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2021-08-31-accounts

REGISTERED COMPANY NUMBER: 00050404 (England and Wales) REGISTERED CHARITY NUMBER: 529686

REPORT OF THE TRUSTEES AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2021

FOR

SCARBOROUGH COLLEGE LIMITED

SCARBOROUGH COLLEGE LIMITED

CONTENTS OF THE FINANCIAL STATEMENTS for the year ended 31 August 2021

Page
Report of the Trustees 1 to 9
Report of the Independent Auditors 10 to 13
Statement of Financial Activities 14
Balance Sheet 15 to 16
Cash Flow Statement 17
Notes to the Cash Flow Statement 18
Notes to the Financial Statements 19 to 34

SCARBOROUGH COLLEGE LIMITED

REPORT OF THE TRUSTEES for the year ended 31 August 2021

The trustees who are also directors of the charity for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 31 August 2021. The trustees have adopted the provisions of 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).

OBJECTIVES AND ACTIVITIES

Objectives and aims

The objects of the Company, in accordance with its Articles and Memorandum of Association, are to establish and conduct in Scarborough, and elsewhere, a Day and Boarding School or Schools for Boys and Girls (aged 3 to 18 years) in which there shall be given a sound education, combined with a moral and religious input.

Aims and Intended Impact

The Company's vision is to be a recognised leader in British independent education.

Mission Statement

The Company's commitment is to discover and fully realise every child's potential by ensuring that all pupils are seen as individuals whose specific needs are recognised and met. We are dedicated to providing a far-reaching education that goes beyond the boundaries of the classroom, underpinned by strong lifelong values, which inspires academic excellence and ensures pupils are challenged. Regular opportunities to understand their own capabilities through exposure to a broad range of sporting, cultural and creative activities, widens our pupils' horizons and builds their self-confidence. Within our outward-facing, grounded and caring community the relationships that exist nurture tolerant, honest and compassionate people who will make a genuine difference in their futures beyond the confines of our school.

Aims of the Company

Scarborough College seeks:

The main objectives remain unchanged and are to achieve excellent public examination results, to continue with the successful work related to the International Baccalaureate programme, to enhance the boarding provision, and to strengthen even further the College's links with the community.

The Scarborough College strategy is to continue to develop the school's facilities, both physical and intellectual, for providing an excellent education for its students. The enhancement of the school facilities will be driven through property development activity which is given in greater detail in the Future Plans section of this report.

Significant activities

The principal activity continues to be the provision in Scarborough of independent education for both boarding and day children between the ages of 3 to 18 years old. The Prep School takes boys and girls from 3 to 11 years of age and also operates a pre-school nursery (Little Owls). The Senior School provides for students aged 11 to 18 years. For this academic year the student population was 445, not including younger children attending the nursery.

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SCARBOROUGH COLLEGE LIMITED

REPORT OF THE TRUSTEES for the year ended 31 August 2021

OBJECTIVES AND ACTIVITIES

Public benefit

The College is committed to its responsibility of a leading and integral role within the Scarborough community and its neighbouring communities. By working closely together with various stakeholders, such as schools, charities and other organisations within these communities, the College will continue to achieve public benefit. The company has complied with the duty in section 17(5) of the 2011 Charities Act to have due regard to guidance published by the Charity Commission.

The Company continues to take an important role in many areas of support to the local community and, in particular, to sport. Following the council's recent permission to allow third-party users, it is the Company's intention to have the all-weather pitch used by both Scarborough Hockey Club and any local sports clubs for a nominal fee.

The summer is, normally, exceptionally busy with local cricket matches, a cricket festival arranged in partnership with Scarborough Cricket Club and the Scarborough Athletic Club using the field for athletics including the long jump and running, all of which use the College facilities and minibuses. The College hosts children from other schools of the area for cross country running competitions, hockey and football trials. This has obviously reduced due to the impact of COVID-19. Bramcote Sports Hall, Deepdale playing fields and the company's main playing fields and tennis courts are available and are used by clubs such as Scarborough Cricket Club, Scarborough Football Club and Yorkshire County Cricket Club.

Where possible, the Company seeks to let other areas of its campus to local schools free of charge. Lisvane Hall Centre of Performing Arts and the Science Block, in particular, are used by local primary schools for their (nativity) productions, Science days and the Tykes in Tune event, which is hosted by Scarborough College. Other companies that let these premises at nominal charges are Welcome to Yorkshire, The English Chess Federation and the Yorkshire Cricket Board. The Company is currently in talks with York and Scarborough Teaching Hospitals for use of its premises.

Although the global pandemic has halted and restricted many of the activities outlined above, it has not stopped the company from exploring its public benefit to the community. Early on, the Design and Technology Department used its resources to create plastic visors for local surgeries and nursing homes. The plastic designed to manufacture these visors was purchased and donated by the Marketing Department. In conjunction with Scarborough Rugby Club, one of the vaccination centres in North Yorkshire, and Age UK, the company used its idle fleet of minibuses to transport many elderly and disabled members of the community to reach their vaccinations free of charge. These minibuses were driven by various different members of staff, including the College drivers.

Community Service

Pupils of all age groups within Scarborough College share a sense of community service. Together with the Friends of Scarborough College parents' group, there are a number of fundraising activities throughout the entire school, including the Harvest Festival and the MacMillan Cancer Trust. Both initiatives directly benefit the local community with the Harvest Festival proceeds going the Rainbow Centre in Scarborough and part of the MacMillan Big Breakfast allocated to local children.

In the senior school, activities within the Duke of Edinburgh's and the Sixth Formers' CAS (Creativity, Activity and Service) support local, regional and international charities and causes. It is an essential part of both the D of E as well as the International Baccalaureate Diploma Programme. Charitable donations from fund raising activities amount to £4,445 in the year.

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SCARBOROUGH COLLEGE LIMITED

REPORT OF THE TRUSTEES for the year ended 31 August 2021

OBJECTIVES AND ACTIVITIES

Bursary and scholarship awards

It is important to us that access to the education we offer is not restricted to those who can afford our fees. We believe our pupils benefit from learning within a diverse community. Learning occurs through social interaction, conversation and shared experiences which help our pupils develop an understanding of the perspectives of other people that will be vital in their adult lives.

Our bursary policy together with our out-reach work contribute to a widening of access to the education we offer and the facilities we enjoy.

Bursaries

The governors view our bursary awards as important in helping to ensure children from families who would otherwise not be able to afford the fees can access the education offered by Scarborough College. Our bursary awards are available to all who meet our general entry requirements and are made solely on the basis of parental means or to relieve hardship where a pupil's education and future prospects would otherwise be at risk, for example, in the case of redundancy. In assessing means the College takes a number of factors into consideration including family income, investments and savings, and family circumstances, for example, dependent relatives and the number of siblings.

Those wishing to be considered for bursary support are required to complete a Bursary Application giving full details of their financial situation, supported by original documents. Bursary remission on fees is assessed according to the guardians' ability to pay full fees and the availability of bursary funds to the College. Bursary awards are subject to the annual testing of the guardians' means.

This year the value of means tested bursaries totalled £618,881 and represented 9% of our gross fees. They provided assistance to 112 pupils, representing 26% of the school roll.

Non means-tested fee remissions

The purpose of our scholarship awards is to recognise high academic, musical, and sporting potential or ability to excel in our co-curricular activities. Our scholarships are awarded on the basis of the aforementioned abilities which will contribute to our co-curricular activities; awards may be subject to conditions. Scholarships are awarded with a fixed remission of fees of between 10% and 100%. Where further assistance is required, scholarship awards may be supplemented by a means-tested bursary. The value of Scholarships in the school year totalled £481,112 awarded to 119 pupils.

Other forms of non means-tested assistance were also awarded during the academic year, including sibling and staff discounts. In total these awards were made to 133 pupils and amounted to £400,683.

The progress of pupils receiving scholarships is reviewed at least annually to ensure their progress is in line with abilities. No scholarships were withdrawn in the year as a result of reviews.

HMC Scholars

In the early 1990s, as communism collapsed in eastern Europe, the Headmasters' and Headmistresses' Conference (HMC) supported a sixth form scholarship scheme to provide educational opportunities for young people in countries that had been behind the Iron Curtain. HMC Projects, as it was called, aimed to identify talented 16 and 17 year olds and give them the opportunity to study and live at a British boarding school. The aim of the scholarship programme is to foster bonds of understanding and friendship between young people across Europe and to give young people from the former communist countries in Central and Eastern Europe an enriching and rewarding experience in some of the best schools in the world. In 2019 Scarborough College first offered a place to a scholar. By 2021 the College had 3 scholars in Year 13 and 3 in Year 12. The value of such Scholarships in the school year totalled £170,190.

Royal SpringBoard

Royal SpringBoard is the UK's largest bursary charity, helping disadvantaged and vulnerable children from across the UK to access fully funded bursaries at leading schools. It is a social mobility charity focusing on harnessing the power of educational opportunities at some of the UK's leading schools to benefit young people who need them the most. In 2019 Scarborough College supported 3 pupils from across the UK by giving them access to a life-changing education. The value of such Scholarships in the school year totalled £56,769.

Our ethos; a caring College serving our local community and society

The governors are responsible for setting a strategy for achieving the objectives they have set. The focus of our strategy is on the development of our pupils, their continued high levels of academic and co-curricular achievement and to further widen access to the education the College provides.

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SCARBOROUGH COLLEGE LIMITED

REPORT OF THE TRUSTEES for the year ended 31 August 2021

OBJECTIVES AND ACTIVITIES

Scarborough College is a charitable trust which seeks to benefit the public through the pursuit of its stated aims. The fees are set at a level to ensure the financial viability of the College, and at a level that is consistent with our aim of providing a first class education to boys and girls from all backgrounds of the local community and beyond. To admit a prospective pupil we need to be satisfied that the College will be able to educate and develop him/her to the best of their potential and in line with the general standards achieved by their peers. Entrance assessments and interviews are undertaken to satisfy the College and parents that potential pupils can cope with the pace of learning and benefit from the education provided. An individual's economic status, gender, ethnicity, race, religion or disability do not form part of the assessment process.

The College is an equal opportunity organisation and is committed to a working environment that is free from any form of discrimination on the grounds of colour, race, ethnicity, religion, sex, sexual orientation or disability. The College makes reasonable adjustments to meet the needs of staff or pupils who are or become disabled, The College is committed to safeguarding and promoting the welfare of the pupils and expects all staff and volunteers to share this commitment.

Parents are given regular information about their children's social and academic progress through parent evenings in addition to the traditional end of term and year reports. The College maintains regular contact with parents throughout the year through informal contacts and the fortnightly newsletter (The Owl). All pupils have a Form Tutor responsible for pastoral care and academic development.

Volunteers

The Friends of Scarborough College, and the Old Scardeburgians Association (OSA) both continue to support the College in many ways. Both groups fund raise to support projects in the College including enhancement of the facilities. The OSA also holds regular functions to bring present and past pupils together both through sport and socially. Furthermore, the OSA sponsor scholarships as part of the scholarship and bursary scheme operated by the College. The Board continues to be extremely grateful for all their efforts, and the enthusiastic support of both groups creates a strong bond between the College and parents, helping to strengthen community spirit.

STRATEGIC REPORT

Achievement and performance

The public examination results this year continue to be excellent. Students were successful at gaining places at the top universities. At GCSE, 96% of students passed 5 or more GCSEs at grades A* to C (9-4) At IB, 36% of our students achieved 38 points or more, with an average IB score of 35.3 which was above the world average of 33.02 points.

In accordance with its mission, the College continues to provide excellent quality in music, art and performing arts lessons, as well as sports coaching. The College's representative teams in the main sports achieve successes sometimes beyond what could be expected with regard to current funds and facilities compared to those of the opponents

Both the depth of activities as well as the qualities of the activities is highlighted by the College's Enrichment Programme, and Yorkshire Grit.

Cricket Centre of Excellence

The Cricket Centre of Excellence is a partnership between Scarborough College and Pro Coach Yorkshire Cricket Academy. Pupils benefit from first-class facilities, such as training at Headingley, as well as first class coaching. The College has 2 former international cricketers as coaches and a number of coaches with either First Class Cricket or Minor County experience.

The tailor-made programme ensures that the needs of the players are met and addresses all aspects of what makes a successful cricketer. As well as aiming to get players to get involved in matches of a suitably high calibre, the programme also focuses on facets such as strength and conditioning and nutritional advice

Golf Centre of Excellence

With the College grounds adjacent to the grounds of South Cliff Golf Club, the school has formed a partnership to help develop players from beginners to those aiming for a professional career. Mr Ivan Oliver, the Head Pro, has been working with Scarborough College as part of our Yorkshire Grit programme as well as school fixtures. In 2020 this success saw the launch of the Golf Centre of Excellence.

The Golf Centre of Excellence provides athlete specific and individual development in small groups and one-to-one sessions. The training regime takes into account fitness, strength and conditioning, nutrition and playing ability and progress. Players have an opportunity to play in club-based competitions as well as the opportunity to represent Scarborough College against other schools.

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SCARBOROUGH COLLEGE LIMITED

REPORT OF THE TRUSTEES for the year ended 31 August 2021

STRATEGIC REPORT Financial review

The full financial statements and the Auditors' Report can be found in the accompanying Annual Accounts for the year.

The College produced a deficit in 2020-2021 of £652,658. This does include income of £2,990 relating to the fair value adjustment on the defined benefit pension scheme. It also includes a provision of £450,000 for an exceptional item relating to ongoing litigation surrounding the historic use of a since demolished building. In addition, there is also a one-off impairment provision of £94,400 relating to the part of the College's estate. It is planned that the College will next year be once again in surplus and hoped that this position can be maintained for future years.

The principal source of income is fees accounting for 95% of the College's total income. The governors are continuing their strategy of deploying all net incoming resources to investing in the educational purposes and fabric of the College.

As a charity the parents of the pupils have the assurance that all income of the College must be applied for educational purposes. As an educational charity we enjoy tax exemption on our educational activities and on our investment income and gains, provided these are applied for our charitable aims. As a charity we are also entitled to an 80% reduction in our business rates on the property we occupy for our charitable purposes. The financial benefits we receive from these tax exemptions are all applied for the educational purposes and indirectly help us to maintain our bursary policy and out-reach programme.

However, as an educational charity, we are unable to reclaim VAT input tax on our costs as we are exempt for VAT purposes. We also pay tax as an employer through the national insurance contributions we make.

In additional to the very substantial benefits the College brings to our pupils, the local community and society through the education we offer, our bursary programme and our out-reach work create a social asset without a cost to the Government.

Developments and Maintenance

Due to COVID-19 many major projects had to be put on hold this year. However, the College is committed to the continuation and final re-roofing works and continuing the window replacement.

Key Performance Indicators

2021 2020 2019 2018 2017
IB exam pass rate 100% 81% 80% 88% 88%
GCSE exam pass rate (9-4) 96% 89% 90% 89% 88%
Net fee income (£000) 5,431 4,709 4,888 4.989 4,416
Non fee income (£000) 258 621 191 888 264
Net incoming (outgoing) resources
before fair value adjustments
(£000) (655) (23) (258) 736 228
Capital expenditure (£000) 173 416 3,106 507 333

Reserves Policy

The governors regularly review the finances, budgets and spend against budget together with a cash flow analysis as part of the effective stewardship of the College.

In common with other independent schools, the governors have invested substantial sums into the College buildings and have a continuing programme of refurbishment and development to maintain the excellent teaching facilities for our pupils.

The Company's unrestricted funds stood at £2,299,310 at the year end, and these were wholly deployed in funding the College's Capital Expenditure on the premises and equipment. The company's restricted funds stood at £75,976 at the year end.

The policy of the trustees and the directors of Scarborough College is to aim to retain reserves of £1.3 million or more. This is equivalent to approximately three months' expenditure, by means of annual operating surpluses, subject to the prior demands of further capital and revenue expenditure needed to maintain the high standard of the educational facilities provided at the College.

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SCARBOROUGH COLLEGE LIMITED

REPORT OF THE TRUSTEES for the year ended 31 August 2021

STRATEGIC REPORT

Future plans

The governors intend to continue their current strategies of maintaining the College's position in a competitive market by investing to provide high quality education for our pupils. Achieving a high standard of academic results is a constant aim whilst maintaining the breadth and depth of the education provided.

The Headmaster and senior staff continue to review the curriculum to ensure that the educational qualifications remain appropriate for our pupils' development.

The governors need to maintain an equitable balance ensuring our current pupils benefit whilst, at the same time, ensuring a sound infrastructure and financial base are preserved for the next generation of pupils in the same way as our current pupils benefit today from past investment.

The governors view our bursary and scholarship awards as important in widening our access to the education our College provides.

Maintaining and, where necessary, developing the fabric and facilities of the College are central to our strategy. Our plans are primarily focused on the completion of the main college re-roofing works, replacement of windows and the development of boarding houses.

We have a programme of planned maintenance and investment with the upgrading of our art block, theatre and science laboratories a priority.

During and after the financial year end there has been a global pandemic, COVID 19, which has affected all businesses. It has in turn affected Scarborough College which went into lock down prior to the 2020 Easter holidays and at the start of the January 2021 term. The College successfully implemented an online educational programme for all pupils and continues to do so.

Although COVID-19 remains active, the College fully re-opened in September 2020 in line with Government guidance and pupil numbers still remain extremely buoyant throughout and predictions for September 2021 looking healthy.

QUALIFYING THIRD PARTY INDEMNITY PROVISIONS

The College has arranged qualifying third party indemnity for all of its directors.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document

The company is governed by its Memorandum and Articles of Association first issued on 4 December 1896 and filed at Companies House most recently on 29 September 2018.

Governing Body

The directors, who are also the charity trustees, are responsible for the overall management and control of the College and meet four times a year at various sub committees, and also four times a year as the full board. The work of implementing their policies is carried out through several governors’ sub committees. The sub committees include a Finance and Management Committee, Education and Welfare Committee, and a Marketing Committee. The Board is a self-appointing body, and directors are elected at a full directors' meeting of the Company. The College Business Manager is responsible for co-ordination the work of the governors and their Committees, preparation of papers and management accounts, and the review of matters arising.

Recruitment and appointment of new trustees

The Governing body requires breadth and depth of experience to carry out its duties effectively and efficiently. When recruiting new governors, the important attribute is a passion for the work of the College and an understanding of education as a holistic and rounded experience of personal growth. Where possible the governors consider that the skills and experience of the Board should comprise of the following:

A governor with a legal background. A governor with a financial/accounting background. A governor with education experience and background. A governor with senior managerial or business experience. A governor with HR/employment law experience. A governor with property/surveying experience.

On appointment, new governors are inducted into the workings of the Board and their responsibilities as directors, charity trustees and school governors. The Charity has no formal governor training procedures in place. However, governors are encouraged to attend training courses and seminars run by AGBIS (The Association of Governing Bodies of Independent Schools). Additionally, governors are encouraged to take a full part in the activities of the College including attendance at concerts and sports events, plus time in the classroom observing lessons.

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SCARBOROUGH COLLEGE LIMITED

REPORT OF THE TRUSTEES for the year ended 31 August 2021

STRUCTURE, GOVERNANCE AND MANAGEMENT Other relationships

The Headmaster is a member of the Society of Heads, attending the society conference which is an opportunity to share expertise, knowledge and experience across the independent school sector. The conference also permits appropriate representation to Government and regulators of the views of the sector. The College is also a member of IAPS and BSA, whilst also holding IB World School status.

Organisational management

The governors and trustees meet as a Board at least four times a year (October, December, March and June) to determine the general policy of the Company and review the overall management and control, for which they are legally responsible. The work of implementing most of their policies is carried out by the Finance and Management Committee, chaired by Mr A S Green, and which meets regularly prior to each meeting of the full Governing Board, and on other occasions when necessary to regulate the administration of the College. The other principal committee is the Education and Welfare Committee, which as its title indicates, focuses on matters relating to education/curriculum and welfare.

The governors determine the general policy of the College but the day to day running of the College is delegated to the Headmaster, supported by the Senior Management Team. The Headmaster undertakes the key leadership role overseeing educational, pastoral and administrative functions in consultation with the senior staff. The day to day administration of both the Prep and Senior schools is undertaken within the policies and procedures approved by the governors which provide for only significant expenditure decisions and major capital projects to be referred to the governors for prior approval. The approval process is detailed within the Financial Regulations of the College.

The Headmaster oversees the recruitment of all educational staff, whilst, under delegated authority, the Business Manager oversees the recruitment of administrative and non-teaching support staff. The Headmaster, Head of the Prep School and Business Manager attend governors' meetings.

Key management personnel

The governors consider that they, together with the Headmaster, The Business Manager and the Prep School Headmaster comprise the key management personnel (see note 12 to the accounts). The governors give of their time freely and the pay and the remuneration of the Headmaster and senior staff is set by the Board and is kept under annual review.

The College operates banded salary ranges for all staff including senior staff. The banded ranges are benchmarked against those of other independent schools. This allows the College to remain an attractive employer in the independent school sector.

The bands are reviewed annually and generally an inflationary increase is applied. This is dependent upon the financial success of the College and also increases being offered in similar schools. Progression within the bands is based upon performance for all levels of staff.

Related parties

None of the governors receives remuneration or other benefits from their work with the College. Any contractual relationships must be disclosed and notes of interest are retained in written form.

Three of the governors had children enrolled in the school during the year with the fees payable at normal published rates. This does not affect their capability to make independent and fair decisions but, if there is a specific situation where there may be conflicted interests, governors will remove themselves from meetings.

One of the governors, Mr R Guthrie, is a director and person with significant control of Broadland Properties Limited. During the year a sum of £60,000 (2020: £60,000) was paid to Broadland Properties for property rental on an arm's length basis.

Risk management

The governors and the Board of Scarborough College, with particular assistance from the College Finance and Management Committee, have examined the principal areas of the College's operations and have considered the major areas of strategic, operational and business risk which the College faces. The Directors actively review the major risks that may arise on a regular basis, as well as the systems and procedures established to manage them, ensuring that those risks already identified can be mitigated. All of the identified risks are contained within the College Risk Management Summary.

REFERENCE AND ADMINISTRATIVE DETAILS

Scarborough College Limited is a charitable company, incorporated in 1896 as a private limited company, which founded the school in 1898 and was subsequently placed on the Register of Charities in 1962.

Registered Company number

00050404 (England and Wales)

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SCARBOROUGH COLLEGE LIMITED

REPORT OF THE TRUSTEES for the year ended 31 August 2021

Registered Charity number 529686 Registered office Filey Road Scarborough North Yorkshire YO11 3BA Trustees Mrs R S Clements J A Cliffe S N Fairbank Mrs V J Gillingham A S Green R Guthrie J R Marshall Dr J Renshaw Dr I G H Renwick (resigned 9.10.21) J S Rowlands J F W Swiers G N M Young J J Cook (resigned 20.9.20) Company Secretary Miss A J Higgins Auditors Moore Statutory Auditors Chartered Accountants 12 Alma Square Scarborough North Yorkshire YO11 1JU Bankers Lloyds 1 St Nicholas Street Scarborough North Yorkshire YO11 2YY Solicitors Lupton Fawcett Denison Till Yorkshire House East Parade Leeds LS1 5BD

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

STATEMENT OF TRUSTEES' RESPONSIBILITIES

The trustees (who are also the directors of Scarborough College Limited for the purposes of company law) are responsible for preparing the Report of the Trustees and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

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SCARBOROUGH COLLEGE LIMITED

REPORT OF THE TRUSTEES for the year ended 31 August 2021

STATEMENT OF TRUSTEES' RESPONSIBILITIES - continued

Company law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing those financial statements, the trustees are required to

The trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as the trustees are aware:

Report of the trustees, incorporating a strategic report, approved by order of the board of trustees, as the company directors, on 6 January 2022 and signed on the board's behalf by:

Dr J Renshaw - Trustee

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REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF SCARBOROUGH COLLEGE LIMITED

Opinion

We have audited the financial statements of Scarborough College Limited (the 'charitable company') for the year ended 31 August 2021 which comprise the Statement of Financial Activities, the Balance Sheet, the 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 (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Emphasis of matter

We draw attention to notes 24 and 28 which relate to a legal provision made in these accounts. Our opinion is not qualified in this respect.

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 Report of the Independent Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF SCARBOROUGH COLLEGE LIMITED

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Trustees.

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

Responsibilities of trustees

As explained more fully in the Statement of Trustees' Responsibilities, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

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REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF SCARBOROUGH COLLEGE LIMITED

Our responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Independent Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the charity.

Our approach was as follows:

We obtained an understanding of the legal and regulatory requirements applicable to the charity and considered that the most significant are the Companies Act 2006, Charities Statement of Recommended Practice, UK financial reporting standards as issued by the Financial Reporting Council, employment, environmental and health and safety legislation.

We obtained an understanding of how the charity complies with these requirements by discussions with management and those charged with governance and inquired as to any known or suspected instances of non-compliance with laws and regulations.

We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance and considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

To address the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

Due to the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement on the financial statements or non-compliance with regulation.

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 Report of the Independent Auditors.

Page 12

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF SCARBOROUGH COLLEGE LIMITED

Use of our report

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Sarah-Jane Sargent (Senior Statutory Auditor) for and on behalf of Moore Statutory Auditors Chartered Accountants 12 Alma Square Scarborough North Yorkshire YO11 1JU

6 January 2022

Page 13

SCARBOROUGH COLLEGE LIMITED

STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING AN INCOME AND EXPENDITURE ACCOUNT) for the year ended 31 August 2021

Notes
INCOME AND ENDOWMENTS
FROM
Donations and legacies
3
Charitable activities
6
Provision of education
Other trading activities
4
Investment income
5
Other income
Total
EXPENDITURE ON
Raising funds
7
Charitable activities
8
Provision of education
Other
10
Total
Net gains/(losses) on investments
NET
INCOME/(EXPENDITURE)
Transfers between funds
25
Other recognised gains/(losses)
Actuarial gains/(losses) on defined
benefit schemes
Net movement in funds
RECONCILIATION OF FUNDS
Total funds brought forward
TOTAL FUNDS CARRIED
FORWARD		 Unrestricted
funds
£
6,558
5,283,989
189,250
1,154
54,689
5,535,640
423,551
5,283,795
489,529
6,196,875
-
(661,235)
6,000
2,990
(652,245)
2,951,555
2,299,310		 Restricted
funds
£
6,000
147,118
-
-
-
153,118
-
147,141
-
147,141
-
5,977
(6,000)
-
(23)
75,897
75,874		 Endowment
fund
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
102
102		 2021
Total
funds
£
12,558
5,431,107
189,250
1,154
54,689
5,688,758
423,551
5,430,936
489,529
6,344,016
-
(655,258)
-
2,990
(652,268)
3,027,554
2,375,286		 2020
Total
funds
£
8,914
4,709,138
148,050
6,684
457,714
5,330,500
341,077
5,012,066
-
5,353,143
(2)
(22,645)
-
(3,855)
(26,500)
3,054,054
3,027,554

The notes form part of these financial statements

Page 14

SCARBOROUGH COLLEGE LIMITED

BALANCE SHEET 31 August 2021

Unrestricted
funds
Notes
£
FIXED ASSETS
Intangible assets
15
39,026
Tangible assets
16
7,288,116
7,327,142
CURRENT ASSETS
Stocks
17
7,174
Debtors
18
4,318,774
Cash at bank
1,105,962
5,431,910
CREDITORS
Amounts falling due within one year 19
(6,982,083)
NET CURRENT ASSETS
(1,550,173)
TOTAL ASSETS LESS
CURRENT LIABILITIES
5,776,969
CREDITORS
Amounts falling due after more than
one year
20
(2,669,071)
PROVISIONS FOR
LIABILITIES
24
(450,000)
PENSION LIABILITY
26
(358,588)
NET ASSETS
2,299,310
Restricted
funds
£
-
-
-
-
-
75,874
75,874
-
75,874
75,874
-
-
-
75,874
Endowment
fund
£
-
-
-
-
-
102
102
-
102
102
-
-
-
102		 2021

Total
funds
£
39,026
7,288,116
7,327,142
7,174
4,318,774
1,181,938
5,507,886
(6,982,083)
(1,474,197)
5,852,945
(2,669,071)
(450,000)
(358,588)
2,375,286		 2020
Total
funds
£
20,529
7,548,175
7,568,704
11,608
4,202,700
304,468
4,518,776
(5,935,136)
(1,416,360)
6,152,344
(2,729,071)
-
(395,719)
3,027,554

The notes form part of these financial statements

continued...

Page 15

SCARBOROUGH COLLEGE LIMITED

BALANCE SHEET - continued 31 August 2021

FUNDS
Notes
Called up share capital:
29
Called up share capital
Unrestricted funds:
25
General fund
Revaluation reserve
Restricted funds:
25
Peggy Bailey legacy
Early Years
Cricket pavilion fund
Endowment funds:
25
Endowment funds
TOTAL FUNDS		 2021
£
5,507
2,278,563
15,240
2,299,310
73,470
1,304
1,100
75,874
102
2,375,286		 2020
£
5,507
2,930,808
15,240
2,951,555
73,470
1,327
1,100
75,897
102
3,027,554

The financial statements were approved by the Board of Trustees and authorised for issue on 6 January 2022 and were signed on its behalf by:

J Renshaw - Trustee

The notes form part of these financial statements

Page 16

SCARBOROUGH COLLEGE LIMITED

CASH FLOW STATEMENT for the year ended 31 August 2021

Notes
Cash flows from operating activities
Cash generated from operations
1
Interest paid
Net cash provided by/(used in) operating activities
Cash flows from investing activities
Purchase of intangible fixed assets
Purchase of tangible fixed assets
Sale of tangible fixed assets
Interest received
Net cash used in investing activities
Cash flows from financing activities
New loans in year
Loan repayments in year
Capital repayments in year
Net cash (used in)/provided by financing activities
Change in cash and cash equivalents in the
reporting period
Cash and cash equivalents at the beginning of
the reporting period
Cash and cash equivalents at the end of the
reporting period		 2021
£
1,308,627
(128,107)
1,180,520
(27,028)
(220,796)
-
1,154
(246,670)
-
(56,260)
(120)
(56,380)
877,470
304,468
1,181,938		 2020
£
(232,222)
(127,941)
(360,163)
(24,635)
(912,908)
230,600
6,684
(700,259)
509,733
-
(120)
509,613
(550,809)
855,277
304,468

The notes form part of these financial statements

Page 17

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE CASH FLOW STATEMENT for the year ended 31 August 2021

1. RECONCILIATION OF NET EXPENDITURE TO NET CASH FLOW FROM OPERATING ACTIVITIES

Net expenditure for the reporting period (as per the Statement of Financial
Activities)
Adjustments for:
Depreciation charges
Losses on investments
Profit on disposal of fixed assets
Interest received
Interest paid
Increase/(decrease) in provisions
Impairment charges
Decrease/(increase) in stocks
Increase in debtors
Increase in creditors
Net cash provided by/(used in) operations		 2021
£
(655,258)
320,567
-
-
(1,154)
128,107
415,859
94,400
4,434
(116,074)
1,117,746
1,308,627		 2020
£
(22,645)
286,977
2
(230,600)
(6,684)
127,941
(36,477)
-
(11,608)
(547,470)
208,342
(232,222)

2. ANALYSIS OF CHANGES IN NET DEBT

Net cash
Cash at bank
Debt
Finance leases
Debts falling due within 1 year
Debts falling due after 1 year
Total		 At 1.9.20
£
304,468
304,468
(2,040)
(63,119)
(2,727,151)
(2,792,310)
(2,487,842)		 Cash flow
£
877,470
877,470
120
(3,620)
59,880
56,380
933,850		 At 31.8.21
£
1,181,938
1,181,938
(1,920)
(66,739)
(2,667,271)
(2,735,930)
(1,553,992)

The notes form part of these financial statements

Page 18

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2021

1. ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements of the charitable company, which is a public benefit entity under FRS 102, 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)', Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006. The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at market value.

COVID-19 is not expected to have a significant impact on the College. The Governors have determined that there is no material uncertainty that casts doubt on the College's ability to continue as a going concern. It expects that COVID-19 might have some impact, though not significant, for example, in relation to expected future performance, or the effects on some future asset valuations.

The College therefore continues to adopt the going concern basis in preparing its financial statements.

Income

Fees receivable, and charges for services and use of the premises, are accounted for in the academic year in which the service is provided. Fees receivable are after deduction of bursaries and allowances. Where fees are received in advance they are deferred until the criteria for income recognition are met. Donations and other income are included in the Statement of Financial Activities when the charity is legally entitled to the income and the amount can be quantified with reasonable accuracy.

Interest receivable

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the Bank.

Legacies

Entitlement is when income is probable and measurable. A legacy receipt is normally probable when there has been a grant of probate, executors have established that there are sufficient assets, and any conditions attached to the legacy are in control or met by the charity. A legacy is measurable when it can be measured or estimated with sufficient reliability.

Government grants receivable

Grants are recognised using the performance model. Grant income is recognised once both the income recognition criteria and terms and conditions attached to the grant are met. Grants receivable as compensation for expenses or losses already incurred, or for the purpose of receiving immediate financial support, are recognised in other operating income in the period in which they become receivable.

Expenditure

All expenditure is accounted for on an accruals basis and has been classified on an actual basis wherever possible. Overhead and other costs not directly attributable to particular functional activity categories are apportioned on the basis of management estimates of the amount attributable to that category in the year, either by reference to staff time or space occupied, as appropriate. Costs include attributable VAT which cannot be recovered.

Allocation of support costs

Support costs are those functions that assist the work of the College but do not directly undertake charitable activity. Support costs include the costs of office salaries and governance costs which support the College in the provision of education. The bases on which support costs have been allocated are set out in note 9.

Intangible assets

Intangible assets comprise of a marketing film and website development costs, both of which are being amortised over their useful estimated lives of five years. Website development costs are capitalised on the basis that they meet the recognition criteria of an asset, namely that future economic benefits will flow to the entity.

Amortisation is recognised as an expense within the expenditure on charitable activities heading within the Statement of Financial Activities.

continued...

Page 19

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

1. ACCOUNTING POLICIES - continued

Tangible fixed assets

Fixed assets are included in the accounts at cost less depreciation. Freehold land and buildings costs comprise previous revaluations as deemed cost on transition to FRS 102 and subsequent additions at cost. Depreciation of fixed assets has been provided at various rates which are anticipated to amortise the cost less residual value over the assets' expected useful lives. Indicative annual rates are:-

Freehold land 0% Freehold buildings 0%-4% straight line Short leasehold property improvements over the term of the lease Motor rollers and mowers 20% straight line Computers and other short life equipment 20%- 33% straight line Other equipment, furnishings and fittings 2%, 5%, 10% or 20% straight line

Management has estimated the useful life of the freehold buildings, except for Weaponness House, to be at least 100 years. Management have estimated the residual value of the freehold buildings to be generally higher than their book value and have accordingly charged no depreciation. Weaponness House has been assessed separately and improvements are being depreciated over a useful life of 25 years.

There is no specific capitalisation threshold for tangible fixed assets. Impairment reviews are undertaken annually for freehold land and buildings and for other assets when there is indication an asset may be impaired.

Inventories

Inventories are included at the lower of cost or net realisable value on the first in, first out (FIFO) basis.

Taxation

The charity is exempt from corporation tax on its charitable activities.

Fund accounting

Unrestricted income funds are available for use at the discretion of the trustees in furtherance of the general objectives of the College. Restricted income funds are funds to be used in accordance with specific restrictions imposed by donors or funds which have been raised for a particular purpose. The aim and use of each restricted fund is set out in the notes to the financial statements.

Pension costs and other post-retirement benefits

The company contributes to the Independent Schools' Pension defined benefit schemes at rates set by the schemes' actuaries. The scheme is a multi-employer pension scheme, as a result of which it is neither possible nor appropriate to identify the assets and liabilities of the scheme which are attributable to the College. In accordance with FRS 102, the schemes are accounted for as defined contribution schemes. Contributions are charged in the financial statements in the period when they fall due. When the scheme is in deficit and where the College has agreed to a deficit funding arrangement, the College recognises a liability for this obligation.

The company also operates two defined contribution schemes and the pension charge represents the amounts payable by the company to the pension funds in respect of the year.

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities such as trade, other accounts receivable and payable and loans to related parties.

Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.

Debt instruments, such as loans and other accounts receivable or payable, are initially measured at present value of the future payments and subsequently at amortised costs using the effective interest method.

Comparatives

Comparative figures have been amended to reflect a better classification between the costs of raising funds and support costs.

continued...

Page 20

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

1. ACCOUNTING POLICIES - continued

True and fair override

Advantage has been taken of a true and fair override in that bank loans falling due after more than one year of £2,667,271 have not been reclassified as current liabilities as required by FRS 102, following a technical breach of a banking covenant described more fully in note 28. The directors have concluded this departure is considered necessary to give a true and fair view as the covenant breach has been waived by the bank post year end and the original repayment terms of the loans therefore remain unaltered.

2. SIGNIFICANT JUDGEMENTS AND ESTIMATES

In preparing the financial statements, management is required to make estimates and assumptions which affect reported income, expenses, assets, liabilities and disclosure of contingent assets and liabilities. Use of available information and application of judgement are inherent in the formation of estimates, together with past experience and expectations of future events that are believed to be reasonable under the circumstances. Actual results in the future could differ from such estimates.

Critical judgements in applying the company's policies

Impairment reviews

Impairment reviews are undertaken where there is an indication that an asset may be impaired. The recoverable amounts of freehold properties including integral features are based on valuations prepared by external professional RICS valuers and management's assessment of the present value of future cash flows expected to be derived from the asset.

Critical accounting estimates and assumptions

Useful economic lives and residual values of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The assumptions used regarding useful economic lives and residual values are assessed annually. They are amended when necessary to reflect current estimates, based on market conditions and the physical condition of the assets.

Provision against liabilities

Provisions are recognised when there is a present obligation as a result of a past event, where a transfer of economic benefits is probable to settle the obligation and this can be reliably measured. From time to time, the company is required to make provision for pending legal claims. The entity makes use of available relevant legal expertise to establish whether quantum can be reliably measured in such cases. Based on this information, the college makes a provision based on the best estimate of the amount potentially required to settle the obligation including costs, taking into account the time value of money where material.

The directors do not consider that any other judgements, estimates and assumptions used in the preparation of these financial statements have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

3. DONATIONS AND LEGACIES

DONATIONS AND LEGACIES
2021 2020
£ £
Donations 12,558 8,914

The income from donations and legacies was £12,558 of which £6,000 (2020: £1,100) was restricted and £6,558 (2020: £7,814) was unrestricted.

continued...

Page 21

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

4. OTHER TRADING ACTIVITIES

Bus income
Special educational needs income
Holiday club income
Registration fees
School holiday and hiring income
Other trading income
INVESTMENT INCOME
Deposit account interest
The income from investments was all unrestricted.
INCOME FROM CHARITABLE ACTIVITIES
Activity
Gross fees
Provision of education
Allowances
Provision of education		 2021
£
80,215
59,124
-
12,521
6,983
30,407
189,250
2021
£
1,154
2021
£
7,202,500
(1,771,393)
5,431,107		 2020
£
59,971
34,314
6,073
13,198
9,195
25,299
148,050
2020
£
6,684
2020
£
6,107,427
(1,398,289)
4,709,138

5.

6. INCOME FROM CHARITABLE ACTIVITIES

The income from school fees was £5,431,107 (2020: £4,709,138) of which £5,283,989 (2020: £4,577,538) was unrestricted and £147,118 (2020: £131,600) was restricted. Included within restricted funds is early years funding to fund early years education of pupils aged between 3 and 5 years old.

7. RAISING FUNDS

Raising funds

Bank charges
Bank loan interest
Other interest
Bad debts
Agent commission
Debt collection fees		 2021
£
27,500
124,511
3,423
41,757
205,144
21,216
423,551		 2020
£
25,215
113,602
9,240
24,231
149,191
19,598
341,077

continued...

Page 22

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

8. CHARITABLE ACTIVITIES COSTS

Provision of education

Direct
Costs
£
4,527,979		 Support
costs (see
note 9)
£
902,957		 Totals
£
5,430,936

Expenditure on charitable activities was £5,430,936 (2020: £5,012,066) of which £147,141 (2020: £131,068) was restricted and £5,283,795 (2020: £4,880,988) unrestricted.

9. SUPPORT COSTS

The College initially identifies the costs of its support functions. It then identifies those costs which relate to the governance function. Having identified its governance costs, the remaining support costs together with the governance costs are allocated to the charitable activity undertaken in the year. Refer to the table below for the basis of apportionment and the analysis of support and governance.

Salaries
Staff superannuation
HR services
Advertising and marketing
Telephone
Postage and stationery
Vehicles
Amortisation
Depreciation
Auditors' remuneration
Auditors' remuneration for non audit work
Governors indemnity insurance
Legal and professional fees		 General support
£
394,410
12,765
14,049
136,449
38,971
119,774
127,839
8,531
3,173
-
-
-
-
855,961		 Governance
function
£
-
-
-
-
-
-
-
-
-
12,000
6,590
1,051
27,355
46,996		 Total
Basis of
apportionment
£
394,410
Support costs
12,765
Support costs
14,049
Support costs
136,449
Support costs
38,971
Support costs
119,774
Support costs
127,839
Support costs
8,531
Support costs
3,173
Support costs
12,000
Governance
6,590
Governance
1,051
Governance
27,355
Governance
902,957

10. OTHER

Other expenditure relates to a pending historic legal claim against the College and includes incurred and anticipated legal costs.

11. NET INCOME/(EXPENDITURE)

Net income/(expenditure) is stated after charging/(crediting):

Auditors' remuneration
Auditors' remuneration for non audit work
Depreciation - owned assets
Impairment - owned assets
Surplus on disposal of fixed assets
Marketing film amortisation
Website development costs amortisation
Operating leases - equipment
Operating leases - property
Bank loan interest payable
Government grants receivable		 2021
£
12,000
6,590
312,036
94,400
-
3,604
4,927
87,421
62,273
124,511
(54,689)		 2020
£
10,910
7,346
281,888
-
(230,600)
983
4,106
56,559
62,277
113,602
(149,769)

During the year, the College received £42,689 (2020: £149,769) in relation to the Covid-19 Job Retention Scheme. It also received a further £12,000 (2020: £nil) in relation to its participation in a Covid-19 pilot testing scheme.

continued...

Page 23

SCARBOROUGH COLLEGE LIMITED NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

12. TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 31 August 2021 nor for the year ended 31 August 2020.

Trustees' expenses

There were no trustees' expenses paid for the year ended 31 August 2021 nor for the year ended 31 August 2020.

13. STAFF COSTS

STAFF COSTS
Wages and salaries
Social security costs
Other pension costs		 2021
£
2,752,224
249,063
315,704
3,316,991		 2020
£
2,631,640
237,957
342,471
3,212,068

Pension costs are allocated to activities in proportion to the related staffing costs incurred and are wholly charged to unrestricted funds.

The College governors were not paid and did not receive any other benefits from employment with the College in the year, neither were they reimbursed expenses during the year. No governor received payment for professional or other services supplied to the College.

The key management personnel of the College comprise the governors, the Headmaster, the Headmaster of the Prep School and the Business Manager. The total employee benefits, including employer pension contributions, of the key management personnel of the College were £275,510 (2020: £269,883).

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

£60,001 - £70,000
£100,001 - £110,000		 2021
1
1
2		 2020
1
1
2

The cost of providing a defined contribution pension for these employees was £20,225 (2020: £18,153).

The average monthly head count was 110 staff (2020: 106 staff) and the average number of employees, analysed by function, was as follows:

Tuition
Administration and service		 2021
Number
61
49
110		 2020
Number
63
43
106

continued...

Page 24

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

13. STAFF COSTS - continued

The average monthly number of full-time equivalent employees (including casual and part-time staff) during the year was as follows:

14.

Tuition
Administration and service
COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES
Unrestricted
Restricted
funds
funds
£
£
INCOME AND ENDOWMENTS FROM
Donations and legacies
7,814
1,100
Charitable activities
Provision of education
4,577,538
131,600
Other trading activities
148,050
-
Investment income
6,684
-
Other income
457,714
-
Total
5,197,800
132,700
EXPENDITURE ON
Raising funds
341,077
-
Charitable activities
Provision of education
4,880,998
131,068
Total
5,222,075
131,068
Net gains/(losses) on investments
(2)
-
NET INCOME/(EXPENDITURE)
(24,277)
1,632
Other recognised gains/(losses)
Actuarial gains/(losses) on defined benefit schemes
(3,855)
-
Net movement in funds
(28,132)
1,632
RECONCILIATION OF FUNDS
Total funds brought forward
2,979,687
74,265
TOTAL FUNDS CARRIED FORWARD
2,951,555
75,897		 2021
Number
49
38
87

Endowment
fund
£
-
-
-
-
-
-
-
-
-
-
-
-
-
102
102		 2020
Number
53
33
86
Total
funds
£
8,914
4,709,138
148,050
6,684
457,714
5,330,500
341,077
5,012,066
5,353,143
(2)
(22,645)
(3,855)
(26,500)
3,054,054
3,027,554


continued...

Page 25

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

15. INTANGIBLE FIXED ASSETS

COST
At 1 September 2020
Additions
At 31 August 2021
AMORTISATION
At 1 September 2020
Charge for year
At 31 August 2021
NET BOOK VALUE
At 31 August 2021
At 31 August 2020
16.
TANGIBLE FIXED ASSETS
COST
At 1 September 2020
Additions
At 31 August 2021
DEPRECIATION
At 1 September 2020
Charge for year
Impairments
At 31 August 2021
NET BOOK VALUE
At 31 August 2021
At 31 August 2020		 Freehold
property
£
6,642,301
-
6,642,301
77,076
92,276
94,400
263,752
6,378,549
6,565,225		 Marketing
film
£
19,656
27,028
46,684
19,656
3,604
23,260
23,424
-
Short
leasehold
£
88,461
-
88,461
6,487
6,226
-
12,713
75,748
81,974		 Website
development
costs
£
24,635
-
24,635
4,106
4,927
9,033
15,602
20,529
Fixtures
and
fittings
£
3,713,559
146,377
3,859,936
2,812,583
213,534
-
3,026,117
833,819
900,976		 Totals
£
44,291
27,028
71,319
23,762
8,531
32,293
39,026
20,529
Totals
£
10,444,321
146,377		 Totals
£
44,291
27,028
71,319
23,762
8,531
32,293
39,026
20,529
10,590,698
2,896,146
312,036
94,400
3,302,582
7,288,116
7,548,175

Freehold properties totalling £5,748,149 (2020: £5,825,225) have been pledged as security for liabilities.

continued...

Page 26

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

17.
STOCKS
Stocks
18.
DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Trade debtors
Other debtors
Prepayments and accrued income
Trade debtors include £43,377 (2020: £86,014) falling due after more than one year.
19.
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Bank loans and overdrafts (see note 21)
Hire purchase (see note 22)
Trade creditors
Social security and other taxes
Other creditors
Accrued expenses
Deferred income		 2021
£
7,174
2021
£
4,114,466
57,446
146,862
4,318,774
2021
£
66,739
120
283,394
60,440
546,858
69,230
5,955,302
6,982,083		 2020
£
11,608
2020
£
3,991,531
88,106
123,063		 2020
£
11,608
4,202,700
2020
£
63,119
120
354,386
61,709
525,308
60,748
4,869,746
5,935,136

Deferred income comprises school fees paid in advance for the next school year. The balance included within creditors relates to amounts deferred during the reporting period of £5,955,302 (2020: £4,869,746), with amounts being released to the Statement of Financial Activities of £4,869,746 (2020: £4,679,904).

20. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Bank loans (see note 21)
Hire purchase (see note 22)		 2021
£
2,667,271
1,800
2,669,071		 2020
£
2,727,151
1,920
2,729,071

Bank borrowings at the year end total £2,734,010. The original bank loan is repayable in 300 consecutive monthly instalments representing principal and interest, which commenced May 2016. The rate of interest payable on the loan is Base Rate plus 4.2% per annum. The loan matures in 2041. Further loan advances were obtained for the re-development of Weaponness House, which are repayable in 288 consecutive monthly instalments representing principal and interest and repayments commenced in April 2019. The rate of the interest payable on this loan is fixed at 4.52% per annum and it matures in 2043.

continued...

Page 27

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

21. LOANS

An analysis of the maturity of loans is given below:

Amounts falling due within one year on demand:
Bank loans
Amounts falling between one and two years:
Bank loans - 1-2 years
Amounts falling due between two and five years:
Bank loans - 2-5 years
Amounts falling due in more than five years:
Repayable by instalments:
Bank loans more than 5 years by instalments
Hire purchase contracts		 2021
£
66,739
80,404
244,259		 2020
£
63,119
76,455
256,129
2,342,608
1,320
2,343,928		 2,394,567
1,440
2,396,007

22. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Net obligations repayable:
Within one year
Between one and five years
In more than five years

Within one year
Between one and five years
In more than five years		 Hire purchase contracts
2021
2020
£
£
120
120
480
480
1,320
1,440
1,920
2,040
Non-cancellable operating
leases
2021
2020
£
£
141,067
105,538
325,576
306,074
435,036
495,436
901,679
907,048		 Hire purchase contracts
2021
2020
£
£
120
120
480
480
1,320
1,440
1,920
2,040		 Hire purchase contracts
2021
2020
£
£
120
120
480
480
1,320
1,440
1,920
2,040		 Hire purchase contracts
2021
2020
£
£
120
120
480
480
1,320
1,440
1,920
2,040
2,040
907,048

continued...

Page 28

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

23. SECURED DEBTS

The following secured debts are included within creditors:

Bank loans
Hire purchase contracts		 2021
£
2,734,010
1,920
2,735,930		 2020
£
2,790,270
2,040
2,792,310

The bank loans are secured by a legal charge on certain freehold properties held by the company and an unlimited debenture incorporating a fixed and floating charge. Finance leases are secured upon the assets to which they relate.

24. PROVISIONS FOR LIABILITIES

Provisions
Provision as at 1 September 2020
Additions in period
Provision as at 31 August 2021		 2021
£
450,000		 2020
£
-
Provision against
legal claims
£
-
450,000
450,000

A provision has been made against an ongoing litigation case surrounding the historic use of a since demolished building based on the current best estimate of the transfer of economic resources required to settle the claim including legal costs. As the case is still ongoing, the entity is taking advantage of the available exemptions under Section 10.83 of Charities SORP (FRS 102) on the grounds that it could be prejudicial to the outcome of this case to disclose further information.

25. MOVEMENT IN FUNDS

Called up share capital
Called up share capital
Unrestricted funds
General fund
Revaluation reserve
Restricted funds
Peggy Bailey legacy
Early Years
Cricket pavilion fund
Projector fund
Endowment funds
Endowment funds
TOTAL FUNDS		 At 1.9.20
£
5,507
2,930,808
15,240
2,951,555
73,470
1,327
1,100
-
75,897
102
3,027,554		 Net
movement
in funds
£
-
(658,245)
-
(658,245)
-
(23)
-
6,000
5,977
-
(652,268)		 Transfers
between
funds
£
-

6,000
-
6,000
-
-
-
(6,000)
(6,000)
-
-		 At
31.8.21
£
5,507
2,278,563
15,240
2,299,310
73,470
1,304
1,100
-
75,874
102
2,375,286

continued...

Page 29

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

25. MOVEMENT IN FUNDS - continued

Net movement in funds, included in the above are as follows:

Unrestricted funds
General fund
Restricted funds
Early Years
Projector fund
TOTAL FUNDS		 Incoming
resources
£
5,535,640
147,118
6,000
153,118
5,688,758		 Resources
expended
£
(6,196,875)
(147,141)
-
(147,141)
(6,344,016)		 Gains and
losses
£
2,990
-
-
-
2,990		 Movement
in funds
£
(658,245)
(23)
6,000
5,977
(652,268)

Comparatives for movement in funds

At 1.9.19
£
Called up share capital
Called up share capital
5,507
Unrestricted funds
General fund
2,958,940
Revaluation reserve
15,240
2,979,687
Restricted funds
Peggy Bailey legacy
73,470
Early Years
795
Cricket pavilion fund
-
74,265
Endowment funds
Endowment funds
102
TOTAL FUNDS
3,054,054
Comparative net movement in funds, included in the above are as follows:
Incoming
Resources
resources
expended
£
£
Unrestricted funds
General fund
5,197,800
(5,222,075)
Restricted funds
Early Years
131,600
(131,068)
Cricket pavilion fund
1,100
-
132,700
(131,068)
TOTAL FUNDS
5,330,500
(5,353,143)		 Net
movement
in funds
£
-
(28,132)
-
(28,132)
-
532
1,100
1,632
-
(26,500)
Gains and
losses
£
(3,857)
-
-
-
(3,857)		 At
31.8.20
£
5,507
2,930,808
15,240
2,951,555
73,470
1,327
1,100
75,897
102
3,027,554
Movement
in funds
£
(28,132)
532
1,100
1,632
(26,500)

continued...

Page 30

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

25. MOVEMENT IN FUNDS - continued

A current year 12 months and prior year 12 months combined position is as follows:

Net
Transfers
movement
between
At 1.9.19
in funds
funds
£
£
£
Called up share capital
Called up share capital 5,507
-
-
Unrestricted funds
General fund
2,958,940
(686,377)
6,000
Revaluation reserve
15,240
-
-
2,979,687
(686,377)
6,000
Restricted funds
Peggy Bailey legacy
73,470
-
-
Early Years
795
509
-
Cricket pavilion fund
-
1,100
-
Projector fund
-
6,000
(6,000)
74,265
7,609
(6,000)
Endowment funds
Endowment funds
102
-
-
TOTAL FUNDS
3,054,054
(678,768)
-
A current year 12 months and prior year 12 months combined net movement in funds, included in the above a
Incoming
Resources
Gains and
resources
expended
losses
£
£
£
Unrestricted funds
General fund
10,733,440
(11,418,950)
(867)
Restricted funds
Early Years
278,718
(278,209)
-
Cricket pavilion fund
1,100
-
-
Projector fund
6,000
-
-
285,818
(278,209)
-
TOTAL FUNDS
11,019,258
(11,697,159)
(867)		 At
31.8.21
£
5,507
2,278,563
15,240
2,299,310
73,470
1,304
1,100
-
75,874
102
2,375,286
re as follows:
Movement
in funds
£
(686,377)
509
1,100
6,000
7,609
(678,768)

A current year 12 months and prior year 12 months combined net movement in funds, included in the above are as follows:

The endowment fund is a prize giving fund, and represents monies held for the endowment of a prize.

The Peggy Bailey Legacy fund represents monies donated to the college restricted to the endowment of an award, prize or scholarship for students.

The Early Years fund represents government funding received for the education of pupils aged 3 to 5 years.

The cricket pavilion fund represents monies donated to the college towards the cost of rebuilding a new pavilion within the grounds of the college, following a fire which completely destroyed the previous building.

The projector fund represents monies donated to the college towards the cost of new equipment purchased in the period.

continued...

Page 32

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

26. EMPLOYEE BENEFIT OBLIGATIONS

Scarborough College Limited, together with many other independent schools, operates a contributory plan providing defined benefits based on final pensionable pay for its employees. The assets of the plans are held separately from those of Scarborough College Limited. They also operate two defined contribution schemes.

Contributions to three schemes during the year were based on the following percentages of salary:-

Independent Schools' Pension Scheme
Aviva Pension Scheme
People's Pension		 Employer
Employee
Total
8.0%
8.0%
16.0%
16.4%
7.4% - 11.7%
23.8%- 28.1%
3.0%
5.0%
8.0%

The defined benefit pension scheme is a multi-employer pension scheme. As a result of which it is neither possible nor appropriate to identify the assets and liabilities of the schemes which are attributable to the College. Accordingly the College has accounted for its contributions as if they were defined contribution schemes.

Outstanding amounts payable to the schemes at the year end were £45,274 (2020: £44,572).

Independent Schools' Pension Scheme

The College participates in the scheme, which is a multi-employer scheme, and provides benefits to some 66 non-associated employers. The scheme is a defined benefit scheme in the UK. It is not possible for the College to obtain sufficient information to enable it to account for the scheme as a defined benefit scheme. Therefore, it accounts for the scheme as a defined contribution scheme.

The scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit occupational pension schemes in the UK.

The scheme is classified as a 'last-man standing arrangement'. Therefore, the College is potentially liable for other participating employers' obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the scheme. Participating employers are legally required to meet their share of the scheme deficit on an annuity purchase basis on withdrawal from the scheme.

A full actuarial valuation for the scheme was carried out with an effective date of 30 September 2017. This actuarial valuation was certified on 27 December 2018 and showed assets of £149.4m, liabilities of £187.6m and a deficit of £38.2m. To eliminate this funding shortfall, the trustees and the participating employers have agreed that additional contributions will be paid, in combination from all employers to the scheme as follows:

Deficit contributions

From 1 September 2019 to 30 April 2030: £2,387,357 per annum (payable monthly and increasing by 3% on each 1st September)

Note that the scheme's previous valuation was carried out with an effective date of 30 September 2014. This valuation showed assets of £110.0m, liabilities of £147.4m and a deficit of £37.4m. To eliminate this funding shortfall, the Trustee has asked the participating employers to pay additional contributions to the scheme as follows:

Deficit contributions

From 1 September 2016 to 31 August 2029: £2,341,000 per annum (payable monthly and increasing by 3% on each 1st September)

The recovery plan contributions are allocated to each participating employer in line with their estimated share of the scheme liabilities.

Where the scheme is in deficit and where the College has agreed to a deficit funding arrangement, the College recognises a liability for this obligation. The amount recognised is the net present value of the deficit reduction contributions payable under the agreement that relates to the deficit. The present value is calculated using the discount rate detailed in these disclosures. The unwinding of the discount rate is recognised as a finance cost.

continued...

Page 32

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

26. EMPLOYEE BENEFIT OBLIGATIONS - continued

Present value of provision
Present value of provision
Reconciliation of opening and closing provisions
Provision as at 1 September 2020
Unwinding of the discount factor (interest expense)
Deficit contribution paid
Remeasurement - impact of any change in assumptions
Remeasurement - amendments to the contribution scheme
Income and expenditure impact
Interest expense
Remeasurement - impact of any change in assumptions
Remeasurement - amendments to the contribution schedule
Contributions paid in respect of future service
Costs recognised in income and expenditure account
Assumptions
Rate of discount		 31 August 2021
(£'000s)
359
2021
£
(£'000s)
396
4
(38)
(3)
-
359		 31 August 2020
(£'000s)
396		 31 August 2019
(£'000s)
449
2020
£
(£'000s)
424
4
(36)
4
-
396
2021
£
(£'000s)
3
(3)
-
-
4
31 August 2021
% per annum
1.09		 31 August 2020
% per annum
0.90		 2020
£
(£'000s)
4
4
-
-
4
31 August 2019
% per annum
1.10

The discount rates shown above are the equivalent single discount rates which, when used to discount the future recovery plan contributions due, would give the same results as using a full AA corporate bond yield curve to discount the same recovery plan contributions.

27. RELATED PARTY DISCLOSURES

During the year the company leased a property, on an arm's length basis from Broadland Properties Limited, for £60,000 (2020: £60,000). Mr R Guthrie (a director of Scarborough College Limited), is a director and person with significant control of Broadland Properties Limited,

Three governors had children enrolled in the College during the year with fees payable at normal published rates totalling £78,148 (2020: £74,117).

28. POST BALANCE SHEET EVENTS

Due to the need to make provision against the legal claim described in note 24, these accounts show the charity would have technically breached one of the loan covenants at the year end. However, the bank were fully aware of the situation and have duly issued a covenant waiver post year end based on current cash flow forecasts which comfortably cover both the scheduled bank loan repayments and the anticipated legal claim.

continued...

Page 33

SCARBOROUGH COLLEGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 August 2021

29. CALLED UP SHARE CAPITAL

Allotted, called up and fully paid
5,507 Ordinary shares of £1 each		 2021
£
5,507		 2020
£
5,507

Shares carry equal voting rights and each class of share also ranks equally in regard to distributions, including distributions arising from a winding up of the College.

Page 34