023
£000
£000
6,429
7,620
(10,945)
(59,712)
(4,516)
(52,092)

Actual loss on scheme assets

The actual loss on plan assets was:

79

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

27 Retirement benefits (continued)

Changes in the present value of the defined benefit obligations

Opening defined benefit obligations
Current service cost
Past service cost
Interest cost
Contributions by members
Actuarial gains
Gain on settlement
Benefits paid
Closing defined benefit obligations
hanges in the fair value of the scheme assets
Opening fair value of scheme assets
(Loss) on scheme assets excluding interest income
Interest income
Contributions by members
Contributions by employer
Scheme administration expenses
Benefits paid
Loss on settlement
Closing fair value of scheme assets		 2024
2023
£000
£000
114,822
278,718
174
1,272
(1,096)
-
4,807
6,458
77
277
(1,123)
(91,655)
-
(73,738)
(4,359)
(6,510)
113,302
114,822
2024
2023
£000
£000
139,325
304,431
(10,945)
(59,712)
6,429
7,620
77
277
735
1,756
(1,580)
(1,223)
(4,359)
(6,510)
-
(107,314)
129,682
139,325

Changes in the fair value of the scheme assets

On 28 February 2023, AQA ceased participation in the GMPF scheme and settled the scheme for an amount of £33,576,000 which is the net of loss on scheme assets of £107,314,000 and gain on defined benefit obligations of £73,738,000.

The sum of actuarial gains on scheme assets £1,123,000 (2023: £91,655,000) and loss on scheme assets excluding interest income was £10,945,000 (2023: £59,712,000) agrees back to the actuarial loss on defined benefit pension scheme in the consolidated Statement of Financial Activities £9,822,000 (2023: £31,943,000 gain) .

80

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

27 Retirement Benefits (continued)

Multi-employer defined benefit schemes

AQA participated in two (2023: two) multi-employer defined benefit schemes where it is not possible to separately identify the assets and liabilities for each participating employer. Accordingly, under section 28 of FRS 102, the schemes were treated as defined contribution scheme for accounting purposes.

Teachers’ Pension Scheme

The Teachers' Pension Scheme (TPS) is a statutory, contributory, defined benefit scheme, governed by the Teachers’ Pension Scheme Regulations 2014. Membership is automatic for teachers employed by AQA. TPS is an unfunded multi-employer pension scheme where it is not possible to identify AQA’s share of the scheme’s assets and liabilities. Accordingly, under Section 28 of FRS 102, AQA has accounted for its contributions to the scheme as if it were a defined contribution scheme. Below is set out the information available on the scheme.

TPS is an unfunded scheme to which both the member and employer makes contributions, as a percentage of salary - these contributions are credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament. The Government Actuary, using normal actuarial principles, conducts a formal actuarial review of the TPS in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014 published by HM Treasury every 4 years. The aim of the review is to specify the level of future contributions. Actuarial scheme valuations are dependent on assumptions about the value of future costs, design of benefits and many other factors. The latest actuarial valuation of the TPS was carried out as at 31 March 2020. The valuation report was published by the Department for Education on 26 October 2023. The key elements of the valuation and subsequent consultation are:

A copy of the valuation report and supporting documentation is on the Teachers’ Pensions website. The next valuation result has been implemented from 1 April 2024.

Other defined benefit pension schemes

The University Superannuation Scheme (USS), which is the main scheme covering most academic and academicrelated staff. The Scheme is a hybrid pension scheme, providing defined benefits (for all members), as well as defined contributions benefits. The assets of the scheme are held in a separate trustee-administered fund. USS is a multiemployer scheme and is accounted for as set out in the accounting policies. The total amount charged to the Consolidated Statement of Financial Activities was £147,000 gain (2023: £384,000 cost) . Deficit recovery contributions due within one year are £nil (2023: £53,000). Future service contribution rates set at 14.5% (2023: 21.6%) of pensionable salary. The latest available complete actuarial valuation of the Retirement Income Builder section of the Scheme is at 31 March 2023 (“the valuation date”), which was carried out using the projected unit method. Since the institution cannot identify its share of USS Income Builder (defined benefit) assets and liabilities, the disclosures reflect those relevant for those assets and liabilities as a whole. The liability figures have been produced using the following assumptions: discount rate 3.8% (2023: 4.7%) and pensionable salary growth CPI +0.5%.

81

AQA Education Notes to the Financial Statements for the year ended 31 March 2024

___________

27 Retirement Benefits (continued)

Defined contribution schemes

During the year, the total amount charged to the consolidated statement of financial activities in relation to defined contribution schemes (including the defined benefit schemes accounted for as defined contribution schemes under section 28 of FRS 102) amounted to £7,794,000 (2023: £9,211,000) . The amount charged includes contributions to the AQA defined contribution scheme. Contributions payable to the schemes at the year-end was £nil (2023: £541,000) .

28 Events after the reporting date

Management has not identified any adjusting events. FRS 102 requires, for non-adjusting events, disclosure of the nature of the event, and either an estimate of its financial effect or a statement that such an estimate cannot be made.

29 Exemption from audit by parent guarantee

Audit exemptions have been applied under s479A-479C of the Companies Act 2006 by the provision of parent guarantee by AQA, ultimate parent company, to AC3 Solutions Limited (company number: 08453864), Blutick Limited (company number: 11318113) and GradeMaker (company number: 08936673).

30 Prior period adjustment – restatement of consolidated statement of cash flows

In the 2023 consolidated statement of cash flows, cash inflows and cash outflows relating to current asset investments were presented net in error.

The change has split the increase in current investments of £57,950,000 into proceeds from redemption of current asset investments of £17,500,000 and purchase of current asset investments of £75,450,000.

82

Legal and administrative details

Registered office

AQA Education Devas Street Manchester M15 6EX Tel: 0800 197 7162 www.aqa.org.uk Registered company number: 03644723 (England and Wales) Registered charity number: 1073334 (England and Wales)

Bankers, investment advisers and auditors

Bankers

NatWest Bank 250 Bishopsgate London EC2M 4AA

Independent Investment Advisors

Cazenove Capital Management 1 London Wall Place London EC2Y 5AU

Independent External Auditors

BDO LLP Eden Building Irwell Street Salford Manchester M3 5EN

Internal Auditors

Deloitte LLP 1 New St Square London EC4A 3HQ

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