## **DRAGON SCHOOL TRUST LIMITED**
## **GROUP ACCOUNTS FOR THE YEAR ENDED**
## **31 AUGUST 2020**
## CONTENTS
i - iv Summary Review by the Chair of Governors and Headmaster v – vii Governors, advisors and constitution viii - xxiv Governors’ Annual report (including strategic report) 1 - 3. Auditors’ report 4. Group statement of financial activities 5. Group and charity balance sheets 6. Statement of cash flows 7 – 25. Notes to the group accounts
Company number: 524331
Registered charity number: 30967
Page 1
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: SUMMARY REVIEW BY THE CHAIR OF GOVERNORS AND HEADMASTER**
Academic year 2020 has been a period of dramatic change and disruption for all institutions and the global pandemic has inevitably had an impact upon Dragon School and its wider community. Given this highly unusual period in the Dragon’s history, it is appropriate to highlight some of the major events this year, whilst recognising that the School is not defined by its response to the pandemic alone.
On the academic front, this was an exceptional year. Faced with the challenge of lockdown, the Virtual Holistic Curriculum (VHC) was launched successfully in April 2020, incorporating through remote learning, the key elements normally provided on site, including live teaching which embraced the full curriculum of academic, academic enrichment, creative subjects, learning support, sport, pastoral support, and whole-school Assemblies. 13+ Common Entrance (CE) exams were notably successful this year, with all CE candidates being offered unconditional places at their first choice of senior school. The exams were taken at home in a virtually invigilated exam hall during lockdown, with the scripts then marked by school staff. 87% of pupils gained A and B grades overall: in English the A-B attainment was 79%; in Science 85%, and in Maths 91% of pupils gained A-B grades. This was also an exceptional year for 13+ awards to senior schools, with 55 scholarships and exhibitions being awarded across the curriculum to a wide range of senior schools. When pupils returned to the classroom they have been able to benefit from the installation of new Promethean interactive white boards which have enhanced the teaching and learning experience further.
This was also a notable year for the School with the introduction of Dragon _QUEST_ , an optional curriculum enrichment programme. It is currently accessible to our year 4 and 5 pupils and the programme will be expanded to all pupils in the Prep School from September 2021. This year’s launch was an outstanding success with over 90% of our pupils opting in and enjoying the wide range of activities available.
Dragon School always has an eye on the future and our development office maintains as its focus the principal goals of fundraising for the new Music and the Performing Arts Centre and endowing our Bursaries Campaign. Despite the impact of the pandemic this year, we are on track to progress the building project, commencing construction in 2021 with the aim of completing early in 2023. With regard to bursaries, the School is forging ahead with its ambition of growing a £15M endowment fund to support pupils who could not otherwise afford a Dragon education. It is our goal to reach this target by our 150[th] Anniversary in 2027.
Following the UK Government’s decision to close schools on 20 March 2020 and the complex, evolving guidance issued by the Department for Education (DfE) and Public Health England (PHE), the School’s response in meeting these challenges can be best understood by five key themes: agility, innovation, professional excellence, community and resilience.
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## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: SUMMARY REVIEW BY THE CHAIR OF GOVERNORS AND HEADMASTER**
## **Agility**
The Dragon’s decision in 2019 to invest in new technology to allow more flexible working was a critical enabler in the successful delivery of our new remote learning experience. The School’s IT infrastructure underwent a significant upgrade building resilience and adding further levels of security. Plus, all teaching staff were issued with leading-edge mobile IT devices. These investments proved invaluable in giving our teaching staff the confidence to prepare and continue to deliver education to our young Dragons in a way that could not have been foreseen as we entered 2020. With Government guidance being continually updated, we were able to remain agile throughout the Summer Term.
Finally, with some meticulous timetabling of attendance, pupils across all year groups were able to enjoy some time physically back at School before the end of the Summer Term and the end of the academic year. This was especially important for those pupils who were leaving the Dragon at the end of the school year. While we were unable to offer any boarding during the Summer Term 2020, some of our boarders chose to return to school as day pupils so they could have a sense of completion of the academic year.
## **Innovation**
Although the Government closed schools on 20 March 2020, Dragon School was determined to remain open for the delivery of education, albeit with no pupils other than key worker children and essential staff physically in school. The Dragon’s solution to the need to continue to deliver education while pupils were unable to be at school was to design, innovate and launch the VHC. This provided a blend of live online teaching, a crucially important central component for all pupils, pre-recorded teaching material, and online resources, all of which was tailored to each year group and indeed to different sets and exam requirements. A whole new timetable was constructed with an inner core focused upon academic lessons and an outer core which included wider curricular pursuits, ensuring an immersive and comprehensive educational experience, including ongoing pastoral provision. The VHC maintained and indeed enhanced the Dragon’s reputation for providing an enriching and stimulating experience for our pupils. Headmaster’s assemblies and Historic Lives podcasts, live streamed Prize Giving events and Leavers’ Services, music lessons, PE, sports activities and challenges all kept our school community connected, including those in different time zones, during this period of lockdown. This enhanced digital accessibility also connected parents, ODs (Old Dragons) and prospective parents to the school as they were seeing the Dragon “in action”.
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**DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020:**
## **SUMMARY REVIEW BY THE CHAIR OF GOVERNORS AND HEADMASTER**
## **Professional Excellence**
The successful delivery of the Dragon’s VHC was only possible as a result of the exceptional commitment and professionalism of our staff. Our teachers, expertly supported by our IT staff, worked tirelessly to develop new techniques and to ensure that our pupils continued to receive the highest standards of education. Working remotely meant the traditional classroom could no longer be an area of reassuring familiarity for our teachers, and instead their personal spaces at home needed to be adapted to become their classrooms. Many teachers had to adjust to having parents present in their classes on some occasions whilst supporting children at home, as well as, in many cases, juggling the care of their family responsibilities. Although many of our support staff were furloughed, we retained a cadre of support personnel to ensure that the business, infrastructure and estate aspects of the School were all ready for its reopening. When our staff and pupils did finally return at the end of the Summer Term, they all benefited from a safe and secure working environment. The Governing Body and School Executive are enormously proud of the way the entire staff body has responded to the challenge.
## **Community**
We are mindful that this has been a particularly challenging period for many of our parents. It is therefore important that we record our profound debt of gratitude to our parents for the way that they supported the School and its efforts through this demanding period. We would like to say a sincere thank you whether it was supporting the learning of their children at home, taking the time to write with offers of support, supporting financially through the prompt payment of fees or supporting those in financial hardship through generously donating to the Dragon’s Coronavirus Hardship Fund. The Dragon was also proud to be able to contribute to the wider community through the distribution of PPE, kindly donated by parents and through the manufacture of faceshields for wider distribution using the School’s 3-D printer. Furthermore, on behalf of the entire Dragon family we would like to acknowledge the significant efforts and contributions of the many key worker parents in our community, especially those within the health service.
## **Resilience**
Throughout the period of the COVID-19 pandemic, the Dragon has needed to ensure that it is appropriately resilient and able to not only be able to respond to further unexpected shocks, but also to bounce back stronger than ever. In the first instance, it was entirely appropriate to revise the fee structure for the Summer Term in recognition of the different learning offered. The School sought to mitigate the resultant loss in revenue through a series of cost saving initiatives, including the UK Government’s Coronavirus Job Retention Scheme. The School also made operational cost savings and in particular all non-essential in-year expenditure was postponed. Finally, the School was able to benefit from a deferral on capital payments against the freehold loan, but of course this will need to be repaid in the coming years. Recognising that uncertainty will continue to be a theme as we
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## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: SUMMARY REVIEW BY THE CHAIR OF GOVERNORS AND HEADMASTER**
start the new academic year, the School has engaged with the Government’s Coronavirus Business Interruption Loan Scheme, ensuring that we enter the new year with additional financial resilience.
All these challenges notwithstanding, the Governing Body and Leadership are confident and resolute that the School will emerge from this period stronger than ever. Never has the School’s motto of “ _Arduus ad Solem_ ” (Reach for the Sun) been more apposite.
Page iv
**DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS, ORGANISATIONAL STRUCTURE, OFFICERS AND ADVISERS**
Dragon School Trust Limited (“Dragon School” or “Trust”) is a company registered under the Companies Act 2006 and a registered charity. It is a company limited by guarantee; the liability of members of the company is limited to £1 each. The Governors of Dragon School are trustees of the charity, and directors and members of the company. Those serving during the year are as follows:
M Breen A R G P Candy G P ° S Chambers S (retired 30 Nov 2019) A C Cowley G* (retired 6 Jun 2020 J C Edmondson G* P F Esiri (appointed 7 Mar 2020, resigned 15 Apr 2020) N L Helliwell A C I M Jones B G P R + ° (acting chairman until 30 November 2019) S J Kerr-Dineen A ° E G King R + ° Prof Dame A R McLean A B IT N Millard Sa N D Portwood ° Lady Stringer G P ° (retired 6 Jun 2020) Sir W G Touche Bt. G P + ° (retired 30 Nov 2019) C J Underwood OBE S W A Webb B G T IT P R ° Chairman (appointed 30 Nov 2019) G H Wilson G P R T °
Subsequent to the year end, G H Wilson retired on 28 November 2020, Dr M Letts OBE was appointed on 18 November 2020 and C Alexander was appointed on 14 January 2021. In addition, the Governing Body is very sad to report that E G King passed away on 24 December 2020.
Committee memberships and other groups (as at the end of year):
A Academic Committee B Bursaries Committee G General Purposes Committee P Property Working Group R Nominations and Remuneration Committee S Social Responsibility Committee
Sa Safeguarding Children IT IT Steering Group T Dragon School Trading Ltd + Old Dragon * Current parent
- ° Former parent
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**DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020:**
## **GOVERNORS, ORGANISATIONAL STRUCTURE, OFFICERS AND ADVISORS (continued)**
## **Board and committees**
The Board of Governors is a self-appointing body. Governors hold office for six years, whereupon they may be reappointed. Governors normally retire at the age of 70. There may be no more than 20 and no fewer than seven Governors. All committees and groups report to the main Board. The Board and other committees and groups routinely meet three times a year and at other times as necessary.
The Academic Committee is the forum for academic discussion in which Governors and staff participate equally.
The Bursaries Committee proposes policy to the Governing Body and considers all applications for means tested awards and grants.
The General Purposes Committee (GPC) has particular responsibility for the School’s finances and financial strategy, but also considers risk, health & safety and compliance matters.
The Nominations and Remuneration Committee is tasked with reviewing the membership of the Governing Body, recommending new Governors for GB approval, and for reviewing the performance and remuneration of Headmaster and Bursar, reporting via the Chairman to the Board of Governors.
The Safeguarding Children Committee ensures Board-level review and responsibility for safeguarding children; other members are senior pastoral staff.
The Social Responsibility Committee oversees the development and implementation of the School’s charitable, social, economic and environmental policies. The activities of this Committee are currently paused while its remit is reviewed.
Other steering groups are appointed and meet as necessary, including the Property Working Group & the IT Steering Group.
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**DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020:**
## **GOVERNORS, ORGANISATIONAL STRUCTURE, OFFICERS AND ADVISORS (continued)**
## **Advisors**
The Trust appoints professional advisors to deal with specialist matters from time to time. All contracts are subject to periodic review as circumstances merit.
Architects: Berman Guedes Stretton Oxford MEB Design Oxford Auditors: Haysmacintyre LLP London Bankers: Barclays Bank Oxford Coutts & Co London Insurance brokers: Marsh Brokers Haywards Heath, West Sussex Pension advisors: Succession Wealth Aylesbury, Buckinghamshire Solicitors: Freeths Oxford Blake Morgan Oxford Browne Jacobson London VealeWasboroughVizards London Surveyors: Sidleys Oxford McBains Cooper Oxford
Registered office and address for correspondence:
Dragon School Bardwell Road Oxford OX2 6SS
Web-site: www.dragonschool.org e-mail contact: bursar@dragonschool.org
The Headmaster is Dr C Hyde-Dunn.
The Company Secretary and Bursar is M R Johnson.
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## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT**
The Governors present their annual report and audited accounts for the year ended 31 August 2020 in compliance with current statutory requirements for companies and charities and the company’s Memorandum and Articles of Association. This report, together with the preceding pages, incorporates the information required for the directors' report and strategic report under the Companies Act. Comparative figures in the accounts are for the year ended 31 August 2019.
## **REFERENCE AND ADMINISTRATIVE INFORMATION**
Dragon School was founded in 1877. It was incorporated in 1953 as a company limited by guarantee and registered at Companies House, number 524331. It is registered with the Charity Commission under charity number 309676. The Governors, principal executive officers and advisers, together with contact details for the School, are given on pages i to iii.
## **STRUCTURE, GOVERNANCE AND MANAGEMENT**
## **Governing Document**
Dragon School is governed by its Memorandum and Articles of Association dating from 1953 and last amended in November 2008.
## **Governing Body**
Overall responsibility for Dragon School rests with the Governors, who are listed on page i together with information regarding their tenure and committee membership.
## **Recruitment and training of Governors**
New Governors are appointed at a meeting of the Board on the basis of recommendations made by the Nomination and Remuneration Committee. Recommendations are made following an interview process with members of the NRC and on the basis of the requirements of the Board in terms of skills and expertise.
New Governors receive an introduction and induction led by the Bursar on behalf of the Chair of Governors. This covers a range of information including general governance matters, together with more detailed discussions of strategic priorities and finances. Further opportunities to attend appropriate seminars and training events are offered when they occur.
## **Organisation and management**
The Governors, as the trustees of the Charity, are legally responsible for the overall management and control of the School. The Board of Governors meets at least once a term, receiving reports from committees which meet with similar frequency.
The day to day running of the School is delegated to the Headmaster and Bursar, supported by the Senior Leadership Team and staff. Generally the Headmaster and Bursar attend all Governors’ and
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## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT (continued)**
Committee meetings, except those of the Nominations and Remuneration Committee and when restricted business is discussed.
## **Key Management**
Key Management Personnel are defined as the Head, Bursar, Head of Pre-Prep and the Deputy Heads.
## **Remuneration**
Remuneration is set by the Governing Body with the overall objective of ensuring appropriate recognition and incentive to encourage exceptional performance. Remuneration must be fair and responsible, and the appropriateness of the School’s remuneration is reviewed periodically; this includes benchmarking with other schools in both independent and maintained sectors. We aim to recruit, subject to experience, at the lower to medium point within a band, providing scope to develop and grow.
## **Group structure and relationships**
Dragon School has a wholly owned trading company, Dragon School Trading Limited (company number 1379919), which is used to generate income for the School through the hire of facilities, the sale of Dragon-related souvenirs and second-hand clothing. All residual profits are paid to the Trust under gift aid.
Dragon School has a relationship with two other charities, ‘The Lynam Educational Fund’ (274993), whose objects include assistance with school fees in cases of need, and ‘The Dragon Christmas Charity Sale’ (1106073), which raises money for charities helping children and families. The School provides support in the form of staff time to these charities, but as the School does not control these charities, their activities and financial results are not included within these reports and accounts, except to the extent that they have donated to the School.
The School actively supports the independent schools’ sector, and contributes to the furtherance of educational standards and the quality of pastoral care, through participation in and subscription to umbrella organisations such as IAPS and BSA and through exam setting and curriculum review processes. The School has also developed links with a number of schools and charities overseas both through regular contacts and as opportunity and need arise.
The School continues to promote the use of its facilities at a discounted rate or, where appropriate, gratis. This includes the use of playing fields, astro-pitches, Lynam Hall and music facilities by local schools and other community groups and charities, and in particular those involved in educational or child-related activities.
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## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT (continued)**
## **CHARITABLE OBJECTS, AIMS AND OBJECTIVES**
## **Charitable objects**
Dragon School’s charitable objects are set out in the Memorandum and Articles of Association. The primary object is to advance the education of the public by acquiring and carrying on any school or schools for the education of children and young adults and by ancillary or incidental educational activities and other associated activities for the benefit of the community. In pursuit of these objects the School operates the Dragon Prep School at Bardwell Road for boys and girls from 8 to 13 years old and the School’s Pre-Prep, Dragon Pre-Prep, on a separate site. Dragon Pre-Prep takes boys and girls from the age of 4.
In setting the School’s objectives, and planning its activities, the Governors have given careful consideration to the Charity Commission’s general guidance on public benefit as updated in September 2013. The School’s commitment to providing financial support to pupils whose parents could not otherwise afford to consider a Dragon education predates the 2006 Charities Act and subsequent guidance from the Charities Commission. The pursuit of wider access to the School is held to be of benefit to all Dragon pupils. To support with these goals, the School manages a number of restricted funds to be used in connection with the development of the School’s facilities, and the provision of bursaries, prizes and other educational purposes.
## **Aims**
The Dragon intends to provide a wide-ranging educational experience for all children, stretching all to the best of their respective abilities in academic, artistic, sporting, cultural and social activities. Although excellence is achieved by pupils in many fields, particularly academic, the School is most proud of its liberal ethos, the inclusivity of its educational provision and its pastoral care for all. In addition, the School aims to play a full and effective part in its local community.
## **Objectives for the year**
The Dragon’s primary objective this year was to continue to provide the best possible education and care for each and every pupil, ensuring that those leaving for other schools achieve the places desired. In addition, the School has sought to widen access and increase its social impact.
## **Strategies used to achieve the year’s objectives**
The School continues formal self-reviews of all areas of operation so as to improve methods and procedures, particularly of teaching and pastoral care, but additionally in the process of monitoring and assessing its own procedures. Specialist external reviews are also sought when deemed valuable. Specific coaching was provided to leavers tailored to the schools of their choice, and the pupils’ abilities, to ensure their applications were successful.
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## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT (continued)**
The school monitors several key performance indicators throughout the year to assess performance against objectives, including, but not limited to, monitoring success in reaching first choice school, average set size, number of extra-curricular music and drama lessons taken, academic and other awards achieved and results achieved at CE, including number of high performing results.
## **IN-YEAR ACHIEVEMENTS**
## **Dealing with the Covid-19 pandemic**
The COVID-19 global pandemic has inevitably had an impact upon Dragon School and its wider community during the academic year 2019/2020. Faced with the challenge of lockdown, the Virtual Holistic Curriculum (VHC) was launched successfully in April 2020, incorporating through remote learning, the key elements normally provided on site, including live teaching which embraced academics, academic enrichment, creative subjects, learning support, sport, pastoral support, and whole-school Assemblies.
The Dragon was able to invest in an IT roll-out programme that became a critical enabler in the new way of working that was to follow. Specifically, all staff were issued with leading-edge mobile IT devices, and the School’s IT infrastructure underwent a significant upgrade to build resilience and introduce new-levels of security.
The successful delivery of the Dragon’s VHC was only possible as a result of the exceptional commitment and professionalism of our staff.
In response to the impact that the pandemic had on the Dragon’s provision, the School’s Governing Body decided to revise the fee structure for the Summer Term in recognition of the fact that the learning was going to be different. The resultant loss in revenue was partially mitigated by a limited use of the UK Government’s furlough scheme, the deferral of some operational spending and capital repayments on an existing loan and borrowing through the UK Government’s Coronavirus Business Interruption Loan scheme. Whilst the loans will need to be repaid, this allowed the School to enter the new School year with financial resilience.
## **POLICIES**
## **Grant making**
The School is particularly sensitive about the costs associated with delivering first class education, and seeks to extend its facilities as far as possible to those who might not otherwise be able to afford such an education. In particular it continues to carry out specific fund-raising to enable means-tested bursaries to be awarded, in appropriate circumstances, which cover all or nearly all of the fees. Currently the School provides up to 25 bursary places at up to 100% grant under its ‘125th anniversary’ scheme. Other awards are made with respect to short-term hardship arising from significant life-changes.
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## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT (continued)**
In general, grants are made from the bursaries, general and other specific funds to provide financial help with the fees. Where significant financial help may be required, the Bursaries Committee considers all circumstances involved in a grant application. This might include, where appropriate, means testing, interviews and home visits, with a view to making grants as fairly and as effectively as possible. All grants are made subject to annual review.
## **Risk management and key risks**
The Governors are responsible for ensuring the management of the risks faced by the Dragon. This is delegated to the General Purposes Committee, who review regularly a summary of the primary risks thought most likely to materialise or have the greatest effect, together with the action taken to mitigate those risks.
## **Risk mitigating controls**
The highest priority is placed on appropriate controls and processes to mitigate risks. Strict adherence to safer recruiting protocols, staff training, and a climate of open communication are fundamental to mitigating safeguarding risks in our School. Operational finance risks are mitigated through in-house oversight and checking. More broadly, risks associated with The Dragon’s borrowings of greater than 1-year are mitigated through appropriate hedging financial instruments. Considered financial planning, together with comprehensive management accounting, reporting and budgetary control, ensures the School maintains adequate reserves. Robust governance, strong policies, and effective communication (both internal and external) underpin the School’s overall risk mitigation strategy. Internal monitoring of the School’s compliance is led by the Compliance Officer on behalf of the Bursar and Headmaster.
## **Reserves**
The Governors review the restricted and designated reserves regularly. The specific objects of restricted funds are as follows:
- a) The Endowment fund represents amounts given with a restriction on the disbursement of the capital amount. The income is used for general purposes. The Trust's endowment fund derives from a small group of gifts in about 1997. The reserve stood at £3k at the end of the year. No aim for holding the fund is required as it is used when appropriate opportunities arise.
- b) The Endowed Bursaries fund provides fee support from income arising from donations whose capital expenditure has been restricted by the donors. Otherwise funds are administered as for other bursaries. The reserve stood at £394k at the end of the year. No aim for holding the fund is required as it is used when appropriate opportunities arise.
- c) The Knatchbull Memorial fund provides funding for travel and exploration activities of former pupils (‘Old Dragons’). It has specific trustees who review the application of resources. The
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## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT (continued)**
reserve stood at £57k at the end of the year. No aim for holding the fund is required as it is used when appropriate opportunities arise.
- d) The Bursaries funds are for the provision of fee support for pupils. The funds include donations for named bursaries; the costs of bursary support are deducted from these sums as appropriate. The funds are administered by the Bursaries Committee who review the application of resources. Additional fee concessions and support are provided from the general fund. The reserve stood at £967k at the end of the year. No aim for holding the fund is required as it is used when appropriate opportunities arise.
- e) The Development fund includes sums raised for specific purposes through the ‘annual giving programme’, other campaigns and unsolicited gifts. Some of these donations are restricted to specific projects, though most are not. In some cases general donations are received without even apparent restrictions with respect to the School's development programme, but the Trust infers a restriction in these cases on the principle that such donations probably originated from literature soliciting funds for such purpose. The balance carried forward on the fund represents unspent donations for specific purposes. The reserve stood at £377k at the end of the year. No aim for holding the fund is required as it is used when appropriate opportunities arise.
- f) The ‘Capital fund’ represents unspent donations raised for building projects – primarily the Music School. Amounts spent on the specific buildings are transferred from the Capital fund to the general fund in the year the expenditure is incurred. The reserve stood at £2,130k at the end of the year. No aim for holding the fund is required as it is used when appropriate opportunities arise.
- g) The Prepaid Fees fund represents income and expenditure with respect to amounts paid in advance for fees. Investments in government stocks and cash deposits are held against the future liabilities. The reserve stood at zero at the end of the year as the aim is for the assets to match the liabilities.
None of the restricted funds are limited by their objects as to the expenditure of capital except the Endowed Bursaries and Endowment funds. All surpluses together with borrowings, eg bank loans, are reinvested to improve the School’s resources.
At the year end the School had unrestricted reserves in the General Fund of £28,290k, mainly represented by land and buildings, which have been financed by the School’s accumulated surpluses and supplemented by bank borrowings. In the absence of free reserves, working capital and cash flow are monitored closely. The Governors’ policy is to continue building up reserves out of operating surpluses, subject to the requirements for further capital expenditure. The School’s working capital is considered to be sufficient to meet its liabilities as they fall due.
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## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT (continued)**
## **Investment**
The Trust’s investment powers are governed by its Memorandum and Articles of Association. These permit funds to be invested in such investments, securities or property as may be thought fit.
Prepaid fees funds are invested at the School’s discretion in cash deposits or Government stocks so as to match individual schemes' requirements.
Miscellaneous investments represent gifts received of sundry investments. These are held with a view to realising maximum capital value within the short-term foreseeable future and then sold.
## **Disabled applicants and staff**
The School makes inclusion a thread which runs through all its activities. Dragon School seeks to engage with the widest possible range of knowledge, skill and experience in all its activities. The School’s policies, therefore, facilitate the employment of disabled people and the provision where appropriate of training and career development. Were an employee to become disabled whilst in service, every effort would be made to retain them.
## **Communication with staff**
Governors place considerable importance on informing all staff of financial and other matters that affect them, consulting with them where appropriate. The Headmaster and Bursar report the outcome of Governors’ meetings to staff through the School’s formal management structure. All other such matters are briefed to staff as they arise through regular staff meetings.
Staff are encouraged to discuss matters of concern within the staff meetings and any feedback is discussed with the Deputy Heads, Headmaster, Bursar and Governors as appropriate. This can then influence school policy in a number of areas.
## **Relationship with parents and pupils**
Dragon School considers its relationship with its parents and pupils to be of the utmost importance. The School prides itself on its open and transparent communication with its parents and pupils and never has this been more important than during the pandemic.
Dragon School issues regular bulletins on a weekly and termly basis and utilises social media to communicate with agility. Parents are encouraged to approach the School as required to ensure effective two communication.
## **Fundraising**
In 2020, the charity undertook fundraising activity with its supporters via direct mail, fundraising events and email in line with the Fundraising Code of Practice set by Fundraising Regulator.
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## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT (continued)**
When you support you can be sure of the following:
- We will never sell your contact details to anyone;
- We will only contact you if you have expressed an interest in our work;
- If we phone you, we will always check you are happy to take the call;
- If you ask us to change how we communicate with you, or stop, we will respect that;
- We do not engage in cold-calling, door to door or street fundraising;
- We try hard to ensure no one ever feels pressurised to support our work;
- We are registered with the Fundraising Regulator and adhere to the Fundraising Code of Practice;
- All our activities are open, fair, honest and legal.
The charity did not work with any fundraising partners in the academic year 2020.
The charity is registered with the Fundraising Regulator and adheres to the standards of the Fundraising Code of Practice. We did not receive any complaints about fundraising in 2020.
## **Dealing with suppliers**
Dragon School prides itself on working collaboratively with its suppliers, both large and small.
In such an unusual year, this was particularly apparent as contracts have been varied to suit the change in demand and we have dealt proactively with suppliers to ensure the changes and issues caused by the pandemic are minimised. The School has introduced a system to monitor supplier payment terms.
## **Carbon Reporting**
As part of our new reporting requirements, the School has reviewed its greenhouse gas emissions and energy use data to compile a report to meet the SECR reporting requirements. the overall consumption of fossil fuels, direct and indirect, can be summarised as equivalent to production of an amount of carbon dioxide (‘CO2e’), measured in tonnes. To do so we have used HM Government’s environmental reporting guidelines, the GHG Reporting Protocol and HM Government's 2020 conversion factors for company reporting, and then expressed the tCO2e per pupil.
The table below summarises the energy use relating to electricity, gas combustion and transport.
Electricity use 1,002,597 kWh Gas Combustion 3,229,433 kWh Transport 39,658 kWh Total 4,271,688 kWh
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## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT (continued)**
The greenhouse gas emissions associated with the energy use identified in the table above are as follows:
Electricity use 233.8 tCO2e Gas Combustion 593.8 tCO2e Transport 9.54 tCO2e Total 837.0 tCO2e
The School consumed an average of 1.04 tCO2e/pupil (based on 804 pupils).
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## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT (continued)**
## **STRATEGIC REPORT**
The School provided education to its pupils in accordance with its stated aims and motto _arduus ad solem_ . Demand for places continues to be high, in large part due to the recognised high standards achieved by the School. During the year the School had (on average) 804 pupils in total between the Prep school and Dragon Pre-Prep. Of the total pupils, 480 were boys and 324 were girls.
The School was inspected by the Independent Schools Inspectorate (ISI) in November 2014 and was graded Exceptional for the quality of the pupils’ achievements and learning, and Excellent in each of the other eight aspects of the School’s work (all judgements being the highest possible descriptors). The four aspects of the quality of the boarding education inspected were also all judged to be Excellent. More recently in April 2019, the School was subject to a Regulatory Compliance inspection by the ISI and was assessed as compliant in every respect. The full text of both inspection reports can be found here:
= https://www.isi.net/reports/?name Dragon%20School
The extensive music provision of around 750 music lessons and some 60 music groups took place on site for the first part of the year and then as part of our online delivery for the latter part of the year. Our numbers show a healthy cross-section across all the orchestral instruments due to the dynamic and engaging teaching of our instrumental staff.
Our ensembles similarly had to adapt to online delivery. We were able to run a virtual Piano Festival and numerous videoed concert performances from our choirs, strings, guitars and wind groups. The summer term was topped off in suitable style with a specially written song ‘Reach for the Sun’ which was performed by children, parents, staff and VMTs and there were even a few celebrity Dragons featured too.
Despite the complications caused the Covid-19 pandemic, 100 children were still able to take their exams with 27 taking Grade 5 or above; our pupils achieved a 100% pass rate.
Musical outreach events have been understandably curtailed in recent weeks but prior to lockdown we were still able to run our annual Dragon Phil Wind Day (in association with Oxford Philharmonic) with a number of local primary schools and other local schools, promoting a shared experience of music making for all. A new outreach initiative this year has included taking a Gamelan Orchestra into local schools to enable Dragon pupils and other primary pupils to participate together. Our Dragon School Choir took part in an epic charity concert in Summertown in the Easter term in which they comprised the grand finale of an epic 3 hour concert involving many of our local schools, both prep and senior. Our Idris Choir featured prominently in our online . end of year celebrations
In Games, too, the School’s vision of making sport accessible to everyone was embraced enthusiastically by Dragons themselves with our aim being that every child has the chance to
Page xvii
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT (continued)**
represent the School in each major termly sport. There are a variety of other sports available for the children to participate in all year round with a breadth of activities on offer through our clubs’ programme in addition to the curriculum sport.
Whilst the Covid-19 pandemic understandably had an impact on our ability to hold sports matches, on any one match day there can be over 30 different teams representing the School, with our more senior sides playing competitive matches on arguably the most competitive Prep-School circuit around. Furthermore, a number of Dragons earn representative honours at district, county and regional level in an increasing number of sports, realising the School’s twin aims of promoting both participation and excellence.
Due to the highly unusual end of year caused by the Covid-19 pandemic, our A Block pupils took their Common Entrance exams at home and sent them to school for marking. 87% of our pupils achieved A&B Grades at Common Entrance – although comparisons to previous years is understandably difficult due to the change in exam conditions; additionally, D&E Grades fell to below 2%. Our leavers gained 55 awards to their senior schools, including 16 academic Scholarships or Exhibitions. We continue with our programme of Dragon 'Learning Habits' of Diligence, Resilience, Ambition, Collaboration and Organisation - spelling out the word 'draco', the Latin word for 'dragon'! We pride ourselves on our consistent marking scheme, as well as tracking pupil work completion and learning. We continue to run standardised testing for pupil spelling and reading each term, as well as targeted spelling and reading interventions for our children who need literacy support.
The School’s Social and Environmental Impact programme, is guided, under instructive facilitation, by the pupils themselves. Each pupil can cast a vote for the charitable sectors the School will support. Both veins of thinking are increasingly blended into normal curriculum subjects, as well as functioning as specific projects in the Activities and Clubs programmes. Each year group usually organises one major charity event, or challenge, each year with all pupils in the year group engaged. In a normal year, these would include A Block pupils (Year 8) being invited to lead their own specific fundraising challenge and B block pupils (Year 7) being given £5 to turn into fundraising projects. Pupils are invited to participate in fundraising for, and the distribution of funds raised by, the Dragon Sale, which is the largest annual Dragon Community fundraising event.
The School continues to take important steps to improve its infrastructure. Its main capital expenditure during the year was on developing the IT infrastructure, particularly relating to the virtual education delivery and continuing progress with designing the Music School project.
## **Operational performance – Key Performance Indicators**
- 99% of leaving children passed to their school of choice.
- 87% of Common Entrance papers were graded A or B (although note that papers couldn’t be taken in the usual school conditions due to the Covid-19 pandemic)
Page xviii
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020:**
## **GOVERNORS’ REPORT (continued)**
- 55 academic, music, art, sporting and all-round awards were made to Dragon pupils by their secondary schools.
- Fee income was £16,901k (Although note that this was artificially depressed by the pandemicbased fee reductions applied for the Summer term)
- Donations and legacies were £469k
- Staff costs were £10,490k
## **Operational performance – Widening Access and Social Impact**
## a) Bursaries and other grants:
Bursaries are at the heart of the Dragon’s public benefit provision. The Dragon reached its target of 25 bursary awards across the School at the start of the 2008/9 academic year and up to a maximum of five new grants per year have been awarded since. Bursary awards (day and boarding) were on average just under 80% of the fees at a cost to the School this year of £277k; a range of other grants including staff, hardship and scholarship totalling a further £665k were awarded between 68 other pupils.
## b) Social Impact:
The School believes that as an institution it should give strong support to the wider community. Of equal importance is the conviction that gaining a proper understanding of their social and environmental responsibilities must be a cornerstone of the education of each of its pupils. The School is committed to involving all pupils in such projects.
## c) Educational:
The Latin in the Community initiative, whereby Dragon teachers and pupils assist teachers and children from other non-fee-paying schools without this expertise, continues to flourish; surplus equipment is donated to other schools or charities; some members of Dragon staff act as governors on local and IEB boards; other links and ideas are built into the curriculum through visits, demonstrations, lectures and debates.
## d) Music, Sport and Arts:
Dragon musicians have played and sung in public at a variety of charities. International visitors have provided sporting as well as musical interaction. In addition, a range of local schools, charities and local groups and clubs continue to use the School’s facilities when available. The provision of facilities for these purposes is valued at an approximate £22k (at the normal discounted rates for charitable use).
## e) Community:
During the year the staff and its pupils raised funds for other charities through wide-ranging entrepreneurial activity, most of which is pupil led. In addition, the Dragon Christmas Charity Sale distributed funds for various charities from proceeds of the sale held at the end of the Christmas term on the School's premises, run by the parents with the assistance of pupils and staff.
Page xix
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT (continued)**
## **Operational performance – Fundraising**
The School raised £469k to further its activities this year. The broad fundraising strategy remains to reach out to the whole Dragon community including Old Dragons, current and past parents focusing on meeting two core needs: the maintenance of bursary funds and supporting the School’s capital plans, in particular the Music and Performing Arts Centre. Successful events were held which promoted the Dragon’s vision and needs to all these groups.
The School is also the grateful recipient of grants from the Lynam Educational Fund with which it can provide help with fees to parents whose circumstances unexpectedly change, providing continuity of environment and education for children in a period when their home lives may be radically upset and also towards the School’s bursaries.
## **Operational performance – Financial**
The Trust’s accounts reflect its general success as a school; this underpins the School’s ability to service the bank loan which financed the purchase of the freehold.
Any operating surplus generated by the School is invested in the major capital projects needed to keep the School at the forefront of preparatory education, and in the provision of subsidised education for children otherwise unable to attend such a school. Inevitably, the demand for capital investment continues to exceed available resources and in setting the fees the Governors have to balance accessibility and fairness to current parents with the investment requirements of a leading school. The School is increasingly reliant on fundraising for capital projects.
Fee income fell during the year due to the reduced fees set for the Summer Term in response to the impact of the pandemic. During the year £16,901k was generated from fees, 98% of its total income of £17,209k.
The other significant element of income is donations and legacies of £469k.
The greatest part of the Trust’s expenditure is on staff costs which at £10,490k represent 63% of expenditure; and of these staff costs, most (£7,868k – 75%) are spent on teaching, with an additional £1,077k (10%) on welfare and pastoral functions.
Finance costs are significant at £614k (4% of total expenditure) payable, mostly as interest on the School’s bank loan. Other non-staff costs include direct expenditure on teaching (£1,105k, 7% of total expenditure), premises (£1,277k, 8%) and welfare (£1,454k, 9%). Virtually all these costs, staff, finance and other, which are necessary for the charity to meet its objects, represent semi-fixed overheads.
The School spent £1,063k on fixed assets. This is mainly represented by enabling activity for the planned Music and Performing Arts Centre and a range of ICT upgrades, not least to ensure the
Page xx
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT (continued)**
success of the School’s VHC. Numerous smaller equipment purchases, some funded by donation, have been made throughout the teaching and boarding areas.
The Trust’s balance sheet is dominated by the net book value of its freeholds £41,526k, including, in particular, the main site purchased in January 2007 for £29,733k. In order to finance this purchase, a loan was obtained and this forms the largest part of the liabilities, with the outstanding creditor standing at £11,352k. The Trust holds an interest rate swap derivative to hedge against this long term loan and the fair value of this swap was a liability of £1,690k at the end of the year. In addition, the School took a £3,000k Coronavirus Business Interruption Loan towards the end of the year to ensure financial stability during the period of uncertainty caused by the Global Covid-19 pandemic. The current assets are comprised primarily of cash at £10,516k which offset the creditors due within one year of £3,422k which are chiefly comprised of pupil deposits, amounts owed on the property loan and fees received in advance relating to pupils.
## **Future plans**
The School reviews its strategic framework regularly, and a major review and overhaul of the two existing key documents, comprising of Guiding Principles and Development Strategy, is underway. The key objectives representing the main pillars of School development that were set out in the strategy, as updated for recent developments, are:
Academic Development:
- Maintain a leading position and reputation for innovative and exciting teaching and learning.
- Maximise all children’s learning potential by improving thinking skills and proving “valueadded”.
- Embrace new technologies for children’s immediate and future educational benefit.
- Achieve more efficient use of teachers’ time and resources.
- Contribute academic and pedagogic resources to the wider community.
## Pastoral Development:
- Create structures within the School that assist children, staff and parents to develop clear identities.
- Maximise all opportunities in the School to help provide children with the social skills to develop positive relationships with others.
- Ensure that parents are fully involved in the School’s pastoral and welfare initiatives.
- Develop training at all levels to help children, staff and parents develop strategies for understanding and promoting good pastoral care.
## ICT Development:
- Provide staff with a more effective and efficient teaching platform at School and at home.
- Ensure a safe and secure ICT environment for the Dragon community.
Page xxi
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020:**
## **GOVERNORS’ REPORT (continued)**
- Develop the School’s cyber-security posture and build resilience into the School’s ICT infrastructure.
- To further develop the School’s goal of becoming a cloud managed environment.
## Social Impact and Public Benefit:
- Widen access further by increasing the expanding the bursary scheme.
- Establish the School as a recognised leader for pupil-led social benefit initiatives.
- Develop the existing initiatives with local schools.
- Reflect sustainable development through policy and practice at all levels.
## Facilities Development:
- Build a new Music and Performing Arts Centre to service the growing musical and performing arts needs and aspirations of the Dragon community.
- Provide residential accommodation to allow the School to recruit and retain the best possible staff.
Page xxii
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT (continued)**
## **STATEMENT OF GOVERNORS’ RESPONSIBILITIES**
The Governors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the Governors to prepare financial statements for each financial year. Under that law the Governors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Governors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Trust and its subsidiary (‘the group’), and of the result of the group for that year.
In preparing these financial statements, the Governors are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgments and accounting estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.
The Governors are responsible for keeping adequate accounting records that are sufficient to show and explain the Trust and subsidiary’s transactions and disclose with reasonable accuracy at any time the financial position of the Trust and subsidiary 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 group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
So far as each of the Governors is aware at the time the report is approved:
- there is no relevant audit information of which the group's auditors are unaware; and
- the Governors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
The Governors are grateful for the tremendous parental support for the School in achieving all that it does. It is the commitment of parents, the leadership of the Headmaster, the effort put into caring for the pupils by the staff, and the energy of those pupils, and the dedicated work of the support staff in all their fields of expertise, which make the School what it is today and enables it to face the future with confidence.
Page xxiii
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GOVERNORS’ REPORT (continued)**
This Governors’ Report, which incorporates the Strategic Report, was approved by the Governors and signed on their behalf by:
Andrew Webb, Chairman
27 February 2021
Page xxiv
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF DRAGON SCHOOL TRUST LIMITED**
## **Opinion**
We have audited the financial statements of Dragon School Trust Limited for the year ended 31 August 2020 which comprise the Group Statement of Financial Activities, the Group and Charity Balance Sheets, the Group Cash Flow Statement and the related 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).
In our opinion the financial statements:
- give a true and fair view of the state of the group’s and charitable company’s affairs as at 31 August 2020 and of its movement in funds for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **Basis for opinion**
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
## **Respective responsibilities of governors for the financial statements**
As explained more fully in the Statement of Governors’ Responsibilities, the Governors (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 governors determine is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.
In preparing the financial statements, the governors are responsible for assessing the group’s and the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the governors either intend to liquidate the Group or the Charitable Company or to cease operations, or have no realistic alternative but to do so.
Page 1
**DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF DRAGON SCHOOL TRUST LIMITED**
## **(continued)**
## **Auditor’s responsibilities for the audit of the financial statements**
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, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the . Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities This description forms part of our auditor’s report.
## **Other information**
The governors are responsible for the other information. The other information comprises the information included in the Governors’ Annual Report. 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.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
## **Opinions on other matters prescribed by the Companies Act 2006**
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Governors’ Annual report (which incorporates the strategic report and the directors’ report) for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Governors’ Annual Report (which incorporates the strategic report and the directors’ report) has been prepared in accordance with applicable legal requirements.
Page 2
**DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF DRAGON SCHOOL TRUST LIMITED**
## **(continued)**
## **Matters on which we are required to report by exception**
In the light of the knowledge and understanding of the group and charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Governors’ Annual Report (which incorporates the strategic report and the directors’ report).
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of Governors’ remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit
## **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 Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and its members, as a body, for our audit work, for this report, or for the opinion we have formed.
Steven Harper, Senior Statutory Auditor, For and on behalf of Haysmacintyre LLP, Statutory Auditors
10 Queen Street Place London EC4R 1AG
## Date: 25 March 2021
Page 3
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020:**
## **GROUP STATEMENT OF FINANCIAL ACTIVITIES**
|Note
INCOME FROM:
Charitable activities
School fees
2.
Other educational
3.
Other ancillary trading
4.
Other trading activities
Non-ancillary trading
Investments
Investment income
5.
Bank and other interest
6.
Voluntary sources
Donations and legacies
7.
Government grants
Total income
EXPENDITURE ON:
Raising funds
Fundraising for voluntary resources
Trading
Other
Total costs of raising funds
Charitable activities
Schools and grantmaking
Schools - financing costs
9.
Total costs of charitable activities
Total expenditure
8.
NET INCOME BEFORE INVESTMENT
GAINS/(LOSSES)
Investment gains/(losses)
NET INCOME
Fair Value gains
18c.
Transfers between funds
26.
NET MOVEMENT IN FUNDS
Fund balances at 1 September 2019
FUND BALANCES AT31 AUGUST2020|Unrestricted
funds
Restricted
funds
Endowed
funds
Total
funds
2020
_Total_
_funds_
_2019_
£'000
£'000
£'000
_£'000_
_£'000_
16,901
-
-
16,901
_18,419_
36
-
-
36
_34_
3
-
-
3
_18_
13
-
-
13
_201_
4
9
-
13
_14_
42
-
-
42
_45_
-
469
-
469
_588_
210
-
-
210
_-_|
|---|---|
||17,209
478
-
17,687
_19,319_|
||206
-
-
206
_169_
10
-
-
10
_118_
93
-
-
93
_54_|
||309
-
-
309
_341_|
||15,290
322
-
15,612
_15,871_
614
-
-
614
_684_|
||15,904
322
-
16,226
_16,555_|
|||
||16,213
322
-
16,535
_16,896_|
||996
156
-
1,152
_2,423_
(10)
(32)
-
(42)
_(12)_|
||986
123
-
1,110
_2,411_
527
-
-
527
_96_
331
(331)
-
-
_-_|
||1,844
(207)
-
1,637
_2,507_
26,780
3,738
397
30,915
_28,408_|
||28,624
3,531
397
32,552
_30,915_|
All activities are continuing. No separate income and expenditure account as required under the Companies Act 2006 has been presented, as there are no differences between that and the Statement of Financial Activities presented above. The notes on pages 7 to 25 form part of these accounts.
Page 4
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GROUP AND CHARITY BALANCE SHEETS**
|Note
Fixed assets
Tangible assets
12.
Investments
29.
Current assets
Stock
13.
Debtors
14.
Investments
15.
Cash at bank and in hand
16.
Creditors: due within one year
17.
Net current assets
Total assets less current liabilities
Creditors: due in more than one year
18.
Total net assets
27.
Endowment funds
Restricted funds
Unrestricted funds
Fund balances
26.|**Group**
Charity
**2020**
**_2019_**
2020
_2019_
**£'000**
**_£'000_**
£'000
_£'000_
**42,444**
**_42,129_**
42,444
_42,129_
**-**
**_-_**
-
_-_|
|---|---|
||**42,444**
**_42,129_**
42,444
_42,129_|
||**6**
**_9_**
5
_6_
**464**
**_1,156_**
461
_1,070_
**254**
**_296_**
254
_296_
**10,516**
**_7,509_**
10,515
_7,509_|
||**11,240**
**_8,970_**
11,235
_8,881_
**(3,422) **
**_(4,764)_**
(3,418)
_(4,696)_|
||**7,818**
**_4,206_**
7,817
_4,185_|
||**50,262**
**_46,335_**
50,261
_46,314_
**(17,710) **
**_(15,420)_**
(17,710) _(15,420)_|
||**32,552**
**_30,915_**
32,551
_30,894_|
||**397**
**_397_**
397
_397_
**3,531**
**_3,738_**
4,112
_3,738_
**28,624**
**_26,780_**
28,292
_26,759_|
||**32,552**
**_30,915_**
32,551
_30,894_|
The notes on pages 7 to 24 form part of these accounts.
In accordance with Section 408 of the Companies Act 2006, no separate Statement of Financial Activities is presented for Dragon School Trust Limited. The Trust income for the year was £1,657k ( _2019: £2,177k_ ).
The financial statements were approved and authorised for issue by the Board of Governors On 27 February 2021 and were signed below on its behalf by
Andrew Webb, Chairman 27 February 2021
Company number: 00524331
Page 5
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GROUP STATEMENT OF CASH FLOWS**
|Note
2020
_2019_
£'000
£'000
_£'000_
_£'000_
Net cash inflow from operations
(a).
3,067
_3,832_
Cash flows from investing activities
Interest paid
(654)
_(684)_
Interest received
42
_45_
Investment income receipts
13
_14_
Payments for tangible fixed assets
(1,063)
_(102)_
Net cash used in investing activities
(1,662)
_(727)_
Cash flows from financing activities
Receipts from prepaid fees scheme
30
_495_
Payments from prepaid fees scheme
(434)
_(445)_
Additional borrowing
3,000
_-_
Loan repayments
(994)
_(1,421)_
Net cash used in financing activities
1,602
_(1,371)_
Change in cash and cash equivalents in the
reporting period
3,007
_1,734_
Cash and cash equivalents at the beginning
of the reporting period
7,509
_5,775_
Cash and cash equivalents at the end of the
reporting period
10,516
_7,509_
Charity law requires separate administration of the cashflows of endowed and other restricted funds of the
Trust. This constraint has not adversely affected group cashflows as stated above.
a) Reconciliation of net income to cash
flow from operating activities
2020
£'000
_2019_
_£’000_
Net income
1,637
_2,507_
Investment losses/(gains)
42
_12_
Fair value (gains)
(527)
_(97)_
Interest payable
602
_684_
Interest receivable
(42)
_(45)_
Investment income
(13)
_(14)_
Depreciation charges
748
_621_
Decrease/(Increase) in stocks
2
_13_
Decrease/(Increase) in debtors
692
_109_
Increase/(Decrease) in creditors
(74)
_42_
Net cash inflow from operating activities
3,067
_3,832_|_2019_
_£'000_
_£'000_
_3,832_
_(684)_
_45_
_14_
_(102)_
_(727)_
_495_
_(445)_
_-_
_(1,421)_
_(1,371)_
_1,734_
_5,775_
_7,509_|_2019_
_£'000_
_£'000_
_3,832_
_(684)_
_45_
_14_
_(102)_
_(727)_
_495_
_(445)_
_-_
_(1,421)_
_(1,371)_
_1,734_
_5,775_
_7,509_|
|---|---|---|
||_495_
_(445)_
_-_
_(1,421)_||
||||
|||_1,734_|
|||_5,775_|
|||_7,509_|
Page 6
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: GROUP STATEMENT OF CASH FLOWS**
|b) Analysis of cash flows and net debt
Cash at bank and in hand
Debt: bank loans
Current asset investments|1 Sept 2019
Cashflow
Other
movements
31 Aug 2020
£'000
£'000
£'000
£'000
7,509
3,007
-
10,516
(13,857)
(494)
-
(14,351)
296
-
(42)
254|
|---|---|
||(6,052)
2,513
(42)
(3,581)|
The notes on pages 7 to 24 form part of these accounts.
Page 7
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
## 1. ACCOUNTING POLICIES
## a) General information
The School is a Public Benefit Entity, registered as a charity (charity number: 309676) and company limited by guarantee (company number: 524331). The School’s registered office address is: Dragon School, Bardwell Road, Oxford, OX2 6SS.
## b) Basis of accounting
The accounts are prepared under the historical cost convention as modified by the revaluation of listed investments, in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), the Companies Act 2006 and the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) - Second Edition, Effective 1 January 2019.
Having reviewed the funding facilities available to the School together with the expected ongoing demand for places and the School’s future projected cash flows, the Governors have a reasonable expectation that the School has adequate resources to continue its activities for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
The functional currency of the School is considered to be GBP because that is the currency of the primary economic environment in which the School operates. The balances in the accounts are rounded to the nearest thousand.
- c) Consolidation/ group accounts
- The Trust has beneficial ownership of 100% of the share capital of Dragon School Trading Limited. The group accounts consolidate the results of this subsidiary, which are summarised in note 29. As the subsidiary pays any surpluses to the parent, the surplus dealt with in the parent company’s accounts is identical to that shown on the group income and expenditure account. The Trust’s Governors represent the ultimate controllers of the group.
- d) Critical accounting judgements and estimates and key sources of estimation uncertainty
- In the application of these accounting policies, the Governors are required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources.
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. Although these estimates are based on management’s best knowledge of the amount, events or actions, actual results may ultimately differ from those estimates. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects current and future periods. The Governors consider the following item to be an area subject to estimation and judgement:
## Depreciation:
The useful economic lives of tangible fixed assets are based on management’s judgement and experience. When management identifies that actual useful economic lives differ materially from the estimates used to calculate depreciation, that charge is adjusted retrospectively. Although tangible fixed assets are significant, variances between actual and estimated useful economic lives will not have a material impact on the operating results. Historically, no changes have been required.
Page 8
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
## 1. ACCOUNTING POLICIES (continued)
The following accounting policies have been used consistently in dealing with items which are considered material in relation to the Group’s accounts.
- e) Income – fees and similar income
- Income is recognised, in general, only with respect to the period of account and are stated after deducting bursaries, scholarships and other remissions allowed by the School. Fees paid with respect to future terms are carried forward as liabilities; and donations of any sort are included only when resources are irrevocably transferred. School fees include extras. Other Educational Income primarily consists of registration fees and income from the hiring out of some of the school’s facilities at certain times during the year. Income from such sources is recognised over the period in which the relevant service is delivered.
- f) Income – donations
- Donations are accounted for as and when entitlement arises, the amount can be reliably quantified and the economic benefit to the School is considered probable. Donations received for the general purposes of the School are credited to Unrestricted Funds. Donations subject to specific wishes of the donors are credited to the relevant Restricted Funds or Endowment Funds.
- g) Income – investments
- Interest is included on an accruals basis. Dividends from investment funds are included as receivable on the due dates.
## h) Expenditure
- With respect to resources expended running the school, ‘property’ includes costs of maintaining the buildings used for educational purposes, while ‘welfare’ include boarding and catering costs; 'support' represents other costs of servicing the direct teaching function, including governance costs. Irrecoverable VAT is included with the item of expense to which it relates in all cases. Overheads and other costs not directly attributable to a functional activity are apportioned on the basis of management estimates consistently applied.
## i) Fund accounting
- The School has three types of funds
- Restricted - where the purpose for which the funds may be used has been restricted by donors;
- • Endowment - where the capital is held in perpetuity to generate distributable income; and
- Unrestricted - where the fund is not restricted as to use other than in furthering the objects of the School. These include Designated Funds, where the funds are unrestricted but the Governors have designated them for a specific purpose.
## j) Tangible fixed assets
Land and buildings are shown at original cost. Fixtures and fittings are capitalised when they are included in the provision of additional facilities, such as when a building is extended or converted; other fixtures and fittings are charged to revenue in the year of purchase. Equipment costing over £1k is capitalised.
Depreciation is provided on all assets other than freehold land. Freehold buildings are amortised on a straight line basis, taking into account their estimated residual value, which in the case of educationspecific buildings is considered negligible but in the case of residential property is expected to approximate their original costs. Leasehold land and buildings are amortised over the period of the lease. With respect to other assets depreciation is provided at straight line on cost.
The estimated lifetimes of various types of assets in use are: Freehold buildings 50 years
Page 9
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
Other
3-10 years
1. ACCOUNTING POLICIES (continued)
A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that the carrying value of any fixed asset may not be recoverable. Shortfalls between the carrying value of fixed assets and their recoverable amounts are recognised as impairments. Impairment losses are recognised in the Statement of Financial Activities.
- k) Operating lease rentals
- Rentals paid under operating leases are charged to the SoFA on a straight line basis over the period of the lease.
- l) Investments Investments are a form of basic financial instrument and are initially shown in the financial statements at market value. Movements in the market values of investments are shown as unrealised gains and losses in the Statement of Financial Activities.
Gains and losses on the realisation of investments are shown as realised gains and losses in the Statement of Financial Activities. Realised gains and losses are calculated as the difference between sale proceeds and opening carrying value or the purchase value if acquired subsequent to the first day of the financial year. Unrealised gains and losses are calculated as the difference between the fair value of investments at the year-end and their carrying value. Realised and unrealised investment gains and losses are allocated to the appropriate Fund according to the “ownership” of the underlying assets. Investment subsidiaries are valued at cost less provision for impairment.
## m) Stock
- Stock of consumables held at the year-end are valued at cost, subject to their usability. Stock held for resale is valued at the lower of cost and net realisable value. Purchases of educational materials for the next academic year are carried forward as prepayments.
- n) Debtors
- Trade and other debtors are recognised at the settlement amount due for the provision of services delivered. Prepayments are recognised at the amount prepaid or the amount paid in advance.
- o) Cash at bank and in hand
- Cash at bank and in hand includes cash and deposits with a short term maturity of six months or less from the date of opening the deposit account.
## p) Creditors
Creditors are recognised where the School has a present obligation arising from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured reliably. Amounts are recognised at their settlement amount.
- q) Property creditor
- The long-term property creditor has been discounted to net present value using the Trust’s fixed bank borrowing rate. Interest is charged to income and expenditure account at this rate and added to the outstanding credit balance until the date of repayment.
- r) Financial instruments
- Basic financial instruments are initially recognised at transaction value and subsequently measured at amortised with the exception of investments which are held at fair value. Financial assets held at amortised cost comprise cash at bank and in hand, together with trade and other debtors. A specific provision is made for debts for which recoverability is in doubt. Cash at bank and in hand is defined as all cash held in instant access bank accounts and used as working capital. Financial liabilities held at amortised cost comprise all creditors except social security and other taxes and provisions.
Page 10
**DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
## 1. ACCOUNTING POLICIES (continued)
Financial assets / liabilities held at fair value through the profit or loss comprise derivatives. Derivatives, including interest rate swaps, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. Changes in the fair value of derivatives are recognised in the SoFA as a fair value movement. The School does not currently apply hedge accounting for interest rate swap derivatives.
## s) Pension costs
Pension costs represent contributions under the Teachers’ Pensions Agency (TPA) teachers’ superannuation scheme, various defined contribution schemes and provision against amounts due with respect to specific obligations recognised by the Trust. Both the TPA and the defined contribution schemes’ costs are shown in the accounts as charged, the payments being made to external funds.
|2. CHARITABLE ACTIVITIES - SCHOOL FEES
School fees and extras
_less_scholarships, bursaries and grants
Bursaries paid from restricted funds
3. CHARITABLE ACTIVITIES – OTHER EDUCATIONAL
Registration fees
4. CHARITABLE ACTIVITIES – ANCILLARY TRADING
Commission and similar income
5. INVESTMENT INCOME
Listed and other investments
6. BANK AND OTHER INTEREST
Bank interest
Other|2020
£'000
17,523
(943)
16,580
321
16,901
2020
£'000
36
36
2020
£'000
3
3
2020
£'000
13
13
2020
£'000
34
8
42||
_2019_
_£'000_
_19,202_
_(965)_|
|---|---|---|---|
||||_18,237_
_182_|
||||_18,419_|
|||||
||||
_2019_
_£'000_
_34_|
||||
_34_|
|||||
||||
_2019_
_£'000_
_18_|
||||
_18_|
|||||
||||
_2019_
_£'000_
_14_|
||||
_14_|
|||||
||||
_2019_
_£'000_
_38_
_7_|
||||
_45_|
Page 11
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
|**NOTES**||||
|---|---|---|---|
|7. DONATIONS AND LEGACIES
Donations for:
Bursaries
Other
8a. ANALYSIS OF TOTAL EXPENDITURE
Cost of raising funds
Fundraising for voluntary resources
Trading costs
Other costs
Total cost of raising funds
Charitable activities
Schools and grantmaking
Teaching
Welfare
Premises
Support costs of schooling (including
governance – note 8c)
Grants, awards and prizes (note 8b)
Schools - financing costs (note 9)
Total costs of charitable activities
Total expenditure|2020
£'000
331
138
469
Staff costs
Depr’n
£'000
£'000
147
-
-
-
-
-||
_2019_
_£'000_
_262_
_326_|
||||
_588_|
|||Other
£'000
59
10
93|2020
Total
£'000
206
10
93|
||147
-|162|
309|
||7,868
38
1,077
51
285
377
1,113
282
-
-|1,105
1,454
1,277
363
323|
9,011
2,582
1,939
1,758
323|
||10,343
748
-
-|4,522
613|
15,613
613|
||10,343
748|5,135|
16,226|
|||||
||10,490
748|5,297|
16,535|
No allocation has been made of senior management time spent on governance matters as such time is additional to full time roles providing support to the School’s teaching. Staff costs are further detailed in note 10.
Page 12
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
## 8a. ANALYSIS OF TOTAL EXPENDITURE (cont’d)
Prior year comparative information
|8a. ANALYSIS OF TOTAL EXPENDITURE (cont’d)
|8a. ANALYSIS OF TOTAL EXPENDITURE (cont’d)
|||||
|---|---|---|---|---|---|
|Prior year comparative information
Cost of raising funds
Fundraising for voluntary resources
Trading costs
Other costs
Total cost of raising funds
Charitable activities
Schools and grantmaking
Teaching
Welfare
Premises
Support costs of schooling (including
governance – note 8c)
Grants, awards and prizes (note 8b)
Schools - financing costs (note 9)
Total costs of charitable activities
Total expenditure
8b. GRANTS, AWARDS AND PRIZES
From Restricted Funds:
Bursaries and other grants and awards
8c. GOVERNANCE COSTS||Staff costs
Depr’n
£'000
£'000
_107_
_-_
_-_
_-_
_-_
_-_||Other
£'000
_62_
_118_
_54_|2019
Total
£'000
_169_
_118_
_54_|
|||_107_
_-_||_234_|
_341_|
|||_7,720_
_41_
_1,357_
_72_
_281_
_377_
_884_
_132_
_-_
_-_||_1,213_
_1,833_
_1,183_
_404_
_374_|
_8,974_
_3,262_
_1,841_
_1,420_
_374_|
|||_10,242_
_622_
_-_
_-_||_5,007_
_684_|
_15,871_
_684_|
|||_10,242_
_622_||_5,691_|
_16,555_|
|||||||
|||_10,349_
_622_||_5,925_|
_16,896_|
||||2020
£'000
321
321|||
||||||
_2019_
_£'000_
_182_|
||||||
_182_|
|||||||
||Auditors’ remuneration – audit
Auditors’ remuneration – non-audit
Reimbursement of expenses to Governors
Other governance costs||2020
£'000
23
2
1
8
34||
_2019_
_£'000_
_23_
_7_
_2_
_35_|
||||||
_67_|
|ERNANCE COSTS|||
|---|---|---|
||2020|
_2019_|
||£'000|_£'000_|
|Auditors’ remuneration – audit|23|
_23_|
|Auditors’ remuneration – non-audit|2|
_7_|
|Reimbursement of expenses to Governors|1|
_2_|
|Other governance costs|8|
_35_|
||34|
_67_|
Page 13
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
|**NOTES**||||
|---|---|---|---|
|9. FINANCING COSTS
Interest payable is due on:
Bank loans and overdrafts
Discounts allowed on prepaid fees|2020
£'000
603
11
614||
_2019_
_£'000_
_675_
_9_|
||||_684_|
Financing costs are included in costs of charitable activities as part of the operation of the School.
|10. EMPLOYEES
Staff costs:
Wages and salaries
National Insurance
Pension costs
Severance pay
Severance pay consisted of negotiated exit payments
The numbers of employees whose remuneration was over £60k
fell into the following bands:
£60 - £70k
£70 - £80k
£80 - £90k
£100- £110k
£110- £120k
£120- £130k
These higher paid staff had a mix of defined
contribution and defined benefit pension schemes,
total cost:
Total pension costs were made up of:
TPA pension contributions
Defined contribution schemes|2020
£'000
8,260
811
1,419
-
10,490
No.
7
5
3
1
1
1
£'000
241
£'000
1,219
200
1,419||
_2019_
_£'000_
_8,510_
_805_
_1,015_
_19_|
|---|---|---|---|
||||_10,349_|
||||
_No._
_7_
_5_
_1_
_2_
_1_
_-_
_£'000_
_152_|
||||_£'000_
_837_
_176_|
||||
_1,013_|
The total employment costs of key management personnel, who are considered to consist of the Head, Head of the Pre-prep, the Bursar, the Governors and the Deputy Heads during the year was £790k ( _2019: £844k_ ).
The Governors did not receive any remuneration. The accounts do not estimate the value of their time and expertise in governance and support roles, though this is considerable. Five Governors received travel expenses totalling £1,505 ( _2019: five for travel totalling £1,698_ ).
Page 14
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
## 10. EMPLOYEES (continued)
|EMPLOYEES (continued)||||
|---|---|---|---|
|The average number of employees, based on
head count, excluding Governors, was:
Teaching
Pensioners
Support staff
Development|2020
No.
213
6
146
3
368||_2019_
No.
_197_
_7_
_119_
_3_|
||||
_326_|
## 11. TAXATION
As a registered charity the Trust does not pay corporation tax on surpluses arising from its charitable activities. The Trust’s subsidiary, Dragon School Trading Limited, pays corporation tax on profits, but these are nil for tax purposes after allowing for the payment of profits to the parent company as a charge.
The Trust suffers irrecoverable VAT on all purchases other than those made by its subsidiary trading company. Irrecoverable VAT paid to Customs and Excise totalled approximately £577k ( _2019: £577k_ ) during the year.
## 12. TANGIBLE FIXED ASSETS (group _and_ parent company) for own use:
|TANGIBLE FIXED ASSETS (group_a_|_nd_parent company) for own use:|
|---|---|
|Cost
at 1 September 2019
additions
disposals
at 31 August 2020
Depreciation
at 1 September 2019
charge
released
at 31 August 2020
Net book value
_at 1 September 2019_
at 31 August 2020|Freehold
property
Motor
vehicles
Other
TOTAL
£'000
£'000
£'000
£'000
48,068
197
5,363
53,628
331
13
719
1,063
-
-
-
-|
||48,399
210
6,082
54,691|
||6,549
165
4,785
11,499
324
14
410
748
-
-
-
-|
||6,873
179
5,195
12,247|
|||
||_41,519_
_32_
_578_
_42,129_|
||41,526
31
887
42,444|
The rebuild cost of properties included in freehold was approximately £55,380k at the most recent insurance review (September 2020), though this does not include the value of the land itself. Governors are of the opinion that the current market value of freeholds is considerably in excess of the historical cost shown. With respect to other assets (fixtures, fittings and equipment), these are insured for £6,404k. These values are cited merely for comparison with the historical cost figures shown above. The School does not own any heritage assets.
Virtually all assets held are used for the purposes of the School’s operation; some small proportion is used for management and trading, but identification of the amounts involved is not practicable.
Page 15
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
|13. STOCKS
Goods for resale
Consumables
14. DEBTORS
Trade debtors
Amount owed by subsidiary
Loans
Prepayments
Accrued income
15. INVESTMENTS HELD AS CURRENT ASSETS
Investments are shown at market value:
Other U.K. listed investments
Historical cost:
Value of investments:
brought forward
disposals at value brought forward
acquired
change in unrealised values
carried forward|Gr|oup
_2019_
_£'000_
_3_
_6_
_9_
oup
_2019_
_£'000_
_599_
_-_
_2_
_255_
_300_
_1,156_|Parent co|mpany|
|---|---|---|---|---|
||2020
£'000
1
5|_2019_
_£'000_
_3_
_6_|2020
£'000
-
5|_2019_
_£'000_
_-_
_6_|
||6|_9_|5|_6_|
||Gr||Parent co|mpany|
||2020
£'000
284
-
3
177
-|_2019_
_£'000_
_599_
_-_
_2_
_255_
_300_|2020
£'000
279
2
3
177
-|_2019_
_£'000_
_509_
_4_
_2_
_255_
_300_|
||464|_1,156_|461|_1,070_|
||||Group and parent
company||
||||2020
£'000
254|_2019_
_£'000_
_296_|
||||254|_296_|
||||173|_173_|
||||296
-
-
(42)|_309_
_-_
_-_
_(13)_|
||||254|_296_|
|Included in the above are M&G Charifund units at £169k, Cazenove Charity Fund £33k and £38k
holdings of listed stocks each representing more than 5% of the total investments held.
16. CASH AT BANK AND IN HAND
Group
Parent company
2020
_2019_
2020
_2019_
£'000
_£'000_
£'000
_£'000_
Cash on deposit
10,512
_7,506_
10,512
_7,506_
Current bank accounts and petty cash
4
_3_
3
_3_
10,516
_7,509_
10,515
_7,509_|Included in the above are M&G Charifund units at £169k, Cazenove Charity Fund £33k and £38k
holdings of listed stocks each representing more than 5% of the total investments held.
16. CASH AT BANK AND IN HAND
Group
Parent company
2020
_2019_
2020
_2019_
£'000
_£'000_
£'000
_£'000_
Cash on deposit
10,512
_7,506_
10,512
_7,506_
Current bank accounts and petty cash
4
_3_
3
_3_
10,516
_7,509_
10,515
_7,509_|Included in the above are M&G Charifund units at £169k, Cazenove Charity Fund £33k and £38k
holdings of listed stocks each representing more than 5% of the total investments held.
16. CASH AT BANK AND IN HAND
Group
Parent company
2020
_2019_
2020
_2019_
£'000
_£'000_
£'000
_£'000_
Cash on deposit
10,512
_7,506_
10,512
_7,506_
Current bank accounts and petty cash
4
_3_
3
_3_
10,516
_7,509_
10,515
_7,509_|
|---|---|---|
||2020
£'000
10,512
3|_2019_
_£'000_
_7,506_
_3_|
||10,515|_7,509_|
Page 16
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
17. CREDITORS: DUE WITHIN ONE YEAR
||||||
|---|---|---|---|---|
|CREDITORS: DUE WITHIN ONE YEAR
Bank loans and overdrafts
Trade creditors
Taxation and social security
Accruals
Deferred income
- fees received in advance
- deposits held
- prepaid fees scheme
Due under finance leases|Gr|oup
_2019_
_£'000_
_1,458_
_347_
_372_
_374_
_1,368_
_452_
_393_
_-_
_4,764_|Parent co|mpany|
||2020
£'000
486
202
372
327
1,365
481
189
-|_2019_
_£'000_
_1,458_
_347_
_372_
_374_
_1,368_
_452_
_393_
_-_|2020
£'000
486
202
372
323
1,365
481
189
-|_2019_
_£'000_
_1,458_
_319_
_341_
_365_
_1,368_
_452_
_393_
_-_|
||3,422|
_4,764_|3,418|_4,696_|
18a. CREDITORS: DUE IN IN MORE THAN ONE YEAR
||||
|---|---|---|
|18a. CREDITORS: DUE IN IN MORE THAN ONE YEAR
Bank loans
Deferred income: prepaid fees
Deposits held
Interest rate swap derivative
18b. ANALYSIS OF LONG TERM CREDITORS
Long term creditors are due in less than five years except as follows:
Bank loans:
due within one year
due between two and five years
due in more than five years
Deferred income - prepaid fees
19.
due within one year
due between two and five years
Deposits held:
due within one year
due between two and five years
due in more than five years
Interest rate swap derivative
due in more than five years|Group and parent
company||
||2020
£'000
13,865
210
1,945
1,690|_2019_
_£'000_
_10,887_
_399_
_1,917_
_2,217_|
||17,710|_15,420_|
||486
9,169
4,696|_1,458_
_6,670_
_4,187_|
||14,352|_12,315_|
||189
210|_393_
_399_|
||399|_792_|
||481
1,543
402|_452_
_1,520_
_397_|
||2,426|_2,369_|
||||
||1,690|_2,217_|
Page 17
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
18c. LONG TERM CREDITORS: EXPLANATORY NOTES
£21,000k was borrowed from Coutts & Co to fund the first payment for the freehold of the School’s site on 31 January 2007, with the option to draw down a further amount by January 2014 so as to pay the deferred balance due for the purchase of the School’s freehold, due by the end of that month. This option was exercised during the 2014 year, a further £6,000k being borrowed from the bank.
This loan is repayable by fixed instalments totalling £2,121k per annum (which amount anticipated the additional draw down). A hedging facility was simultaneously arranged so that in effect interest is fixed at 5.615%. The loan is secured by a fixed and floating charge on the whole of the Trust’s property, together with additional specific charges over several freehold properties. The loan outstanding at the year-end (£11,351k) represents less than half of the value of properties used for security. During the year, the capital element of one repayment (£707k) was deferred. The School agreed with the bank that the capital repayments due in September 2020 and January 2021 would also be deferred. These deferred payments will need to be made by the end of the term of the loan.
The Interest Rate Swap Derivative is the mark to market valuation adjustment on the fixed rate hedging facility mentioned above.
During the year, £3,000k was borrowed from Coutts & Co under the UK Government backed Coronavirus Business Interruption Loan scheme. The loan is repayment by instalments over a five year period starting in August 2021. The loan is secured by a fixed and floating charge ocer the property also secured under the existing loan from Coutts & Co mentioned above. The interest rate on the loan at the year end was 3.50% over Coutts Base Rate, currently 3.60%.
## 19. PREPAID FEES ACCOUNT
||||
|---|---|---|
|EPAID FEES ACCOUNT
Balance at the beginning of the year
New contracts
Amounts accrued to contracts as debt-financing costs
Amounts used in payment of fees
– to the School
Balance at year end|Group and parent
company||
||2020
£'000
792
30
11
(434)|_2019_
_£'000_
_733_
_495_
_11_
_(445)_|
||399|_792_|
## 20. PENSIONS
The majority of the staff participate in one of two pension schemes: the Teachers’ Pension Scheme (TPS) run by the Teachers’ Pension Agency specifically for teaching staff, and a defined contribution scheme for other staff, formerly with Aviva and from March 2013 with Scottish Widows.
The TPS is an unfunded multi-employer defined benefits pension scheme governed by The Teachers’ Pensions Regulations 2010 (as amended) and The Teachers’ Pension Scheme Regulations 2014 (as amended). Members contribute on a “pay as you go” basis with contributions from members and the employer being credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament.
The employer contribution rate is set by the Secretary of State following scheme valuations undertaken by the Government Actuary’s Department. The most recent actuarial valuation of the TPS was prepared as at
Page 18
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
31 March 2016 and the Valuation Report, which was published in March 2020, confirmed that the employer contribution rate for the TPS would increase from 16.4% to 23.6% from 1 September 2020. Employers are also required to pay a scheme administration levy of 0.08% giving a total employer contribution rate of 23.68%.
The 31 March 2016 Valuation Report was prepared in accordance with the benefits set out in the scheme regulations and under the approach specified in the Directions, as they applied at 5 March 2020. However, the assumptions were considered and set by the Department for Education prior to the ruling in the ‘McCloud/Sargeant case’. This case has required the courts to consider cases regarding the implementation of the 2015 reforms to Public Service Pensions including the Teachers’ Pensions.
On 27 June 2020 the Supreme Court denied the government permission to appeal the Court of Appeal’s judgment that transitional provisions introduced to the reformed pension schemes in 2015 gave rise to unlawful age discrimination. The government is respecting the Court’s decision and has said it will engage fully with the Employment Tribunal as well as employer and member representatives to agree how the discriminations will be remedied.
The TPS is subject to a cost cap mechanism which was put in place to protect taxpayers against unforeseen changes in scheme costs. The Chief Secretary to the Treasury, having in 2019 announced that there would be a review of this cost cap mechanism, in January 2020 announced a pause to the cost cap mechanism following the Court of Appeal’s ruling in the McCloud/Sargeant case and until there is certainty about the value of pensions to employees from April 2015 onwards.
In view of the above rulings and decisions the assumptions used in the 31 March 2016 Actuarial Valuation may become inappropriate. In this scenario, a valuation prepared in accordance with revised benefits and suitably revised assumptions would yield different results than those contained in the Actuarial Valuation.
Until a remedy to the discrimination conclusion has been determined by the Employment Tribunal it is not possible to conclude on any financial impact or future changes to the contribution rates of the TPS. Accordingly no provision for any additional past benefit pension costs is included in these financial statements.
The school operates a defined contribution scheme with Scottish Widows. The assets of the scheme are held separately from the Trust in an independently administered fund. The employer contributes up to 12% corresponding to employees’ chosen contribution rates.
Included within salary costs are payments to certain former staff members or their spouses whose pension provision prior to the School adopting the Teachers’ Pension Scheme was inadequate during their employment. The total amount paid was £22k ( _2019: £22k_ ). The Trust is under no legal obligation to continue with these payments and accordingly the accounts do not include any estimate, actuarial or otherwise, of a possible total future commitment.
## 21. RELATED PARTIES
Three of the Governors had children at the School during the year, for which they are charged normal fees and extras as agreed in the standard parent-school contract.
In addition to assisting the school in raising funds, Governors themselves make charitable donations to the school from time to time, but there is no requirement to do so. The total charitable contributions in the year from Governors was £10k ( _2019: £61k_ ).
Page 19
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
The School also had transactions with its subsidiary company, Dragon School Trading Limited, which are detailed in note 29.
There were no other related parties.
## 22. CAPITAL COMMITMENTS
The School had no capital commitments ( _2019: none_ ) with respect to building contracts in progress at the year-end. There were no amounts committed but not yet contracted.
## 23. FINANCE LEASE COMMITMENTS
The School has no future minimum lease commitments under non-cancellable finance leases.
## 24. OPERATING LEASE COMMITMENTS
The School had total future minimum lease commitments under non-cancellable operating leases as follows:
|Land & Buildings
Due within 1 year
Other
Due within 1 year|Group and parent
company|Group and parent
company|
|---|---|---|
||2020
£'000
12|_2019_
_£'000_
_38_|
||Group and parent
company||
||2020
£'000
3|_2019_
_£'000_
_3_|
The total operating lease expense recognised in the SoFA for the year is £41k ( _2019: £41k_ ).
Page 20
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
## 25. FUNDS: DETAILED MOVEMENTS
|ENDOWMENT FUND
ENDOWED BURSARIES FUND
RESTRICTED FUNDS
Knatchbull Memorial fund
Bursaries funds
Capital fund
Development fund
UNRESTRICTED FUNDS
Prepaid fees
General fund
CHARITY total funds
Non-charity trading funds
GROUP
Prior year comparative
information
ENDOWMENT FUND
ENDOWED BURSARIES FUND
RESTRICTED FUNDS
Knatchbull Memorial fund
Bursaries funds
Capital fund
Development fund
UNRESTRICTED FUNDS
Prepaid fees
General fund
CHARITY total funds
Non-charity trading funds
GROUP|Balance at
1 Sept
2019
Incoming
resources
Outgoing
resources
Investment
gains/
(losses)
Transfers
between
funds
Balance at
31 Aug
2020
£'000
£'000
£’000
£'000
£'000
£'000
3
-
-
-
-
3
394
-
-
-
-
394|
|---|---|
||397
-
-
-
-
397|
||66
2
(1)
(10)
-
57
979
331
(321)
(22)
-
967
2,430
31
-
-
(331)
2,130
263
114
-
-
-
377|
||3,738
478
(322)
(32)
(331)
3,531|
||-
-
(11)
-
11
-
26,759
17,196
(16,192)
517
341
28,621|
||26,759
17,196
(16,203)
517
352
28,621|
|||
||30,894
17,674
(16,525)
485
21
32,549|
||21
13
(10)
-
(21)
3|
||30,915
17,687
(16,535)
485
-
32,552|
||Balance at
1 Sept
2018
Incoming
resources
Outgoing
resources
Investment
gains/
(losses)
Transfers
between
funds
Balance at
31 Aug
2019
£'000
£'000
£’000
£'000
£'000
£'000
3
-
-
-
-
3
394
-
-
-
-
394|
||397
-
-
-
-
397|
||69
2
(1)
(4)
-
66
955
266
(237)
(5)
-
979
2,268
162
-
-
-
2,430
139
164
(40)
-
-
263|
||3,431
594
(278)
(9)
-
3,738|
||-
1
(11)
-
10
-
24,568
18,523
(16,489)
93
64
26,759|
||24,568
18,524
(16,500)
93
74
26,759|
|||
||28,396
19,118
(16,778)
84
74
30,894|
||12
201
(118)
-
(74)
21|
||28,408
19,319
(16,896)
84
-
30,915|
||Page 21|
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
||**NOTES**|
|---|---|
|26. FUNDS: NET ASSETS
ENDOWMENT FUND
ENDOWED BURSARIES FUND
RESTRICTED FUNDS
Knatchbull Memorial fund
Bursaries funds
Capital fund
Development fund
UNRESTRICTED FUNDS
Prepaid fees
General fund
CHARITY total funds
Non-charity trading funds
GROUP
Prior year comparative information
ENDOWMENT FUND
ENDOWED BURSARIES FUND
RESTRICTED FUNDS
Knatchbull Memorial fund
Bursaries funds
Capital fund
Development fund
UNRESTRICTED FUNDS
Prepaid fees
General fund
CHARITY total funds
Non-charity trading funds
GROUP|Fixed
Assets
Invest-
ments
Other net
current
assets
Long term
liabilities
Total net
Assets at 31
Aug 2020
£'000
£'000
£'000
£'000
£'000
-
-
3
-
3
-
-
394
-
394|
||-
-
397
-
397|
||-
51
6
-
57
-
101
866
-
967
-
-
2,130
-
2,130
-
-
377
-
377|
||-
152
3,379
-
3,531|
||-
-
210
(210)
-
42,444
102
3,575
(17,500)
28,621|
||42,444
102
3,785
(17,710)
28,621|
|||
||42,444
254
7,561
(17,710)
32,549|
||-
-
3
-
3|
||42,444
254
7,564
(17,710)
32,552|
||Fixed
Assets
Invest-
ments
Other net
current
assets
Long term
liabilities
Total net
assets at 31
Aug 2019
£'000
£'000
£'000
£'000
£'000
-
-
3
-
3
-
-
394
-
394|
||-
-
397
-
397|
||-
62
4
-
66
-
123
856
-
979
-
-
2,430
-
2,430
-
-
263
-
263|
||-
185
3,553
-
3,738|
||-
-
399
(399)
-
42,219
111
(551)
(15,020)
26,759|
||42,219
111
(152)
(15,419)
26,759|
|||
||42,219
296
3,798
(15,419)
30,894|
||-
-
21
-
21|
||42,219
296
3,819
(15,419)
30,915|
Page 22
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
## 27. FUNDS: EXPLANATORY NOTES
- a) The Endowment fund represent amounts given with a restriction on the disbursement of the capital amount. The income is used for general purposes. The Trust's endowment fund derives from a small group of gifts in about 1997.
- b) The Endowed Bursaries fund provides fee support from income arising from donations whose capital expenditure has been restricted by the donors. Otherwise funds are administered as for other bursaries.
- c) The Knatchbull Memorial fund provides funding for travel and exploration activities of former pupils (‘Old Dragons’). It has specific trustees who review the application of resources.
- d) The Bursaries funds are for the provision of fee support for pupils. The funds include donations for named bursaries; the costs of bursary support are deducted from these sums as appropriate. The funds are administered by the Bursaries Committee who review the application of resources. Additional fee concessions and support are provided from the general fund.
- e) The Development fund includes sums raised for specific purposes through the ‘annual giving programme’, other campaigns and unsolicited gifts. Some of these donations are restricted to specific projects, though most are not. In some cases general donations are received without even apparent restrictions with respect to the school's development programme, but the Trust infers a restriction in these cases on the principle that such donations probably originated from literature soliciting funds for such purpose. The balance carried forward on the fund represents unspent donations for specific purposes.
- f) The ‘Capital fund’ was previously included within the generality of the ‘Development fund’ but, as it has grown significantly is now shown separately. This represents unspent donations raised for building projects – currently the Music School. Amounts spent on the specific buildings are transferred from the Capital fund to the general fund in the year the expenditure is incurred.
- g) The Prepaid Fees fund represents income and expenditure with respect to amounts paid in advance for fees. Investments in government stocks and cash deposits are held against the future liabilities.
Page 23
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
## 28. TRADING SUBSIDIARY
The Trust holds 100 ordinary shares of £1 each, representing 100% of the issued share capital of Dragon School Trading Limited, a company incorporated in England and Wales. The value of the investment as determined by the equity method is £100. These shares are included on the parent company balance sheet as investments held as fixed assets:
|Shares in subsidiary company at cost|2020
£
100||
_2019_
_£_
_100_|
|---|---|---|---|
The Trust advances working capital as necessary to the trading company to finance its operations. Interest is charged on the amount outstanding from time to time at the same rate as charged by the Trust’s bankers.
The Trading company's results for the year, and balance sheet at the year end, from the audited accounts, are summarised below:
|re summarised below:||||
|---|---|---|---|
|Turnover
Cost of sales
Gross profit
Administration expenses
Profit for the financial year
To be paid to Dragon School Trust Ltd under gift aid
Generated for parent company:
Surplus above
Management charges from Trust
Current assets
Intercompany account
Current liabilities
Net assets
Called up share capital
General reserves|2020
£'000
12
(7)
5
(4)
1
1
1
3
4
12
(4)
(7)
1
-
1
1||
_2019_
_£'000_
_204_
_(175)_|
||||
_29_
_(7)_|
||||
_22_|
||||
_22_|
||||
_23_
_6_|
||||
_29_|
||||
_96_
_(4)_
_(68)_|
||||
_22_|
||||
_-_
_22_|
||||
_22_|
Page 24
## **DRAGON SCHOOL TRUST LIMITED ANNUAL REPORT AND ACCOUNTS 2020: NOTES**
|**NOTES**|**NOTES**|**NOTES**||||
|---|---|---|---|---|---|
|29. CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES –|||COMPARATIVE FIGURES BY FUND-TYPE|||
||Note|Unrestricted funds|Restricted|Endowed|Total|
||||funds|funds|funds|
||||||2019|
|||£'000|£'000|£'000|_£'000_|
|INCOME FROM:||||||
|Charitable activities||||||
|School fees|2.|18,419|-|-|18,419|
|Other educational|3.|34|-|-|34|
|Other ancillary trading|4.|18|-|-|18|
|Other trading activities||||||
|Non-ancillary trading||-|-|-|201|
|Investments||||||
|Investment income|5.|8|6|-|14|
|Bank and other interest|6.|45|-|-|45|
|Voluntary sources||||||
|Donations and legacies|7.|-|588|-|588|
|Total income||18,725|594|-|19,319|
|EXPENDITURE ON:||||||
|Raising funds||||||
|Fundraising for voluntary resources||169|-|-|169|
|Trading||118|-|-|118|
|Other||54|-|-|54|
|Total costs of raising funds||341|-|-|341|
|Charitable activities||||||
|Schools and grantmaking||15,593|278|-|15,871|
|Schools - financing costs|9.|684|-|-|684|
|Total costs of charitable activities||16,277|278|-|16,555|
|||||||
|Total expenditure|8.|16,618|278|-|16,896|
|||||||
|NET INCOME BEFORE INVESTMENT||||||
|AND FAIR VALUE GAINS AND||||||
|TRANSFERS||2,107|278|-|2,423|
|Investment gains (losses)||(3)|16|-|(12)|
|Fair Value gains (losses)|18c.|96|(9)|-|96|
|Transfers between funds|26.|-|-|-|-|
|NETINCOME/MOVEMENT IN FUNDS||2,200|307|-|2,507|
|Fund balances at 1 September 2017||24,580|3,431|397|28,408|
|FUND BALANCES AT31 AUGUST2019||26,780|3,738|397|30,915|
Page 25