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2023-07-31-accounts

Charity number: 508285

The Royal Grammar School Educational Trust

Annual report

31 July 2023

The Royal Grammar School Educational Trust

Contents

Page
Reference and administrative details 1
Trustees’ report 2-6
Trustees' responsibilities statement 7
Independent auditor's report to the trustees ofThe Royal Grammar School Educational 8-11
Trust
Statement of financial activities 12
Balance sheet 13
Statement of cash flows 14
Notestothefinancialstatements 15-26

The Royal Grammar School Educational Trust

Reference and administrative details

Trustees P Hudspith (ex-officio) (appointed 16 February 2023)
A Fletcher (ex-officio)
M Squires (co-opted)
P Haggie (ex officio) (resigned 21 November 2022)
J Marks (co-opted)
N J McMinn (appointed by the Governors ofthe Royal Grammar School)
N R Paton (co-opted)
GE
Stanford (appointed by the Governors of the Royal Grammar School)
Charity registered
number 508285
Principal office Eskdale Terrace
Newcastle upon Tyne
NE2 4DX
Secretary tothe Trust CF Black
Independent auditor UNW LLP
Chartered Accountants
Citygate
St James' Boulevard
Newcastle upon Tyne
NE1 4JE
Bankers Barclays Bank PLC
PO BOX 379
71 Grey Street
Newcastle upon Tyne
NE99 1JA
Investment advisors CCLA
Senator House
85 Queen Victoria Street
London
EC4V4ET

1

The Royal Grammar School Educational Trust

Trustees’ report Year ended 31 July 2023

The trustees present their annual report together with the audited financial statements of The Royal Grammar School Educational Trust (‘the Trust’) for the year ended 31 July 2023.

Objectives and activities

The primary objects, and the aims of the Trust, are:

a) the advancement generally of education and in particular at the Newcastle upon Tyne Royal Grammar School (‘the School’) or through the medium of the School; and

b) the furtherance of the education of or the relief of poverty among persons who are or intend or desire to become or who have been, pupils at the School or who are members of staff at the School.

The trustees have adopted appropriate policies with regard to its operations (for example in the areas of Risk Management and Data Protection).

Strategies for achieving objectives

The main strategy for generating funds is through the Bursary Campaign, overseen by a Steering Committee. Funds generated are used to support bursaries at the School. The key strategy for allocation of funds is that any young person capable of benefiting from education at the School should be able to do so, regardless of his or her family's financial circumstances.

Activities for achieving objectives

The main activities related to generating funds are the seeking of donations from corporate organisations, charitable trusts and individual donors as part of a structured programme, and the management of the Trust's investments. The main activity relating to the allocation of funds is the allocation, by trustees, of funds to the School to deliver means tested financial assistance to pupils, and the monitoring of these pupils’ progress.

Grant making policies

In accordance with the Trust deed, the trustees, at their discretion, receive from the Governors of the School, on an annual basis, a report on how best the objectives of the Trust can be implemented in relation to the specific needs of the School to primarily fund the delivery of bursaries for students attending the School although they may also consider requests to support outreach through study or research projects in partnership with other schools or capital projects for premises, equipment or facilities.

Nain activities undertaken to further the charity's purposes for public benefit

The Trust achieves its purposes for the public benefit through the provision of means tested financial assistance for pupils who would not otherwise be able to afford the education offered through the Newcastle upon Tyne Royal Grammar School.

In setting objectives and planning for activities, the trustees have given due consideration to general guidance published by the charity commission relating to public benefit.

2

The Royal Grammar School Educational Trust

Trustees’ report (continued) Year ended 31 July 2023

Achievements and performance

Review of activities

The Trust continued to make a major contribution in support of the Royal Grammar School's passionate and effective commitment to providing bursaries to pupils from families who meet our strict criteria for support. Eighty-three (2022: 82) RGS students were in receipt of bursaries during the school year at a total cost to the school of £1,191,923 (2022: £1,084,547) of which £1,099,709 (2022: £904,035) was contributed by the Bursary Campaign and other funds controlled by the Trust. The trustees continue to recognise their critical role in sustaining and hopefully increasing this level of support for the provision of bursaries. RGS bursaries are strictly means-tested and parents of bursary holders contribute on a sliding scale according to their family income. The average level of fee support during the year was 95% (2022: 93%) of fees, indicating the trustees’ strategy to direct its finite resources to families who could demonstrate the greatest financial need. Seventy two students (2022: 65) received bursaries of between 90% to 100% of school fees, indicating that their family incomes will have been somewhat below £43,300 per annum (2022: £39,700).

The school continues to see an increase in bursary applications which is encouraging and shows that more and more people are aware of the opportunity, but demand for places continues to significantly outstrip the funds available.

With the approval of both the trustees of the RGS Educational Trust, and the Governors of the Royal Grammar School, the trustees are responsible for the management and allocation of funds raised by the means of the RGS Bursary Campaign. Both trustees and the RGS Governors approved criteria for the assessment of applications for financial assistance.

Investment policy and performance

The trustees meet regularly and set, and then review, the investment policy objectives and work with the fund’s designated advisors to ensure these policies are met.

Investment activity is then delegated to the investment advisors, who consider the income requirements of the Trust, risk profile and their view of market prospects of the investment portfolio. The performance of the investments is monitored by the trustees with a view to maintaining an appropriate balance between income and growth.

The Trust pools its investments in all its unrestricted and restricted funds in order to reduce transaction charges. Investment values are allocated to the appropriate fund in accordance with the relevant percentages of investments held. The Statement of Investment Principles was reviewed by the trustees and updated during the year.

The total return on the investment portfolios (capital growth with income received) for the year to 31 July 2023 was for the Pooled General Investments Fund +0.94% (2022: +1.54%) and for the Brian Ritchie Fund +0.94% (2022: +1.69%). The total return on the investment portfolios (capital growth with income received) for the 3 years to 31 July 2023 was for the Pooled General Investments Fund +7.12% per annum and for the Brian Ritchie Fund +7.12% per annum.

3

The Royal Grammar School Educational Trust

Trustees’ report (continued) Year ended 31 July 2023

Financial review

Going concern

The Trust holds substantial investment assets, but maintains sufficient cash reserves to allow it to meet its ongoing commitments. Consequently, the trustees have a reasonable expectation that the Trust has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

Principal risks and uncertainties

The principal risks and uncertainties to the charity lie in the unpredictable nature of donations receivable and investment gains. The Trust mitigates against these risks by utilising a fundraising team within the RGS to promote the Trust and raise funds for the Trust and uses professional investment managers to manage the investments within clear guidelines from the trustees to provide a sensible balance between risk and returns. In addition, the Trust's Reserves Policy requires that a proportion of the reserves are held in liquid instruments (e.g. money market funds) providing further risk mitigation. During the year the impact of the cost of living crisis and the subsequent economic volatility and consistent high levels of inflation has led to uncertainty that is expected to continue into the next financial year and the Trust will continue to assess these risks on a regular basis.

Reserves policy

it is currently the policy of the trustees to use the income generated from fundraising activities and investments to advance the objects of the Trust. While the trustees make no commitment to maintain the payments for so long as the recipient requires assistance they aim to maintain reserves sufficient to ensure that having once awarded a bursary, the Trust can continue to do so for so long as is required during the pupil's education at the RGS subject to satisfactory conduct, effort and progress. The Bursary Campaign actively seeks to raise funds for the long term provision of additional bursaries.

Total reserves at the year end amount to £5,558,264 (2022: £6,125,097). Of this, £237,587 (2022: £298,608) is restricted for payment of bursaries towards specific activities and £5,045,444 (2022: £5,545,377) is unrestricted. Of these unrestricted funds, £471,032 (2022: £877,509) is designated for payment of some specific bursaries in future periods.

Principal funding

The Bursary Campaign provides the principal source of funding although other sources are also actively pursued.

Material investments policy

Investments are to be held within several classes by investment advisers, with the majority of investments being held within overseas and UK equities. Investment managers are expected to select a number of individual securities within this and other asset classes to further diversify risk.

4

The Royal Grammar School Educational Trust

Trustees’ report (continued) Year ended 31 July 2023

Structure, governance and management

Constitution

The Trust is constituted under a Declaration of Trust dated 9 November 1978 and is governed in accordance with this deed.

Method of appointment or election of trustees

The trustees who have served during the year and since the year end are set out on page 1. Two trustees are appointed by the Governors of the School plus the Chairman of Governors who serves as an ex officio member. Other trustees are appointed by the Board of Trustees. The Trust deed requires that no more than three Governors of the School or two Governors and the Headmaster may serve as trustees at any one time.

Policies adopted for the induction and training of trustees

Trustees make arrangements for induction and training of new trustees.

Organisational structure and decision making

The Trust is an unincorporated trust and a registered charity. The Trust deed requires that there shall be a minimum of four and a maximum of seven trustees who serve for a period of five years.

The trustees meet at least annually to agree the broad strategy and areas of activity for the Trust, including consideration of grant making, investment, reserve and risk management policies and performance. The day to day running of the Trust is delegated to the Secretary to the Trust.

Related party relationships

The Trust shares certain trustees with the School, a registered charity. The School's administrative staff provide assistance with the Trust's record keeping at no charge to the Trust. The Trust grants income towards bursaries paid by the School for some pupils of the School. The grant made towards the School's bursaries in the year amounted to £1,099, 709 (2022: £904,035).

Risk management

The trustees monitor the major strategic, business and operational risks which the Charity faces and confirm that systems have been established to enable regular reports to be produced to the trustees’ meetings so that the necessary steps can be taken to mitigate these risks. This year particular attention has been made to monitoring the risks arising from the cost of living crisis and taking appropriate actions to mitigate these exceptional risks. The trustees have also considered the political environment and considered how a change in Government may impact both the economy and the independent school sector.

5

The Royal Grammar School Educational Trust

Trustees’ report (continued) Year ended 31 July 2023

Future developments

The Development Office (which is paid for by the Newcastle upon Tyne Royal Grammar School), which was originally formed in 2002 and re-established in 2019, has been further strengthened in the year with the addition of a new Head of Development. In FY22/23 fundraising activities raised a total income of £504,711 (2022: £785,334). The climate for fundraising in the year has been impacted by the cost of living pressure which families are experiencing, however the strengthened Development Office is:

Approved by order of the members of the board of trustees on 1 February 2024 and signed on their behalf by:

----- Start of picture text -----
BEN
M Squires
(Chair of trustees)
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6

;

The Royal Grammar School Educational Trust

Statement of trustees’ responsibilities Year ended 31 July 2023

The trustees are responsible for preparing the trustees’ report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (‘United Kingdom Generally Accepted Accounting Practice’).

The law applicable to charities in England & Wales requires the trustees to prepare financial statements for each financial which give a true and fair view of the state of affairs of the charity and of its incoming resources and application of resources, including its income and expenditure, for that period. In preparing these financial statements, the trustees are required to:

The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charity's transactions and disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the Trust deed. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities,

Approved by order of the members of the board of trustees on 1 February 2024 and signed on its behalf by:

M Squires (Chair of trustees)

7

Independent auditor's report to the members of The Royal Grammar School Educational Trust

Opinion

We have audited the financial statements of The Royal Grammar School Educational Trust (‘the charity’) for the year ended 31 July 2023 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and the related notes, 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’).

The financial statements have been prepared in accordance with Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standards applicable in the UK and Republic of Ireland (FRS 102) in preference to the Accounting and Reporting by Charities: Statement of Recommended Practice issued on 1 April 2005 which is referred to in the extant regulations but has been withdrawn.

This has been done in order for the accounts to provide a true and fair view in accordance with the Generally Accepted Accounting Practice effective for reporting periods beginning on or after 1 January 2015.

In our opinion the financial statements:

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 charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

8

Independent auditor's report to the members of The Royal Grammar School Educational Trust (continued)

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the 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. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Charities (Accounts and Reports) Regulations 2008 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the trustees' responsibilities statement, the trustees are responsible for the preparation of the financial statements which give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

9

Independent auditor's report to the members of The Royal Grammar School Educational Trust (continued) ;

Auditor's responsibilities for the audit of the financial statements

We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: We identified areas of law and regulations that could reasonably be expected to have a material effect on the financial statements from our general and sector experience and through discussions with the trustees and other management (as required by Auditing Standards) and from inspection of the charity's legal correspondence and we discussed with the trustees and other management the policies and procedures in place regarding compliance with the laws and regulations. We communicated identified laws and regulations throughout our audit team and remained alert to any indications of non-compliance throughout the audit.

Firstly, the charity is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation) and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly, the charity is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect; health and safety, employment law, data protection and certain aspects of charity legislation, recognising the nature of the charity's activities. Auditing Standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the trustees and other management and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance material to the financial statements.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. 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.

10

Independent auditor's report to the members of The Royal Grammar School Educational Trust (continued)

Use of our report

This report is made solely to the charity's trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charity's trustees those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and its trustees, as a body, for our audit work, for this report, or for the opinions we have formed.

Anne Hallowell BSc FCA DChA (Senior Statutory Auditor) for and on behalf of UNW LLP, Statutory Auditor Chartered Accountants Newcastle upon Tyne 1 February 2024

11

The Royal Grammar School Educational Trust

Statement of financial activities

Year ended 31 July 2023

Unrestricted Restricted Endowment Total Total
funds funds funds funds funds
2023 2023 2023 2023 2022
Note £ £ £ £ £
Income
and
endowments from:
Donations and legacies 3 504,711 - - 504,711 1,235,334
Investments 4 139,420 9,395 - 148,815 145,779
Total
income		 and eeeee ee
endowments 644,131 9,395 - 653,526 1,381,113
Expenditure on:
Charitable activities 5 1,032,940 76,845 - 1,109,785 922 236
Total expenditure 1,032,940 76,845 - 1,109,785 922,236
Net losses on
investments (103,592) (1,103) (5,879) (110,574) (82,535)
Net wee
(expenditure)/income (492,401) (68,553) (5,879) (566,833) 376,342
Transfers between
funds 10 (7,532) 7,532 - - -
Net
movement		 in eC
funds (499,933) (61,021) (5,879) (566,833) 376,342
Reconciliation of
funds:
Total funds brought
forward 5,545,377 298,608 281,112 6,125,097 5,748,755
Net movement in funds (499,933) (61,021) (5,879) (566,833) 376,342
Total
funds
carried		 ee
forward 5,045,444 237,587 275,233 5,558,264 6,125,097

The notes on pages 15 to 26 form part of these financial statements.

12

The Royal Grammar School Educational Trust

Balance sheet At 31 July 2023

2023 2022
Note £ £
Fixed assets
Investments 7 5,177,043. 5,287,617
Current assets
Debtors 8 78,891 543,819
Cash at bank and in hand 307,435 295,389
386,326 839,208
Creditors: amounts falling due within one
year 9 (5,105) (1,728)
Net current assets 381,221 837,480
Total assets less current liabilities 5,558,264 6,125,097
Total net assets 5,558,264 6,125,097
Charity funds
Endowment funds 10 275,233 281,112
Restricted funds 10 237,587 298,608
Unrestricted funds 10 5,045,444 5,545,377
Totalfunds 5,558,264 6,125,097

The financial statements were approved and authorised for issue by the trustees on 01 February 2024 and signed on their behalf by:

,

M Squires

(Chair of trustees)

The notes on pages 15 to 26 form part of these financial statements.

13

The Royal Grammar School Educational Trust

Statement of cash flows Year ended 31 July 2023

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||||||||||||| |---|---|---|---|---|---|---|---|---|---|---|---| |2023|2022| |Note|£|£| |Cash|flows|from|operating|activities| |Net|cash|used|in|operating|activities|{2|(136,769)|(146,428)| |Cash|flows|from|investing|activities| |Dividends,|interests|and|rents|from|investments|148,815|145,779| |Purchase|of|investments|-|(500,000)| |Net|cash|generated|from/(used|in)|investing|activities|148,815|(354,221)| |Change|in|cash|and|cash|equivalents|in|the|year|12,046|(500,649)| |Cash|and|cash|equivalents|at|the|beginning|of the|year|295,389|796,038| |Cash|and|cash|equivalents|at|the|end|of the|year|13|307,435|295,389| |The|notes|on|pages|15|to|26|form|part|of these|financial|statements|

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14

The Royal Grammar School Educational Trust

Notes to the financial statements Year ended 31 July 2023

1. Accounting policies

1.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with the Charities SORP (FRS 102) - Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities Act 2011.

The financial statements have been prepared to give a ‘true and fair’ view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a ‘true and fair view. This departure has involved following the Charities SORP (FRS 102) published in October 2019 rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005 which has since been withdrawn.

The Royai Grammar School Educational Trust (‘the charity’) meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.

The accounts are presented in pounds sterling and are rounded to the nearest £1.

1.2 Going concern

The charity holds substantial investment assets, but maintains sufficient cash reserves to allow it to meet its ongoing commitments. Consequently, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

All income is recognised once the charity has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.

The recognition of income from legacies is dependent on establishing entitlement, the probability of receipt and the ability to estimate with sufficient accuracy the amount receivable. Evidence of entitlement to a legacy exists when the charity has sufficient evidence that a gift has been left to them (through knowledge of the existence of a valid will and the death of the benefactor) and the executor is satisfied that the property in question will not be required to satisfy claims in the estate. Receipt of a legacy must be recognised when it is probable that it will be received and the fair value of the amount receivable, which will generally be the expected cash amount to be distributed to the charity, can be reliably measured.

Grants from charitable trusts are recognised immediately as income when they fulfil the income recognition criteria provided by the Charity Commission SORP. Where a grant has been pledged by a charitable trust for several years, all of the grant is recognised in the year in which the pledge is made, regardless of the timing of payments.

Income tax recoverabie in relation to investment income is recognised at the time the investment income is receivable.

15

The Royal Grammar School Educational Trust

Notes to the financial statements Year ended 31 July 2023

1. Accounting policies (continued)

1.4 Expenditure

Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settiement and the amount of the obligation can be measured reliably.

All expenditure is accounted for on an accruals basis and has been included under expense categories that aggregate all costs for allocation to activities. Where costs cannot be directly attributed to particular activities they have been allocated on a basis consistent with the use of resources.

Grants payable are charged in the year when the offer is made except in those cases where the offer is conditional, such grants being recognised as expenditure when the conditions attaching are fulfilled. Grants offered subject to conditions which have not been met at the year end are noted as a commitment, but not accrued as expenditure.

Support costs are those costs incurred directly in support of expenditure on the objects of the charity, including those incurred in connection with the administration of the charity and compliance with constitutional and statutory requirements.

Expenditure on charitable activities is incurred on directly undertaking the activities which further the charity's objectives, as well as any associated support costs.

All expenditure is inclusive of irrecoverable VAT.

1.5 Investments

Fixed asset investments are a form of financial instrument and are initially recognised at their transaction cost and subsequently measured at fair value at the balance sheet date, unless the value cannot be measured reliably in which case it is measured at cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and presented as ‘Gains/(Losses) on investments’ in the statement of financial activities.

1.6 Debtors

Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

Cash at bank and in hand includes cash and short-term highly liquid investments with a short maturity of three months or iess from the date of acquisition or opening of the deposit or similar account.

1.8 Liabilities and provisions

Liabilities are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably.

Liabilities are recognised at the amount that the charity anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.

16

The Royal Grammar School Educational Trust

Notes to the financial statements Year ended 31 July 2023

1. Accounting policies (continued)

1.9 Financial instruments

The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.

1.10 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes.

Designated funds comprise unrestricted funds that have been set aside by the trustees for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the charity for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

Endowment funds are funds which are held for the permanent benefit of the charity. There is no power to convert capital into income.

Investment income, gains and losses are allocated to the appropriate fund.

2. Critical accounting estimates and areas of judgment

Estimates and judgments 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.

In preparing these financial statements the trustees do not consider there were any estimates or significant areas of judgment that were required in applying the charity's accounting policies as set out above.

17

The Royal Grammar School Educational Trust

Notes to the financial statements Year ended 31 July 2023

3. Income from donations and legacies

Unrestricted Total
funds funds
2023 2023
£ £
Charitable trusts 3,000 3,000
Legacies 91,707 91,707
The Newcastle upon Tyne Royal Grammar School - -
Individuals 410,004 410,004
504,711 504,711
Unrestricted Total
funds funds
2022 2022
£ £
Charitable trusts 13,000 13,000
Legacies 266,000 266,000
The Newcastle upon Tyne Royal Grammar School 450,000 450,000
Individuals 506 334 506 334
1,235,334 1,235,334

4. Investment income

Unrestricted Restricted Total
funds funds funds
2023 2023 2023
£ £ £
Income from listed investments 139,420 9,395 148,815
Unrestricted Restricted Total
funds funds funds
2022 2022 2022
£ £ £
Income from listed investments 135,691 40,088 145,779

18

The Royal Grammar School Educational Trust

Notes to the financial statements Year ended 31 July 2023

5. Analysis of expenditure on charitable activities

Summary by fund type

Unrestricted Restricted Total
funds funds funds
2023 2023 2023
£ £ £
Charitable activities 1,032,940 76,845 1,109,785
Unrestricted Restricted Total
funds funds funds
2022 2022 2022
£ £ £
Charitable activities 861,197 61,039 922,236
  1. Analysis of expenditure by activities
Direct
costs		 Support
costs		 Total
funds
2023 2023 2023
£ £ £
Grants awarded 1,099,709 10,076 1,109,785
Direct
costs		 Support
costs		 Total
funds
2022 2022 2022
£ £ £
Grants awarded 904,035 18,201 922,236

19

The Royal Grammar School Educational Trust

Notes to the financial statements Year ended 31 July 2023

6. Analysis of expenditure by activities (continued) Analysis of support costs

Total Total
funds funds
2023 2022
£ £
Special project expenses 2,425 5,759
Auditor's remuneration 3,192 3,750
Bank charges 1,088 1,433
Otherexpenses 3,371 7,259
10,076 18,201
7. Fixed asset investments
Listed
investments
£
Cost or valuation
At 1 August2022 5,287,617
Revaluations (110,574)
At 31 July2023 5,177,043
Net book value
At 31 July2023 5,177,043
At 31 July2022 5,287,617
8. Debtors
2023 2022
£ £
Other debtors - 456,516
Prepayments and accrued income 78,891 87,303
78,891 543,819

20

The Royal Grammar School Educational Trust

Notes to the financial statements Year ended 31 July 2023

9. Creditors: amounts falling due within one year

2023 2022
£ £
Other creditors 185 -
Accruals and deferred income 4,920 1,728
5,105 1,728

10. Statement of funds

Statement of funds - current year

Balance at Balance at
4 August Transfers Gains/ 31 July
2022 Income Expenditure injout (losses) 2023
£ £ £ £ £ £
Unrestricted funds
Designated funds
John Cockburn Macdonaid
Memorial Fund 82,393 2,196 - - (1,631) 82,958
Stemson Fund 57,413 1,530 - - (1,137) 57,806
Bursary Campaign Fund 409,681 515,628 (1,022,864) 105,667 (8,112) -
Wolfson Foundation Bursary
Fund 328,022 8,741 - - (6,495) 330,268
877,509 528,095 (1,022,864) 105,667 (17,375) 471,032
General funds
General Fund 4,667,868 116,036 (10,076) (113,199) (86,217) 4,574,412
Total unrestricted funds 5,545,377 644,131 (1,032,940) (7,532) (103,592) 5,045,444
Endowment funds
RitchieFund 281,112 - - - (5,879) 275,233

21

The Royal Grammar School Educational Trust

Notes to the financial statements Year ended 31 July 2023

10. Statement of funds (continued)

----- Start of picture text -----
|||||||||| |---|---|---|---|---|---|---|---|---| |Balance|at| |Balance|at|1|Transfers|Gains/|31|July| |August|2022|Income|Expenditure|in/out|(losses)|2023| |£|£|£|£|£|£| |Restricted|funds| |Coomblea|Trust|10,714|286|-|-|(212)|10,788| |Reece|Foundation|28,344|755|(30,738)|2,200|(561)|-| |Ritchie|Fund|2,111|7,967|(15,369)|5,332|(41)|-| |Kenneth|Hamilton|Imison| |Fund|13,506|360|-|-|(269)|13,597| |Dr|Carr|Fund|1,028|27|~|-|(20)|1,035| |Advani|Fund|171,046|-|(15,369)|-|-|155,677| |Flagstone|Fund|71,859|-|(15,369)|-|-|56,490| |298,608|9,395|(76,845)|7,532|(1,103)|237,587| |Total|of funds|6,125,097|653,526|(1,109,785)|~|(110,574)|5,558,264|

----- End of picture text -----

22

The Royal Grammar School Educational Trust

Notes to the financial statements Year ended 31 July 2023

10. Statement of funds (continued)

Statement of funds - prior year

Balance at Balance at
1 August
2021		 Income Expenditure Gains/
(losses)		 31 July
2022
£ £ £ £ £
Unrestricted funds
Designated funds
John Cockburn Macdonald
Memorial Fund 81,415 2,306 - (1,328) 82,393
Stemson Fund 56,731 1,607 - (925) 57,413
Bursary Campaign Fund 17,137 1,235,819 (842,996) (279) 409,681
Wolfson Foundation Bursary Fund 324,129 9,179 - (5,286) 328,022
479,412 1,248,911 (842,996) (7,818) 877,509
General funds
General Fund 4,634,272 122,114 (18,201) (70,317) 4,667,868
Total unrestricted funds 5,113,684 1,371,025 (861,197) (78,135) 5,545,377
Endowment funds
RitchieFund 284,225 - - (3,113) 281,112

23

The Royal Grammar School Educational Trust

Notes to the financial statements Year ended 31 July 2023

10. Statement of funds (continued)

----- Start of picture text -----
|||||||||| |---|---|---|---|---|---|---|---|---| |Balance|at|Balance|at| |1|August|Gains/|31|July| |2021|Income|Expenditure|(losses)|2022| |£|£|£|£|£| |Restricted|funds| |Red|Box Fund|420|12|(425)|(7)|-| |Coomblea|Trust|10,587|300|-|(173)|10,714| |Reece|Foundation|42,333|1,199|(14,499)|(689)|28,344| |Ratcliff|Fund|2,587|73|(2,618)|(42)|-| |Ritchie|Fund|8,654|8,097|(14,499)|(141)|2,111| |Kenneth|Halton|Imison|Fund|13,346|378|-|(218)|13,506| |Dr|Carr Fund|1,016|29|-|(17)|1,028| |Advani|Fund|185,545|-|(14,499)|-|171,046| |Flagstone|Fund|86,358|-|(14,499)|-|71,859| |350,846|10,088|(61,039)|(1,287)|298,608| |Total|of funds|5,748,755|1,381,113|(922,236)|(82,535)|6,125,097|

----- End of picture text -----

The designated funds relate to donations which the trustees wish to record separately in recognition of the generosity of the original gifts. Should a donor specify that their donation was to be used for a particular purpose which is more specific than the general objects of the charity then the donation would be placed into restricted funds.

The Ritchie Endowment Fund is to fund one bursary up to 100% of fees in perpetuity in any subject and at any level at The Newcastle upon Tyne Royal Grammar School. The Fund is treated by the trustees as a permanent endowment fund, the income of which is applied towards one bursary each year.

Coomblea Trust - this bequest is to be used for the setting up of a bursary for chemistry or chemical engineering students.

Reece Foundation - the donation is to be used for the setting up of bursaries for 6th form science and engineering students.

Kenneth Halton Imison Fund - this bequest is to be used for the setting up of a bursary for applied science and engineering students.

Dr Carr Fund - this donation is to be used to provide organ music tuition.

Advani Fund - this donation is to fund two bursaries of 100% of fees from Year 7 to Year 13.

Flagstone Fund- this donation is to fund one bursary of 100% of fees from Year 7 to Year 13 for a student starting at the School in September 2019.

24

The Royal Grammar School Educational Trust

Notes to the financial statements Year ended 31 July 2023

11. Analysis of net assets between funds

Analysis of net assets between funds - current year

Unrestricted Restricted Endowment Total
funds funds funds funds
2023 2023 2023 2023
£ £ £ £
Fixed asset investments 4,664,223 237,587 275,233 5,177,043
Current assets 386,326 ~ - 386,326
Creditors due within one year (5,105) - - (5,105)
Total 5,045,444 237,587 275,233 5,558,264
Analysis of net assets between funds - prior year
Unrestricted Restricted Endowment Total
funds funds funds funds
2022 2022 2022 2022
£ £ £ £
Fixed asset investments 4,707,897 298,608 281,112 5,287,617
Current assets 839,208 - - 839,208
Creditors due within one year (1,728) - - (1,728)
Total 5,545,377 298,608 281,112 6,125,097
  1. Reconciliation of net movement in funds to net cash flow from operating activities
2023 2022
£ £
Net income for the year (as per statement offinancial activities) (566,833) 376,342
Adjustments for:
Losses on investments 110,574 82,535
Dividends, interests and rentsfrom investments (148,815) (145,779)
Decrease/(increase) in debtors 464,928 (456,936)
Increase/(decrease) in creditors 3,377 (2,590)
Netcashusedinoperatingactivities (136,769) (146,428)

25

The Royal Grammar School Educational Trust

Notes to the financial statements Year ended 31 July 2023

  1. Analysis of cash and cash equivalents
2023 2022
£ £
Cash in hand 307,435 295,389

14. Analysis of changes in net debt

At 1 August At 31 July
2022 Cash flows 2023
£ £ £
Cash at bank and in hand 295,389 12,046 307,435

15. Related party transactions

The charity shares certain trustees with The Newcastle upon Tyne Royal Grammar School, a registered charitable company. The school's administrative staff provide assistance with the charity's record keeping at no charge to the charity. The school maintains a bank account on behalf of the charity in respect of donations towards the charity's campaign appeal and the school has met the charity's campaign appeal costs totalling £105,508 (2022: £133,502).

The charity grants income towards bursaries paid by the school for some pupils of the school. The grant made towards the school's bursaries in the year amounted to £1,099,709 (2022: £904,035).

The charity received no donations in the year (2022: £450,000) from The Newcastle upon Tyne Royal Grammar School as a grant towards bursary payments.

The charity has also received donations totalling £63,595 (2022: £51,196) from trustees or charities with which trustees have an association.

The Storrow Scott Charitable Willi Trust, a charity controlled by the school, applies its income to the charity. Grants paid or payable from the school to the charity in the year amounted to £30,738 (2022: £28,998).

No trustees received any remuneration or repayment of expenses in the year (2022: Enil).

26