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2020-08-31-accounts

Charity number: 526631

KING DAVID SCHOOLS (MANCHESTER)

TRUSTEE'S REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2020

KING DAVID SCHOOLS (MANCHESTER)

CONTENTS

Page
Reference and administrative details of the Charity, its Trustees and advisers 1
Trustee's report 2 - 8
Independent auditor's report on the financial statements 9 - 11
Consolidated statement of financial activities 12
Consolidated balance sheet 13 - 14
Charity balance sheet 15
Consolidated statement of cash flows 16
Notes to the financial statements 17 - 46

KING DAVID SCHOOLS (MANCHESTER)

REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARITY, ITS TRUSTEES AND ADVISERS FOR THE YEAR ENDED 31 AUGUST 2020

Trustees

Directors of Trustee company: J Rowe (Chair of Trustees) S E Elias A Berkeley

Charity registered number

526631

Principal office

Eaton Road Crumpsall Manchester M8 5DY

Independent auditor

Crowe U.K. LLP 3rd floor The Lexicon Mount Street Manchester M2 5NT

Bankers

The Co-operative Bank plc 1 Balloon Street Manchester M60 4EP

Solicitors

Kuit Steinart Levy 3 St Mary's Parsonage Manchester M3 2RD

Page 1

KING DAVID SCHOOLS (MANCHESTER)

TRUSTEE'S REPORT FOR THE YEAR ENDED 31 AUGUST 2020

The Trustee present their annual report together with the audited financial statements of the for the year 1 September 2019 to 31 August 2020.

Objectives and activities

a. Charity Information

The Trustee presents its annual report and the financial statements for the year ended 31 August 2019. These accounts are prepared in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), the Charities Statement of Recommended Practice (SORP) 2015 and Charities Act 2011.

b. Reference and Administrative Details

King David Schools (Manchester) is a registered charity (No. 526631), its principal address is shown on the charity information page. The charity is a public benefit entity.

c. Structure, Governance and Management

King David Schools (Manchester) was established under a Trust Deed dated 20 February 1873 and Articles of Government sealed 27 January 1959 as amended by Constitution dated 13 January 2003.

On 7 February 2012 the Charity Commission for England and Wales approved the replacement of the former individual trustees by a corporate trustee, KDS Trustee Limited. The former individual trustees became directors of the new trustee.

The Trustee is responsible for the overall governance of the Schools as a charity. The Trustee’s role is to have an overview of the effectiveness of the schools and to ensure the maintenance of the faith and of the high standards of education generally. The Trustee appoints the Foundation Governors. The delivery of the education and curriculum and the management of the schools is controlled through the various Boards of Governors of each of the schools, namely

Effective partnership between the Trustee, Governors and staff has contributed significantly to a successful year of activity. The trustees meet, formally, once per year to discuss the accounts and are in touch with each other throughout the year. These meetings include a review of strategy and operational performance and set operating plans and budgets as and when necessary.

New officers of the Trustee company receive an induction pack containing everything they need to know about the Schools and its work for effective and informed decision-making. The officers of the Trustee company are regularly kept up to date about their responsibilities. Remuneration of key management personnel is determined by the trustee.

d. Bursar and Trustee

The Bursar and certain delegated officers of the Trustee company are responsible for the day to day management of King David Schools (Manchester) and for implementing policies.

Page 2

KING DAVID SCHOOLS (MANCHESTER)

TRUSTEE'S REPORT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2020

Objectives and activities (continued)

e. Corporate Governance

Processes are in place to ensure that performance is monitored and that appropriate management information is prepared and reviewed regularly by both the Treasurer officer of the Trustee company and its Board of Directors.

The systems of internal control are designed to provide reasonable assurance but not absolute assurance against material misstatement or loss. They include:

f. Risk Management

The Trustee has introduced a formal risk management process to assess business risks and implement risk management strategies. This has involved identifying the types of risks the School faces, prioritising them in terms of potential impact and likelihood of occurrence, and identifying means of managing the risks. As part of this process the Trustee has reviewed the adequacy of the School’s current internal controls and the costs of operating particular controls relative to the benefits obtained. Procedures have been established for reporting failings immediately to the Board of Directors of the Trustee that include regular bank reconciliations as well as the production of management accounts at the end of each term which are reviewed by the officers of the Trustee.

The key risk facing the charity is the level of voluntary contributions and donations that it receives from parents and donors.Declining receipts translate into less funds available to improve the education being offered to our KD pupils.The Trustee endeavour to educate parents along with the wider community of the importance of their financial support especially in the light of the reducing government funding being made to our schools on the KD campus.

Page 3

KING DAVID SCHOOLS (MANCHESTER)

TRUSTEE'S REPORT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2020

Achievements and performance

a. Objectives, Activities, Achievements and Performance

King David Schools (Manchester) exists to provide Jewish children with a meaningful orthodox Jewish religious education coupled with an excellent secular education.

All units on campus continue to achieve exemplary results in both the religious and secular area. The Primary School is ranked as one of the best performing in the country and the High School (including Sixth Form and Yavneh) results for both GCSE and 'A’ level examinations puts it among the top tier of secondary schools in the country, both in relation to the State and Independent sectors. The High School has also achieved 'Outstanding' status with OFSTED recognising the significant contribution that the school makes to the education of pupils. Substantial grants have been awarded by the Government to the schools to enable them to continue with the expansion and upgrading of their facilities.

The Trustee have given due consideration to the Charity Commission’s guidance on public benefit requirement under the Charities Act 2011. when reviewing the Charity’s aims and objectives and in planning future activities. As a leading quality school to the Jewish community the Trustee notes that its success acknowledged nationally both in the secular and religious fields continues. Our pupils are well prepared to move on to leading universities, religious and secular colleges with many of our former students achieving success in the wider community.

The Trustee took possession of the new building financed primarily by the government under Building Schools for the Future (BSF) in November 2010 so that our pupils and staff enjoy a state of the art Education Facility second to none.

b. Core Objectives and Strategy

The core objective of the charity continues to be that of providing Jewish children with a meaningful orthodox Jewish religious education coupled with an excellent secular education.

The strategy is achieved by encouraging all units on the King David Campus to employ highest grade teachers who are able to instil in the pupils not only excellence in knowledge but also to experience a warm, friendly Jewish environment with a commitment to giving to the community as a whole. The Trustee continues to ensure that the facilities are up to date and suitable for the delivery of the educational and religious objectives.

The School is dependent on voluntary contributions from parents, donations and educational grants in order to fulfil its objectives. Failure of parents to meet their voluntary contribution commitments will threaten the school’s ability to achieve its objectives.

Page 4

KING DAVID SCHOOLS (MANCHESTER)

TRUSTEE'S REPORT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2020

Financial review

a. Financial Review, Management Policies and Results for the Year

The Consolidated Statement of Financial Activities (SoFA), set out on page 10, shows that the group received total income of £9,235,077 (2019: £9,015,929). £9,752,564 (2019: £9,653,219) was incurred as expenditure leaving a deficit of £265,514 (2019: £1,324,781) after a depreciation charge of £621,884 (2019: £611,683) and gains arising from changes in actuarial assumptions of £252,000 (2019: losses of £686,000).

This group position however, takes into account the surpluses in actuarial gains/(losses) in the pension schemes positions, which are long term non-cash items, of £132,000 (2019: (£401,000)) in The King David High School (KDHS) and £120,000 (2019: (£285,000)) in the King David Primary School (KDPS). Had these accounting entries not been included in this year's results, we would be facing a deficit of around £517,514 (2019: £638,781).

The principal funding sources are donations, voluntary contributions from parents, income from the nursery and statutory government funding for the two academies, King David High School and King David Primary School.

The charity itself generated a deficit of £454,189 (2019: £584,968).

The charity made an unrealised loss on its investments of £27 (2019: £1,491) leaving a total net movement in funds to be added to the reserves. The trustee remains conscious that more funds will have to be raised to maintain the ongoing excellence to which they are committed. Without parental assistance the current achievement of acclaimed success could be threatened.

The Charity continues to monitor its results against performance as its measurement of success. The Charity does not employ a professional fundraiser and relies on assistance from the Trustee, Governors and parents. Whilst it was noted that the Voluntary Contributions from parents continued below expectation, the Charity held a Fundraiser in 2020 which raised some £1,200,000 (due over 2 years). The Charity must continue its fundraising activities in order for it to be able to continue providing for its primary objectives and to maintain the high levels of educational standards. The Charity has not received any complaints about its fundraising activities and has policies in place to ensure that there is no unreasonable intrusion into a person's privacy.

b. Reserves

The policy of the Trustee has been and continues to be to utilise all reserves to fund the activities of the charity which has resulted from the development and growth of the campus, particularly the High School and to improve the religious and cultural educational experience across all the schools. Ideally the trustee would like the trust to hold two years' net expenditure of approx £1,000,000 in the unrestricted reserve fund but with constant erosion of the Academies funding from central government resulting in the Trustee having to support the 2 academies on the KD campus at a greater level than was envisaged that has not been possible.

The total reserves at the year end are £23,967,669 (2019: £24,233,180). This includes unrestricted reserves of £3,321,185 (2019: £3,170,700) and restricted reserves of £20,646,481 (2019: £21,062,480).

The Trustee is seeking sources of additional funding for capital expenditure in order that total reserve levels are improved. The Trustee does not consider that this has inhibited activities in any way.

Free Reserves

Free reserves for the group as at 31 August 2020 stood at £582,960 (2019: £500,048).

Page 5

KING DAVID SCHOOLS (MANCHESTER)

TRUSTEE'S REPORT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2020

c. Investment Policy and Performance

The Charity has a small investment in a quoted company and a subsidiary but in the main all funds are held in cash since they are currently being directed to the major campus enhancement capital building programme. The policy is to sell these shares as and when the trustee consider the time to be propitious.

The Charity has an investment in Tesco plc with a market value of £11,948 (2019: £11,975). This constitutes more than 5% of the charity’s investments.

The Charity has an investment in a dormant subsidiary, K D Advertising Limited, of £2 (2019: £2).

d. Staff Training and Career Development

The schools are committed to the training, career development and welfare of its employees. An individual’s career development is assessed through appraisal and supervision. Training programmes are provided to meet ongoing needs, with the aim of developing employees for both their current and their future roles.

Pay and remuneration of Key Management Personnel are reviewed independently by the Directors of the Trustee Company who themselves are not compensated.

e. Auditors

Crowe U.K. LLP will be proposed for re-appointment at the Trustee meeting.

f. Future Plans

The King David School Campus now provides top class education in both secular and Jewish religious studies, with a wide cross section of extracurricular activities covering sports, art and culture housed in the most modern buildings with enhanced advance technological facilities supported by a most dedicated and capable staff. The Trustee is determined to reach out further in building a school of excellence which will continue to be the pride of the Jewish Community.

Page 6

KING DAVID SCHOOLS (MANCHESTER)

TRUSTEE'S REPORT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2020

g. Going Concern

The charity and group meets its day-to-day requirements thorough its bank facilities and the extremely generous donors and parents. The group are considering a number of fundraising opportunities to recover the deficits going forward. Charity projections taking account of reasonable possible changes in performance show that the charity should be able to operate within the level of its current facilities. There is no intention by Mr J Rowe to request full repayment of the concessionary loan in the near future unless the charity can afford to do so.

The charity continues to monitor its results against performance as its measurement of success. The charity does not employ a professional fundraiser and relies on the assistance from the Trustee, governor and parents. Whilst voluntary contributions from parents continue to be below the ideal level, to compensate, the charity held an internet fundraising campaign in the year which raised over £1m (payable over a number of years). This ensures that the charity is able to continue with its primary objectives and to maintain the high levels of educational standards.

The Covid 19 pandemic has had an impact on the level of parental contributions being received but expenses have also reduced somewhat due to the Furlough schemes. The charity has also been able to reduce its donations to the academies. The trustees’ aim is to ensure that the savings achieved offset some of the reduction in income. The Charity has use of an overdraft facility to ensure that any temporary cash flow shortfalls are covered. This is due for renewal in July 2021.

As has been the case for many years, the Trustee continues its success in maintaining sufficient income to ensure the requirements of the group are met in full. However, the group must continue its fundraising activities if the Academies are to continue to provide the academic excellence it has in the past.

The group therefore continues to adopt the going concern basis in the financial statements.

Page 7

KING DAVID SCHOOLS (MANCHESTER)

TRUSTEE'S REPORT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2020

Statement of Trustee's responsibilities

The Trustee are responsible for preparing the Trustee's 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 Trustee to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Group and the Charity and of their incoming resources and application of resources, including their income and expenditure, for that period. In preparing these financial statements, the Trustee are required to:

The Trustee are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and the Charity's transactions and disclose with reasonable accuracy at any time the financial position of the Group and 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 Group and the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Disclosure of information to auditor

Each of the persons who are Trustee at the time when this Trustee's report is approved has confirmed that:

mbers of the board of Trustee on 8 March 2021

and signed on their behalf by:

Joshu Rowe Chair of KDS Trustees Ltd

Page 8

KING DAVID SCHOOLS (MANCHESTER)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KING DAVID SCHOOLS (MANCHESTER)

Opinion

We have audited the financial statements of King David Schools (Manchester) (the 'parent charity') and its subsidiaries (the 'group') for the year ended 31 August 2020 which comprise the Consolidated Statement of Financial Activities, the Consolidated balance sheet, the Charity balance sheet, the Consolidated 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 Group 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

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

Page 9

KING DAVID SCHOOLS (MANCHESTER)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KING DAVID SCHOOLS (MANCHESTER) (CONTINUED)

Other information

The Trustee is 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 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 Trustee's 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 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 Group or the parent charity or to cease operations, or have no realistic alternative but to do so.

Page 10

KING DAVID SCHOOLS (MANCHESTER)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KING DAVID SCHOOLS (MANCHESTER) (CONTINUED)

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 its trustees, as a body, for our audit work, for this report, or for the opinions we have formed.

Crowe U.K. LLP

Statutory Auditor

3rd floor

The Lexicon

Mount Street

Manchester

M2 5NT

Date: 8 March 2021

Crowe U.K. LLP are eligible to act as auditors in terms of section 1212 of the Companies Act 2006.

Page 11

KING DAVID SCHOOLS (MANCHESTER)

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 AUGUST 2020

Note
Income from:
Donations and legacies
4
Charitable activities
5
Other trading activities
6
Investments
7
Total income
Expenditure on:
Charitable activities
8
Total expenditure
Net losses on investments
Net movement in funds before other
recognised gains/(losses)
Other recognised gains/(losses):
Actuarial gains/(losses) on defined
benefit pension schemes
25
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Net movement in funds
Total funds carried forward		 Restricted
funds
2020
£
30,461
6,637,068
-
-
6,667,529
7,335,528
7,335,528
-
(667,999)
252,000
(415,999)
21,062,480
(415,999)
20,646,481		 Unrestricted
funds
2020
£
1,201,010
752,623
613,162
753
2,567,548
2,417,036
2,417,036
(27)
150,485
-
150,485
3,170,700
150,485
3,321,185		 Total
funds
2020
£
1,231,471
7,389,691
613,162
753
9,235,077
9,752,564
9,752,564
(27)
(517,514)
252,000
(265,514)
24,233,180
(265,514)
23,967,666		 Total
funds
2019
£
1,359,501
7,632,369
23,676
383
9,015,929
9,653,219
9,653,219
(1,491)
(638,781)
(686,000)
(1,324,781)
25,557,961
(1,324,781)
24,233,180

The Consolidated Statement of Financial Activities includes all gains and losses recognised in the year.

The notes on pages 17 to 46 form part of these financial statements.

Page 12

KING DAVID SCHOOLS (MANCHESTER)

CONSOLIDATED BALANCE SHEET AS AT 31 AUGUST 2020

Note
Fixed assets
Tangible assets
13
Investments
14
Current assets
Stocks
15
Debtors
16
Cash at bank and in hand
Creditors: amounts falling due within one
year
17
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after more
than one year
18
Net assets excluding pension liability
Defined benefit pension scheme liability
25
Total net assets
Charity funds
Restricted funds:
Restricted funds excluding pension asset
20
Pension reserve
20
Total restricted funds
20
Unrestricted funds
20
Total funds		 4,066
587,888
3,018,456
3,610,410
(1,215,861)
22,414,481
(1,768,000)		 2020
£
23,830,056
11,950
23,842,006
2,394,549
26,236,555
(500,889)
25,735,666
(1,768,000)
23,967,666
20,646,481
3,321,185
23,967,666		 5,566
931,519
2,080,337
3,017,422
(725,735)
22,829,480
(1,767,000)		 2019
£
24,320,143
11,977
24,332,120
2,291,687
26,623,807
(623,627)
26,000,180
(1,767,000)
24,233,180
21,062,480
3,170,700
24,233,180

Page 13

KING DAVID SCHOOLS (MANCHESTER)

CONSOLIDATED BALANCE SHEET (CONTINUED) AS AT 31 AUGUST 2020

· for issue by the Trustee and signed on their behalf by: Chair Date: 8 March 2021

The notes on pages 17 to 46 form part of these financial statements.

Page 14

KING DAVID SCHOOLS (MANCHESTER)

CHARITY BALANCE SHEET AS AT 31 AUGUST 2020

Fixed assets
Tangible assets
Investments
Current assets
Stocks
.Debtors
Cash at bank and in hand
Creditors: amounts falling due within one
year
Net current assets/ liabilites
Total assets less current liabilities
Creditors: amounts falling due after more
Note
13
14
15
16
17
than one year
18
Net assets excluding pension asset
Total net assets
Charity funds
4,066
95,867
506,956
606,889
(583,766)
17,847,332
Restricted funds excluding pension asset
Restricted funds
20
20
20
Unrestricted funds
Total funds
st.t
��
a
z
th
c:
:y		 2020
22,372,704
11,950
22,384,654
23,123
22,407,777
(500,889)
21,906,888
21,906,888
5,566
65,875
340,524
411,965
(437,892)
----
18,167,283
2019
£
22,942,341
11,977
22,954,318
(25,927)
22,928,391
(567,315)
22,361,076
22,361,076
17,847,332
18,167,283
4,059,556
4,193,793
21,906,888
22,361,076
the Trustee and s;gned on the;, behalf by:

Joshua Ro e Chair of K, S Trustees Limited Date: 8 March 2021

The notes on pages 17 to 46 form part of these financial statements.

Page 15

KING DAVID SCHOOLS (MANCHESTER)

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 AUGUST 2020

Note
Cash flows from operating activities
Net cash used in operating activities
22
Cash flows from investing activities
Dividends, interests and rents from investments
Purchase of tangible fixed assets
Net cash (used in)/provided by investing activities
Cash flows from financing activities
Repayments of borrowing
Net cash used in financing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
23
The notes on pages 17 to 46 form part of these financial statements		 2020
£
1,296,251
753
(131,797)
(131,044)
(131,615)
(131,615)
1,033,592
1,764,560
2,798,152		 2019
£
841,757
383
-
383
(75,302)
(75,302)
766,838
997,722
1,764,560

Page 16

KING DAVID SCHOOLS (MANCHESTER)

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

1. General information

King David Schools (Manchester) is a registered charity (No. 526631), its principal address is shown on the charity information page. The charity is a public benefit entity.

2. Accounting policies

2.1 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.

King David Schools (Manchester) 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 Consolidated statement of financial activities (SOFA) and Consolidated balance sheet consolidate the financial statements of the Charity and its subsidiary undertaking. The results of the subsidiary are consolidated on a line by line basis. The charity has the right to appoint/ remove members and governors of the consolidated entities and as such has control.

Page 17

KING DAVID SCHOOLS (MANCHESTER)

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

2. Accounting policies (continued)

2.2 Going concern

The charity and group meets its day-to-day requirements thorough its bank facilities and the extremely generous donors and parents. The group are considering a number of fundraising opportunities to recover the deficits going forward. Charity projections taking account of reasonable possible changes in performance show that the charity should be able to operate within the level of its current facilities. There is no intention by Mr J Rowe to request full repayment of the concessionary loan in the near future unless the charity can afford to do so.

The charity continues to monitor its results against performance as its measurement of success. The charity does not employ a professional fundraiser and relies on the assistance from the Trustee, governor and parents. Whilst voluntary contributions from parents continue to be below the ideal level, to compensate, the charity held an internet fundraising campaign in the year which raised over £1m (payable over a number of years). This ensures that the charity is able to continue with its primary objectives and to maintain the high levels of educational standards.

The Covid 19 pandemic has had an impact on the level of parental contributions being received but expenses have also reduced somewhat due to the Furlough schemes. The charity has also been able to reduce its donations to the academies. The trustees’ aim is to ensure that the savings achieved offset some of the reduction in income. The Charity has use of an overdraft facility to ensure that any temporary cash flow shortfalls are covered. This is due for renewal in July 2021.

As has been the case for many years, the Trustee continues its success in maintaining sufficient income to ensure the requirements of the group are met in full. However, the group must continue its fundraising activities if the Academies are to continue to provide the academic excellence it has in the past.

The group therefore continues to adopt the going concern basis in the financial statements.

2.3 Income

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.

Grants are included in the Consolidated statement of financial activities on a receivable basis. The balance of income received for specific purposes but not expended during the period is shown in the relevant funds on the Balance sheet. Where income is received in advance of entitlement of receipt, its recognition is deferred and included in creditors as deferred income. Where entitlement occurs before income is received, the income is accrued.

Gifts in kind donated for distribution are included at valuation and recognised as income when they are distributed to the projects. Gifts donated for resale are included as income when they are sold.

Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.

Page 18

KING DAVID SCHOOLS (MANCHESTER)

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

2. Accounting policies (continued)

2.4 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 settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset’s use.

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

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.

All expenditure is inclusive of irrecoverable VAT.

2.5 Government grants

Government grants relating to tangible fixed assets are treated as deferred income and released to the Consolidated statement of financial activities over the expected useful lives of the assets concerned. Other grants are credited to the Consolidated statement of financial activities as the related expenditure is incurred.

2.6 Tangible fixed assets and depreciation

Tangible fixed assets costing £2,000 or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

Tangible fixed assets are initially recognised at cost. After recognition, under the cost model, tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. All costs incurred to bring a tangible fixed asset into its intended working condition should be included in the measurement of cost.

At each reporting date the Charity assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined to be the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Page 19

KING DAVID SCHOOLS (MANCHESTER)

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

2. Accounting policies (continued)

2.6 Tangible fixed assets and depreciation (continued)

Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following bases:

2.7 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 Consolidated statement of financial activities.

Investments in subsidiaries are valued at cost less provision for impairment.

2.8 Stocks

Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.

2.9 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.

2.10 Cash at bank and in hand

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

Page 20

KING DAVID SCHOOLS (MANCHESTER)

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

2. Accounting policies (continued)

2.11 Liabilities

Liabilities and provisions 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.

Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised in the Consolidated statement of financial activities as a finance cost.

2.12 Financial instruments

The Group 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 with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.

2.13 Pensions

The Group operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Group to the fund in respect of the year.

Contributions for personal pension schemes are accounted for in the year to which they relate.

2.14 Fund accounting

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

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the Group 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.

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

Page 21

KING DAVID SCHOOLS (MANCHESTER)

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

3. 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.

Critical accounting estimates and assumptions:

The Charity 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.

The present value of the Local Government Pension Scheme defined benefit liability depends on a number of factors that are determined on an actuarial basis using a variety of assumptions. The assumptions used in determining the net cost or income for pensions include the discount rate. Any changes in these assumptions, which are disclosed in note 26, will impact the carrying amount of the pension liability. Furthermore a roll forward approach which projects results from the latest full actuarial valuation performed at 31 March 2018 has been used by the actuary in valuing the pensions liability at 31 August 2020. Any differences between the figures derived from the roll forward approach and a full actuarial valuation would impact on the carrying amount of the pension liability.

Page 22

KING DAVID SCHOOLS (MANCHESTER)

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

4. Income from donations and legacies

Donations & grants
Parental voluntary contributions
Job retention scheme grants
Tax refund
Donations & grants
Parental voluntary contributions
Tax refund		 Restricted
funds
2020
Unrestricted
funds
2020
£
£
30,461
131,068
-
741,801
-
164,294
-
163,847
30,461
1,201,010
Restricted
funds
2019
Unrestricted
funds
2019
£
£
133,503
243,493
-
848,834
-
133,671
133,503
1,225,998		 Total
funds
2020
£
161,529
741,801
164,294
163,847
1,231,471
Total
funds
2019
£
376,996
848,834
133,671
1,359,501

5. Income from charitable activities

Operation of the school
Operation of the school		 Restricted
funds
2020
Unrestricted
funds
2020
£
£
6,637,068
752,623
Restricted
funds
2019
Unrestricted
funds
2019
£
£
6,430,013
1,202,356		 Total
funds
2020
£
7,389,691
Total
funds
2019
£
7,632,369

Page 23

KING DAVID SCHOOLS (MANCHESTER)

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

6. Fundraising income

Unrestricted
funds
2020
£
Income from gala dinner
8,210
Other fundraising activities
604,952
613,162
Unrestricted
funds
2019
£
Income from gala dinner
23,676		 Total
funds
2020
£
8,210
604,952
613,162
Total
funds
2019
£
23,676

7. Investment income

Unrestricted
funds
2020
£
Investment income
753
Unrestricted
funds
2019
£
Investment income
383		 Total
funds
2020
£
753
Total
funds
2019
£
383

Page 24

KING DAVID SCHOOLS (MANCHESTER)

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

8. Analysis of expenditure on charitable activities

Summary by fund type

Operation of the school
Operation of the school		 Restricted
funds
2020
Unrestricted
funds
2020
£
£
7,335,528
2,417,036
Restricted
funds
2019
Unrestricted
funds
2019
£
£
6,863,004
2,790,215		 Total
funds
2020
£
9,752,564
Total
funds
2019
£
9,653,219

9. Analysis of expenditure by activities

Operation of the school
Operation of the school		 Activities
undertaken
directly
2020
£
6,976,822
Activities
undertaken
directly
2019
£
6,665,674		 Support
costs
2020
£
2,775,742
Support
costs
2019
£
2,987,545		 Total
funds
2020
£
9,752,564
Total
funds
2019
£
9,653,219

Page 25

KING DAVID SCHOOLS (MANCHESTER)

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

9. Analysis of expenditure by activities (continued)

Analysis of direct costs

Staff costs
Educational materials
Food & meal costs
Trips
Travel costs
Bus donations
Teacher training
Other direct costs
Staff costs
Educational materials
Food & meal costs
Trips
Travel costs
Bus donations
Teacher training
Other direct costs
Bad debt provision		 Operation
of the
school
2020
£
5,780,532
676,245
356,417
101,784
240
12,500
39,077
10,027
6,976,822
Operation of
the school
2019
£
5,217,042
703,931
486,091
213,067
718
19,172
11,587
7,607
6,459
6,665,674		 Total
funds
2020
£
5,780,532
676,245
356,417
101,784
240
12,500
39,077
10,027
6,976,822
Total
funds
2019
£
5,217,042
703,931
486,091
213,067
718
19,172
11,587
7,607
6,459
6,665,674

Page 26

KING DAVID SCHOOLS (MANCHESTER)

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

9. Analysis of expenditure by activities (continued)

Analysis of support costs

Staff costs
Depreciation
Governance
Security and transport
Repair costs
Light & heat
Loan interest
Cleaning
Printing, postage and stationery
Bank charges and interest
Insurance
Sundries
Telephone
Recharge of expenses
Legal and professional fees		 Operation
of the
school
2020
£
571,363
621,884
37,610
156,286
116,556
228,387
9,651
165,609
32,925
9,514
102,990
98,460
53,434
430,892
140,181
2,775,742		 Total
funds
2020
£
571,363
621,884
37,610
156,286
116,556
228,387
9,651
165,609
32,925
9,514
102,990
98,460
53,434
430,892
140,181
2,775,742

Page 27

KING DAVID SCHOOLS (MANCHESTER)

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

9. Analysis of expenditure by activities (continued)

Analysis of support costs (continued)

Staff costs
Depreciation
Governance
Security and transport
Repair costs
Light & heat
Loan interest
Cleaning
Printing, postage and stationery
Bank charges and interest
Insurance
Sundries
Telephone
Travel
Recharge of expenses
Legal and professional fees
Auditor's remuneration
Fees payable to the Charity's auditor for the audit of the Charity's annual
accounts		 Operation of
the school
2019
£
528,760
611,683
41,799
187,541
177,056
193,995
16,557
199,658
29,925
14,096
107,900
75,100
27,240
88,647
493,212
194,376
2,987,545
2020
£
21,550		 Total
funds
2019
£
528,760
611,683
41,799
187,541
177,056
193,995
16,557
199,658
29,925
14,096
107,900
75,100
27,240
88,647
493,212
194,376
2,987,545
2019
£
20,924

10. Auditor's remuneration

Page 28

KING DAVID SCHOOLS (MANCHESTER)

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

11. Staff costs

Wages and salaries
Social security costs
Contribution to defined contribution pension schemes		 Group
2020
£
4,941,684
400,006
1,010,205
6,351,895		 Group
2019
£
4,607,937
377,451
760,414
5,745,802

The average number of persons employed by the Charity during the year was as follows:

Teaching
Educational Support
Administration
Premises
Management
LA/SLA		 Group
2020
No.
97
94
8
6
3
5
213		 Group
2019
No.
94
77
8
5
3
6
193

The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:

Group Group
2020 2019
No. No.
In the band £60,001 - £70,000 2 2
In the band £70,001 - £80,000 1 1

The remuneration (excluding emplyer pension and NI costs) received by key management personnel of the charity was £70,805 (2019: £67,049). The remuneration received by key management personnel of the academies was £413,715 (2019: £359,736).

One or more of the Governors has been paid remuneration or has received other beneifts from an employment with the subsidiary academy trusts. The Principal and other staff governors only receive remuneration in respect of services they provide in undertaking the roles of Principal and other staff members under their contracts of employment. and not in respect of their role as Governors. The value of Governors' remuneration and other benefits is disclosed in the individual academy financial statements and are publicly available.

Page 29

KING DAVID SCHOOLS (MANCHESTER)

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

12. Trustee's remuneration and expenses

During the year, no Trustees received any remuneration or other benefits (2019 - £NIL) .

During the year ended 31 August 2020, no Trustee expenses have been incurred (2019 - £NIL) .

Page 30

KING DAVID SCHOOLS (MANCHESTER)

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

13. Tangible fixed assets

Group

Cost or valuation
At 1 September 2019
Additions
At 31 August 2020
Depreciation
At 1 September 2019
Charge for the year
At 31 August 2020
Net book value
At 31 August 2020
At 31 August 2019		 Freehold
property
Motor
vehicles
£
£
29,044,454
37,180
-
-
29,044,454
37,180
4,858,001
22,308
580,889
7,436
5,438,890
29,744
23,605,564
7,436
24,186,453
14,872		 Fixtures
and
fittings
Computer
equipment
£
£
1,054,069
312,228
-
121,432
1,054,069
433,660
935,251
312,228
17,823
15,736
953,074
327,964
100,995
105,696
118,818
-		 AUC
£
-
10,365
10,365
-
-
-
10,365
-		 Total
£
30,447,931
131,797
30,579,728
6,127,788
621,884
6,749,672
23,830,056
24,320,143

Page 31

KING DAVID SCHOOLS (MANCHESTER)

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

13. Tangible fixed assets (continued)

Charity

Cost or valuation
At 1 September 2019
At 31 August 2020
Depreciation
At 1 September 2019
Charge for the year
At 31 August 2020
Net book value
At 31 August 2020
At 31 August 2019		 Freehold
property
£
27,590,718
27,590,718
4,767,195
551,814
5,319,009
22,271,709
22,823,523		 Fixtures and
fittings
£
498,337
498,337
379,519
17,823
397,342
100,995
118,818		 Computer
equipment
£
5,130
5,130
5,130
-
5,130
-
-		 Total
£
28,094,185
28,094,185
5,151,844
569,637
5,721,481
22,372,704
22,942,341

Page 32

KING DAVID SCHOOLS (MANCHESTER)

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

14. Fixed asset investments

Group and Charity
Cost or valuation
At 1 September 2019
Revaluations
At 31 August 2020
Net book value
At 31 August 2020
At 31 August 2019		 Listed
investments
£
11,977
(27)
11,950
11,950
11,977

15. Stocks

Group Group Charity Charity
2020 2019 2020 2019
£ £ £ £
Finished goods and goods for resale 4,066 5,566 4,066 5,566

16. Debtors

Due within one year
Trade debtors
Amounts owed by group undertakings
Amounts owed by participating interests
Other debtors
Prepayments and accrued income		 Group
2020
£
6,955
-
10,155
59,902
510,876
587,888		 Group
2019
£
4,954
-
5,390
66,732
854,443
931,519		 Charity
2020
£
6,955
4,606
10,155
37,668
36,483
95,867		 Charity
2019
£
4,954
2,429
5,390
3,160
49,942
65,875

Page 33

KING DAVID SCHOOLS (MANCHESTER)

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

17. Creditors: Amounts falling due within one year

Bank overdrafts
Bank loans
Other loans
Trade creditors
Other taxation and social security
Other creditors
Accruals and deferred income
Deferred income at 1 September 2019
Resources deferred during the year
Amounts released from previous periods		 Group
2020
£
220,304
66,377
65,203
27,941
7,418
37,640
790,978
1,215,861
Group
2020
£
64,942
189,577
(64,942)
189,577		 Group
2019
£
317,406
64,008
61,721
46,121
10,092
32,813
193,574
725,735
Group
2019
£
25,121
64,942
(25,121)
64,942		 Charity
2020
£
220,304
66,377
-
26,442
7,418
4,977
258,248
583,766
Charity
2020
£
55,111
143,231
(55,111)
143,231		 Charity
2019
£
251,403
64,008
-
40,837
10,092
5,041
66,511
437,892
Charity
2019
£
6,213
55,111
(6,213)
55,111

Page 34

KING DAVID SCHOOLS (MANCHESTER)

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

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

Group
2020
£
Bank loans
215,272
Other loans
285,617
500,889
Included within the above are amounts falling due as follows:
Group
2020
£
Between one and two years
Bank loans
68,773
Other loans
285,617
Between two and five years
Bank loans
146,499		 Group
2019
£
283,292
340,335
623,627
Group
2019
£
60,701
340,335
222,591		 Charity
2020
£
215,272
285,617
500,889
Charity
2020
£
68,773
285,617
146,499		 Charity
2019
£
283,292
284,023
567,315
Charity
2019
£
60,701
284,023
222,591

Over five years

Included within creditors are balances due to lenders in respect of bank loans. At 31 August 2020 the balance is £281,632 (2019: £347,300). The interest charged on the loan is 2.5% over bank base rate. The loans are secured by a letter of set off over credit balances.

Creditors includes a concessionary loan from J Rowe, a trustee of King David Schools (Manchester), of £285,617 (2019: £284,023). The loan is subject to a 12 month and 1 day notice period and not subject to interest.

Page 35

KING DAVID SCHOOLS (MANCHESTER)

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

19. Financial instruments

Financial assets
Financial assets measured at amortised cost
Financial liabilities
Financial liabilities measured at amortised
cost		 Group
2020
£
3,586,703
Group
2020
£
1,172,917		 Group
2019
£
2,940,713
Group
2019
£
883,672		 Charity
2020
£
587,382
Charity
2020
£
648,372		 Charity
2019
£
375,694
Charity
2019
£
655,981

Financial assets measured at amortised cost comprise trade debtors, other debtors and accrued income.

Financial liabilities measured at amortised cost comprise bank loans and overdrafts, trade creditors, other creditors and accruals.

Financial assets measured at fair value through income and expenditure comprise investments and total £11,950 (2019: £11,977) for both the Group and Charity.

Page 36

KING DAVID SCHOOLS (MANCHESTER)

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

20. Statement of funds

Statement of funds - current year

Unrestricted funds
General Funds
Restricted funds
Academy funds
Donations
SEN grant
Nursery grant
Junior school prize fund
High school prize fund
Yavneh prize fund
Grant of buildings and fixtures
from BSF
Pension reserve
Total of funds		 Balance at 1
September
2019
£
3,170,700
994,362
44,478
58,917
67,226
669
205
2,155
21,661,468
(1,767,000)
21,062,480
24,233,180		 Income
£
2,403,254
6,517,540
3,248
95,935
50,806
-
-
-
-
-
6,667,529
9,070,783		 Expenditure
£
(2,252,742)
(6,192,281)
(47,726)
(154,852)
(118,032)
-
-
-
(569,637)
(253,000)
(7,335,528)
(9,588,270)		 Gains/
(Losses)
£
(27)
-
-
-
-
-
-
-
-
252,000
252,000
251,973		 Balance at
31 August
2020
£
3,321,185
1,319,621
-
-
-
669
205
2,155
21,091,831
(1,768,000)
20,646,481
23,967,666

Page 37

KING DAVID SCHOOLS (MANCHESTER)

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

20. Statement of funds (continued)

Statement of funds - prior year

Unrestricted funds
General Funds
Restricted funds
Academy funds
Donations
SEN grant
Nursery grant
Junior school prize fund
High school prize fund
Yavneh prize fund
Grant of buildings and fixtures
from BSF
Pension reserve
Total of funds		 Balance at
1 September
2018
£
2,634,864
1,552,818
-
-
-
669
205
2,155
22,234,250
(867,000)
22,923,097
25,557,961		 Income
£
2,452,413
6,392,895
44,478
58,917
67,226
-
-
-
-
-
6,563,516
9,015,929		 Expenditure
£
(1,915,086)
(6,951,351)
-
-
-
-
-
-
(572,782)
(214,000)
(7,738,133)
(9,653,219)		 Gains/
(Losses)
£
(1,491)
-
-
-
-
-
-
-
-
(686,000)
(686,000)
(687,491)		 Balance at
31 August
2019
£
3,170,700
994,362
44,478
58,917
67,226
669
205
2,155
21,661,468
(1,767,000)
21,062,480
24,233,180

Page 38

KING DAVID SCHOOLS (MANCHESTER)

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

21. Analysis of net assets between funds

Analysis of net assets between funds - current period

Tangible fixed assets
Fixed asset investments
Current assets
Creditors due within one year
Creditors due in more than one year
Provisions for liabilities and charges
Total
Analysis of net assets between funds - prior period
Tangible fixed assets
Fixed asset investments
Current assets
Creditors due within one year
Creditors due in more than one year
Provisions for liabilities and charges
Total		 Restricted
funds
2020
Unrestricted
funds
2020
£
£
23,830,056
-
-
11,950
-
3,610,410
(914,686)
(301,175)
(500,889)
-
(1,768,000)
-
20,646,481
3,321,185
Restricted
funds
2019
Unrestricted
funds
2019
£
£
21,661,468
2,658,675
-
11,977
1,168,012
1,849,410
-
(725,735)
-
(623,627)
(1,767,000)
-
21,062,480
3,170,700		 Total
funds
2020
£
23,830,056
11,950
3,610,410
(1,215,861)
(500,889)
(1,768,000)
23,967,666
Total
funds
2019
£
24,320,143
11,977
3,017,422
(725,735)
(623,627)
(1,767,000)
24,233,180

Page 39

KING DAVID SCHOOLS (MANCHESTER)

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

22. Reconciliation of net movement in funds to net cash flow from operating activities

23.

Net expenditure for the period (as per Statement of Financial Activities)
Adjustments for:
Depreciation charges
Gains on investments
Dividends, interests and rents from investments
Decrease in stocks
Decrease in debtors
Increase in creditors
Decrease in provisions
LGPS pension movement
Net cash provided by operating activities
Analysis of cash and cash equivalents
Cash in hand
Overdraft facility repayable on demand
Total cash and cash equivalents		 Group
2020
£
(517,514)
621,884
27
(753)
1,500
344,027
716,818
(122,738)
253,000
1,296,251
Group
2020
£
3,018,456
(220,304)
2,798,152		 Group
2019
£
(638,781)
611,683
1,491
(383)
5,111
607,799
159,178
(118,341)
214,000
841,757
Group
2019
£
2,081,966
(317,406)
1,764,560

Page 40

KING DAVID SCHOOLS (MANCHESTER)

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

24. Analysis of changes in net debt

Cash at bank and in hand
Bank overdrafts repayable on demand
Loan due within 1 year
Loans due after 1 year		 At 1
September
2019
£
2,080,337
(317,406)
(125,729)
(623,627)
1,013,575		 Cash flows
£
938,119
97,102
131,880
1,594
1,168,695		 Other non-
cash
changes
At 31
August 2020
£
£
-
3,018,456
-
(220,304)
(137,731)
(131,580)
121,144
(500,889)
(16,587)
2,165,683

25. Pension commitments

The Charity operates a defined contribution pension scheme. Contributions totalling £1,883 (2019: £1,982) were payable to the fund at the balance sheet date and are included in creditors.

The Group operates a defined benefit pension scheme.

The academies' employees belong to two principal pension schemes: the Teachers' Pension Scheme for England and Wales (TPS) for academic and related staff; and the Local Government Pension Scheme (LGPS) for non-teaching staff, which is managed by Hymans Robertson LLP. Both are multi-employer defined benefit schemes.

The latest actuarial valuation of the TPS related to the period ended 31 March 2016 and of the LGPS 31 March 2018.

There were no outstanding or prepaid contributions at either the beginning or the end of the financial year.

Teachers' Pension Scheme

The Teachers' Pension Scheme (TPS) is a statutory, contributory, defined benefit scheme, governed by the Teachers' Pension Scheme Regulations 2014. Membership is automatic for full-time teachers in academies and, from 1 January 2007, automatic for teachers in part-time employment following appointment or a change of contract, although they are able to opt out.

The TPS is an unfunded scheme and members contribute on a 'pay as you go' basis - these contributions along with those made by employers are credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament.

The Government Actuary, using normal actuarial principles, conducts a formal actuarial review of the TPS in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014 published by HM Treasury every 4 years. The aim of the review is to specify the level of future contributions. Actuarial scheme valuations are dependent on assumptions about the value of future costs, design of benefits and many other factors. The latest actuarial valuation of the TPS was carried out as at 31 March 2016. The valuation report was published by the Department for Education on 5 March 2019.

Page 41

KING DAVID SCHOOLS (MANCHESTER)

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

25. Pension commitments (continued)

The key elements of the valuation and subsequent consultation are:

  1. employer contribution rates set at 23.68% of pensionable pay (including a 0.08% administration levy) 2. total scheme liabilities (pensions currently in payment and the estimated cost of future benefits) for service to the effective date of £218,100 million and notional assets (estimated future contributions together with the notional investments held at the valuation date) of £196,100 million, giving a notional past service deficit of £22,000 million

  2. the SCAPE rate, set by HMT, is used to determine the notional investment return. The current SCAPE rate is 2.4% above the rate of CPI, assumed real rate of return is 2.4% in excess of prices and 2% in excess of earnings. The rate of real earnings growth is assumed to be 2.2%. The assumed nominal rate of return including earnings growth is 4.45%.

The next valuation result is due to be implemented from 1 April 2023.

The employer's pension costs paid to TPS in the year amounted to £595,356 (2019 - £529,330).

A copy of the valuation report and supporting documentation is on the Teachers' Pensions website (https://www.teacherspensions.co.uk/news/employers/2019/04/teachers-pensions-valuation-report.aspx).

Under the definitions set out in FRS 102, the TPS is an unfunded multi-employer pension scheme. The academy has accounted for its contributions to the scheme as if it were a defined contribution scheme. The academy has set out above the information available on the scheme.

Local Government Pension Scheme

The LGPS is a funded defined benefit pension scheme, with the assets held in separate trustee administered funds. The total contribution made for the year ended 31 August 2020 was £173,000 (2019 - £174,000), of which employer's contributions totalled £77,000 (2019 - £78,000) and employees' contributions totalled £47,000 (2019 - £46,000). The agreed contribution rates for future years are 19.1 per cent for employers and 5.5 - 12 per cent for employees.

As described in note the LGPS obligation relates to the employees of the academy, who were the employees transferred as part of the conversion from the maintained school and new employees who were eligible to, and did, join the Scheme in the year. The obligation in respect of employees who transferred on conversion represents their cumulative service at both the predecessor school and the academy at the balance sheet date.

Parliament has agreed, at the request of the Secretary of State for Education, to a guarantee that, in the event of academy closure, outstanding Local Government Pension Scheme liabilities would be met by the Department for Education. The guarantee came into force on 18 July 2013.

Page 42

KING DAVID SCHOOLS (MANCHESTER)

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

25. Pension commitments (continued)

Principal actuarial assumptions at the Balance sheet date (expressed as weighted averages):

At 31 At 31 August
August 2020 2019
% %
Discount rate 1.7 1.8
Rate of increase in salaries 3.0 3.1
Rate of increase for pensions in payment/inflation 2.2 2.3
At 31 At 31 August
August 2020 2019
Years Years
Mortality rates (in years)
- for a male aged 65 now 20.5 20.6
- at 65 for a male aged 45 now 22.0 22.0
- for a female aged 65 now 23.1 23.1
- at 65 for a female aged 45 now 25.0 24.8

The Group's share of the assets in the scheme was:

At 31
August 2020
£
Equities
2,291,600
Gilts
539,200
Property
235,900
Cash and other liquid assets
303,300
Total fair value of assets
3,370,000		 At 31 August
2019
£
2,169,200
340,810
274,870
405,120
3,190,000

The actual return on scheme assets was £(33,000) (2019 - £59,000) .

The amounts recognised in the Consolidated Statement of Financial Activities are as follows:

Page 43

KING DAVID SCHOOLS (MANCHESTER)

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

25. Pension commitments (continued)

Movements in the present value of the defined benefit obligation were as follows:

Opening defined benefit obligation
Contributions by scheme participants
Actuarial gains
Benefits paid
Current service costs
Interest cost
Closing defined benefit obligation		 2020
£
4,957,000
47,000
(285,000)
(45,000)
371,000
93,000
5,138,000

Movements in the fair value of the Group's share of scheme assets were as follows:

Opening fair value of scheme assets
Interest income
Actuarial losses
Contributions by scheme participants
Benefits paid
Employer contributions
Closing fair value of scheme assets		 2020
£
3,190,000
59,000
(33,000)
47,000
(45,000)
152,000
3,370,000

26. Operating lease commitments

At 31 August 2020 the Group and the Charity had commitments to make future minimum lease payments under non-cancellable operating leases as follows:

Not later than 1 year
Later than 1 year and not later than 5 years		 Group
2020
£
4,329
4,672
9,001		 Group
2019
£
5,256
5,256
10,512

Page 44

KING DAVID SCHOOLS (MANCHESTER)

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

27. Related party transactions

During the year J Rowe, a Director of the Trustee Company advanced £51,594 (2019: £nil) and was repaid £50,000 (2019: £nil) of the loan owed to him. The amount due to him at the year end was £285,617 (2018: £284,023). This loan is unsecured and interest free.

During the year J Rowe donated £96,000 (2019:96,000) to the charity.

During the year, King David High School, which has trustees common to the directorships of the Trustee Company, was recharged cleaning and caretaking costs to the value of £19,548 (2019: £3,258) by King David Schools. In addition the charity recharged catering costs amounting to £15,290 (2019: £33,492), decorating and repair costs of £nil (2019: £5,000) and trip expenses of £786 (2019: £nil). They also recharged sundry costs of £nil (2019: £577) and paid voluntary contributions of £25,607 (2019: £nil). The High School recharged the charity £nil (2019: £3,339) in the year. During the year, King David Schools loaned the High School £51,594. £50,000 was repaid in the year leaving a balance due to the charity at the year end of £1,629 (2019: £nil).

During the year, general donations of £553,000 (2019: £141,740) and restricted donations of £508,136 (2019: £483,450) to fund religious education and SEN teaching were made to King David High School to fund religious education and SEN teaching. Of the general donations, £100,000 (2019: £NIL) was in creditors at the balance sheet date.

During the year King David Primary School, which has trustees common to the directorships of the Company, was recharged caretaking costs to the value of £9,600 (2019: £1,600) by King David Schools. In addition the charity recharged catering costs amounting to £55,229 (2019: £83,270), and sundry costs of £979 (2019: £871 ). The charity also recharged decorating and repair costs of £nil (2019: £1,200) to the school. The Primary School recharged £nil (2019: £1,918) in the period. The balance due to the charity at the year end was £505 (2019: £800).

During the year, King David Schools (Manchester) Charitable Trust provided donations to the value of £184,900 (2019: £187,900) to King David Primary School.

During the year, King David Resources Limited, a company in which J Rowe and A Berkely are Directors, was recharged cleaning costs of £2,032 (2019: 21,094) and loaned £5,000. The balance due to the charity at the year end was £10,155 (2019: £5,390).

Page 45

KING DAVID SCHOOLS (MANCHESTER)

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

14. Fixed asset investments (continued)

28. Principal subsidiaries

The following were subsidiary undertakings of the Charity:

Names Company Registered office or principal Principal activity Included in
number place of business consolidation
The King David High 07716057 Eaton Road, Crumpsall, Secondary education Yes
School Manchester, M8 5DY
The King David 08424154 Wilton Polygon, Bury Old Road, Primary education Yes
Primary School Manchester, M8 5DJ

The financial results of the subsidiaries for the year were:

Names Income Expenditure Profit/(Loss) Net assets
£ £ / Surplus/ £
(Deficit) for
the year
£
The King David High School 6,483,304 6,588,872 26,432 2,424,841
The King David Primary School 2,573,549 2,528,295 165,254 (353,796)

The charity has the right to appoint/ remove members and governors of the consolidated entities and as such has control.

Page 46