2024-07-31-accounts - Duchess Of Somerset's Scholarship

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The Manchester Grammar School Foundation

REPORT AND ACCOUNTS

For the year ended 31 July 2024

Registered Charity number: 529909

The Manchester Grammar School Foundation CONTENTS

	Page
Trustee’s Report	2
Auditor’s Report	14
Statement of Financial Activities	17
Balance Sheet	18
Cash Flow Statement	19
Accounting Policies	20
Notes to the Financial Statements	25

The Manchester Grammar School Foundation TRUSTEE’S REPORT

The Governors of The Manchester Grammar School (“the School”), present their annual report together with the audited financial statements of the School for the year ended 31 July 2024. The financial statements have been prepared in accordance with the accounting policies set out in the notes to the accounts and comply with the School’s Trust Deed, the Charities Act 2011 and 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 effective 1 January 2019 (the Charities SORP, FRS102).

The Governors of the School and other administrative information are listed below:

GOVERNORS Co-opted J Barot A W Beardsworth M P H M Bokkerink M C Bolton (Chair) H Campbell Professor D A Cardwell (Deputy Chair) K Hinduja B H Leigh (Treasurer) J C Luca A H Malik Professor J R W Prag R T Race ** M J Robinson M S Yaffe J T Young

Representative

Dr D Barker (University of Manchester)

Ex-Officio

The Dean of Manchester The President of Corpus Christi College, Oxford The Lord Mayor of Manchester

Member of the Finance and General Purposes Committee

** Attends the Finance and General Purposes Committee, as appropriate, to advise on the School’s investments

CORPORATE TRUSTEE

The Manchester Grammar School Foundation Trustee Limited

HIGH MASTER Dr M A Boulton

ADDRESS

The Manchester Grammar School Old Hall Lane Manchester M13 0XT

BURSAR AND CLERK TO GOVERNORS

G M Batchelor

The School’s professional advisors are as follows:

AUDITOR

RSM UK Audit LLP Ninth Floor, Landmark St Peter’s Square 1 Oxford Street Manchester M1 4PB

SOLICITORS

DWF LLP 1 Scott Place 2 Hardman Street Manchester M3 3AA

Farrer and Co LLP INVESTMENT ADVISERS 66 Lincoln’s Inn Fields CCLA London 1 Angel Lane WC2A 3LH London EC4R 3AB BANKERS NatWest Bank Plc Castlefield Investment Partners LLP 19 Market Street Ninth Floor, 111 Piccadilly Manchester Manchester M1 1WR M1 2HY

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The Manchester Grammar School Foundation TRUSTEE’S REPORT

REFERENCE AND ADMINISTRATIVE INFORMATION

The School is an unincorporated charitable trust, registered charity number 529909. Its official name is The Manchester Grammar School Foundation. The Manchester Grammar School Foundation Trustee Limited (the ‘Trustee’), company number 09156289, is the sole corporate trustee for the School.

All current Governors are listed on page 2 and served throughout the year other than Mr Marc Simon Yaffe (appointed 21 March 2024). The terms of office of Professor David Cardwell and Mr Michael Robinson ended on 31 July 2024 and they were re-elected on 19 September 2024. In addition, Ms Joy Kingsley resigned as a Governor on 30 November 2023. The Governors would like to take this opportunity to thank Ms Kingsley for her valued service to the School.

All Governors are also directors of the Trustee, and serve as directors of the Trustee at the same time as they are Governors of the School. Governors, as referred to throughout this report, serve as representatives of the Trustee in their capacity as directors of that body. The School has purchased insurance to protect Governors and Officers from claims arising from any negligent act, error or omission in good faith occurring whilst on School business. The insurance provides cover up to £10,000,000 on any one claim, and in the aggregate in any one year.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document

The School is governed by a Trust Deed dated 19 June 2000 which consolidates a number of previous Trust Deeds and has been amended by deeds dated 6 September 2001, 23 June 2004 and 31 July 2014.

Governing Body

The board of Governors currently comprises 15 co-opted Governors, 1 representative Governor and 3 ex–officio Governors. The co-opted and representative Governors are appointed for three year terms.

Recruitment and training of Governors

The board of Governors is a self-appointing body. When a vacancy arises for a co-opted Governor, the Nominations Committee will consider suggestions and invite a suitable candidate to join. The Representative Governor is appointed by The University of Manchester.

New Governors are invited to the School to meet the High Master, Bursar and senior staff. An information pack is provided, which includes details of the School and the Governing Body and relevant advice from the Charity Commission. All Governors are given the opportunity to attend relevant training courses.

Organisational management

The Governors, as representatives of the Trustee, are responsible for the overall management and control of the School and meet at least four times a year. The work of implementing most of their policies is carried out by the Finance and General Purposes Committee which meets before the November, March and June meetings of the full Governing Body. The Committee also meets termly to discuss risk. Other principal committees are the Health and Safety Committee and the Estates Committee which meet on at least a termly basis, and the Nominations Committee and the Remuneration Committee.

The day to day running of the School is delegated to the High Master and the Bursar, supported by other members of the Senior Leadership Team - Head of Junior School, Deputy Head (Pastoral), Deputy Head (Safeguarding), Deputy Head (Academic), Deputy Head (Teaching and Learning) and the Surmaster (who has responsibility for Co-curricular).

Remuneration policy for key management personnel

The Governors consider that the key management personnel of the School are the High Master and the Senior Leadership Team. The Remuneration Committee consisting of the Chair, Deputy Chairman and Treasurer meets annually to review the pay of the High Master. The High Master has responsibility for determining the pay levels of the Senior Leadership Team and reports on his decisions to the Remuneration Committee.

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The Manchester Grammar School Foundation

TRUSTEE’S REPORT

Relationships

The Manchester Grammar School Foundation Trustee Limited is the sole corporate trustee of the School and its controlling party.

In 1966 M.G.S. Trust, registered charity 526564, was established as a separate charity from The Manchester Grammar School Foundation, to manage funds provided by various donors for the benefit of the School, its pupils and former pupils. The Manchester Grammar School Foundation has no control or influence over M.G.S. Trust with each charity having separate Trustees in position. As disclosed in note 1, the School received bursary funding of £2,601,110 in respect of the year ended 31 July 2024 (2023: £2,375,628) from M.G.S. Trust. No amounts were owed to or from M.G.S. Trust at the year end (2023: £nil).

Principal risks and uncertainties

The Governors, as representatives of the Trustee, are responsible for the management of the risks faced by the School. The School’s risk management strategy includes an annual review of the risks faced by the School, together with the establishment of systems and procedures to mitigate those risks. The Governing Body looks in detail at the principal risks the School faces by reviewing a risk management report produced by the Senior Leadership Team. The report is a working document which sets out all the identified risks to which the School is exposed and is updated regularly as and when new risks are identified or existing risks change. Areas with high retained risk are monitored either by individual Governors such as the Safeguarding Governor, or by committees with Governor representation such as the Finance and General Purposes Committee and Health and Safety Committee. Whilst a detailed review of risks is carried out annually, the management of risk is a feature of every Governing Body meeting with a particular focus on material changes to the School’s identified major risks. The Finance and General Purposes Committee specifically reviews risk at the initial meeting each term.

The key risks identified by the Governors are as follows:

The impact of the introduction of VAT on school fees, loss of charitable business rates relief and the changes to national insurance contributions for employers
Significant changes to the cost associated with the Teachers’ Pension Scheme
Recruitment and retention of pupils

The introduction of VAT, the loss of charitable business rates relief, and the changes to national insurance contributions for employers have introduced an unprecedented change to the financial position of all independent schools. The approach we have taken to manage these changes includes making cost savings where possible, but in a way that does not affect the education that pupils receive at the school. Whilst some of these costs have inevitably had to be passed on to parents in significant increases in fees inclusive of VAT, we have tried to limit this to what is absolutely necessary and also to give some certainty over what changes there will be over the next two years so that parents are able to plan for them. The key approach is to try to ensure that pupils do not have to leave the School as a result of the changes, and this is being done by the School shouldering some of the burden and having available some means-tested hardship funding.

The pension schemes, and associated costs, for all staff are kept under review by the Governors. The Manchester Grammar School Pension Scheme is a defined benefit scheme for non-teaching staff that closed to new entrants and future accrual on 30 September 2016. The scheme had a deficit of £2.984m at the September 2020 actuarial valuation and repayments are being made over a period of 5 years and 8 months from 1 September 2022. Further details are set out in note 18.

The School is very aware of the risks associated with cybercrime and cyberfraud and has put in place suitable defence strategies including having taken out an insurance policy relating to this area.

The Governors are aware of the Charity Governance Code and are using the Charity Commission diagnostic tool to monitor the School’s performance in this area and to make any appropriate adjustments. Four of the co-opted governors have served for more than ten years but their contributions and experience continue to be valued.

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The Manchester Grammar School Foundation TRUSTEE’S REPORT

OBJECTS, AIMS, OBJECTIVES AND ACTIVITIES

Charitable objects

The School was founded in 1515 by Hugh Oldham, Bishop of Exeter, for the purpose of educating all boys who qualified by nature of their ability, regardless of family circumstances. Maintaining this tradition is central to the culture of the School.

Purpose

The Manchester Grammar School was founded in 1515 ‘to educate the poor boys of Manchester in Godliness and good learning’. Today the School interprets this in the following ways:

We offer an education that enables our pupils to lead rich and fulfilled lives beyond their time at the School, but also instils in them the importance of making a positive impact on their community and society more widely.
We want to ensure that access to the School is not governed solely by the ability to pay fees and we provide a significant number of places to those from the most disadvantaged backgrounds, including looked after children.

Ambition

We aim to be at the forefront of educational practice, to ensure that we maintain our position as one of the country’s leading academic schools.
We want to grow our bursary provision with the aim that we achieve needs blind admissions at some point in our future.

Priorities

Develop and deliver a rich and broad curriculum that prepares pupils for their future lives.
Build a caring community of pupils and staff who value each other and celebrate difference.
Ensure that bursary provision is given due prominence in terms of its growth and application.
Be a lead proponent of the use of technology in education through the development and sharing of best practice.

Values

Scholarship . Learn to think for yourself, learn to think creatively and develop a life-long love of learning and in keeping with the School’s moto, ‘Sapere Aude’, develop the courage to use the understanding you gain from your education.
Individuality . Feel valued as an individual, and value the individuality of others.
Kindness . Develop an awareness of the needs of others and treat every member of our community with respect.
Resilience . Learn to cope when things don’t go well and learn to bounce back after setbacks.
Service . Develop a true sense of service to your community and wider society.

Strategies to achieve the above

Regular generous donations received into the School’s foundation bursary fund over many years have been used to support boys from lower-income families who would not otherwise be able to accept a place at the School. As further funds are donated, it is hoped to increase the number of boys that can be helped. Funds are also made available to assist the parents of boys already at the School who are in need of temporary financial assistance, for example in cases of redundancy or bereavement.
The School places the recruitment of talented and inspirational staff and their subsequent development as one of its most important tasks. In doing the latter there is a strong emphasis on the sharing of best practice throughout the School.
The School sees itself as part of a wider community. Its links with other local schools, both state and independent, and its links with a variety of other charities, play a vital part in the life of MGS.

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The Manchester Grammar School Foundation TRUSTEE’S REPORT

Strategies to achieve the above (continued)

The School seeks to have first-class facilities to ensure that it can deliver a rich, broad education which will prepare pupils for life beyond MGS. The School is in the process of building a new Sixth Form Centre, sports pavilion and dining room as the next substantial addition to our facilities.

Principal activities

The principal activity is the provision of education for boys in the Manchester area. In September 2023 there were 1,648 boys in the School (2022: 1,654).

Grant making policies

Fee assistance is awarded on a means-tested basis, subject to availability of funds. The School also makes awards from various restricted funds, covering, for example, prizes and assistance with school trips. A hardship fund helps with school fees where families’ circumstances change significantly.

Volunteers

Within the School, members of the parents’ society organise a number of events which benefit the whole School community and serve as volunteers at sports and other events. The fundraising activities of the parents’ society provide gifts of equipment for the School which are greatly appreciated. A number of volunteers assist in other areas of the School, for example, by helping within the archive library and by assisting with religious assemblies.

REVIEW OF ACHIEVEMENTS AND PERFORMANCE FOR THE YEAR

Operational performance and public benefit

This year the GCSE and ICCSE results were as strong as would be expected, with 40% of grades at level 9 and 67% of grades at level 9-8. At A level, 32.3% of the grades were at the A or equivalent level and 85.1% were A- B or equivalent.

Principal funding sources for the School’s activities comprise fee income and generous donations from M.G.S. Trust and other donors towards fee assistance and other activities.

The School is a Public Benefit Entity. In accordance with the objectives for the year and with due regard to the published Charity Commission guidance on the operation of the public benefit requirement of the Charities Act 2011, the Governors, as representatives of the corporate trustee, have undertaken appropriate activities in furtherance of those aims for the public benefit.

The principal public benefit provided by the School is means-tested fee assistance. In the year ended 31 July 2024, 217 boys benefitted from fee assistance including 31 new starters, 17 in receipt of temporary hardship assistance and 154 of which received 100% fee assistance.

In setting the School’s objectives the Governors have given careful consideration to the Charity Commission’s guidance on public benefit. The School was founded in 1515 by Hugh Oldham, Bishop of Exeter, for the purpose of educating all boys who qualified by nature of their ability, regardless of family circumstances. The provision of an outstanding education and making this accessible to all through the provision of a significant bursary programme remains the key means of achieving this objective.

The School is fully committed to providing public benefit in a much broader sense, through links and partnerships with the local community, including the following examples:

Partnership with The Bursary Foundation. The School has partnered with the charity “The Bursary Foundation” since 2018, working closely with state primary schools in Manchester and Salford to identify pupils with strong academic potential from low-income backgrounds, providing tutoring and mentoring to help prepare them and their families before sitting entrance examinations for Manchester Grammar School and other independent schools.

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The Manchester Grammar School Foundation TRUSTEE’S REPORT

Operational performance and public benefit (continued)

Looked After Children. We are working in partnership with The Royal Springboard Foundation to develop meaningful and long lasting relationships between local authorities and independent day schools in the North West to secure places for children in the care system. A member of the School’s teaching Staff is also the North West Regional Lead for care experienced and vulnerable children at The Royal Springboard Foundation.
Blackden Trust. The School continues to support The Blackden Trust, an inspirational cultural hub which provides art events and tours for adults alongside special interest days and site-specific, focused educational courses for schools.
Mandarin teaching project. The School is now in the eighth year of partnership with the Swire Chinese Language Foundation. Working with the support of John Swire and Son Ltd (“Swire”), our aim is to secure a major expansion of the teaching and learning of Chinese throughout state schools in Manchester and beyond.
Junior School Outreach concert. The Head of Junior School Music works with Year 4 pupils from Co-op Academy New Islington, St James Primary School and The Manchester Grammar School’s own Year 4 pupils, Senior School Choir and The Thursday Singers, to create a spectacular concert performed in the Memorial Hall, inviting parents from all the schools involved.
Teaching English. Through a partnership with Manchester City Council some of our Sixth Form students are trained with basic TEFL (Teaching English as a Foreign Language) skills and use this to support young people in different communities across Manchester who seek to improve their English.
Orchestral Day. The Music department ran an Orchestral Day to give students in local schools who are learning an instrument an opportunity to play in an orchestra. Prior to the day pupils helped teach the repertoire in local primary schools
Refugee Partnership Day. In partnership with Manchester City Council the School’s Year 7 hosted a Refugee Partnership Day in support of Manchester’s refugee community. Pupils hosted the guests running games, cricket, football, music and art activities, as well as raising funds before the event to support costs of transport and food on the day.
All Saint’s Primary School. This is a school that works with children who live in a socio-economically deprived area in Gorton. During the year we provided French curriculum support for Year 3 and Year 5.
Together Dementia Support. Pupils visit this charity in Longsight each week to support residents. Varied afternoons include singing and dancing, making crafts, listening to stories and drinking tea.
Charitable fund-raising. Fund-raising activities conducted within the School raise significant sums of money for distribution to a range of local, regional, national and international charitable causes . In particular this year, pupils chose to support Macmillan Cancer Support, UNICEF and continued to support Shiners School in Kenya.
Volunteering. This is a staple of the School’s Sixth Form Enrichment programme, involving 103 student volunteers and 20 members of staff. Activities include supporting the French, Maths, Science and Literacy curriculum in state primary schools across Manchester, supporting the English as an Additional Language literacy programme at Manchester Academy in Moss Side, volunteering at Together Dementia Support, providing digital assistance for the elderly at Withington Methodist Church and working with Manchester City Council in offering language and literacy support to children in the Afghan Resettlement Scheme Project.
Volunteers continued to work with St Paul’s Church, Salford. In the Christmas holiday, over 40 student and staff volunteers helped to sort and deliver hundreds of gifts donated by the MGS community to homes across Salford, as well as to children supported by Salford Council.
Middle School students continued to volunteer with the nursery class at St. Mary’s RC Primary School in Levenshulme with support for language development. The Middle School pick litter each week with The Friends of Birchfields Park. Chess and Chat continues to form part of the Middle School volunteering program; during weekly visits to St Peter’s RC High School in Manchester pupils have enjoyed the chess challenge as well as the friendships that have developed.

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The Manchester Grammar School Foundation TRUSTEE’S REPORT

Operational performance and public benefit (continued)

In addition to supporting the School community through sport and co-curricular activities, staff support the wider community in numerous ways. In 2023, they gave over 7,000 volunteering hours supporting local groups and projects including religious settings, youth and sports clubs, music groups, libraries, Mountain Rescue and counselling. Members of the school community are also involved in public life in roles such as trustees, nonexecutive directorships, the local judiciary and lieutenancy. Importantly, members of the school give time to support state maintained schools in governor roles, many as chair or vice-chair of governing bodies. This contributed an additional 950 voluntary hours of time to supporting local maintained schools. Many staff enhance their ability to contribute to the school and develop as an individual as a result of their professional intellectual involvement in the wider community. Staff have published papers in national journals and had books published. Many also support exam boards at Key Stage 2, GCSE and A Level as Examiners, Senior Markers, Team Leaders, Moderators and Chief Examiners. Some Musicians are also examiners for the Associated Board for the Royal School of Music (ABRSM). We thank colleagues for their important contributions to the wider community.
Teacher training. The School is actively involved in the training of teachers working closely with both Manchester University and Manchester Metropolitan University providing adapted student teacher placements and offering mentoring support.

At our last full inspection, carried out in January 2024 the key findings were as follows:

The school fulfils its aims successfully. Leaders nurture pupils’ talents and interest from a young age. They provide a broad curriculum and an extensive co-curricular programme, which encourage pupils to excel. Leaders are dynamic, visible and approachable, and constantly seek to further improve the wellbeing of all pupils.
Pupils achieve highly in public examinations. This is due to the guidance, support and encouragement pupils receive from their knowledgeable teachers. The provision for pupils who have special educational needs and/or disabilities (SEND) is a significant strength of the school.
The extensive co-curricular and enrichment programmes are a significant strength of the school. They bring challenge, inclusivity and diversity to pupils’ education.
Self-evaluation and reflection are integral to leaders’ approach to strategy and planning. Knowledgeable, supportive governors provide strong systematic oversight of leaders’ work, whilst ensuring an appropriate level of challenge.
Leaders have put in place an effective programme to support pupils in their personal development. Personal, social and health education (PSHE) informs pupils well about important topics relating to wellbeing. Pupils respect each other, understand the importance of feeling valued and valuing others and how knowing yourself well is key to wellbeing and achievement.
In line with the School’s aims of service to others, pupils contribute to the local and wider community through a range of community service and charity initiatives. The careers programme is effective in helping pupils make decisions about their future pathways.
Pupils are taught about safeguarding matters. They know how to keep themselves safe, including online, and how to report a concern. Leaders prioritise training for all staff and governors on effective safeguarding.

Sustainability

The School is very aware of its responsibility to the local community and the environment and is seeking to improve its performance and become more sustainable. The newly installed solar panels on the roof of the sports hall are now in use and the School will consider further solar projects in the future once their effectiveness has been reviewed. There has been some additional cavity wall insulation in some buildings to reduce heat loss. The School is in the process of building the new Sixth Form Centre and a significant part of this process is the design of the energy and heating systems that will be used. Various other types of work continue, for example, the move to energy efficient LED light fittings and adjustments to the heating system to create smaller, more individually controllable heating zones. Pupils are encouraged to bring in water bottles to minimise single use plastics. The school has good systems in place for the recycling of cardboard, paper, glass, electrical and metal waste. Food waste is sent to an anaerobic digestion plant to create biogas. Staff are regularly reminded to switch off lights and computer equipment when rooms are not in use. The next stage of the ESOS assessment was completed during 2023/24.

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The Manchester Grammar School Foundation TRUSTEE’S REPORT

Investment performance

The governors have noted that investment performance is lower than the benchmark comparator, due to under exposure to US Technology stocks in the portfolio. The governors will continue to monitor investment performance and will review asset allocation with the investment manager at the next investment review meeting.

Fundraising performance

The main focus of fundraising continues to be the bursary funds which are held by M.G.S. Trust. The funds are currently valued at over £30 million and it is the School’s aim to increase this to over £100 million in the coming decades through on-going fundraising and prudent financial management by the Trustees.

In addition to donations to M.G.S. Trust, a number of donations have been made directly to the School for various purposes for which the Governors are very grateful. In particular there has been an appeal to raise money to support the building of the new Sixth Form Centre, sports pavilion and dining room. This appeal has raised over £3.0 million to date towards a £4 million target.

FINANCIAL REVIEW AND RESULTS FOR THE YEAR

A summary of the year’s financial activities is set out on page 17 in the attached accounts. The net income for the year before investment gains and the actuarial loss on The Manchester Grammar School Pension Scheme, a defined benefit pension scheme, was £1,618,882 (2023: £3,474,469 net income).

The principal funding sources of the School continue to be fee income, donations and legacies received which support the key objectives. The increase in fee income on the previous year resulted from an 8.6% uplift in fees. Income arising from donations and legacies in the year includes accrued income of £360,000 expected to be received after year end, arising from a single legacy for which the School is extremely grateful. The value of that accrued income is based on an estimate of the value of assets held by the estate of the benefactor, yet to be sold, with the funds arising then due to be released to the School. The benefactor did not place any restriction on the use of these legacy funds, and the Governors have designated those funds towards the cost of building the proposed new Sixth Form Centre, sports pavilion and dining room. That legacy income is therefore included in designated funds as part of overall unrestricted funds. Further detail relating to funds is given in note 14. The largest element of the School’s expenditure continues to be staff costs.

The net increase in total funds was £777,726 (2023: £2,791,579), giving total school funds of £23,901,341 (2023: £23,123,615). Continuing careful control of operating costs together with the significant legacy received in the year referred to above contributed to net income on unrestricted funds of £1,248,473 (2023: £2,396,860) and an increase in unrestricted funds of £123,473 (2023: £1,854,052) after fund transfers and actuarial losses, giving total unrestricted funds of £16,448,896 (2023: £16,325,423) . Restricted funds increased by £654,253 (2023: £937,527) due to a combination of donations received in the year yet to be spent in accordance with the terms for which they were provided and investment gains, giving total restricted funds of £7,452,445 (2023: £6,798,192).

Additions to fixed assets in the year were £1,023,843 (2023: £1,183,749) which includes £607,757 (2023: £235,442) in the capital work in progress category, incurred on professional fees and preliminary site preparation costs relating to the new Sixth Form Centre which to date has been funded from general unrestricted funds. As the main build phase progresses the income received from donations and legacies specifically for this project, or designated by School for this project, will be used to contribute to the build costs.

Unrestricted funds as shown in the financial statements includes a liability of £1,544,738 (2023: £666,738) in relation to The Manchester Grammar School Pension Scheme. These figures reflect an actuarial loss in the current year and prior year. Further details are given in note 18.

The School has net current assets at 31 July 2024 of £4,405,990 (2023: assets £3,341,316). Day to day working capital requirements are met by use of an overdraft facility when required, by an early payment discount scheme and by careful management of cash and it is anticipated that there will be no significant changes to pupil numbers or to the take up of the early payment discount scheme. The Governors do not consider there to be any material uncertainty about the School’s ability to continue as a going concern, as set out in the accounting policies. A significant number of parents took advantage of the early payment discount scheme in June 2024 which has contributed to the increased cash balance and increased fees in advance creditor at year end. The decrease in debtors and increase in cash year on year was largely a result of prior year accrued legacy income having been received during the year.

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The Manchester Grammar School Foundation TRUSTEE’S REPORT

FINANCIAL REVIEW AND RESULTS FOR THE YEAR (continued)

Reserves policy

The Governors continue to monitor the level of reserves in line with the School's strategic plan on a termly basis and in conjunction with the risks faced by the School. The Governors are satisfied with the position and consider the reserves are adequate given the careful use of the School's bank facilities and the use of fees paid in advance.

There were £16.4m of unrestricted funds at 31 July 2024 (2023: £16.3m). School funds of £15.5m (2023: £15.2m) are invested in the School estate, meaning there were free reserves amounting to £0.9m at 31 July 2024 (2023: surplus of £1.1m). Unrestricted funds includes £1.7m (2023: £1.3m), of which £0.4m (2023: £1.2m) is accrued income not yet received by year end, all of which has been designated towards the cost of building the proposed new Sixth Form Centre, sports pavilion and dining room. The need for day to day working capital is met by careful management of the bank balance with a £500,000 overdraft facility being available if required and the use of fees paid in advance (see note 11), in the absence of significant free reserves. The School funds major projects using operating surpluses and bank borrowing. The Development Office focuses mainly on fundraising for school bursaries and assists with certain specific projects as required. The School has accounted for a provision for The Manchester Grammar School Pension Scheme pension deficit of £1.5m (2023: £0.7m). Excluding this balance, unrestricted funds would be £17.9m (2023: £17.0m). Current capital commitments are given in note 21.

The School recognises the importance of reserves in its financial stability. The aim therefore continues to be to build up reserves out of annual operating surpluses and investment returns to a level which is considered adequate to meet the future needs of the School and allow further capital expenditure, repairs and refurbishment to equip the School with up-to-date facilities needed to maintain the standard of educational and academic services currently provided.

Investment policy

Investment powers are governed by the 2000 Trust Deed which states that Governors must review the School’s investments periodically and consider the suitability of the investments and the need for diversification. A new investment policy was agreed by the Governors in March 2018 and is reviewed annually. The management of the School’s portfolio is handled by a professional investment manager who reports to the Governors three times a year. Following a review last year there has been a change of investment manager during the year. There are no restrictions on the School’s power to invest.

FUTURE PLANS

Educational Technology

Following the roll-out of Microsoft Surface computers to teachers and pupils, the School is continuing to develop best practice for the use of these devices, both in and out of the classroom. Classrooms have been equipped with large format screens which can mirror pupil or staff screens in lessons. The effective use of educational technology remains a focus of our professional development for staff, promoting the sharing of best practice to ensure that these new technologies continue to enhance Teaching and Learning at the School.

Curriculum

A whole curriculum review took place in the 2023/24 academic year. The main outcome of this was moving from pupils sitting ten GCSEs to nine and the addition of a Personal Research Project (PRP) to the curriculum for all pupils. More time has also been given to the teaching of English, Modern Foreign Languages and PSHE in the Middle School. Over the next two years, we will review the effectiveness of the PRP, the effect of the increased time for English, and the increased time for PSHE.

Academic tracking

At the start of the 2023/24 academic year we implemented an academic tracking system (integrated with the School’s management information system, ISAMS) which help the School measure the academic progress of pupils and provide them with more effective support. Throughout the course of academic year 2024/25 we will explore the possibility of integrating the data produced by the tracking system into the reporting system.

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The Manchester Grammar School Foundation TRUSTEE’S REPORT

FUTURE PLANS (continued)

Safeguarding

To support the social, emotional and mental health of our young people, a wellbeing room has been created to provide a supervised safe space during break and lunchtimes for pupils who are vulnerable or who feel they would like wellbeing support. A new role of Wellbeing Prefect has been created, and prefects in this role have been specially trained in how to support the wellbeing of younger pupils, as well as in the protocols to follow in the event of the disclosure of safeguarding concerns. The SEN Department has purchased a therapy dog using a donation from benefactors. A whole-school mental health strategy is in the process of development. The Junior School has agreed to collaborate with Manchester Metropolitan University (MMU) in an educative research project which aims to promote wellbeing and emotional health.

The school timetable has been changed to replace the tutorial model for the teaching of PSHE in Middle School. There are now timetabled lessons for both Year 9 and 10, taught by specialist teachers rather than tutors, with a curriculum designed by the Head of PSHE. In Sixth Form, the weekly PSHE session with tutors is to be supplemented by thematically linked, half termly assemblies by a Head of College. With the addition of a new Relationships and Sex Education Governor to our institution, we will be able to maintain careful oversight of the changes as the new program evolves.

Staff development

The School is embedding and evaluating a new system of Individual Staff Review to increase the responsiveness of Continuing Professional Development (CPD) provision, along with a new, whole-school approach to support the continuing development of Teaching and Learning across the School. This will take the form of a programme of collaborative lesson observations, learning walks and discussions to enable Heads of Departments to evaluate and inform their Departmental Development Plans.

Estates

The project to build a new Sixth Form Centre and sports pavilion on the site of the existing pavilion is now well underway. A steering group is meeting regularly to manage this project. Fundraising plans for the project are managed by the Director of Development. The building contract was signed in July 2024 and the project is due to be completed by the end of 2025. Further information is given in notes 21 and 24 relating to expected future project cost and funding for the project respectively.

Page 11

The Manchester Grammar School Foundation TRUSTEE’S REPORT

TRUSTEE’S ACCOUNTING AND REPORTING RESPONSIBILITIES

The Trustee is 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 charity and of incoming resources and application of resources of the charity for that period. In preparing these financial statements, the Trustee is required to:

select suitable accounting policies and then apply them consistently;
observe the methods and principles in the Charities’ SORP (FRS102);
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.

The Trustee is responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provision of the Trust Deed. It is also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Trustee is responsible for the maintenance and integrity of the School and financial information included on the School’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Page 12

TRUSTEE’S REPORT

The Manchester Grammar School Foundation

STATEMENT AS TO DISCLOSURE OF INFORMATION TO THE AUDITOR

The Governors (as representatives of the Trustee) who were in office on the date of approval of these financial statements have confirmed, as far as they are aware, that there is no relevant audit information of which the auditor is unaware. Each of the Governors has confirmed that he/she has taken all the steps that he/she ought to have taken as a Governor in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor.

Approved by the Board of Governors on

and signed on its behalf by:

M C Bolton Chair of Governors and Director of the Trustee

Page 13

Independent Auditor’s Report to the Trustee of The Manchester Grammar School Foundation

Opinion

We have audited the financial statements of The Manchester Grammar School Foundation (the ‘charity’) for the year ended 31 July 2024 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the charity’s affairs as at 31 July 2024 and of its incoming resources and application of resources for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Charities Act 2011.

Basis for opinion

We have been appointed as auditors under section 144 of the Charities Act 2011 and report in accordance with regulations made under section 154 of that Act.

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 Trustee’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

Other information

The other information comprises the information included in the Trustee’s Report other than the financial statements and our auditor’s report thereon. The Trustee is responsible for the other information contained within the Trustee’s Report. Our opinion on the financial statements does not cover the other information and, we do not express any form of assurance conclusion thereon.

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

We have nothing to report in this regard.

Page 14

Independent Auditor’s Report to the Trustee of The Manchester Grammar School Foundation

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Charities Act 2011 requires us to report to you if, in our opinion:

the information given in the financial statements is inconsistent in any material respect with the Trustee’s Report; or
sufficient accounting records have not been kept; or
the financial statements are not in agreement with the accounting records and returns; or
we have not received all the information and explanations we require for our audit.

Responsibilities of the Trustee

As explained more fully in the Statement of Trustee’s responsibilities set out on page 12 the Trustee is 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 Trustee determines 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 Trustee is responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustee either intends to liquidate the charity or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

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

The extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.

In relation to fraud, the objectives of our audit are to identify and assess the risk 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 and to respond appropriately to fraud or suspected fraud identified during the audit.

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

obtained an understanding of the nature of the sector, including the legal and regulatory frameworks, that the charity operates in and how the charity is complying with the legal and regulatory frameworks;
inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.

Page 15

Independent Auditor’s Report to the Trustee of The Manchester Grammar School Foundation

As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, Charities SORP (FRS 102), Charities Act 2011 and the charity’s governing document.

We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing the financial statements including the Trustee’s Report and disclosures, whilst remaining alert to new or unusual transactions which may not be in accordance with the governing documents.

The most significant laws and regulations that have an indirect impact on the financial statements are The Education (Independent School Standards) Regulations 2014, Keeping Children Safe in Education under section 175 of the Education Act 2002, and the UK General Data Protection Regulation (UK GDPR). We performed audit procedures to inquire of management and those charged with governance whether the charity is in compliance with these law and regulations and inspected correspondence with regulatory authorities.

The audit engagement team identified the risk of management override of controls and fraud in revenue recognition as the areas where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed in relation to management override of internal controls included but were not limited to testing manual journal entries and other adjustments, evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business and challenging judgments and estimates. Audit procedures performed in relation to the risk of fraud in revenue recognition included agreeing a sample of legacy assets donated to external information to gain comfort over the valuation provided by management.

A further description of our responsibilities for the audit of the financial statements is provided on the Financial Reporting Council’s website at http://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 Trustee as a body, in accordance with the Charities Act 2011. Our audit work has been undertaken so that we might state to the charity’s Trustee those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity’s Trustee as a body, for our audit work, for this report, or for the opinions we have formed.

RSM UK Audit LLP, Statutory Auditor Chartered Accountants Ninth Floor, Landmark St Peter's Square 1 Oxford Street Manchester M1 4PB

RSM UK Audit LLP is eligible to act as auditor in terms of Section 1212 of the Companies Act 2006.

Page 16

The Manchester Grammar School Foundation STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 July 2024

INCOME Note Donations and legacies Donations and legacies 1 Charitable activities School fees 2a Catering income Other charitable income 3 Investments Investment income 4 Other Other income 5 TOTAL INCOME EXPENDITURE Raising funds Fundraising Investment management Charitable activities Teaching staff costs Teaching support staff costs Other teaching costs Catering expenditure Other welfare costs Premises costs Grants, awards and prizes 2c Support costs Management and administration TOTAL EXPENDITURE 7 Net income before investment gains Net gains/(losses) on investments 9 NET INCOME (Loss) on defined benefit pension scheme 18 Transfers between funds 14 NET MOVEMENT IN FUNDS RECONCILIATION OF FUNDS: FUND BALANCES BROUGHT FORWARD FUND BALANCES CARRIED FORWARD	Unrestricted funds £ 360,000 24,342,243 1,050,123 612,710 26,365,076 166,554 25,075 26,556,705 302,755 - 302,755 13,480,531 1,594,617 2,717,144 1,348,676 160,788 3,008,319 78,725 2,424,175 192,502 25,005,477 25,308,232 1,248,473 - 1,248,473 (1,131,000) 6,000 123,473 16,325,423 16,448,896	Restricted funds £ 2,887,114 - - 75,546 2,962,660 288,171 - 3,250,831 31,482 6,412 37,894 73,520 - 25,129 3,685 - 3,433 2,727,883 8,878 - 2,842,528 2,880,422 370,409 289,844 660,253 - (6,000) 654,253 6,798,192 7,452,445	Total 2024 £ 3,247,114 24,342,243 1,050,123 688,256 29,327,736 454,725 25,075 29,807,536 334,237 6,412 340,649 13,554,051 1,594,617 2,742,273 1,352,361 160,788 3,011,752 2,806,608 2,433,053 192,502 27,848,005 28,188,654 1,618,882 289,844 1,908,726 (1,131,000) - 777,726 23,123,615 23,901,341	Total 2023 £ 4,906,348 22,552,407 990,144 672,804 29,121,703 174,006 32,735 29,328,444 285,144 24,494 309,638 12,762,717 1,398,115 2,248,455 1,258,768 142,666 2,660,481 2,628,815 2,226,112 218,208 25,544,337 25,853,975 3,474,469 (116,890) 3,357,579 (566,000) - 2,791,579 20,332,036 23,123,615

The accounting policies and notes on pages 20 to 41 form part of these accounts.

Page 17

The Manchester Grammar School Foundation BALANCE SHEET As at 31 July 2024

Note FIXED ASSETS Tangible assets 8 Investments 9 CURRENT ASSETS Debtors 10 Cash at bank and in hand CREDITORS: Amounts falling due within one year 11 NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES CREDITORS: Amounts falling due after more than one year 12 TOTAL NET ASSETS EXCLUDING PENSION PROVISION Pension provision 18 TOTAL NET ASSETS FUNDS Restricted funds Unrestricted funds: General unrestricted funds Designated funds Pension reserve Total unrestricted funds TOTAL FUNDS OF THE SCHOOL 15	2024 £ 15,486,195 5,776,044 21,262,239 982,707 15,372,093 16,354,800 (11,948,810) 4,405,990 25,668,229 (222,150) 25,446,079 (1,544,738) 23,901,341 7,452,445 16,301,634 1,692,000 (1,544,738) 16,448,896 23,901,341	2023 £ 15,206,164 5,462,473 20,668,637 1,830,872 11,712,193 13,543,065 (10,201,749) 3,341,316 24,009,953 (219,600) 23,790,353 (666,738) 23,123,615 6,798,192 15,660,161 1,332,000 (666,738) 16,325,423 23,123,615

The accounts were approved and authorised for issue by the Board of Governors, on behalf of the Trustee, on and signed on its behalf by:

B H Leigh Treasurer G M Batchelor Bursar

The accounting policies and notes on pages 20 to 41 form part of these accounts.

Page 18

The Manchester Grammar School Foundation CASH FLOW STATEMENT For the year ended 31 July 2024

Note CASH FLOWS FROM OPERATING ACTIVITIES 16 CASH FLOWS FROM INVESTING ACTIVITIES Investment income Interest received Purchase of investments (Increase)/decrease in cash held within investments Proceeds from sale of investments Purchase of tangible fixed assets NET CASH USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Interest paid Repayments of borrowing NET CASH USED IN FINANCING ACTIVITIES CHANGE IN CASH AND CASH EQUIVALENTS IN THE YEAR CASH AND CASH EQUIVALENTS AT 1 AUGUST CASH AND CASH EQUIVALENTS AT 31 JULY REPRESENTED BY: Cash at bank and in hand	£ 236,043 166,554 (5,285,963) 122,361 5,139,875 (1,023,843) - -	2024 £ 4,304,873 (644,973) - 3,659,900 11,712,193 15,372,093 15,372,093	£ 114,811 59,195 (296,732) (120,286) 441,512 (1,183,749) (21,574) (526,262)	2023 £ 3,769,135 (985,249) (547,836) 2,236,050 9,476,143 11,712,193 11,712,193

The accounting policies and notes on pages 20 to 41 form part of these accounts.

Page 19

The Manchester Grammar School Foundation ACCOUNTING POLICIES

LEGAL STATUS AND CHARITY INFORMATION

The School is an unincorporated charitable trust (charity no. 529909), registered in England and meets the definition of a public benefit entity under FRS102. The School’s address is The Manchester Grammar School, Old Hall Lane, Manchester, M13 0XT. The object of the School is to educate all boys who qualify by nature of their ability, regardless of family circumstances. The principal activity of the School is to educate boys aged 7 to 18.

BASIS OF ACCOUNTING

The financial statements (“accounts”) are prepared under the Charities Act 2011 on the historical cost convention as modified by the adoption of fair value for investment assets and in accordance with applicable accounting standards. The accounts have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) effective 1 January 2019 (the Charities SORP (FRS 102)) and the Charities Act 2011.

The accounts 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 rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005 which has been withdrawn.

Monetary amounts in these financial statements are rounded to the nearest whole £1, except where otherwise indicated.

GOING CONCERN

The Governors do not consider there to be any material uncertainties about the School’s ability to continue as a going concern. The School has net current assets at 31 July 2024 of £4,405,990 (2023: assets £3,341,316). Day to day working capital requirements are met by use of an overdraft facility when required, by an early payment discount scheme and by careful management of cash and it is anticipated that there will be no significant changes to pupil numbers or to the take up of the early payment discount scheme. Included within the year end cash balance, within current assets, is an amount of £9,958,410 (2023: £8,078,540) which relates to fees in advance which will be released to income during the next financial year. There is currently no external borrowing.

The School has prepared cash flow forecasts for two years ending 31 July 2026, covering a period of 20 months from approval of its financial statements which support the going concern basis of preparation. The Governors are aware of the financial impact of the introduction of VAT on school fees, loss of charitable business rates relief and the changes to national insurance contributions for employers and will carefully monitor the impact of these changes on the School’s financial position during this time.

Having considered the cash flow forecasts prepared, the Trustee considers there to be no uncertainties surrounding the School’s ability to continue as a going concern and have prepared the financial statements on this basis.

INCOME

Income from school fees and similar income are accounted for in the period in which the tuition or other service is provided. Fees received in respect of tuition to be given after the year end are included in creditors as fees received in advance. Fees receivable are stated after deducting allowances and scholarships granted by the School, but include contributions received from restricted funds for scholarships, bursaries and other grants.

Donations received for the general purposes of the School are credited to unrestricted funds and are recognised where there is entitlement, amount can be measured with sufficient reliability and the economic benefit to the School is probable. Donations subject to specific wishes of the donors are credited to the relevant restricted funds.

For legacies, entitlement is taken on a case by case basis as the earlier of the date on which: the charity is aware that probate has been granted, the estate has been finalised and notification has been made by the executor(s) to the charity that a distribution will be made, or when a distribution is received from the estate. Receipt of a legacy, in whole or in part, is only considered probable when the amount can be measured reliably and the charity has been notified of the executor’s intention to make a distribution. If the legacy is in the form of an asset other than cash or an asset listed on a recognised stock exchange, recognition is subject to the value of the asset being able to be reliably measured and title to the asset has passed to the charity. Where legacies have been notified to the charity, or the charity is aware of the granting of probate, and the criteria for income recognition have not been met, then the legacy is a treated as a contingent asset and disclosed if material.

Page 20

The Manchester Grammar School Foundation

ACCOUNTING POLICIES

INCOME (continued)

Other income, including investment income, is accounted for on an accruals basis.

EXPENDITURE

Expenditure is accrued as soon as a liability is considered probable, discounted to present value for longer-term liabilities. Expenditure is summarised under functional headings on a direct costs basis. Costs of raising funds are those costs incurred in attracting voluntary income and those incurred in investment management. Charitable activities include expenditure associated with the objects of the School and both the direct costs and support costs relating to this activity. Grants awarded are expensed as soon as they become legal or operational commitments. Governance costs include those incurred in the governance of the School and its assets and are primarily associated with constitutional and statutory requirements.

TAXATION

The School is a registered charity and as such is entitled to certain tax exemptions on its income and gains from investments to the extent that these are applied to its charitable objects.

VALUE ADDED TAX

The School is exempted from levying VAT on the services it provides to pupils. For this reason the School is generally unable to recover input VAT it suffers on goods and services purchased, which is included in the cost of these goods and services.

TANGIBLE FIXED ASSETS

Assets acquired since 1970 are measured at their cost or value at the time of acquisition, net of depreciation and any impairment losses. No value is included in the accounts in respect of previously acquired land and buildings which form the largest part of the present School premises. However, the net book value of the pre 1970 land and buildings if depreciated would not be material.

Profits and losses on the disposal of properties are recognised in the Statement of Financial Activities in the year of disposal.

Where land and buildings are acquired with the aid of specific grants they are capitalised as above. Related grants for the restricted purposes of providing such fixed assets, are accounted for immediately as restricted funds.

All purchases of computer and other equipment costing in excess of £7,500 are capitalised.

The carrying values of tangible fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

DEPRECIATION

Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost or valuation of each asset on a straight line basis over its expected useful life, as follows:

Freehold buildings 2% Equipment 20%

Capital work in progress is carried at cost, less any identified impairment loss. Cost includes professional fees and other directly attributable costs that are necessary to bring the property to its operating condition. Depreciation commences when the properties are ready for their intended use.

IMPAIRMENT OF FIXED ASSETS

An assessment is made at each reporting date of whether there are indications that a fixed asset may be impaired or that an impairment loss previously recognised has fully or partially reversed. If such indications exist, the School estimates the recoverable amount of the asset.

Shortfalls between the carrying value of fixed assets and their recoverable amounts, being the higher of fair value less costs to sell and value-in-use, are recognised as impairment losses. Impairments of revalued assets are treated as a revaluation loss. All other impairment losses are recognised in net income/expenditure.

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The Manchester Grammar School Foundation

ACCOUNTING POLICIES

IMPAIRMENT OF FIXED ASSETS (continued)

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Reversals of impairment losses are recognised in net income/expenditure or, for revalued assets, as a revaluation gain.

On reversal of an impairment loss, the depreciation or amortisation is adjusted to allocate the asset’s revised carrying amount (less any residual value) over its remaining useful life.

INVESTMENTS

Investments are stated in the balance sheet at their market value as at the balance sheet date. All movements in value arising from investment changes or revaluation are shown in the Statement of Financial Activities and are allocated to the appropriate fund according to the allocation of the underlying asset. Investment management costs are accounted for as incidental costs of the acquisition or disposal where transaction based, while investment income management costs are charged as expenditure out of the relevant income funds.

FUND ACCOUNTING

The School has the following types of funds for which it is responsible and which require separate disclosure.

Unrestricted funds	Funds which are expendable at the discretion of the Governors in furtherance of the
	objects of the School. In addition to expenditure on tuition, such funds may be held
	in order to finance capital investment and working capital.
	Unrestricted funds which have been set aside by the Governors for particular
Designated funds	purposes (see note 14).
Restricted funds	Donations or legacies received which are earmarked by the donor for specific
	purposes within the overall aims of the School. Amounts spent on capital projects
	out of restricted funds are shown as transfers to unrestricted funds in the Statement
	of Financial Activities (see note 14).

AGENCY ARRANGEMENTS

The School collects monies and makes payments in respect of trips. As these funds do not represent income for the School, they are not accounted for in the Statement of Financial Activities.

The School acts as agent in the administering of Swire grants on behalf of other schools. The School only recognises their own share of Swire grant income, with income received and paid out in respect of other schools being excluded from the Statement of Financial Activities, as the School does not have a beneficial interest in the individual transactions. Where funds have not been fully disbursed to other schools in the year, then an amount will be included in creditors.

EMPLOYEE BENEFITS

The costs of short-term employee benefits are recognised as a liability and an expense.

TERMINATION BENEFITS

Termination benefits are recognised immediately as an expense when there is a clear decision or commitment to terminate the employment or provide such termination benefits.

RETIREMENT BENEFITS

Retirement benefits for the School’s teaching staff are provided by the Teachers’ Pensions Scheme (“TPS”), a multiemployer defined benefit scheme, and, for non-teaching staff, The Pensions Trust Flexible Retirement Plan (FRP), a defined contribution scheme. The Manchester Grammar School Pension Scheme (“MGSPS”) is a defined benefit scheme for non-teaching staff that closed to new entrants and future accrual on 30 September 2016.

The TPS is an unfunded scheme. Contributions to the TPS are calculated so as to spread the cost of pensions over employees’ working lives with the School in such a way that the pension cost is a substantially level percentage of current and future pensionable payroll. The contributions are determined by the Government Actuary on the basis of quadrennial valuations using a projected unit method. The TPS is an unfunded multi-employer scheme with no underlying assets to assign between employers. Consequently there is insufficient information available to use defined benefit accounting and therefore it is accounted for as a defined contribution scheme, with the amount charged to the

Page 22

The Manchester Grammar School Foundation

ACCOUNTING POLICIES

RETIREMENT BENEFITS (continued)

statement of financial activities being the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either other creditors or prepayments.

The FRP is a defined contribution scheme. For defined contribution schemes the amount charged to the statement of financial activities is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either other creditors or prepayments.

The MGSPS is a funded scheme, and the assets of the scheme are held separately. Pension schemes are measured at fair value and liabilities are measured on an actuarial basis using the projected unit credit method. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date. The amounts charged to the statement of financial activities are the current service costs and the costs of scheme introductions, benefit changes, settlements and curtailments. They are included as part of staff costs. The net interest cost on the net defined benefit liability/asset is charged to comprehensive income and included within support costs. Re-measurement comprising actuarial gains and losses and the return on scheme assets (excluding amounts included in net interest on the net defined benefit liability) are recognised immediately in the statement of financial activities after Total Expenditure .

FINANCIAL INSTRUMENTS

The School has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102, in full, to all of its financial instruments. The School only has financial assets and liabilities of a kind that qualify as basic financial instruments.

Trade and other debtors and creditors are initially recognised at transaction value and subsequently measured at their settlement value.

Bank loans are initially recognised at their transaction value and subsequently measured at amortised cost using the effective interest rate method. Interest expense is recognised on the basis of the effective interest method and is included in interest payable and other similar charges.

Investments are initially measured at transaction price and subsequently measured at fair value through net income or expenditure.

CRITICAL ACCOUNTING ESTIMATES AND AREAS OF JUDGEMENT

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions

The School makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are detailed below:

• Pension liability

A number of assumptions were made in relation to determining the present value of the deficit in relation to the MGSPS. The assumptions used include the discount rate and rate of salary increases. Any changes in these assumptions, which are disclosed in note 18, will impact the carrying amount of the pension liability.

• Useful life of fixed assets

In making decisions regarding the depreciation of tangible fixed assets, management must estimate the useful life of said assets to the School. A change in estimate would result in a change in the depreciation charged to the statement of total comprehensive income in each year. The carrying value of tangible fixed assets is £15,486,195 (2023: £15,206,164) with depreciation of £743,812 (2023: £702,121) being charged during the year.

• Accrued income relating to legacy

In determining the amount of accrued income relating to any legacy for which probate has been granted, management must estimate valuations of properties and shares held by estates with reference to probate values of the properties and recent listed share prices.

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The Manchester Grammar School Foundation

ACCOUNTING POLICIES

CRITICAL ACCOUNTING ESTIMATES AND AREAS OF JUDGEMENT (continued)

Critical accounting judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements:

Categorisation of leases

In categorising leases as finance leases or operating leases, management makes judgements as to whether significant risks and rewards of ownership have transferred to the School as lessee.

Page 24

The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

1 DONATIONS AND LEGACIES

M.G.S. Trust donations to Bursary Fund Other donations to Bursary Fund Other donations Legacy income Total donations and legacies	Unrestricted £ - - - 360,000 360,000	Restricted £ 2,601,110 99,997 186,007 - 2,887,114	Total 2024 £ 2,601,110 99,997 186,007 360,000 3,247,114	Total 2023 £ 2,375,628 103,523 1,069,197 1,358,000 4,906,348

In the year ended 31 July 2023 donations and legacies, with the exception of £1,332,000 unrestricted legacy income, were otherwise all credited to restricted funds.

2 SCHOOL FEES

2a) Gross fees Less: fee discounts Less: bursaries, scholarships and awards (see note 2b) Plus: bursaries, scholarships and awards paid for by restricted funds (see note 2b) 2b) Bursaries, scholarships and awards in fee income (note 2a): Restricted funds – fee assistance Unrestricted funds – fee assistance 2c) Grants, awards and prizes expenditure in charitable activities: Restricted funds – fee assistance Restricted funds – other awards and prizes Unrestricted funds - other awards	2024 £ 25,089,603 (491,890) (2,962,882) 21,634,831 2,707,412 24,342,243 2,707,412 255,470 2,962,882 2,707,412 20,471 2,727,883 78,725 2,806,608	2023 £ 23,190,020 (402,338) (2,765,545) 20,022,137 2,530,270 22,552,407 2,530,270 235,275 2,765,545 2,530,270 27,111 2,557,381 71,434 2,628,815

The total fee assistance awards provided assistance to 217 (2023: 218) pupils. School fee income is credited to unrestricted funds.

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

3 OTHER CHARITABLE INCOME

Unrestricted Restricted £ £ Grants receivable - 75,546 Shuttle bus income 468,024 - Other income 144,686 - 612,710 75,546	Total 2024 £ 75,546 468,024 144,686 688,256	Total 2023 £ 68,969 442,258 161,577 672,804

In the year ended 31 July 2023 grants receivable and £895 of other income were credited to restricted funds, with all shuttle bus income and £160,682 of other income credited to unrestricted funds.

4 INVESTMENT INCOME

Unrestricted £ Listed investments - Other unlisted securities - Interest on other bank accounts 166,554 166,554	Restricted £ 9,252 190,576 88,343 288,171	Total 2024 £ 9,252 190,576 254,897 454,725	Total 2023 £ 51,242 41,122 81,642 174,006

In the year ended 31 July 2023 investment income, with the exception of interest on other bank accounts of £59,195 was credited to restricted funds.

5 OTHER INCOME

	Unrestricted	Restricted	2024	2023
	£	£	£	£
Lettings	25,075	-	25,075	32,735

In the year ended 31 July 2023 all lettings income was credited to unrestricted funds.

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

6 EXPENDITURE

EXPENDITURE
Charitable expenditure includes: Depreciation Bank interest payable Operating lease payments Net interest on pension liability Governance costs includes: Auditor’s remuneration (excluding VAT) - statutory audit Auditor’s remuneration – other assurance services Auditor’s remuneration – accountancy services Staff costs: Wages and salaries Social security costs Pension costs Redundancy costs The average number of employees during the year was: Teaching staff Other The number of employees whose emoluments exceeded £60,000 were: £60,001 to £70,000 £70,001 to £80,000 £80,001 to £90,000 £90,001 to £100,000 £110,001 to £120,000 £230,001 to £240,000 £250,000 to £260,000	2024 £ 743,812 - 733,440 27,000 28,850 1,260 2,100 13,676,245 1,548,604 2,922,611 1,708 18,149,168 2024 No. 182 144 326 2024 No. 45 5 7 1 1 - 1	2023 £ 702,121 21,574 391,095 8,000 27,475 1,200 2,000 12,854,359 1,465,956 2,584,237 16,550 16,921,102 2023 No. 184 137 321 2023 No. 38 1 6 1 1 1 -

Included in the above higher paid employees were 55 (2023: 47) accruing benefits under defined benefit schemes.

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

7 ANALYSIS OF EXPENDITURE

Charitable expenditure Teaching staff costs Teaching support staff costs Other teaching costs Catering expenditure Other welfare costs Premises costs Grants, awards and prizes Support costs Management and administration of the School Costs of generating funds Fundraising Investment management	Staff costs £ 13,554,051 1,594,617 - 556,154 138,102 762,839 - 1,272,950 - 17,878,713 270,455 - 18,149,168	Other £ - - 2,458,312 785,277 22,686 1,828,680 2,806,608 1,131,415 192,502 9,225,480 63,782 6,412 9,295,674	Depreciation £ - - 283,961 10,930 - 420,233 - 28,688 - 743,812 - - 743,812	Total 2024 £ 13,554,051 1,594,617 2,742,273 1,352,361 160,788 3,011,752 2,806,608 2,433,053 192,502 27,848,005 334,237 6,412 28,188,654	Total 2023 £ 12,762,717 1,398,115 2,248,455 1,258,768 142,666 2,660,481 2,628,815 2,226,112 218,208 25,544,337 285,144 24,494 25,853,975

Support costs comprise general office costs, insurance, loan interest, pension finance costs, staff related costs and governance costs. Governance costs amount to £36,132 (2023: £34,410). Management and administration costs comprise legal and professional fees, bank charges and school inspection costs.

Of the total charitable expenditure of £27,848,005 (2023: £25,544,337), £25,005,477 (2023: £22,888,592) was unrestricted and £2,842,528 (2023: £2,655,745) was restricted.

Of the total cost of generating funds of £340,649 (2023: £309,638), £302,755 (2023: £283,969) was unrestricted and £37,894 (2023: £25,669) was restricted.

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

8 TANGIBLE FIXED ASSETS

Capital work in progress Freehold land & buildings £ £ Cost At 1 August 2023 551,464 20,639,476 Additions 675,660 186,302 Transfers (316,022) 128,083 Disposals - - At 31 July 2024 911,102 20,953,861 Depreciation At 1 August 2023 - 6,753,967 Charge for the year - 413,455 Disposals - - At 31 July 2024 - 7,167,422 Net book value At 31 July 2024 911,102 13,786,439 At 31 July 2023 551,464 13,885,509	Equipment £ 2,121,821 161,881 187,939 (214,971) 2,256,670 1,352,630 330,357 (214,971) 1,468,016 788,654 769,191	Total £ 23,312,761 1,023,843 - (214,971) 24,121,633 8,106,597 743,812 (214,971) 8,635,438 15,486,195 15,206,164

The School’s buildings currently have an insured value of £102,908,823 (2023: £99,141,448). Legal title of the School’s land and buildings is held by the Corporate Trustee, The Manchester Grammar School Foundation Trustee Limited. Given the risks and rewards of ownership reside with the School, post-1970 School buildings and subsequent additions or capital improvements are capitalised within these financial statements.

9 INVESTMENTS

Listed investments Unit trusts £ £ Market value At 1 August 2023 1,611,088 3,729,024 Additions - 5,285,963 Disposals (1,547,866) (3,592,009) Net investment gains (63,222) 353,066 At 31 July 2024 - 5,776,044 Listed Investments £ Unit trusts £ Historical cost At 31 July 2024 - 5,285,963 At 31 July 2023 1,299,965 3,521,363	Cash Total £ £ 122,361 5,462,473 - 5,285,963 (122,361) (5,262,236) - 289,844 - 5,776,044 Cash £ Total £ - 5,285,963 122,361 4,943,689

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

9 INVESTMENTS (continued)

All listed investments relate to direct investment in listed securities.

Investment assets based and managed within the UK Investment assets outside the UK	2024 £ 5,776,044 - 5,776,044	2023 £ 3,064,852 2,397,621 5,462,473

At year end, although all investment assets are held within an investment fund that is based in the UK, the investments made by that fund are well diversified and geographically spread.

10 DEBTORS

Trade debtors Prepayments and accrued income Other debtors	2024 £ 130,163 757,316 95,228 982,707	2023 £ 113,990 1,675,361 41,521 1,830,872

Trade debtors are stated after a bad debt provision of £235,237 (2023: £181,626). The provision for bad and doubtful debts increased during the year resulting in a debit to charitable activities of £53,611 (2023: debit £7,222).

11 CREDITORS: Amounts falling due within one year

Trade creditors Other taxation and social security Other creditors Accruals and deferred income Fees in advance Refundable deposits	2024 £ 257,532 356,971 700,604 643,287 9,958,410 32,006 11,948,810	2023 £ 541,443 358,302 644,672 543,312 8,078,540 35,480 10,201,749

Fees in advance are payments that have been received for school fees for the 2024/2025 academic year.

Deferred income relates to shuttle buses, lunches and other income which have been received in respect of future financial years.

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

11 CREDITORS: Amounts falling due within one year (continued)

Summary of movements in fees in advance and deferred income during the year:

Balance brought forward at 1 August Amounts released during the year Amounts deferred during the year Balance carried forward at 31 July REDITORS: Amounts falling due after more than one year Refundable deposits	2024 £ 8,217,566 (8,217,566) 10,166,824 10,166,824 2024 £ 222,150 222,150	2023 £ 7,112,165 (7,112,165) 8,217,566 8,217,566 2023 £ 219,600 219,600

12 CREDITORS: Amounts falling due after more than one year

There were no outstanding bank loans at 31 July 2024. Since year end the School has taken out a revolving bank loan to contribute to the funding mix for the new Sixth Form Centre, sports pavilion and dining room building project. Further details are given in notes 21 and 24.

Refundable deposits

Parents not in receipt of fee assistance pay a deposit when a pupil joins the School. These are classified as short term or long term liabilities based on the expectation pupils remain in the School for the duration of their education. Assuming the pupils remain in the School, the deposits are expected to be refundable as follows:

Amounts due within one year 1 to 2 years 2 to 5 years More than 5 years	2024 £ 32,006 25,500 84,300 112,350 254,156	2023 £ 35,480 22,350 84,750 112,500 255,080

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

13 FINANCIAL INSTRUMENTS

The carrying amount of the School’s financial instruments at 31 July were:

Financial assets: Debt instruments measured at amortised cost Equity instruments measured at fair value through profit or loss Financial liabilities measured at amortised cost	2024 £ 686,792 5,776,044 6,462,836 2024 £ 1,647,164	2023 £ 1,342,435 5,340,112 6,682,547 2023 £ 1,845,481

14 FUNDS

Restricted Pension reserve unrestricted General unrestricted Designated unrestricted Total funds	Balance 1 August 2023 £ 6,798,192 (666,738) 15,660,161 1,332,000 23,123,615	Incoming resources £ 3,250,831 - 26,556,705 - 29,807,536	Resources expended £ (2,880,422) (117,421) (25,190,811) - (28,188,654)	Transfer between funds £ (6,000) 370,421 (724,421) 360,000 -	Other gains/ (losses) Balance 31 July 2024 £ £ 289,844 7,452,445 (1,131,000) (1,544,738) - 16,301,634 - 1,692,000 (841,156) 23,901,341

Unrestricted funds are retained as necessary to cover working capital. Transfers between funds comprise:

1) Transfers relating to the in-year contributions, the in-year expenditure and the gain/loss in relation to the defined benefit pension scheme.
2) The transfer out of restricted funds into general unrestricted funds of amounts spent on capitalised equipment assets in the year. The transfer represents amounts spent in accordance with the restriction and capitalised within tangible assets in the year.
3) The transfer out of general unrestricted funds into designated funds relating to income from a legacy inherited during the year upon which no restriction was placed by the benefactor. The amount transferred is estimated to be receivable under the legacy after 31 July 2024. The Governors have designated those funds towards the cost of building the proposed new Sixth Form Centre, sports pavilion and dining room along with the amount brought forward in designated funds.

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

14 FUNDS (continued)

Restricted funds

1) Bursary Fund 2) New Building Fund 3) Leaving Exhibition Fund 4) Scholarship Fund 5) Prize Fund 6) Educational Travel Fund 7) Sports and Games Fund 8) Library Fund 9) Other funds	Balance 1 August 2023 £ 4,285,435 1,057,235 511,855 78,982 188,812 286,735 78,799 166,065 144,274 6,798,192	Incoming resources £ 2,888,807 162,123 18,556 2,801 8,240 10,685 2,792 5,857 150,970 3,250,831	Resources expended £ (2,712,346) (929) (5,997) (3,591) (4,843) (6,506) (1,654) (3,170) (141,386) (2,880,422)	Transfers between funds £ Investment gains £ - 223,050 - - - 26,077 - 3,958 - 9,589 - 13,698 - 3,741 - 7,692 (6,000) 2,039 (6,000) 289,844	Balance 31 July 2024 £ 4,684,946 1,218,429 550,491 82,150 201,798 304,612 83,678 176,444 149,897 7,452,445

Restricted funds are used as follows

1) The Bursary Fund is used on a means tested basis to provide fee assistance for pupils from lower income families who would not otherwise be able to attend or remain at the School.
2) The New Building Fund will be used towards the cost of building the new Sixth Form Centre, sports pavilion and dining room.
3) The Leaving Exhibition Fund is used to advance the education of former pupils by the award of exhibitions tenable at any training college for teachers, university or other institution of further (including professional and technical) education. The Governors may also grant financial assistance or materials to enable former pupils on leaving school, university or other establishment to prepare for, or assist their entry into a profession, trade or calling.
4) The Scholarship Fund is used to advance the education of pupils attending the School by the award of scholarships or other suitable awards to pupils selected on the grounds of merit.
5) The Prize Fund is used to advance the education of pupils attending the School by the award of prizes or other suitable rewards or marks of distinction.
6) The Educational Travel Fund is used to advance the education of pupils attending the School by the award of grants to enable them in furtherance of their education to travel in this country or abroad.
7) The Sports and Games Fund is to advance the education of pupils attending the School by the provision of items, services and facilities for sports and games.
8) The Library Fund is used for the provision of items, services and facilities for the School library. 9) Other funds comprise various separate funds all for the benefit of the School or pupils. Incoming resources and resources expended from these funds includes a grant of £75,546 to be used for the teaching of Chinese, as part of the Swire project.

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

14 FUNDS (continued)

Prior year funds:	Prior year funds:
		Balance		Incoming		Resources	Transfer	Other	Balance
		1 August		resources		expended	between	gains/	31 July
		2022					funds	(losses)	2023
		£		£		£	£	£	£
	Restricted	5,860,665		3,759,023		(2,681,414)	(23,192)	(116,890)	6,798,192
	Pension reserve	(362,738)		-		(99,000)	361,000	(566,000)	(666,738)
	unrestricted
	General
	unrestricted	14,834,109		25,569,421	(23,073,561)		(1,669,808)	-	15,660,161
	Designated
	unrestricted	-		-		-	1,332,000	-	1,332,000
	Total funds	20,332,036		29,328,444	(25,853,975)		-	(682,890)	23,123,615
Restricted funds:
		Balance					Transfers		Balance
		1 August		Incoming		Resources	between	Investment	31 July
		2022		resources		expended	funds	losses	2023
			£		£	£	£	£	£
1)	Bursary Fund	4,359,748		2,564,187		(2,549,020)	-	(89,480)	4,285,435
2)	New Building
	Fund		-	1,057,271		(36)	-	-	1,057,235
3)	Leaving
	Exhibition
	Fund	521,902		8,409		(8,154)	-	(10,302)	511,855
4)	Scholarship
	Fund	80,821		1,282		(1,525)	-	(1,596)	78,982
5)	Prize Fund	192,695		3,981		(3,997)	-	(3,867)	188,812
6)	Educational
	Travel Fund	274,945		31,693		(14,379)	-	(5,524)	286,735
7)	Sports and
	Games Fund	89,346		1,334		(316)	(10,056)	(1,509)	78,799
8)	Library Fund	183,221		2,734		(3,650)	(13,136)	(3,104)	166,065
9)	Other funds	157,987		88,132		(100,337)	-	(1,508)	144,274
		5,860,665		3,759,023		(2,681,414)	(23,192)	(116,890)	6,798,192

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

15 ANALYSIS OF NET ASSETS BETWEEN FUNDS

As at 31 July 2024:

Restricted funds
Unrestricted funds
As at 31 July 2023:

Restricted funds
Unrestricted funds

Tangible
fixed assets
Investments
Net current
assets/(liabilities)
Long term
liabilities and
provisions
Total
£
£
£
£
£
-
5,776,044
1,676,401
-
7,452,445
15,486,195
-
2,729,589
(1,766,888)
16,448,896

15,486,195
5,776,044
4,405,990
(1,766,888)
23,901,341

Tangible
fixed assets
Investments
Net current
assets/(liabilities)
Long term
liabilities and
provisions
Total
£
£
£
£
£
-
5,462,473
1,335,719
-
6,798,192
15,206,164
-
2,005,597
(886,338)
16,325,423

15,206,164
5,462,473
3,341,316
(886,338)
23,123,615

16 CASH FLOW STATEMENT

Reconciliation of net income to net cash flow from operating activities

Net income Depreciation Interest receivable (Gains)/losses on investments Interest payable Investment income Decrease/(increase) in debtors Increase in fees in advance (Increase)/decrease in other creditors Defined benefit pension scheme costs less contributions payable Defined benefit pension scheme finance cost Net cash provided by operating activities	2024 £ 1,908,726 743,812 (166,554) (289,844) - (288,171) 900,293 1,879,870 (130,259) (280,000) 27,000 4,304,873	2023 £ 3,357,579 702,121 (59,195) 116,890 21,574 (114,811) (1,199,882) 1,116,003 90,856 (270,000) 8,000 3,769,135

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

17 ANALYSIS OF CHANGES IN NET DEBT

1 August 2023 £ Cash at bank and in hand 11,712,193 Borrowings excluding overdrafts - 11,712,193	Cash flows £ Non-cash flows £ 31 July 2024 £ 3,659,900 - 15,372,093 - - - 3,659,900 - 15,372,093

18 PENSION SCHEMES

The School’s teaching staff are entitled to join the Teachers’ Pension Scheme (“TPS”) and the non-teaching staff, The Pensions Trust Flexible Retirement Plan (“FRP”). The TPS is a multi-employer defined benefit scheme and the FRP is a defined contribution scheme. The latest actuarial valuation of the TPS related to the period ended 31 March 2016. A third scheme, The Manchester Grammar School Pension Scheme (“MGSPS”), is a defined benefit scheme for non-teaching staff that closed to new entrants and future accrual on 30 September 2016.

TEACHERS’ PENSION SCHEME

The School participates in the TPS for its teaching staff. The employer's pension costs paid to the TPS in the period amounted to £2,409,713 (2023: £2,153,156) and at the year-end £310,378 (2023: £257,987) was included in other creditors in respect of contributions to this scheme.

The TPS is a statutory, contributory, defined benefit scheme, governed by the Teachers’ Pension Scheme Regulations 2014. Membership is automatic for teachers. All teachers have the option to opt-out of the TPS following enrolment. The TPS is an unfunded scheme to which both the member and employer make contributions, as a percentage of salary - these contributions are credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament.

Valuation of the Teachers’ Pension Scheme

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 2023 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 2020 in accordance with The Public Service Pensions (Valuations and Employer Cost Cap) Directions 2023 and the Employer Contribution Rate was assessed using agreed assumptions in line with the Directions and was accepted at the original assessed rate as there was no cost control mechanism breach.

The valuation report was published by the Department for Education on 26 October 2023. The key elements of the valuation are:

Total scheme liabilities for service (the capital sum needed at 31 March 2020 to meet the stream of future cash flows in respect of benefits earned) of £262 billion
Value of notional assets (estimated future contributions together with the proceeds from the notional investments held at the valuation date) of £222 billion
Notional past service deficit of £39.8 billion (2016 £22 billion)
Discount rate is 1.7% in excess of CPI (2016 2.4% in excess of CPI) (this change has had the greatest financial significance)

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

18 PENSION SCHEMES (continued)

As a result of the valuation, new employer contribution rates have been set at 28.68% of pensionable pay from 1 April 2024 until 31 March 2027 (compared to 23.68% under the previous valuation) including a 0.08% administration levy.

A copy of the valuation report and supporting documentation is available on the Teachers’ Pension Scheme’s website.

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

THE PENSIONS TRUST FLEXIBLE RETIREMENT PLAN

The FRP is a defined contribution scheme run by The Pensions Trust. Total contributions charged to the Statement of Financial Activities were £458,361 (2023: £416,516). Included within other creditors is a balance of £56,239 relating to the FRP scheme (2023: £51,877).

THE MANCHESTER GRAMMAR SCHOOL PENSION SCHEME

The MGSPS is a defined benefit scheme. It is closed to new entrants and to future accrual. This is a separate trustee administered fund holding the pension scheme assets to meet long term pension liabilities.

An actuarial valuation is currently underway as at 30 September 2023 and the preliminary results of this have been updated to 31 March 2024 by a qualified actuary, independent of the scheme's sponsoring employer.

The most recent actuarial valuation as at 30 September 2020 showed a deficit of £2,984,000. The employer has agreed with the Trustees that it will aim to eliminate the deficit over a period of 5 years 8 months from l September 2022 by the payment of annual contributions of £281,386 per annum (payable monthly) increasing at 3% per annum. In addition contributions of £82,000 per annum are payable monthly towards scheme expenses (including the Pension Protection Fund Levy).

The principal assumptions used in the calculation of the valuation of the plan assets and the present value of the defined benefit obligations include:

	2024	2023
	%	%
Discount rate	5.1	5.2
Inflation (RPI)	3.1	3.1
Inflation (CPI)	2.8	2.7
Salary growth	2.8	2.7

The mortality assumptions adopted imply the following life expectancies:

	At 31 July 2024	At 31 July 2023
	Life expectancy at	Life expectancy at
	age 65 (years)	age 65 (years)
Male retiring in 2024	19.6	19.8
Female retiring in 2024	22.2	22.3
Male retiring in 2044	20.8	21.0
Female retiring in 2044	23.6	23.7

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

18 PENSION SCHEMES (continued)

Amounts recognised in profit and loss (in the Statement of Financial Activities) in respect of the defined benefit scheme are as follows:

Expenses Net interest cost	2024 £000 91 27 118	2023 £000 91 8 99

Amounts recognised in other comprehensive income (in the Statement of Financial Activities) in respect of the defined benefit scheme are as follows:

Loss on plan assets (excluding amounts included in net interest costs) Experience losses arising on the plan liabilities (Loss)/gain as a result of effects of changes in the demographic and financial assumptions underlying the present value of the plan liabilities Total loss recognised in other comprehensive income Changes in pension value of the defined benefit obligation: Defined benefit obligation at start of period Interest expense Actuarial loss/(gain) Benefits paid Defined benefit obligation at end of period Changes in the fair value of plan assets: Fair value of plan assets at start of period Interest income Actuarial loss Contributions by the School Benefits paid Expenses Fair value of plan assets at end of period Deficit in plan		2024 £000 (80) (921) (130) (1,131) 2024 £000 8,781 450 1,051 (255) 10,027 2024 £000 8,114 423 (80) 371 (255) (91) 8,482 1,545	2023 £000 (3,476) (365) 3,275
			(566) 2023 £000 11,610 412 (2,910) (331)
			8,781
			2023 £000 11,247 404 (3,476) 361 (331) (91)
			8,114
			667

The actual return on the plan assets over the period ended 31 July 2024 was a gain of £343k (2023: loss of £3,072k).

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

18 PENSION SCHEMES (continued)

The analysis of the scheme assets at the reporting date were as follows:

Equity-type assets Bonds Property Other Total assets	2024 £000 1,023 3,562 347 3,550 8,482	2023 £000 196 4,050 395 3,473 8,114

The School is aware that the Court of Appeal has recently upheld the decision in the Virgin Media vs NTL Pension Trustees II Limited case. The decision puts into question the validity of any amendments made in respect of the rules of a contracted-out pension scheme between 6 April 1997 and 5 April 2016. The judgment means that some historic amendments affecting s.9(2B) rights could be void if the necessary actuarial confirmation under s.37 of the Pension Schemes Act 1993 was not obtained. Until further investigations have been completed by the Scheme Trustees and/or any legislative action taken by the government, the potential impact if any, on the valuation of scheme liabilities remains unknown.

19 RELATED PARTIES

The Manchester Grammar School Foundation Trustee Limited

The Manchester Grammar School Foundation Trustee Limited (‘the Trustee’) is the trustee of the School and its controlling party. There were no transactions with the Trustee in the year.

Key management personnel

The Governors consider that the key management personnel of the School are the High Master and the Senior Leadership Team. The total employment benefits including employer pension contributions and employer national insurance contributions of the key management personnel were £1,325,223 (2023: £1,135,313).

20 TRANSACTIONS WITH GOVERNORS

Two of the Governors, Mr Hugh Campbell and Mr Kunal Hinduja, each have one child attending the School. Both of those children were also in attendance last year. Neither received a bursary or other form of assistance.

One of the Governors, Mr Michael Robinson, is a director of IN4M Property Consultants Ltd. During the year the School purchased consultancy services in relation to the new Sixth Form Centre, sports pavilion and dining room from IN4M Property Consultants Ltd at a cost of £20,400 (2023: £20,400). As at 31 July 2024 the School owed IN4M Property Consultants Ltd £2,400 (31 July 2023: £nil). Another of the Governors, Mr Marc Yaffe, is Managing Partner of JMW Solicitors LLP. During the year the School purchased legal services in relation to the new building project from JMW Solicitors LLP at a cost of £1,800 (2023: £nil). As at 31 July 2024 the School owed JMW Solicitors LLP £nil (31 July 2023: £nil). The transactions with both IN4M Property Consultants Ltd and JMW Solicitors LLP were at arms-length and at market value.

During the year 2 (2023: 2) Governors received reimbursement of travelling expenses totalling £363 (2023: £834).

Two Governors made donations to the School in their personal capacity, totalling £4,500, to contribute to the new building fund.

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

20 TRANSACTIONS WITH GOVERNORS (continued)

The ultimate controlling parties of the School are the Governors, in their capacity as directors of the Trustee.

None of the Governors received any remuneration from the School.

21 CAPITAL COMMITMENTS

As at 31 July 2024, the School had capital commitments totalling £9,672,643 (2023: £509,470). The increase compared to the previous year end relates to building works in progress for the new Sixth Form Centre, sports pavilion and dining room. The above figures are inclusive of value added tax (VAT) but once VAT is introduced from January 2025 some of the VAT on capital commitments will be recoverable. Further information about the funding for this project is given in note 24.

22 OPERATING LEASE COMMITMENTS

As at 31 July 2024, the School had outstanding commitments for future minimum lease payments under noncancellable operating leases which fall due as follows:

Within 1 year Within 1 to 2 years Within 2 to 5 years	2024 £ 672,069 369,963 163,700 1,205,732	2023 £ 690,370 652,572 467,427 1,810,369

Commitments under leases for Microsoft Surface computers provided to all pupils and teachers to enhance teaching and learning are reflected in the figures above.

23 AGENCY ARRANGEMENTS

The School acts as agent in respect of school trips. All trips are budgeted on a break-even basis but transactions relating to each trip often span financial years. In the year ended 31 July 2024 the School received £1,167,952 and paid £1,257,057 in respect of school trips (2023: school received £1,446,572 and paid £1,415,787). An amount of £247,121 (2023: £287,936) is included in other creditors, and £71,105 (2023: £22,815) is included in other debtors in respect of trip income that has yet to be fully disbursed at the year end.

The School also acts as agent in administering the Swire programme for Chinese teaching for other local schools. In the year ended 31 July 2024 the School received £260,454 and paid out £146,798 in respect of the Swire programme (2023: school received £268,494 and paid out £205,310). £73,520 was recognised as the School’s own income in respect of Swire, included in grants receivable in the Statement of Financial Activities (2023: £68,969). An amount of £82,806 is included in other creditors in respect of Swire income that has yet to be distributed to recipient schools at the year-end (2023: £42,671).

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The Manchester Grammar School Foundation NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 July 2024

24 POST BALANCE SHEET EVENTS

After year end the School has taken out a revolving bank loan to contribute to the funding mix for the new Sixth Form Centre, sports pavilion and dining room building project. This revolving loan facility provides flexibility over the amount borrowed up to a maximum of £5million over a 3 year period at an interest rate of 1.8% over Bank of England base rate on borrowings and a non-utilisation fee of 0.5% on the balance not borrowed. The loan is secured against some of the School’s buildings. Further information about this capital project is given in note 21. In addition to this loan facility funding for the project will come from a mix of restricted funds donated for the purpose, unrestricted funds from legacy income designated for the purpose, with the balance coming from general unrestricted funds.

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