bR THE KING'S SCHOOL CH ESTER ANNUAL REPORT AND FINANCIAL STATEMENTS For the 17 Month Period from 1st April 2019 to 315t August 2020 Charity no. 525934 KING'S IUNIORS Igniting curiosity KINtts SENIORS Selzlng op￿rtUnIty KING'S SIXTH FORM Becomlng exceptlonal EVERY OPPORTUNITY. ENDLESS POSSIBILITIES. **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## **CONTENTS** ||**PAGE**| |---|---| |Governors’ Report|3 – 30| |Statement of Governors’ Responsibilities|
31 – 32| |Auditor’s Report|33 – 35| |Statement of Financial Activities|36| |Statement of Financial Position|37| |Cash Flow Statement|38| |Notes to the Financial Statements|39 – 56| 2 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## **GOVERNORS’ REPORT** ## **GOVERNORS, OFFICERS AND ADVISERS** ## **The Governors of The School, as trustees, who have held office during this period were:** R Arnold BSc **C, CP** Prof R Ashford PhD FCIM FHEA B.Ed **C** ^ Chair of the Safeguarding Committee (Retired June 2019) A Bartley (From 20 March 2020) J M Carr BA FCA **C** * % S Docking BA **C** ^ Chair of the Education Committee J Ebo **N5** % (From 20 March 2020) C A Edwards MA **N2** Chair of the Safeguarding Committee from June 2019 I O’Doherty BE MSc MBA **C,** * # $ % Chair of Finance & General Purposes Committee A Owen * (From 20 March 2020) G P Ramsbottom BSc MSc MRICS **C, CP** $ # Chair of Governance Committee D K Rowlands Hon MSc **N2** Chair of Governors Very Revd Dr T Stratford **N1** ^ (From June 2019) J Walsh **C CP** * N H Wood BSc MRICS IRRV **N5** % (Retired 31 Oct 2019) S Verity BSc **C** % Chair of the Risk and Compliance Committee 1 vacancy for Liverpool University 1 vacancy for Manchester University _Members of the Risk & Compliance Committee % Members of the Finance & General Purposes Committee * Members of the Governance Committee $ Members of the Education Committee ^ Trustees of the King’s School Bursary Trust Fund # All Governors are Trustees of The Lester Smith Bursary Fund and The Prize Fund_ 3 **Annual Report and Financial Statements** **For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## **The Scheme of the Charity Commissioners (Administrative Provisions) permit:** ## **Patron (s)** His Grace the Duke of Westminster Such other persons as the Charity Board may from time to time elect ## **Vice Patron (s)** Lord Bishop of Chester Dean of Chester Lord Mayor of the City of Chester Such other persons as the Charity Board may from time to time elect ## **Governors** ## 7 **Nominative** Governors **(N)** N1 Two by the Dean and Chapter of Chester Cathedral N2 Two by Trustees of the Educational Foundation of Dr Robert Oldfield N3 One by Liverpool University N4 One by Manchester University N5 One by The Chester Bluecoat Charity (TCBC), being the sole trustee of the Charity of Owen Jones (Chester Municipal Charities) ## 16 **Co-optative** Governors **(C)** The number of seats on the Charity Board held by current parents shall be reviewed from time to time **(CP)** ## **Tenure** All Governors are appointed to hold office for 4 years and for re-appointment for a further 4 years subject to the approval of the Board of Governors ## **Officers of the School who have held office during this year are:** Headmaster: G J Hartley MA Clerk: H A Jordan FInstLM, MCGI Director of Finance and Operations: H A Jordan FInstLM, MCGI Address: The King’s School, Wrexham Road, Chester CH4 7QL Website: www.kingschester.co.uk 4 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## **Advisers:** Bankers Royal Bank of Scotland 15 Foregate Street Chester CH1 1HD Insurance Hettle Andrews 2 Brunswick Square Birmingham B1 2LP Lawyers Weightmans 100 Old Hall Street Liverpool, L3 9QJ Ellis Whittam Knights 1759 Woodhouse The Brampton Aldford Newcastle-Under-Lyme Chester Staffordshire CH3 6JD ST5 0QW Investment Investec Wealth & Investment Advisers 100 Old Hall Street Liverpool L3 9AB Auditors Crowe U.K. LLP 3rd floor The Lexicon Mount Street Manchester M2 5NT Architects Associated Architects Scott Architecture Limited 1 Severn Street Place 68 High Street The Mailbox Tarporley Birmingham Cheshire B1 1SE CW6 0AT 5 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** The Governors present their annual report for the 17-month period from 01 April 2019 to 31 August 2020 under the Charities Act 2011, together with the audited accounts for the period and confirm that the latter comply with the requirements of the Act, the Scheme of Government and the Charities SORP (FRS 102) 2015 applicable to charities preparing their accounts in accordance with the financial reporting standard in the UK (FRS102). This annual report is for a 17-month period due to a change of year end. ## **HISTORY AND OBJECTIVES OF THE SCHOOL** The King’s School was founded by Henry VIII in 1541 and for over four hundred years the school occupied buildings adjacent to the Cathedral. The school moved to a new site on the Wrexham Road in 1960 since when there has been an impressive programme of additional building development. These include the Wickson Library, a new Music School, the Vanbrugh Theatre and extensions to the Sixth Form Centre. In September 2014 the Junior School was extended to provide a new Junior School Library and Learning Centre and in September 2015 our purpose-built Infant School was opened by the Duke of Westminster. Most recent developments have included a new Sports Centre, new Pastoral Centre and an extensive refurbishment of classrooms and science laboratories. The School retains strong links with the cathedral and with the city. It is Chester’s oldest independent school and is proud to serve the city as well as the surrounding areas. 6 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** The King's School comprises the Senior School (ages 11-18), the Junior School (ages 7-11) and the Infant School, Willow Lodge (ages 4-7). King's is a school for pupils of high academic ability. We seek to develop this ability in each pupil to his or her full potential and at the same time to develop the pupil’s character and other talents in a friendly and stimulating atmosphere. Further information about the school can be found on our website: www.kingschester.co.uk The charitable objects of the School are the provision and conduct in or near Chester of a school for boys and girls, in connection with the Cathedral Church at Chester. The conduct of the School is in accordance with the articles made by the Governors. The Charity also has permanent endowed and unendowed trust funds held for special purposes in connection with the development of the School’s facilities and for bursaries, prizes and other educational purposes. The School’s aim is to provide an outstanding independent education, through superb academic tuition and through giving the opportunities to develop wider sporting, artistic and social skills to all its pupils. The School nurtures spiritual growth and provides an environment where each pupil can develop and fulfil his or her potential, helping build self-confidence and a desire to serve the wider community. ## **VISION AND VALUES** We hold an absolute commitment to do the very best for every individual student through great learning, opportunities and challenge, so that they gain the confidence and abilities to achieve more than they thought possible at a school they love. Our aim is to provide a first-class independent education, both through outstanding academic tuition and through giving all our pupils the opportunities to develop wider sporting, artistic and social skills. We nurture spiritual growth and provide an environment where each pupil can develop and fulfil his or her potential. 7 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** In caring about excellence and each other, and in promoting enjoyment and happiness through fulfilment, the members of the King’s community believe in our three core values: ## **ASPIRE** We want all our students to aspire to be the very best versions of themselves. This relates to both their academic achievement, where we want them to attain their ‘sustainable best’, and just as importantly to their personal development as unique individuals. Excellent qualifications remain important, but the nurture of attributes such as resilience, adaptability, emotional intelligence and curiosity are arguably even more significant in today’s world. ## **RESPECT** We want our students to have respect for themselves and others in the school community, particularly their fellow students. We believe that allowing young people to be comfortable in their own skin, as well as respectful of difference in others with regard to diversity, are both essential. We also want our students to respect their surroundings in terms of the school itself, where they live outside school and with due regard to the global environment. 8 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## **COLLABORATE** We want our students to collaborate effectively so that they can achieve more than they would on their own and learn how to work effectively with others. We also want to collaborate positively as part of the broader school community and in doing so contribute to a higher purpose than simply advancing themselves. Human collaboration is only going to become more relevant in the years ahead. ## **STRUCTURE, GOVERNANCE AND MANAGEMENT** The King’s School, Chester was founded in 1541 as a fully independent day school and is registered with the Charity Commission under Charity number 525934. ## **Governing Documents** The School is administered in conformity with a Scheme of Government dated 13 June 1988, modified by subsequent Orders of The Charity Commission, by a body of trustees constituted as Governors. The associated Trusts, which are linked charities are administered in conformity with their Trust Deeds or Will Trusts. 9 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## **Governing Bodies** Details of the Governing Board are explained at the beginning of this report together with information on how members are appointed. All Governors are trustees of The Lester Smith Bursary Fund and The Prize Fund. The trustees of The King’s School Bursary Trust Fund are appointed under the terms of its Trust Deed and include three of the Governors of the School. ## **Recruitment and Training of Governors** The Board having adopted fixed terms of Office for Governors and the Chair of the Board, seeks via the Governance Committee, to re-fresh itself on an on-going basis with new Governors being nominated to the Board following a set induction process. This involves an interview process with members of the Governance Committee, the Chair of the Board, the Headmaster and the Bursar/Director of Finance and Operations prior to the nomination being approved by the full Board at a subsequent meeting notice of which is given in advance to all Governors. Nominations can be received from any source but mainly come from existing Governors and those organisations having nomination rights to the Board. Appointments are made on the basis of eligibility, personal competence and specialist skills that will complement the skills of the existing Governors. The Board undertakes regular audits of its skills in order to ensure that its members possess the skills considered necessary for the successful running of the school in the current era. The Board will also undergo an external audit by the Association of Governing Bodies of Independent Schools (AGBIS) every three years. All new Governors receive an Induction Pack, including the School’s up-to-date Constitution; a list of current Governors and School Staff; the most recent accounts of the School; the most recent inspection report; the School’s strategic and business plans; the School’s budget for the relevant financial period; the School’s Governance Manual and a full list of all the School’s policies (on website); the Charity Commission publication CC3 ‘the Essential Trustee’; the School’s key risk assessment documentation; the minutes of the last three meetings of the Governors and related papers. These new Governors are then personally briefed by the Clerk to the Governors. 10 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** New Governors are invited to join the most appropriate committees according to their specialist skills. All Governors are trained in Child Protection and attend training seminars as and when required. ## **Key Management Personnel** Salaries for key management personnel are reviewed and set on an annual basis by the Remuneration Committee. In undertaking this review the committee utilise independent benchmark data from a variety of sources (AGBIS, HMC, Baines and Cutler) in addition to performance assessments of the key management personnel. ## **SCHOOL STRUCTURE AND MANAGEMENT** The Governors, as the trustees, are legally responsible for the overall management and control of the School and meet four times a year, with one meeting being solely dedicated to The Safeguarding of Children. The work of implementing most of their policies is carried out by the members of the Finance and General Purposes Committee (F&GP), the Risk and Compliance Committee (including Health and Safety), the Education Committee, the Safeguarding Committee and the Governance Committee who meet several weeks before each meeting of the full Governing Board. The Chair of each committee is shown in the front pages. The day to day running of the School is delegated to the Headmaster supported by the King’s Leadership Team (KLT). The Headmaster and the Bursar/Clerk to the Governing Board attend meetings of all the Governors’ sub committees and working groups. The Headmaster also attends meetings of Heads of academic departments, which deal with relevant and necessary operational matters. ## **RELATIONSHIPS WITHIN THE SECTOR** The School actively supports the highest standards of education through networking with other Schools and maintaining excellent relationships within the educational sector. The Headmaster is an elected member of the Headmasters and Headmistresses Conference (HMC) and its Membership Committee. The School is a member of the national HMC network of Leading Academic Day Schools, the Bursar is a member of the Independent School Bursars Association, a Fellow of the Institute of Leadership and Management and a Member of the 11 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** City and Guilds Institute. The Head of Willow Lodge and the Junior School is a member of the regional networking group AJIS (the Association of Junior Independent Schools). Close links are maintained with the Cathedral at Chester. ## **RISK MANAGEMENT** In addition to the school’s previous Risk Management controls, including the Risk and Compliance Committee reviewing and rewriting the School’s Strategic Risk Register during the reporting period, the School’s main focus has been managing the risks associated with the COVID-19 pandemic. The health and safety of the staff and pupils during the pandemic were paramount for the latter part of the reporting period, and the main agenda item at each meeting of the Risk and Compliance Committee and the Full Governors’ Board. The Risk and Compliance Committee and KLT have written extensive risk assessments to cover the provision for key-worker children, the opening of the school to three-year groups in June 2020 and the full reopening in September 2020. From each risk assessment, mitigating measures were put into place to guard against the spread of COVID-19 as much as possible, including external handwashing stations, enhanced cleaning routines and materials and hand sanitiser and cleaning materials being available in every classroom and corridor. The mental health of staff and pupils were also considered within the risk assessments and extra monies were allocated for counselling services and general mental well-being initiatives. During the period of lockdown, the Remote Learning Programme provided education to the pupils in-line with their normal curriculum programme, and the vast majority of pupils are at their expected level of educational achievement. Plans have been made to support those pupils who have fallen behind when they returned to school in September. In addition to the COVID-19 risk and risk mitigation, the Governors continued to monitor the effectiveness of the system of internal controls, including insurance cover where appropriate, by which those risks already identified by the Governors can best be managed. 12 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** The key controls used by the School include: - Formal agendas for all Committee and Board activity, - Detailed terms of reference for all Committees, - Comprehensive strategic planning, budgeting and management accounting, - Established organisational structure and lines of reporting, - Formal written policies, - Clear authorisation and approval levels and - Safeguarding procedures as required by law for the protection of children. Affordability continued to be a focus for the School and this has enabled the School to manage fee increases to be the lowest in recent times and well below the sector average. The School has not raised fees for 2020/21 to help parents dealing with the effects of COVID-19. The Governors have recently reviewed the ten-year financial plan to ensure that the school continues to develop, and have since held strategy meetings to test the plan against the impact of Covid-19, the extra financial commitment of the increase in the employers’ contribution to the Teachers’ Pension Scheme, and the risks and impacts of Brexit, VAT being added to fees, and the loss of Business Rates Relief. 13 ## **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## **CHARITABLE OBJECTS** Within its Charitable objects, the School has permanent endowed and unendowed trust funds held for special purposes in connection with the development of the School's facilities and for bursaries, prizes and other educational purposes. ## **STRATEGIC REPORT** The strategic plan for the School has eight key objectives: - _Every pupil known, valued and cared for_ : developing pastoral care with the new house system with a renewed focus on student well-being; - _Great place to work_ : for staff in all sections of the school, both teaching and support; - _Great learning, future-orientated_ : optimising teaching and learning across the school and developing the curriculum; - _Opportunities for all_ : ensuring the provision of extra-curricular activities for all students across the school; - _A full co-educational school:_ maximising student numbers on the current site with a target of 40% girls; - _At the heart of the community_ : developing closer and collaborative links with parents, Chester schools and other institutions in the area; 14 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** - _Widening access_ : ensuring the recruitment of the brightest students from our catchment area, including the increased provision of bursaries; - _Revitalising the site:_ delivering the principles of the ten-year masterplan to redevelop the School. ## **ACHIEVEMENTS AND OVERALL PERFORMANCE** The objectives agreed at the beginning of the academic year 2019 were thwarted by the COVID-19 pandemic that resulted in the school closing in March 2020. The school continued to remain open for the children of key-workers, including the school holiday periods, and the school also developed an effective Remote Learning Programme that ensured the majority of our pupils maintained the same academic development had the school remained open. The school opened to our two Infant year groups and Year 4 Juniors in June 2020 and for all other year groups in September 2020. The opening of these year groups involved the development of a robust risk assessment, and numerous safety measures, including outdoor sinks, specialist cleaning machines, and an increase of £10K per term for cleaning material, hand gel and cleaning hours. Despite the pressures of the pandemic on the school and its staff, the following academic objectives were achieved throughout the 17-month reporting period, in addition to the continued excellent public examination results at both GCSE and A level achieved in the summer of 2019 and 2020: - a full review of school numbers and school capacity; - a reformulation of the school masterplan in response to changing priorities; - phase 3 of Faculty System development with emphases on adoption of best practice, streamlining of protocols and standardisation of meeting formats; - continued development and implementation of the ‘Learning to Learn’ programme to develop more effective and sustainable study skills throughout the school; - phase 2 of the whole school curriculum review; - implementation and embedding of a new Senior School reporting system (Learning Scores) - the standardisation of Senior School department tracking & intervention programme; 15 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** - Phase 3 of the House System development with emphases on clarity of procedures, consistency of staff and development of initiatives; - Introduction of a new pastoral monitoring system to pro-actively identify possible concerns; - the development of creative arts provision and opportunities in the Junior school through the Artsmark initiative and making best use of the new music and drama facilities; - review of bursary recruitment and student support programme to maximise inclusivity and effectiveness; - the continued success of the King’s 100 Challenge (bursaries campaign) with fundraising comfortably in line with targets; - measures to increase levels of parental engagement across the whole school; - establishment of procedures to ensure the effective review and compliance of key policies; - continued development of Chester Schools Together (CST) and the partnerships programme; - establishment of phased classroom renovation programme across Junior and Senior Schools; - the opening of The Rohan Ingley Centre that has improved the provision for medical care, learning support and counselling; - continued implementation of the Sustainable Transport Plan to reduce car usage to/from King’s. ## **PUBLIC BENEFIT THROUGH BURSARIES AND GRANT MAKING** The Governors have given regard to the Charity Commission’s guidance on public benefit. The objects of the School are for ‘public benefit’ as that term is used in the Charities Act 2011, being part of a public group and providing public benefit. The group of potential beneficiaries described in the objects of the school represents a sizable number of individuals. The School’s catchment area stretches across North and Mid Wales 16 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** and East Cheshire; the objects of the School are open and inclusionary and the School aims to be open to able pupils from all backgrounds. To that end, the School offers means-tested bursaries funded by donations, The King’s School Bursary Trust fund and from its own resources. To enable more pupils to benefit from bursary support, the School is actively seeking further benefactions and support for its Bursary Trust Fund, with the aim to help with 100 children on bursaries by 2041 when the School will celebrate its 500th year anniversary. Fundraising has been limited during the period of the COVID-19 pandemic, resulting in single donations being reduced to around 50% of the income of the previous period. Some pledges were unable to be fulfilled and the returns from investments were lower for the period. Going forward, there are plans for a significant drive with Alumni and Major Donors during early 2021, and it is expected that the investment forecast will return to previous expectations in the future. During this 17-month period, the total cost to the school of bursaries, grants and allowances was £1,371,000, equating to 7.38% of gross fee income. The total number of students on means tested bursaries were 62 for the period. A high proportion of our current bursaries are 100%, as we move forward we will continue to offer 100% bursaries to those families most in need whilst also looking to grow our support to those families who need a part bursary. ## **PUBLIC BENEFIT THROUGH EDUCATIONAL EXCELLENCE** The School also provided public benefit through its high-quality education delivered to more than 1100 pupils. 2019 A Level data: - 87% of grades A*/B for second consecutive year - 65% at A*/A grade – second highest in school’s history - Ten students to Oxford and Cambridge - Top performing school in Cheshire and top co-ed in the North West for 2019 A Level results 17 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## 2019 GCSE data: - 26% of grades at 9 - 48% of all grades were at 9-8 - 69% A*/A - Best GCSE results in Cheshire for 2019 The King’s School is the top performing co-ed in the North West for A Level results and the best school in Cheshire for GCSEs, according to The Telegraph’s 2019 league table for independent schools across the UK. It has also been named as the top independent co-ed in North West - Sunday Times Parent Power Guide 2020. In the Telegraph’s league table, King’s is one of only four schools in the North West in the top 50 for A Level results. In the 2019 year’s A Level results, an incredible 65% of grades were A*/A, matching a record year in 2015. Talented students also achieved the highest percentage of A* in four years, with 23% of grades at this level. In an outstanding year for King’s, 67% of students achieved at least 2 A*/A grades at A Level. In GCSEs, the number of Grade 9s increased by nearly 10% from 2018. An incredible 26% of results were grade 9, with 48% at 9/8 and 84% 9/6. Overall in 2019, 40% of students achieved seven or more 9/8 grades (including A/A* Further Maths), with 14 students celebrating 10 or more grade 9/8s, including five students with straight grade 9s. Ten subjects recorded more than 50% of grades at 9/8, including History with 70% grade 9/8 (50% grade 9). More than 60% of grades in all three sciences were at 9/8. 18 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** Our 2020 GCSE students faced some unique challenges due to the uncertainty surrounding the coronavirus pandemic. We were delighted to be able to congratulate them on their fantastic results. A total of 31% of pupils gained five or more 9 grades and 53% of grades awarded were at 9-8. Our 2020 A Level students secured places at top universities after achieving some outstanding results. The year group excelled despite being unable to formally take their exams due to the coronavirus health crisis. A total of 31% of grades achieved were at A*, 70% of all grades were at A*/A and 93% at A*-B. Eighty per cent of students gained a place in their first-choice university, with 94% gaining a place at either their first or second choice university. Students continued to succeed academically well beyond examination results and also excelled outside of the classroom. Recent highlights include: - A fourth year CCF Cadet was selected to attend a prestigious Army Cadet exchange with the Royal Canadian Army Cadets, following a tough national selection process - Rowing squads enjoyed success in the National Schools’ Regatta, Henley Royal Regatta and Thames Valley Park Regatta - A number of senior school students achieved top spots in The Chester Music Festival 2019 - Two students won ‘certificate of merit’ and ‘highly commended’ in the Mathematical Education on Merseyside (MEM) Challenge - More than 100 students took part in a Summer Concert, including performances from Senior School String Orchestra, Wind Band and Voz Nueva During the summer term, the school achieved a number of sporting accolades, including the 1[ST] XI becoming County Champions in football. In addition, the number of King’s pupils representing national and international teams has continued to be strong. International and national representation has been achieved in the following sports: 19 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** - Hockey - Football - Netball - Rugby - Athletics - Golf - Skiing - Sailing - Orienteering - Cricket - Lacrosse - Basketball The strong sporting tradition in the Junior School continues: - Pupils picked up 28 medals at the AJIS (Association of Junior Independent Schools) competition - Four pupils qualified for the ESSA (English Schools Swimming Association) national finals in Sheffield - U11 A Football Team was named Chester Schools’ FA Champions 20 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## PUBLIC BENEFIT THROUGH PARTNERSHIP As an educational charity, we believe we have a responsibility to provide, where possible, educational opportunities to all those who would like to benefit from them, free of charge. These are routinely promoted in schools. Partnership activities during 2019/20 have included: The _Chester Schools Together_ is a new partnership between The King’s School, Blacon High School and Bishops’ Blue Coat High School. This innovative project aims to bring together students from all three schools for a variety of exciting learning experiences. An exhibition and celebration of work produced from the first series of Saturday Masterclasses was held in the summer term 2019. 21 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** The second series of Saturday Masterclasses took place in January 2020, over three consecutive weekends. The students from King's, Bishops' Blue Coat and Blacon High School worked in mix groups in each school, producing some wonderful individual and group work in projects focusing on Journalism (Bishops'), Chemistry (King's) and DT (Blacon). - We also welcomed more than 100 pupils from Belgrave, Dee Point and Highfield Blacon primary schools and St Martin’s Academy to a talk and Q&A session with the Children’s Laureate, Lauren Child, in December 2019 - Six schools took part in a hockey workshop with members of the England squad at the end of March, followed by a Q&A session - 19 teams from 16 different schools took part in our annual Physics Olympics - Twenty-four pupils from six local primary schools took part in a Forensic Science Investigation Day - Year 5/6 Annual Invitational Tournament. We were delighted to welcome more than 160 children from local schools to take part in an Invitational Tournament at King’s. The pupils, from ages 9-11, were invited to compete in netball and football matches throughout the afternoon. Students showed great determination and displayed excellent sportsmanship. More than 160 children took part, aged 7-10 years old - King's invited students from Christleton High School and Upton High School to take part in an eye dissection led by Mr Jonathan Bhargava, a consultant ophthalmologist at the Countess of Chester NHS Trust. Students from all three schools were first treated to an interesting lecture on the structure of the eye, which included a real time video of cataract surgery. Mr Bhargava then expertly demonstrated to the students how to dissect a sheep’s eye. - King's hosted the Junior Stretch and Challenge Conference as part of the United Kingdom 2019 Junior Programme Gifted & Talented Study Day Programme of Academy Conferences. More than 140 external pupils attended from 12 schools, aged 12-14. The event was for able Key Stage 3 pupils (Year 7-9, ages 12-14). King's funded a number of places for local secondary schools (£25 per pupil). 22 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** - King’s hosted National Pathology Week: The Living Autopsy. Secondary students from more than 20 local schools were invited to a Living Autopsy Event at King's as part of National Pathology Week. Working in partnership with pathologists, laboratory scientists and schools across the UK, the RCoP programme of events and activities aims to engage people of all ages, and improve public awareness and understanding of how pathologists and scientists diagnose disease. Students were able to speak to members of the NHS about careers in and related to pathology and then enjoy a 'living autopsy' lecture, including a Q&A. The School has continued to develop connections with the wider community. These include: - The School hosted King’s Camps holiday clubs during the three school holidays which were open to all local children - Fun Tech and Mad Science holiday clubs also run through school holidays - The House of Dance ran several holiday clubs at school which were open to all local children - The School hired the swimming pool for lessons attended by local children - The School hosted Bike Chester in June 2019 - The School hosted the Chester Music Festival In addition, the School promoted the arts in Chester by acting as a repertory venue for visiting theatre groups performers, to which students from other schools were invited free of charge. We believe engagement with the local community should be part of every King’s student’s education and we are increasing the spread of activities through our enrichment programme. This includes: - Music students have continued to perform at a care home in Gresford as part of the school’s Enrichment Programme. The visits are something greatly valued by the residents and staff at the home - Students volunteered in local charity shops 23 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** In 2019, the school held a Charity Fortnight, during which our eight Houses organised activities to raise money for their nominated house charity. The nominated charities were: - Alder Hey Children’s Hospital (Gladstone and Bradbury Houses) - Chester Link - Nicola’s Fund - SHARE - Papyrus - CLIC Sargent - North Clywd Animal Rescue Centre Students in Removes (Year 7) raised money for StreetDoctors. Fundraising events ranged from a Spring Fete, bake sales, a dodgeball tournament and ‘dress your tutor’. More than £3,000 was raised over the two weeks. Other fundraising activity included: - 200 shoe boxes were donated to Teams4u. Teams4u is a Wrexham based charity aiming to make a difference to the lives of children around the world that find themselves in desperate hopeless situations - Sponsored sleep out involving staff and students - A student completed a 12-hour sponsored cycle - Teenage Cancer - Donated bikes to The Bren Project - King’s Charity Challenge - Shoe Box Appeal 2019 - Macmillan Cancer Bake Off In May 2020, our Design Technology Department produced more than 200 plastic visors for local hospitals and care homes and our Science Department donated safety goggles and plastic gloves to hospitals and medical centres in the area. 24 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** Parents were invited to donate their fee rebate to cheshirecommunityfoundation.org.uk/ following the switch to remote learning. This resulted in £6,300 being donated to the Trust’s Covid appeal. There are other fixed dates in the calendar for events we hold every year such as the MacMillan cake sale/coffee morning, Comic Relief day and Children in Need day, which together with other charitable events throughout the year raised more than **£18,400.** ## **FINANCIAL REPORT** ## **COVID-19** During the last five months of the reporting period the school was directed to close by the Government to help stop the spread of COVID-19. The school continued to be open for the children of key-workers and welcomed back three year groups for the second half of the summer term. For those pupils at home, the school introduced a Remote Learning 25 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** Programme as soon as the school closed, and this enabled the majority of our pupils to be taught in line with their normal academic timetable. The Governors agreed to offer fee discounts to our parents from between 20-30% with the younger years receiving the larger discounts. This level of discount was amongst the most generous for the North West and the UK. In addition, the Governors also agreed a pot of £600K to be allocated to helping parents who had lost or had their income severely reduced. The vast majority of our parents agreed that the Remote Learning Programme was an excellent alternative to normal school lessons, and that the discount was generous and reflected a fair discount to take into account the loss of the full experience offered by the school. A very small number have refused to pay their fees for the period and these will be pursued legally for payment. The school also has a number of parents continuing on a payment plan for fees following personal financial impact from COVID-19. The school’s finances were impacted by the school closure, and the resulting fee reductions and hardship payments, with the surplus for the 12-month period (August 2019 to August 20202) which included the period of closure, reducing from a projected surplus of £1.17M to a surplus of £392K which is the remaining balance of the hardship fund. The main impact of this reduced surplus is the cancellation or delay of projects due to be completed under the masterplan for the school. These cancellations included a new Sixth Form Centre and a replacement All Weather Pitch. The school continued to complete the smaller projects and achieved a number of improvements to classrooms within both the Senior and Junior Schools. Looking forward, the School remains in a strong, viable financial position with pupil numbers being retained for September 2020 and record numbers applying for 2021. Whilst there has been a financial impact the school reserve policy has not been broken and the School continues to be a going concern with no immediate threats to its future. ## **OTHER FINANCIAL MATTERS** The school changed its financial year from ending in March each year to ending in August each year, hence this extended 17 month reporting period. The change was made to bring the financial year in line with the school’s academic year. The school’s net income for the 17month period, before recognised gains and losses was £1,014k (2019 (12-month period): 26 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** £1,849k)), with the net movement in funds being a surplus of £1,454K (2019 (12-month period): £1,987k)). Total pupil numbers starting the school in September 2019 were 1102 and charitable activity expenditure for the year was well controlled and regularly scrutinised by the Governors. King’s Space Ltd has continued trading in support of the school. This subsidiary exists to manage the hiring of the school’s premises outside of school hours, and any profits made by this subsidiary are gift aided back to the school. Although profits were lower in the latter 5 months of the reporting period due to COVID-19, future bookings remain strong going forward. At the beginning of the reporting period the school took over the newly developed pastoral centre that now houses the school’s SEND and medical teams, and facilitates specialist, external support for children. In addition, a programme of classroom upgrades has also continued throughout the Senior and Junior Schools. ## **RESERVES** The Governors recognise the need to hold minimum reserves, and this is currently set at an ambitious amount of £4M, equivalent level to one term’s worth of costs. As shown in the table below, the report details that at the end of the period the Charity held unrestricted funds of £15.5M. 27 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ||**2020**| |---|---| |**FUNDS**|**£'000**| |**Unrestricted Funds held by the Charity as at 31.08.20**|**15,518**| |Less Fixed Assets|(15,812)| |Plus Bank Borrowings|2,429| |**Total Unrestricted Funds held by Charity as at 31.08.20**|**2,135**| None of the funds held are reliant on the disposal of any tangible fixed asset. Once Creditors are considered the remaining reserves held by the school are £2,135K. In the coming years, it is a key objective to increase the funds maintained, in particular, by The King’s School Bursary Trust Fund in order to support more families who need assistance with fees. The school is generating additional reserves on an ongoing basis in order to repay the fixed term bank loans and also to fund new developments at the school which have been determined in the masterplan and which will further improve the offer for our pupils and the wider community. In respect of the charity’s defined benefit scheme for support staff, the valuation at this year shows the scheme has remained as a surplus. The Governors believe that this notional funding calculation has no material effect on the charity’s short-term cash flow and that in the longer term its effects are sustainable out of future income. For this reason, it is considered that it should be disregarded for Reserves Policy purposes. ## **INVESTMENT PERFORMANCE AGAINST OBJECTIVES** The trustees of The King’s School Bursary Trust Fund adopted a discretionary management route with the School’s investment advisers in September 2005. The trustees of The Lester Smith Bursary Fund and The King’s School Prize Fund adopted the same route in August 2008. The aim of this is to achieve a favourable return against the appropriate benchmark as follows: Equities up to 60% - measured against the FTSE All Share Index 28 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** Gilts and Fixed Interest & Cash up to 100% - measured against the FT Govt All Stocks Index Total Return - measured against a Bespoke Benchmark in the period to August 2020 the relevant returns in respect of the funds and the benchmarks chosen are shown below. The performance for this year has been severely affected by COVID-19, but the longer-term performances are predicted to be around the same as last year’s predictions: ||1 year|5 year YTD| |---|---|---| |The King’s School Bursary Trust Fund Performance|1.53%|35.57%| |The Lester Smith Bursary Fund Performance|0.16%|27.31%| |The King’s School Prize Fund Performance|-1.95%|36.57%| |FTSE All Share Index|-12.65%|17.32%| |FT Government All Stocks Index|2.42%|27.81%| |Bespoke Benchmark|-2.22%|29.03%| ## **INVESTMENT POLICY AND OBJECTIVES** The Governors' investment powers are determined by the Scheme of Government dated 13 June 1988, which permits investment in trust for The School of sums not needed for immediate working purposes, modified in the case of The King's School Bursary Trust Fund (KSBTF) to permit, amongst other things, investment in any stock, funds or securities authorised by law for the investment of trust funds. The Governors' policy is to maximise the overall return on investments having regard to the need for a flow of income to meet the school's requirements for funding a number of bursary awards. In order to achieve this performance, the Governors and the trustees of the KSBTF have appointed an Investment Manager. The performance of the Investment Manager is monitored under the terms of a Statement of Investment Principles to which the Manager is required to adhere. The investment objectives are to preserve the long-term value of the funds in real terms and to maintain an appropriate level of income in real terms. The achievements of the Manager are measured against appropriate benchmarks in respect of equities, gilts and total return. The Governors and trustees meet with the Investment Manager at least twice each year. 29 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** Investments in a range of company stocks, gilt-edged securities and unitised funds, are held in the name of the Investment Manager's nominee company. ## **FUND-RAISING** The School has an in-house Development team responsible for all fund-raising activities. No member of this team has been subject to an undertaking to be bound by any voluntary scheme for regulating fund-raising, or any voluntary standard of fund-raising, in respect of activities on behalf of the School. The fundraising for this year has been affected by COVID-19 and is around 50% less than the previous year. A large programme of fundraising is scheduled for 2021. In order to protect vulnerable people and other members of the public from unreasonably intrusive or persistent fund-raising, the School’s fund-raising activities are overseen by the King’s Leadership team and board of Governors. No complaints have been received by the School regarding fund-raising activities. ## **AUDITORS** The School continues to use Crowe U.K. LLP. 30 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## **STATEMENT OF GOVERNORS’ RESPONSIBILITIES** The Governors are responsible for preparing the Governors' Annual 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 and Wales requires the Governors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources of the charity for that period. 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 estimates that are reasonable and prudent; - state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business. The Governors are responsible for keeping proper accounting records that 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. The Governors are responsible for the maintenance and integrity of the charity and financial information included on the charity's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. The Governors who were in office on the date of approval of these financial statements have confirmed as far as they are aware that there is no relevant audit information of which the auditor is unaware. Each of the Governors has confirmed that he/she has taken all of the 31 Annual Report and Financial Statements For tlie 17 Monih Period Trom 151 April 2019 to 31$; August 2020 hR THE KING'S SCHOOL CHESTE steps that he/she ought to have taken as Governors in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor. Approved by the Board of Governors & signed on Its behalf by- Date: g)-Ii) 32 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE KING’S SCHOOL, CHESTER** ## **Opinion** We have audited the financial statements of The King’s School Chester for the 17-month period ended 31 August 2020 which comprise consolidated statement of financial activities, the consolidated and school statement of financial position, the consolidated cash flow statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: - give a true and fair view of the state of the group’s and of the parent charity’s affairs as at 31 August 2020 and of the group’s incoming resources and application of resources, including its income and expenditure for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and - have been prepared in accordance with the requirements of the Charities Act 2011. ## **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 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. ## **Conclusions relating to going concern** We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you were: - the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or - the trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group’s or the parent charity’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. 33 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## **Other information** The trustees are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and 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. ## **Matters on which we are required to report by exception** We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion: - the information given in the financial statements is inconsistent in any material respect with the trustees’ report; or - sufficient accounting records have not been kept by the parent charity; or - the financial statements are not in agreement with the accounting records and returns; or - we have not received all the information and explanations we require for our audit ## **Responsibilities of trustees** As explained more fully in the trustees’ responsibilities statement set out on page 31, the trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. 34 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** In preparing the financial statements, the trustees are responsible for assessing the group’s and the parent 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. ## **Auditor’s responsibilities for the audit of the financial statements** We have been appointed as auditor under section 151 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. 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. ## **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 the charity’s trustees as a body, for our audit work, for this report, or for the opinions we have formed. **Crowe U.K. LLP** Statutory Auditor The Lexicon Mount Street Manchester M2 5NT Date 21st May 2021 35 Annual Report and Financial Statements For the 17 Month Period from 1st April 2019 to 315t August 2020 THE KING'S SCHOOL CH ESTER 1019 17371 78 178 175 177 17Jl• 194 NETIMcoiie AMDNeT •AoveMÉ14T¥I IUILDBIEVCV WI¥ mEfiopA140 METMOVEME￿14IUtr l.W7 36 • _hR_ . THE KING'S SCHOOL Annual Report and Financial Statements For the 17 Month Period from 1[st ] April 2019 to 31[st ] August 2020 CHESTER. ## **CONSOLIDATED AND SCHOOL STATEMENT OF FINANCIAL POSITION** ## **AS AT 31[51 ] AUGUST 2020** |**FIXED ASSETS**
**Tangible assets**
**Investment assets**
**Investment in subsidiaries**
**Total Fixed Assets**
**CURRENT ASSETS**
**Stock**
**Debtors**
**Cash at bank and in hand**
**Total Current Assets**
**Creditors: Due Within One Year**
**NET CURRENT ASSETS**
**TOTAL ASSETS LESS CURRENT LIABILITIES**
**CREDITORS: Due After One Year**
**Creditors**
**TOTAL NET ASSETS before pension asset**
**Pension Scheme asset**
**TOTAL NET ASSETS**
**FUNDS**
**Endowment Funds**
**Restricted Funds**
**Unrestricted Funds**
**Pension Resere Asset**
**Net Unrestricted Funds**
**TOTAL FUNDS**
**Note**
7
8a
8b
**9**
**10**
**10**
**17**
**12**
**12**
**12**|**Consolidated**
**31-Aug**
**31-Mar**
**2020**
**2019**
**£'000**
**£'000**
**15,812**
**2,653**
**18,465**
**9**
**3,649**
**5,815**
**9,473**
**(7,948)**
**1,525**
**19,990**
**(1,930)**
**18,060**
**657**
**18,717**
**242**
**2,958**
**14,860**
**657**
**15,517**
**18,717**
**15,450**
**2,318**
**17,768**
**5**
**475**
**5,270**
**5,750**
**(3,557)**
**2,193**
**19,961**
**(2,846)**
**17,115**
**148**
**17,263**
**238**
**2,615**
**14,262**
**148**
**14,410**
�|**Consolidated**
**31-Aug**
**31-Mar**
**2020**
**2019**
**£'000**
**£'000**
**15,812**
**2,653**
**18,465**
**9**
**3,649**
**5,815**
**9,473**
**(7,948)**
**1,525**
**19,990**
**(1,930)**
**18,060**
**657**
**18,717**
**242**
**2,958**
**14,860**
**657**
**15,517**
**18,717**
**15,450**
**2,318**
**17,768**
**5**
**475**
**5,270**
**5,750**
**(3,557)**
**2,193**
**19,961**
**(2,846)**
**17,115**
**148**
**17,263**
**238**
**2,615**
**14,262**
**148**
**14,410**
�|**School**
**31-Aug**
**31-Mar**
**2020**
**2019**
**£'000**
**£'000**
**15,812**
**2,653**
**50**
**18,515**
**9**
**3,673**
**5,695**
**9,376**
**(7,930)**
**1,446**
**19,961**
**(1,930)**
**18,032**
**657**
**18,689**
**242**
**2,958**
**14,832**
**657**
**15,489**
**18,689**
**15,450**
**2,318**
**50**
**17,818**
**5**
**432**
**5,157**
**5,594**
**(3,488)**
**2,106**
**19,924**
**(2,846)**
**17,078**
**148**
**17,226**
**238**
**2,615**
**14,225**
**148**
**14,373**
**17,226**|**School**
**31-Aug**
**31-Mar**
**2020**
**2019**
**£'000**
**£'000**
**15,812**
**2,653**
**50**
**18,515**
**9**
**3,673**
**5,695**
**9,376**
**(7,930)**
**1,446**
**19,961**
**(1,930)**
**18,032**
**657**
**18,689**
**242**
**2,958**
**14,832**
**657**
**15,489**
**18,689**
**15,450**
**2,318**
**50**
**17,818**
**5**
**432**
**5,157**
**5,594**
**(3,488)**
**2,106**
**19,924**
**(2,846)**
**17,078**
**148**
**17,226**
**238**
**2,615**
**14,225**
**148**
**14,373**
**17,226**| |---|---|---|---|---| |||**18,465**
**9**
**3,649**
**5,815**
**9,473**
**(7,948)**
**1,525**
**19,990**
**(1,930)**
**18,060**
**657**
**18,717**
**242**
**2,958**
**14,860**
**657**
**15,517**
**18,717**||**17,818**
**5**
**432**
**5,157**| |||||**5,594**
**(3,488)**
**2,106**| |||||**19,924**
**(2,846)**| |||||**17,078**
**148**| |||||**17,226**
**238**
**2,615**
**14,225**
**148**| |||||**14,373**| |||||| |||||**17,226**| The net result for the 17-month period dealt with in the financial statements of the parent charity was a surplus of £908k {12 months ended 3l[5][1 ] March 2019: surplus of £1,950k). Approved and authorized for issue by the Board of Governors on 19 **[th ]** March 2021 and signed on its behalf by: ('\ _ J\ / �[l\ ] '""'-\. "'[�•] ,r[\'\. ] f'). -\..;j 4'""\ '(_ 7, \ (,� � �a."'- ��-J;;,_-QJ . rs= _�_ Date: _**g/4--J**_ 15/4- j-ZPZ--1 Annual Report and Financial Statements For the 17 Month Period from 1st April 2019 to 315t August 2020 THE KING'S SCHOOL CH ESTER CCrfI80L￿1E0 CASH FLI￿•T￿TEllE1lT FOR niE PEAIOD ENDED JI *iWST20 INFLOWFAOM fjRWPfffRATINGXTIVIThS is CAIH FLOWSFR¢)M ¢3ROUP IMVE$T*IGXTMrnS ASIDI ljl F4ET CAIH FLOWFROIA fjRIyJp&MLlTWI￿1Mw￿S •P4wm*nl ¢1 b•nh 14b *1 THE YE•JI 12.wl Ji S.210 1.919 i•) 38 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **1. Accounting Policies** ## **Legal Status** The King’s School, Chester is an unincorporated charitable trust (charity no. 525934), registered in England. The School is a public benefit entity. The School’s address is The King’s School, Wrexham Road, Chester, CH4 7QL. The object of the charity is the provision and conduct, in or near Chester, of a school for boys and girls, in connection with the cathedral at Chester. The principal activity of the School is the provision of an Infant, Junior and Senior School and Sixth Form. The financial statements have been prepared under the historical cost convention with items recognised at cost or transaction value except for certain financial instruments at fair value. The financial statements have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2015), the Charities SORP (FRS 102) and the Charities Act 2011. The principal accounting policies adopted in the preparation of the financial statements are set out below. The School constitutes a public benefit entity as defined by FRS 102. The financial statements are prepared in sterling, which is the functional currency of the School. Monetary amounts in these financial statements are rounded to the nearest £’000. These financial statements are prepared in accordance with Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (FRS 102) and the Charities SORP (FRS 102). ## **Going Concern** The school has undertaken to move its year end date from 31 March to 31 August 2020, these accounts therefore represent 17 months of trading 39 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** The School had net current assets of £1,525k at the year-end (2019: £2,193k). The Governors have reviewed the forecasts to March 2023 and consider that in view of the forecast surplus and the financing arrangements in place, the use of the going concern basis to prepare the financial statements is appropriate. A summary of the more important Accounting Policies is set out below: ## **1.1 Accounts and related Trust Funds** The School accounts include two Trust Funds which are linked charities; The King’s School Bursary Trust Fund and The Lester Smith Bursary Fund. The accounts for these funds have previously held a financial year end of 5 April but this has now been aligned with the School’s accounts and end 31 August 2020. This means that as with the School accounts 17 months of trading are present in these accounts. Trust Funds are amalgamated on a line-by-line basis. ## **1.2 Basis of consolidation** The group financial statements consolidate the financial statements of the School and its subsidiary, King’s Space Limited (company number 11067044). All intergroup transactions and profits are eliminated fully on consolidation. As permitted by section 408 of the Companies Act 2006 the parent charity’s SOFA has not been included in these financial statements. The School has taken advantage of the exemption available to qualifying entity’s in FRS102 from the requirement to present a charity only cash flow statement with the consolidated financial statements. ## **1.3 Fees and similar income** Fees receivable, charges for services and use of the premises are accounted for in the period in which the service is provided. Fees receivable are stated at fair value and after deducting allowances, scholarships and other remissions granted by The School from its Unrestricted Funds, but include contributions received from Restricted Funds for scholarships, bursaries and other grants. ## **1.4 Grant making** The School offers a number of bursaries each year to its pupils. All families in receipt of a bursary are means tested with the level of bursary awarded dependent on the family income and assets. All bursaries are subject to annual review. In addition, the School offers a small number of scholarships to pupils each year for performance in the Senior School entrance exam. The individual scholarship awards are for no more than £500 and are a one-off amount. 40 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## **1.5 Donations, legacies and fund accounting** Donations, gifts and legacies are recognised where there is entitlement, probability of receipt and the amount can be measured with sufficient reliability. Income received for the general purposes of The School is included as Unrestricted Funds. Income for activities restricted by the wishes of the donor is taken to Restricted Funds where these wishes are legally binding on the Governors. Income required to be retained as capital in accordance with the donor's wishes is accounted for as Endowments - permanent or expendable according to the nature of the restriction. ## **1.6 Other income** Other income, including investment income, is accounted for on an accruals basis. ## **1.7 Expenditure** Expenditure is accounted for on an accruals basis. Overhead and other costs not directly attributable to particular functional activity categories are apportioned over the relevant categories on the basis of management estimates of the amount attributable to that activity in the year, either by reference to staff time or space occupied, as appropriate. The irrecoverable element of VAT is included with the item of expense to which it relates. Governance costs comprise the costs of running The School, including strategic planning for its future development, external audit, any legal advice for The School’s Governors, all costs of committee meetings, of preparing statutory accounts and satisfying public accountability. ## **1.8 Pension Schemes** Retirement benefits to employees of the School are provided through three pension schemes, two defined benefit and one defined contribution. The pension costs are charged in the Statement of Financial Activities and determined as follows: (a) Teachers’ Pension Scheme - The School contributes to the Teachers’ Pension Defined Benefits Scheme at rates set by the Scheme Actuary and advised to the Board of the Scheme Administrator and are charged in the period in which the salaries to which they relate are payable. The Scheme is a multi-employer pension Scheme and it is not possible to identify the assets and liabilities of the Scheme which are attributable to The School. In accordance with FRS102 therefore, the Scheme is accounted for as a Defined Contribution Scheme. (b) The School Support Staff Pension - The School also contributes to a Defined Benefit Scheme for a number of support staff at rates advised by the Scheme Actuary. The defined 41 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** benefit pension scheme current service costs are charged to the Statement of Financial Activities within staff costs. The expected return on the scheme assets less the scheme interest costs are credited within other interest. The scheme actuarial gains and losses are recognised immediately as other recognised gains and losses. The defined benefit scheme assets are measured at fair value at the balance sheet date. Scheme liabilities are measured on an actuarial basis at the balance sheet date using the projected unit method and discounted at a rate relevant to the current rate of return on a high quality corporate bond of equivalent term to the scheme liabilities. The resulting defined benefit asset or liability is presented separately after other net assets on the face of the balance sheet. (c) The School Personal Pension Scheme - The School operates a personal pension scheme with Scottish Widows for support staff not in the above defined benefits scheme. This is a money purchase scheme under which The School contributes a matching amount to the employee up to a maximum of 5% of pensionable salary per annum. ## **1.9 Operating leases** Rentals payable are recognised in the SOFA on a straight-line basis over the period of the lease. ## **1.10 Fixed Assets** Tangible fixed assets costing more than £1,000 and representing significant added value to the school are capitalised and are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost of each asset on a straightline basis over its expected useful life, as follows: Buildings 2% - 4% Fixtures, Fittings and Equipment 6.66% - 33.3% Properties in the course of construction are carried at cost, less any identified impairment loss. Cost includes professional fees and other directly attributable costs that are necessary to bring the property to its operating condition. Depreciation commences when the properties are ready for their intended use. Shortfalls between the carrying value of fixed assets and their recoverable amounts, being the higher of fair value less costs to sell and value-in-use, are recognised as impairment losses. 42 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** Where donations are received towards the cost of fixed assets, the amount of the donation is treated as Restricted Funds. The equivalent proportion of the annual depreciation charge of the assets concerned is debited to Restricted Funds. ## **1.11 Investments** Investments are included in the financial statements initially at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted bid price. Transaction costs are expensed to income and expenditure as incurred. The statement of financial activities includes the net gains and losses arising on revaluation and disposal throughout the year. ## **1.12 Stock** Food stock is valued at the lower of cost or net realisable value. ## **1.13 Employee Benefits** The costs of short-term employee benefits are recognised as a liability and an expense. The best estimate of the expenditure required to settle an obligation for termination benefits is recognised immediately as an expense when the Company is demonstrably committed to terminate the employment of an employee or to provide termination benefits. ## **1.14 Unrestricted Funds and Designated Funds** Funds are retained to cover the fixed assets, provide working capital and repay long-term loans. Funds are designated within Unrestricted Funds when there is a specific project to be undertaken. ## **1.15 Restricted Funds** Funds are restricted when they have been given or raised for a specific purpose. ## **1.16 Endowment funds** Funds are endowed when they have been given for a specific purpose and the capital is to be maintained. ## **1.17 Cash and cash equivalents** Cash and cash equivalents include cash in hand, deposits held at call with banks, and others short-term liquid investments with original maturities of three months or less. 43 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## **1.18 Financial instruments** The School has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102, in full, to all of its financial instruments. The School only has financial assets and liabilities of a kind that qualify as basic financial instruments. Trade and other debtors and creditors are initially recognised at transaction value and subsequently measured at their settlement value. Bank loans are initially recognised at their transaction value and subsequently measured at amortised cost using the effective interest rate method. Interest expense is recognised on the basis of the effective interest method and is included in interest payable and other similar charges. Investments are initially measured at transaction price and subsequently measured at fair value through net income or expenditure. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to fair value, at each reporting date. Fair value gains and losses are recognised in net income/expenditure. ## **1.19 Impairment of financial assets** Assets are assessed for indicators of impairment at each reporting end date. Assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the asset, the estimated future benefit has been affected. The impairment loss is recognised in Statement of Financial Activities. ## **1.20 Critical accounting estimates and judgements** 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. ## **Critical accounting estimates and assumptions** The School makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. 44 **Annual Report and Financial Statements For the 17 Month Period from 1[st] April 2019 to 31[st] August 2020** ## **Pension scheme valuation assumptions** Assumptions have been made by the actuary in calculating the valuation of the defined benefit pension scheme at the year end. Details of the assumptions made are included within the pensions note. ## **Hedging** The Hedging arrangement previously held on loans has been settled prior to the end of the financial year. ## **Critical areas of judgement** A provision for impairment of fee debtors is established when there is objective evidence that the amounts due will not be collected in line with the usual fee collections due to financial difficulty of the parents. 45 Annual Report and Financial Statements For the 17 Month Period from 1st April 2019 to 315t August 2020 THE KING'S SCHOOL CH ESTER IhDF Tal 46 Annual Report and Financial Statements For the 17 Montli Period from 1st April 2019 to 3151 August 2020 THE KING'S SCHOOL CHESTER 12npnlh¥ E￿￿ndItu1 tharftablB irtlv1ty￿XpEr￿1lur@)r￿lld￿$ Ope1•tlyle￿ej[Or￿¥fjt 1￿mi￿¢￿ery GwrnarKE expEnditur8 includ8 Tor4lstJff¢05t5 corythed W¥KandSalii 516 OnfontrIb￿tI0￿l CDntrKtL¥bllur E171201Y.'224th*hYknknc•kul•t*d¢Th•fultiNNTrwL*141efitbDsls. x*5 16112019..173I￿kn47￿h 10212019..961 ¥¥oMt*•¢h￿ slifT. I7￿￿h$ 20 Expe*dfturec4nt1n￿ed 2UI* £GD.100.E70mD £YD.oao480.ODD £9Q.ooQ.É￿, £iW.L4X4iiQ.OllO £IID.QODth¢ 2019r4r*l¥ for0￿E￿ar. ￿￿￿$1111￿¢t￿jQUslwQfflrtdn￿thNhlp¢I1**chtrSb1￿￿*n$I￿￿F￿nd. Ddenned beftElrtstheTh¢. ￿￿$¢￿￿¢￿￿lejtOth￿SeS¢h¢￿￿S Dt16.l%of penslw?ble$414tvfoitheTe4rF¢n Pift5kn5chiTh¢.45J%*oiChosFd £￿¢¥￿tr￿n1￿￿￿5t(1Ill1w£2O3k120x¥.E40￿l wert D4dettrtheTe•rl¢N' P￿S￿￿F￿￿￿l**htQfth￿h1lh￿rY￿*Tr￿lW•5 ThEGove￿5r￿r•1¥td￿￿fflun1rn1 ppnses lot•lllw É1612Q19É￿lIIv￿R￿￿￿t0 t(￿19..£￿11)IO¥ewd¥￿nItr¢v2rfV& 17 K•Y￿r￿S1￿mJTrtp+￿th 441 441 Salaries for key management personnel are reviewed and set on an annual basis by the Remuneration Committee. In undertaking this revrew the committee utilise independent benchmark data from a variety of source5 IAGBIS, HMC. Baines and Cutler) in addition to performance assessments of the key management personnel. 47 Annual Report and Financial Statements For the 17 Month Period from 1st April 2019 to 315t August 2020 THE KING'S SCHOOL CH ESTER •4* iiJ•4 41 ?x•4 343FZ 4.11$ •.•pi 1$.41 48 Annual Report and Financial Statements For the 17 Month Period from 1st April 2019 to 315t August 2020 THE KING'S SCHOOL CH ESTER Ji 117DI T• ¥1 *r4 i• Jll*i• ?A•i 49 Annual Report and Financial Statements For the 17 Month Period from 1st April 2019 to 315t August 2020 THE KING'S SCHOOL CH ESTER lol i•I•W 50 Annual Report and Financial Statements For the 17 Month Period from 1st April 2019 to 315t August 2020 THE KING'S SCHOOL CH ESTER 1] •Z4 51 Annual Report and Financial Statements For the 17 Month Period from 1st April 2019 to 315t August 2020 THE KING'S SCHOOL CH ESTER ijo Th• 2.018 51 1• 1¥• lJ)7S 52 Annual Report and Financial Statements For the 17 Month Period from 1st April 2019 to 315t August 2020 THE KING'S SCHOOL CH ESTER SMt•rn• •74 167 q•F 1S3 1$. 53 Annual Report and Financial Statements For the 17 Month Period from 1st April 2019 to 315t August 2020 THE KING'S SCHOOL CH ESTER Aly4 VJT SJ12 17• 54 Annual Report and Financial Statements For the 17 Month Period from 1st April 2019 to 315t August 2020 THE KING'S SCHOOL CH ESTER tolhe F" Annual Report and Financial Statements For the 17 Month Period from 1st April 2019 to 315t August 2020 THE KING'S SCHOOL CH ESTER ?•45 56