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2022-07-31-accounts

Kilgraston School Trust

Charity number SC029664

Financial statements for the year ended 31 July 2022

Kilgraston School Trust

Contents

Page
Board of Trustees and officials 1
Trustees’ report 2 - 9
Statement of Trustees’ responsibilities 10
Independent auditor’s report 11 - 13
Statement of financial activities 14
Balance sheet 15
Statement of Cash Flows 16
Notes to the financial statements 17 - 35

Kilgraston School Trust

Board of Trustees and Officials

Board of Trustees

Chairman Board Members

Board of Governors The Board of Governors resigned as at 31 Jul 2023 and were replaced by Achieve Advisory Board

Chairman Deputy Chair Board Members

Directors of Achieve Advisory Board (All appointed 31 Jul 2023)

Bridge of Earn, Perthshire, PH2 9BQ

Principal office

Officials

Headteacher Bursar & Clerk to the Trustees Bankers

Royal Bank of Scotland plc, Dunkeld Road, Perth, PH1 5UT

Insurance

Marsh Insurance Brokers Ltd, PO Box 15322, Glasgow, G1 3YN

Solicitors Anderson Strathern, 1 Rutland Court, Edinburgh, EH3 8EY Auditor

Henderson Loggie LLP, Ground Floor, 11-15 Thistle Street, Edinburgh, EH3 1DF

1

Kilgraston School Trust

Trustees’ report

The Trustees have pleasure in submitting their financial statements for the year ended 31 July 2022.

The information set out on page 1 forms part of this report. The financial statements of the School are prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 (as amended).

Trust’s Purposes

The primary objects for which the Trust is established are as follows:

Mission Statement

Kilgraston School aims, through its education, to develop the whole person harmoniously and progressively, as a loved child of God in the world of today and tomorrow.

In keeping with the educational philosophy of the Society of the Sacred Heart, this aim is implemented through the School’s development of:

Faith; Character; Intellect; Community; and Social Concern

In pursuing these objectives, the School will be guided and directed by the on-going articulation of policy for Sacred Heart Schools as devised by the Network of Sacred Heart Schools for Ireland, Scotland and Malta Province.

2

Kilgraston School Trust

Trustees’ report (continued)

Management

The primary aim of the Trustees is to give effect to the Trust purposes. Their statutory responsibilities are set out on page 10. The Trustees meet at least twice a year. The number of Trustees at any one time shall not be less than five or more than ten. Trustees are appointed for a period of five years and may be appointed for a further term or terms. In the period to 23 June 23 The Trustees appointed a Board of Governors to manage the School, ensure that it operated effectively, implementing and maintaining the educational philosophy of the Society of the Sacred Heart.

As per note 16, on 24 June 2023 and further to the Trustees announcing their initial intention to close the School at the end of the 2023 academic year, on the grounds that they considered it financially unviable to continue operating, the Trustees were pleased to enter into an arrangement with Achieve Education Limited.

Under the arrangement Achieve Education Limited assumed management of the School, agreed to maintain the educational philosophy of the Sacred Heart and provided significant financial support thereby restoring the financial stability of the School and helping to secure its long term future. The Governing Board subsequently stood down.

Under both management approaches the day to day management of the School was delegated to the Headteacher assisted by the Bursar and supported by the senior leadership team drawn from the teaching and support staff

Related Parties

None of the Trustees receive remuneration or other benefit from their work with the School. The following Trustees and Governors had children in attendance in School during the year however the fees paid were in line with normal fee levels – and

There are no other related parties to note other than the remuneration of key management personnel as per note 4.

Organisational structure

The School comprises a Junior School, Senior School and Sixth Form.

The School aims to achieve the highest standards in the Independent Schools sector, partly through networking with other major schools and partly through peer group studies for the evaluation of quality and performance improvement methods. It also co-operates with many local charities. This is to widen public access to the education that can be provided, to optimise the use of its cultural and sporting facilities and to awaken in our pupils an awareness of the social context of the all-round education they receive at Kilgraston.

Risk Management

In the year to 31 July 22 The Trustees and Governors continued to keep the School’s activities under review. They monitored the effectiveness of the system of internal controls and sought to mitigate risks where possible.

Support was provided through various sub committees, the senior leadership team and through the advice and guidance received from professional advisors, including legal advisors (e.g. on charity law, employment law and statutory compliance), insurance brokers, regulatory bodies (e.g. Care Inspectorate and General Teaching Council for Scotland) and key educational bodies (e.g. Scottish Council for Independent Schools, Scottish Qualifications Authority and Education Scotland).

3

Kilgraston School Trust

Trustees’ report (continued)

Risk Management (continued)

Since 24 June 23 the Trustees and Achieve Education Limited have continued to review the principal risks and uncertainties facing the School and ensure contingency plans are in place should external factors affect the School or the sector in general. Uncertainties over future school roll are always a factor and the Trustees are increasingly mindful of the fact that the economic climate may affect parents’ ability to choose an independent education for their children. The end of the business rates relief historically received by charities, employer pension contributions and teacher pay levels and the currently increasing operational costs (particularly in relation to gas and electricity supplies) continue to have an impact on future school fee levels. The Board believe that the reputation of the School is key to ensuring the future success and that this will allow the School roll to be maintained and has a mandate to minimise fee increment impact where possible.

In order to provide a high standard of education the quality of the School buildings is important and the Board are aware that there is a risk that additional or unexpected repair work will be required. The Board have ensured that full insurance is in place and continue to undertake annual repairs and maintenance to reduce the risk of substantial repairs.

Covid-19

In addition to the on-going risk management as detailed above, the Board continued to consider the impact on the School of the Covid-19 virus. The financial impact for the School during 2021-22 remained significant due to the reduced international boarders through travel restrictions and a general nervousness and a reduction in the 2022 summer language school programme.

Increasing Operational Costs

The Board are aware of the continued increases to operational costs, especially the cost of gas and electricity supplies, in particular in relation to the Russian invasion of Ukraine in February 2022 and the impact on the world markets, with increases of over 100%. Other consumable and personnel costs continue to rise, driven by supply chain challenges and increased inflation rates which reached 10.1% at the end of the reporting period and have varied since the year end, reaching highs of 11.1% in October 2022. The Board is actively working with the senior leadership team to mitigate these costs through a review of supply contracts and procurement options and, while it acknowledges there are continuing challenges to be addressed, it believes it is well placed to manage these new risks.

Review of Achievements and Performance for the Academic Year 2021-2022

We are a Sacred Heart school, Catholic in tradition but welcoming to pupils of all faiths or none. Religious and spiritual development of our pupils is paramount, whatever their creed or religion and the Society of the Sacred Heart’s goals continue to provide the basis for education and life at Kilgraston.

At Kilgraston we have an established self-evaluation process which seeks to draw on the experiences, values and judgments of all staff. Through this process of reflection we are then able to establish the priorities for the next academic year bearing in mind the overall needs of the School, external demands for changes to the curriculum and priorities from partner agencies such as SQA and initiatives such as the 2018 National Improvement Framework and Improvement plan for Scottish Education. The framework of HGIOS 4 and Care Standards are used in the planning process.

4

Kilgraston School Trust

Trustees’ report (continued)

The whole school priorities for the improvement plan included sharing visions of our values and aims as a Laudato Si school; building on the skills agenda in the senior school and skills for learning for life in the junior school; and moving towards a concise one stop summary of key information on progress and achievement.

The Sacred Heart Goals are a central part of the school’s ethos and, each year, within the Ireland, Scotland, and Malta Network, one of the five goals is selected as the main focus. For the academic year 2021-22 the goal was ‘building community as a Christian value’. Our work on the goal of Community aims to help prepare our pupils to become agents of change and responsible citizens who can contribute meaningfully to society. No pupil/staff member should finish the school year with a sense of marginalisation or of feeling undervalued. A whole school focus on Charites was well supported with emphasis placed on awareness-raising as much as fundraising. Our Laudato Si status was well embedded with the developments led by our Eco -committee including successfully gaining the Scottish Green Flag Award and running events to link with COP26. Links were made with other Sacred Heart Schools in two on-line conferences. Sixth form pupils led successful Goals days based around community with activities ranging from karaoke to invited speakers. In the summer term there was a ‘Save the Planet ‘art exhibition. Staff well-being was recognised in an activities session on one of our INSET days.

Children want a better world and many of them have the idealism to do something about it. It can be a long, hard road. The Sacred Heart educator aims to walk with them, helping them to begin to acquire not only the knowledge and skills but also the staying power and unselfishness that, over a lifetime, turns dreams into reality, however great, however modest. In keeping with the spirit of this statement as part of our response to the impact of Covid19 on education Kilgraston staff implemented a recovery plan for 2021-2022. Although almost all of the Covid restrictions had been lifted staff recognised that there were many aspects of academic and social life that pupils had missed out on. Each department and pastoral area of the school highlighted a priority to focus on in the academic year. Building resilience and focussing on kindness were two important strands to the recovery plan. In the pastoral area of school programmes for anti-bullying ambassadors, mental health ambassadors and the BFG buddy system were developed.

The School continues to look outwards and through the Society of the Sacred Heart has a long established history of international networks. The Trustees and Governors encourage and welcome international students and embrace the cross-cultural diversity that this brings to the School. Despite the constraints for travel during the covid and post covid period we have welcomed students from Mexico, Germany, Spain, France, Italy, Luxemburg, Ukraine, Hong Kong and China. For all our pupils this is a valuable experience equipping them for the global environment in which we live today.

Educational Performance of the School

Education at Kilgraston is very much a partnership between the school, the parents and the pupils themselves. The support received from all stakeholders contributes greatly to excellent academic, sporting and social achievements throughout the school. Academically Kilgraston regularly achieves outstanding results and this trend in exam results together with positive destinations, post school, means that our pupils have continued to succeed despite the challenges they have faced throughout lock down and restrictions enforced by covid regulations. The 2022 exam diet was the first occasion for two years that pupils sat formal SQA exams marked externally by the exam board. (2020 results were based on teacher estimates, 2021 on internally assessed and moderated assessments) The Kilgraston exam results for 2022, saw pupils achieve above the national average, at all examination levels.

5

Kilgraston School Trust

Trustees’ report (continued)

Educational Performance of the School (continued)

Results 2021-2022

ADVANCED HIGHER (Equivalent to A Level) Kilgraston Grade A 45% (national average 34%) Kilgraston Grade A-B 76% (national average 60%) Kilgraston Grade A-C 92% (national average 81%)

HIGHER (Equivalent to A Level) Kilgraston Grade A 45% (national average 35%) Kilgraston Grade A-B 80% (national average 59%) Kilgraston Grade A-C 95% (national average79 %)

NATIONAL 5 (Equivalent to GCSE) Kilgraston Grade A 69% (national average 40%) Kilgraston Grade A-B 85% (national average 63%) Kilgraston Grade A-C 93% (national average 81%)

Our 2022 destinations saw the majority of pupils aiming for Scottish Universities including Aberdeen, Dundee, Edinburgh, Heriott-Watt, Glasgow, Napier, Robert Gordons, St Andrews and Strathclyde Universities. Loughborough and St Mary’s featured as destinations in England. Our leavers went on to a wide range of courses. STEM courses are popular with Ecology and Environmental Science, Molecular and Cell Biology and Mechanical Engineering featuring this year. Psychology remains popular as does Law and Business Management. In a departure from recent years, leavers also successfully entered the world of work.

Pastoral

Kilgraston prides itself on the duty of care it bestows on each pupil and as the Founder of the Society of the Sacred Heart, St. Madeleine Sophie Barat, said: ‘For the sake of one child, I would have founded the Society’.

Notable sports achievements include a full range of fixtures across the key team sports: hockey and netball, successful equestrian events run by the school as well as whole school cross country and two sports days. Our senior hockey team won the Scottish Hockey Aspire Trophy. Art was represented in a House Art competition as well as the display of academic work for National 5, Higher and Advanced Higher. Junior pupils were able to participate in Perform in Perth and ended the year with an amazing production of Matilda. The whole school took part in the Christmas concert at Perth Concert Hall and our talented musicians also participated in the Kilgraston Young Musician of the Year competition.

The School also monitors success through the extent to which parents are involved in school life, as the Board acknowledges parent involvement as key to the continued success of the School. The Kilgraston Parents’ Association has recently undergone new recruitment and they are very active in various activities to engage with all our current parents and the wider Kilgraston Community. KPA ran the nearly new uniform shop and held monthly coffee and cake events for parents. The Summer Fair was held in June 2022 which was a resounding success. Further events are planned for 2022-23.

Kilgraston has remained committed to providing support to the community beyond the Kilgraston classroom. Every year, members of the teaching staff are markers or examiners for SQA. Kilgraston also serves as an examination centre for external music candidates. Staff give talks and presentations at local primary and nursery schools. Volunteering is an important part of life at Kilgraston. It features as part of the Kilgraston Certificate and Diploma and the Duke of Edinburgh Award scheme. Our pupils are involved in community service activities in the local area, particularly Moncreiffe Care Home, supporting local coffee mornings and providing musical entertainment. The Kilgraston Chapel serves as the local Catholic Church for the area, providing a venue for worship during term times for a number of families.

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Kilgraston School Trust

Trustees’ report (continued)

The school encourages the use of its grounds and facilities to local groups, sports clubs and schools at less than market cost or free of charge. Regular users of our facilities are Perthshire Hockey Club and various other Perth and Kinross youth and adult groups who use the swimming pool, sports pitches and tennis courts. Kilgraston operates a very successful and extensive range of activities and sports programs during the holiday period. The Kilgraston Summer School team continues to explore all opportunities to build local and UK centric activities whilst also rebuilding the International Language School.

Financial Review and Results for the Year 21/22

The School has operated at a deficit, after depreciation and interest, of £113,563 (2020-21 - £474,502 deficit). The deficits have been largely due to the Covid-19 pandemic and the rising cost of living, with the former resulting in a significant revenue reduction against expectation from reduced fees, due to enforced school closures and the cancellation of an extensive letting program, and the latter resulting in increased costs.

The main source of revenue for the School is through fee income charged for the provision of education. In the 2021-22 school year, the fees charged were:

Junior Day £13,410 - £17,820 (2020-21: £11,550 - £15,360)
Junior Boarding £27,150 - £31,230 (2020-21: £25,620 - £29,460)
Senior Day £20,805 (2020-21: £19,635)
Senior Boarding £35,535 - £38,400 (2020-21: £33,525 - £36,240)

At the start of the 2021/2022 academic year pupil numbers on the School roll were 254 (2020-21 - 241) with the average for the full academic year was maintained at 255 (2020-21 - 254). Pupil numbers remain impacted due to Covid with fewer International Boarders being able to commit to the travel during the restrictions.

In addition, the revenue which is generated through an extensive external lettings programme with the Summer School operating alongside a variety of other lets was also significantly impacted. In 2021/2022, the effect of continued restrictions on travel led to a reduction of summer school pupils versus pre-Covid years. A review of opportunities is underway with an external Language school provider delivering the language course in summer 2023. With international travel now firmly back in place the School remains buoyant and excited about its prospects for revenue generation in the next year.

The main expenditure for the School is that of staff salaries. Our staff are key to the on-going success of the School and therefore we continue to invest in the highest standard of teaching and operations staff and are also committed to ensuring their continued professional development. Staff salaries accounted for 65% (2020-21: 66.2%) of expenditure.

The School has continued to review and achieve cost savings. In both 2019-20 and 2020-21 these savings primarily related to costs for catering, heat and light, transport and other consumables used in the physical operation of the School during Covid. In 2021/22 there has been an unavoidable increase in costs. This has included the increase of rates from April 2022 due to the removal of the rates relief, the impact of the soaring cost of electricity, as a result of the Russia/Ukraine war and the increasing rise in inflation and food costs. The net result is an increase in total operating expenditure in the year.

The School's finance committee remains committed to a programme of cost efficiency while at the same time being conscious of the need to invest in the School facilities in order to remain competitive within the independent schools market.

As a result of the economic challenges, during the year, the School’s cash balances decreased by £62,882 to a closing balance of £288,868, compared to £351,750 for the previous year.

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Kilgraston School Trust

Trustees’ report (continued)

Pupil Financial Assistance

The School remains committed to providing support through various means to ensure that it is able to attract a diversity of pupils from various financial backgrounds to maintain and promote the ethos of Kilgraston as the Sacred Heart School. The Board continues to consider the best provision available and remains committed to ensuring a wider number of pupils gain facilitated access to education through bursary funding. The School has no ‘stand-alone’ bursary fund and therefore costs must be met as part of the charities’ operations. The School offers a variety of financial support structures available to parents who are unable to meet the full cost of school fees, including means tested bursaries and scholarships.

Total fee remissions for the year amount to £857,584 (2020-21- £887,391) or 14% (2020-21-17.3%) of gross income. Awards can be split into means tested and non-means tested awards and a pupil may be in receipt of more than one type of award at any time. For the year under review, Kilgraston has offered a total of £434,307(2020-21 - £444,764) or 7.1% (2020/21 - 8.7%) of gross income, representing means tested assistance to 50 (2020-21: 64) pupils.

Reserves

The School's reserves totalled £1,680,931 (2020-21 - £1,794,494) at the year end, split into unrestricted reserves of £1,314,664 (2020/21 - £1,419,269) and restricted reserves of £366,267 (2020-21 - £375,225). The unrestricted reserves comprise the School's property and equipment. Principally the restricted reserves comprise donations received from the Kilgraston Educational Foundation in respect of the swimming pool and hockey pitch projects and the Croftinloan and Swinton Funds.

Future Plans

Kilgraston has continued its commitment to academic and sporting excellence and has outstanding facilities. Future aspirations, currently on hold due to the aforementioned challenges, continue to include an extension to the current dining room facility, an Expressive Arts studio and upgrading of the residential accommodation within the boarding houses.

Our new Headteacher, who arrived at the start of the Summer 2022 term has had a wonderful start and continues to grow the school in many areas.

See note 16 for further details on post balance sheet events.

Key management

The Boards of Trustees and Achieve Advisory Board together with the Headteacher and Bursar are the key management personnel of the School. The School has a pay structure which is reviewed by the Board on a regular basis. Staff are remunerated within that pay structure commensurate with their qualifications and experience.

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Kilgraston School Trust

Trustees’ report (continued)

Statement of disclosure of information to auditors

The Trustees who held office at the date of approval of this annual report as set out on page 1 state that:

…………………………………….

Chairman of Trustees

…………………. 2023

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Kilgraston School Trust

Statement of Trustees’ responsibilities

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

The law applicable to charities in Scotland requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the School and of the incoming resources and application of resources of the School for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping accounting records which disclose with reasonable accuracy at any time the financial position of the School and enable them to ensure that the financial statements comply with The Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and the Trust Deed. They are also responsible for safeguarding the assets of the School and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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Kilgraston School Trust

Independent auditor’s report to the Trustees of Kilgraston School Trust

Opinion

We have audited the financial statements of Kilgraston School Trust (the ‘School’) for the year ended 31 July 2022 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis of opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the School 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.

Emphasis of matter - financial statements prepared on a basis other than going concern

We draw attention to note 1 to the financial statements, which indicates that the School incurred net expenditure during the year ended 31 July 2022 of £113,563 (2021 - £474,502) and, as of that date, the School’s current liabilities exceeded its current assets by £547,537 (2021 - £447,237). An agreement was put in place with Achieve Education Limited who have agreed to provide a loan to the School to help support the cash flow requirements, with the ultimate option to acquire the trade of the School dependent upon achieving projected pupil roll levels and the continued support from the bank. Provided this goes ahead as intended, the Trustees intend to close the Kilgraston School Trust as an entity, with the School trade continuing into the future through Achieve Education Limited. As such, the Trustees do not consider it appropriate to adopt the going concern basis in preparing the financial statements. Accordingly the financial statements have been prepared on a basis other than going concern as described in note 1.

Our opinion is not modified in respect of this matter.

Other information

The other information comprises the information included in the Annual Report, other than the financial statements and our auditor’s report thereon. The Trustees are responsible for the other information contained within the Trustees’ 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 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.

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Kilgraston School Trust

Independent auditor’s report to the Trustees of Kilgraston School Trust (continued)

Other information (continued)

We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Charities Accounts (Scotland) Regulations 2006 requires us to report to you if, in our opinion:

Responsibilities of Trustees

As explained more fully in the Trustees’ responsibilities statement set out on page 10, the Trustees are responsible for the preparation of the financial statements which give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditor’s responsibilities for the audit of the financial statements

We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with regulations made under that Act.

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.

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

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

As part of our planning process:

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Kilgraston School Trust

Independent auditor’s report to the Trustee of Kilgraston School (continued)

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

Owing to the inherent limitations of an audit, there is unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of this report

This report is made solely to the Trustees, as a body, in accordance with Section 44 (1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and regulation 10 of the Charities Accounts (Scotland) Regulations 2006 (as amended). Our audit work has been undertaken so that we might state to the Trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the School and its Trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Henderson Loggie LLP

Chartered Accountants & Statutory Auditors Ground Floor 11-15 Thistle Street Edinburgh EH2 1DF

……………………….2023

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Kilgraston School Trust

Statement of financial activities for the year ended 31 July 2022

2022 2021
Unrestricted Restricted Total Unrestricted Restricted Total
funds funds Funds funds funds Funds
Note £ £ £ £ £ £
Income
Charitable Activities
School fees receivable 6,117,824 - 6,117,824 5,132,521 - 5,132,521
Less Scholarships, bursaries and discounts (857,584) - (857,584) (887,391) - (887,391)
___ ______ ___ ___ ______ __
Net school fees receivable 5,260,240 - 5,260,240 4,245,130 - 4,245,130
Registration fees 11,865 - 11,865 1,904 - 1,904
Grants and donations 2,346 - 2,346 102,838 - 102,838
Investment income 1,389 3,287 4,676 2,460 - 2,460
Rents, letting and other income 187,000 - 187,000 56,752 - 56,752
___ _ ___ ___ ______ __
Total income 5,462,840 3,287 5,466,127 4,409,084 - 4,409,084
___ _ ___ _____ __ ____
Expenditure
Charitable Activities
School operating costs 5 5,491,686 6,716 5,498,402 4,881,960 14,406 4,896,366
Governance costs 5 15,600 - 15,600 9,270 - 9,270
___ ______ __ ___ ______ __
Total expenditure 5,507,286 6,716 5,514,002 4,891,230 14,406 4,905,636
___ ______ __ ___ ______ __
Realised and unrealised (losses)/gains 7 (5,166) (14,149) (19,315) 5,752 15,553 21,305
___ ______ __ ___ ______ __
Net expenditure before gains and losses (49,612) (17,578) (47,875) (476,394) 1,147 (496,552)
Transfers (8,620) 8,620 - 44,314 (44,314) -
Pension Deficit remeasurement (46,373) - (46,373) 745 - 745
__ ______ __ __ ______ __
Net expenditure for the year (104,605) (8,958) (113,563) (431,335) (43,167) (474,502)
Total funds brought forward 1,419,269 375,225 1,794,494 1,850,604 418,392 2,268,996
___ ______ __ ___ ______ __
Total funds carried forward 12 1,314,664 366,267 1,680,931 1,419,269 375,225 1,794,494

In relation to the continuation of the operations above, see note 1.

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Kilgraston School Trust

Balance sheet at 31 July 2022

2022 2021
Note £ £
Fixed assets
Buildings and equipment 6 3,151,227 3,181,075
Investments 7 283,239 310,600
__ __
3,434,466 3,491,675
__ __
Current assets
Stocks 9,604 8,357
Debtors 9 324,910 329,234
Cash at bank and in hand 288,868 351,750
__ __
623,382 689,341
Creditors
Amounts falling due within one year 10 (1,170,919) (1,166,578)
__ __
Net current liabilities (547,537) (477,237)
__ __
Total assets less current liabilities 2,886,929 3,014,438
Creditors
Amount due after more than one year 11 (1,100,895) (1,143,837)
Advanced fee payments 11 (105,103) (76,107)
__ __
Total net assets 1,680,931 1,794,494
Unrestricted funds 12 1,314,664 1,419,269
Restricted funds 12 366,267 375,225
__ __
Total Funds 1,680,931 1,794,494

The financial statements were approved by the Trustees on ………………….2023 and signed on its behalf by:

Trustee

Trustee

The notes on pages 17 to 35 form part of these financial statements.

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Kilgraston School Trust

Statement of Cash Flows for the year ended 31 July 2022

2022 2021
Note £ £
Net cash inflow/(outflow) from
operating activities 14 70,577 (573,576)
_ _
Cash flows used in investing
activities
Interest and investment income 4,676 2,460
Purchase of tangible fixed assets (91,531) (99,432)
Proceeds on disposal of fixed assets - 3,500
Proceeds on disposal of investments 8,046 -
_ _
Net cash outflow used in investments
activities (78,809) (93,472)
_ _
Cash flows (used in)/from financing
activities
Proceeds from bank loans - 784,000
Bank loans refinanced - (278,380)
Repayment of bank loans (1,784) (14,220)
Repayment of finance lease obligations (15,210) (28,912)
Interest paid (37,656) (15,029)
_ _
Net cash (outflow)/inflow from capital
expenditure and financial investment (54,650) 447,459
_ _
Decrease in cash in year (62,882) (219,589)
Cash and cash equivalents at 31 July 2021 351,750 571,339
_ _
Cash and cash equivalents at 31 July 2022 288,868 351,750

16

Kilgraston School Trust

Notes to the financial statements

1 Statement of accounting policies

The financial statements of the School are prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 (as amended).

Kilgraston School Trust meets the definition of a public benefit entity under FRS 102.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of land and buildings. The principal accounting policies adopted are set out below.

The financial statements are prepared in sterling, which is the financial currency of the School. Monetary amounts in these financial statements are rounded to the nearest £.

The following is a summary of the significant accounting policies adopted by the School in the preparation of the accounts.

Going concern

The financial statements have been prepared on a basis other than going concern.

When considering the going concern assumption, the Trustees recognised that the School had incurred net expenditure during the year ended 31 July 2022 of £113,563 (2021 - £474,502) and, as of that date, the School’s current liabilities exceeded its current assets by £547,537 (2021 - £447,237). In making their assessment of going concern, the Trustees reviewed a number of factors including the School’s current results, the School’s forecast future cash flows dependent on pupil roll levels, and the impact of subsequent events. These factors also included the current cost of living crises impacting the UK and the increasing levels of inflation and borrowing rates. Moreover, the Trustees assessed the assets at the School’s disposal and the continued access to sufficient borrowing facilities from the bank including the School’s overdraft facility which has recently been renewed.

As a result, the Trustees initially announced on 1 June 2023 a decision to close the School at the end of the 2023 term. Subsequent to that, the School entered into an agreement with Achieve Education Limited who have provided additional loan funding to the School and have taken on a management role in the running of operations. Achieve Education Limited have indicated their willingness to support the School through these periods to ensure the School can meet its obligations. The agreement with Achieve Education Limited provides them the ultimate option to acquire the trade of the School dependent upon achieving projected pupil roll levels and the continued support from the bank. Provided this goes ahead as intended, the Trustees plan to close the Kilgraston School Trust as an entity, with the School trade continuing into the future through the Achieve Education Limited group.

As such, the Trustees do not consider it appropriate to adopt the going concern basis in preparing the financial statements.

In coming to this position, appropriate considerations have been made where necessary as to the carrying value of the School’s assets to ensure that there has been no change to the carrying amount as disclosed in these financial statements as a result of this assessment. The Trustees acknowledge, however, that the carrying values adopted are dependent on the above acquisition taking place, which is itself materially dependent on pupil roll levels as indicated.

17

Kilgraston School Trust

Notes to the financial statements (continued)

1 Statement of accounting policies (continued)

Pension schemes

Kilgraston School participates in the Scottish Teachers’ Pension scheme (STPS) and for nonteaching staff, the Aegon Group Pension Scheme or the Independent School’s Trust Pension Scheme (ISTP). The STPS and the ISTP are multi-employer, funded defined benefit schemes whereas the Aegon Scheme is a money purchase arrangement.

It is not possible to identify the share of underlying assets and liabilities belonging to individual participating employers in the STPS. In accordance with FRS 102 the STPS is accounted for as defined contribution schemes with contributions payable recognised as a cost in the Statement of Financial Activities.

During the year under review only a former bursar (left 2019), former director of sport (left 2020) and the current assistant bursar belong to the ISPS. The School’s share of the underlying assets and liabilities within the ISPS are identifiable and as such have been accounted for as a defined benefit scheme in the year.

The Aegon Scheme is a money purchase arrangement, with contributions payable recognised as a cost in the Statement of Financial Activities.

Financial instruments

The School has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the School’s statement of financial position when the School becomes party to the contractual provisions of the instrument.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Basic financial liabilities

Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Derecognition of financial liabilities

Financial liabilities are derecognised when the School’s contractual obligations expire or are discharged or cancelled.

Income

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

18

Kilgraston School Trust

Notes to the financial statements (continued)

1 Statement of accounting policies (continued)

Income (continued)

Fees and similar income

Fees receivable and charges for services and use of premises are accounted for in the period in which the service is provided. Fees receivable are stated before deducting bursaries, grants and remissions granted by the School.

Deferred income - advance fees

Where the School receives fees in advance of the academic year to which they relate, they are included in deferred income allocated between falling due within one year and out with one year. Any discount given is deducted from School fees.

Donations

Donations receivable for the general purposes of the School are credited to “unrestricted funds”. Donations for purposes restricted by the wishes of the donor are taken to “restricted funds”. Donations required to be retained as capital in accordance with the donor’s wishes are accounted for as “endowments”. Where fixed tangible assets are donated, the endowment is released to unrestricted funds in line with the depreciation on those assets.

Investment income

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the School, this is normally upon notification of the interest paid or payable by the bank. Dividends are recognised once the dividend has been declared and notification has been received of the dividend due. This is normally upon notification by our investment advisor of the dividend yield of the investment portfolio.

Grant income

Income from government or other grants, whether ‘capital’ grants or ‘revenue’ grants, is recognised when the School has entitlement to the funds, any performance conditions attached to the grants have been met, it is probable that the income will be received and the amount can be measured reliably.

Expenditure

Liabilities are recognised as soon as there is a legal or constructive obligation committing the School to that expenditure, it is probable that a settlement will be required and the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis. Certain expenditure is apportioned to cost categories based on the estimated amount attributable to that activity in the year. The irrecoverable element of VAT is included with the item of expense to which it relates.

19

Kilgraston School Trust

Notes to the financial statements (continued)

1 Statement of accounting policies (continued)

Fixed Assets

Land and Buildings were originally shown in the balance sheet at their estimated value (based on earlier professional valuation) at the time they were donated at the inception of the Trust. Land and buildings were revalued in April 2018 and this was accounted for in the year to July 2019.

Other fixed assets transferred from the predecessor Trust were transferred at book value in the old Trust. Subsequent additions are included at cost.

Depreciation is provided on tangible fixed assets other than land at rates calculated to write off the cost less estimated residual value of each asset evenly over its expected useful life, as follows:

Buildings 50 years Equipment 5-10 years Plant and Machinery 5 years

Investment Policy

Investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value at the balance sheet date using the closing quoted market price. The statement of financial activities includes the net gains and losses arising on revaluation and disposals throughout the year.

The School does not acquire put option, derivatives or other complex financial instruments.

Debtors

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

Cash at bank

Cash at bank includes cash held in a deposit or similar account. The School and grounds are assets held as security formally charged to the Royal Bank of Scotland.

Stock

Stock consists of items held for distribution and is incorporated at the lower cost or market value.

Concessionary loans

Concessionary loans are initially recognised and measured at the amounts received, with the carrying amounts adjusted in subsequent years to reflect repayments and adjusted if necessary for any impairments. The loan from the Energy Savings Trust constitutes a concessionary loan.

Teaching Materials

Supplies of games equipment, books, stationery and sundry materials are written off to the General Reserve account as soon as the expenditure on procuring them is incurred.

Funds

Funds are classified as either restricted, unrestricted or designated funds defined as follows:

20

Kilgraston School Trust

Notes to the financial statements (continued)

2 Statement of accounting policies (continued)

Funds

Restricted funds are funds subject to specific purposes which may be declared by the donor or their authority (e.g. by the restricted wording of an appeal). Some are restricted income funds expendable at the discretion of the Trustees in the furtherance of a particular activity, such as central and local government grants, and funds raised for particular client groups or activities. Other are capital funds where the assets are required to be invested for long term use.

Unrestricted funds are expendable at the discretion of the Trustees in furtherance of the objects of the Kilgraston School Trust.

Designated funds are unrestricted funds which have been earmarked by the Trustees for particular purposes.

If required a transfer is made from unrestricted funds to compensate fully all restricted funds or designated funds which would otherwise be in deficit at the accounting date.

Taxation

The School is a Recognised Charity and is not liable to taxation.

2 Critical accounting estimates and judgements

In the application of the School’s accounting policies, the Trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates include fixed asset depreciation, investment valuation, bad debt provisions, accruals and deferred income, and the pension deficit.

In preparing these financial statements, the Trustees have made the following judgements:

Useful life of tangible fixed assets

Tangible fixed assets are depreciated over a period to reflect their estimated useful lives. The applicability of the assumed lives is reviewed annually, taking into account factors such as physical condition, maintenance and obsolescence. Fixed assets are also assessed as to whether there are indicators of Impairment.

Trade debtor recovery

Credit control is an important function which requires assessment, on an ongoing basis, of the recoverability of amounts due from debtors. Where recovery is in doubt, management will adequately provide against this specific debt and will arrive at such conclusions based on the knowledge of the debtor and their “ability to pay”. The Trustees adopt a prudent approach to credit control.

Accruals

Management estimate the requirements for accruals using post year end information and information available from detailed budgets. This identifies costs that are expected to be incurred for services provided by other parties. Accruals are only released when there is a reasonable expectation that these costs will not be invoiced in the future.

Deferred income

Deferred income is primarily on advance fees which is recognised as being due out with one year where the payment received is for an academic year beyond the next year. The Trustees estimate the deferred income by pro rating the fees paid over the period in which the payment covers.

21

Kilgraston School Trust

Notes to the group financial statements (continued)

2 Critical accounting estimates and judgements (continued)

Defined benefit pension scheme

The School has obligations to pay pension benefits to certain employees. The cost of these benefits and the present value of the obligation depend on various factors, including; life expectancy, salary increases, asset valuations and discount rates on corporate bonds. Trustees make use of appropriately qualified actuaries to support the estimation of these factors in determining the net pension obligation. The assumptions reflect historical and current trends.

3 Expenditure includes:

3 Expenditure includes:
2022 2021
£ £
Auditor’s remuneration 15,600 9,270
2022 2021
£ £
4 Total staff costs comprises:
Wages and salaries 2,905,002 2,676,476
Social security costs 270,366 251,119
Pension contributions 427,023 416,938
__ __
3,602,391 3,344,533

Neither the Trustees or the Governors received any remuneration or expenses during the academic year 2021/22 or the year 2020/21. Trustee indemnity insurance is in place.

The remuneration of key management personnel including benefits in the year was £260,337 (2021 - £ 246,277 ).

The number of employees with emoluments £70,000-£80,000 amounted to Nil (2021 -1), £100,000-£110,000 amounted to 1 (2021 – Nil) and £130,000-£140,000 amounted to Nil (2021 – 1).

The average number of staff during the year was:

The average number of staff during the year was:
2022 2021
Total Total
Teaching staff
Full time 27 28
Part time 33 29
Residential
Full time 4 4
Part time 1 1
Domestic 19 20
Maintenance 3 2
Garden 1 1
Management/administration/Secretarial
Full time 13 16
Part time 15 9
______ ______
116 110

22

Kilgraston School Trust

Notes to the financial statements (continued)

5 Analysis of total expenditure
Other 2022 Other 2021
Staff costs costs Total Staff costs costs Total
£ £ £ £ £ £
Charitable activities
Teaching costs 2,256,696 120,994 2,377,690 2,127,022 125,411 2,252,433
Welfare costs 145,329 432,958 578,287 148,614 330,734 479,348
Premises costs 376,497 567,356 943,853 333,875 530,411 864,286
Support costs 602,523 333,621 936,144 520,163 116,490 636,653
Management and administration costs 221,346 319,703 541,049 214,859 327,711 542,570
Depreciation - 121,379 121,379 - 121,076 121,076
__ __ __ __ __ __
School operating costs 3,602,391 1,896,011 5,498,402 3,344,533 1,551,833 4,896,366
__ __ __ __ __ __
Governance costs - 15,600 15,600 - 9,270 9,270
__ __ __ __ __ __
Total expenditure 3,602,391 1,911,611 5,514,002 3,344,533 1,561,103 4,905,636

23

Kilgraston School Trust

Notes to the financial statements (continued)

6 Tangible fixed assets

2022
Cost
At 1 August 2021
Additions
Disposals
At 31 July 2022
Depreciation
At 1 August 2021
Disposals
Charge for year
At 31 July 2022
Net book value
At 31 July 2022
At 31 July 2021
2021
Cost
At 1 August 2020
Additions
Disposals
At 31 July 2021
Depreciation
At 1 August 2020
Disposals
Charge for year
At 31 July 2021
Net Book Value
At 31 July 2021
_
 Land &
Plant &
buildings
equipment
£
£
3,000,000
599,562
-
79,036
-
-
__
__
3,000,000
678,598
__
_
103,000
315,487
-
-
51,500
67,796
_
_
154,500
383,283
_
__
2,845,500
295,315
2,897,000
284,075
Land &
Plant &
buildings
equipment
£
£
3,000,000
427,332
-
175,480
-
(3,250)
__
_
3,000,000
599,562
_
_
51,500
247,661
-
(1,750)
51,500
69,576
_

103,000
315,487
_
______
2,897,000
284,075

 Motor
vehicles
£
-
12,495
-
_
12,495
_
-
-
2,083
__
2,083
_
10,412
-
Motor
vehicles
£
-
-
-
_
-

-
-
-

-
_____
-
 Total
£
3,599,562
91,531
-
_
3,691,093
_
418,487
-
121,379
_
539,866
_
3,151,227
3,181,075
Total
£
3,427,332
175,480
(3,250)
_
3,599,562
_
299,161
(1,750)
121,076
_
418,487
__
3,181,075

24

Kilgraston School Trust

Notes to the financial statements (continued)

The freehold property was revalued on 04 April 2018 by RICS registered valuer Graham & Sibbald at £3,000,000 to reflect fair value. This impairment was incorporated in the financial statements at 31 July 2019.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Plant and equipment
7
Investments
Opening market value at 31 July 2021
Movement in the year
Disposals
Unrealised (loss)/gain

Closing market value at 31 July 2022
Represented by:
Investments held as part of portfolio		 2022
£
31,687

2022

£
310,600
(9,525)
(17,836)
__
283,239
283,239		 2021
£
46,896

2021
£
289,295
-
21,305
__
310,600

310,600

The investments are held within a managed portfolio and are mainly index linked securities and bonds.

Investment Risks

FRS 102 requires the disclosure of information in relation to certain investment risks. These risks are set out by FRS 102 as follows:

Credit risk: this is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.

Market risk: this comprises currency risk, interest rate risk and other price risk.

25

Kilgraston School Trust

Notes to the financial statements (continued)

7 Investments (continued)

Investment risks (continued)

The School has exposure to these risks because of the investments it makes to implement its investment strategy. The Trustees manage investment risks, including credit risk and market risk, within agreed risk limits which are set taking into account the School’s strategic investment objectives. These investment objectives and risk limits are implemented through the investment manager agreements in place with the School’s investment managers and monitored by the Trustees by regular reviews of the investment portfolios.

Further information on the Trustees’ approach to risk management and the School’s exposure to credit and market risks are set out below.

Credit Risk

The School invests in pooled investment vehicles and is therefore directly exposed to credit risk in relation to the instruments it holds in the pooled investment vehicles and is indirectly exposed to credit risks arising on the financial instruments held by the pooled investment vehicles.

Pooled investment arrangements used by the School comprise authorised unit trusts.

Indirect credit risk arises in relation to underlying investments held in the bond pooled investment vehicles. This risk is mitigated by only investing in pooled funds which invest in at least investment grade credit rated securities.

Currency risk

The School is subject to currency risk because some of the School’s investments are held in overseas markets.

Interest rate risk

The School is subject to interest rate risk through investments comprising bonds.

Other price risk

Other price risk arises principally in relation to equities held in pooled vehicles. The School manages this exposure to other price risk by constructing a diverse portfolio of investments across various markets.

8 Financial instruments

Financial instruments
2022 2021
£ £
Carrying amount of financial assets
Financial assets measured at fair value through the statement of
financial activities 283,239 310,600

Financial assets measured at fair value through the statement of financial activities comprises investments.

26

Kilgraston School Trust

Notes to the financial statements (continued)

9
Debtors
Fee debtors
Other operational debtors
Prepayments
10
Creditors: amounts falling due within one year
Amounts falling due within one year:
Other creditors
Loans
Pension deficit
Creditors and accruals
11
Creditors: amounts falling due after more than one year
Amounts exceeding one year:
Other creditors
Advanced fees
Pension deficit
Loans		 2022
£
150,599
129,544
44,767
_
324,910

2022
£
434,051
11,315
12,379
713,174
__
1,170,919
2022
£
218,125
105,103
109,795
772,975
__
1,205,998		 2021
£
247,792
31,654
49,788
_
329,234

2021
£
562,008
9,115
8,931
586,524
_
1,166,578
2021
£
266,903
76,107
99,975
776,959
_
1,219,944		 2021
£
247,792
31,654
49,788
_
329,234

27

Kilgraston School Trust

Notes to the financial statements (continued)

11 Creditors amounts falling due after more than one year (continued)

The loan balance comprises two separate loans. The first loan of £784,000 was received in the prior year and is to be repaid by 228 monthly instalments of £4,832 and a final instalment of an amount sufficient to repay the outstanding balance in full. The Royal Bank of Scotland hold a standard security over the School and grounds in respect of this loan. The second loan, from the Energy Saving Trust, represents a loan towards cutting down on energy use by the School. An amount of £2,047 is still outstanding from a total loan of £98,000. The loan is repaid by 26 equal monthly instalments of £2,053. The loan is interest free.

Included within other creditors are amounts due in relation to finance leases. The liabilities from finance leases are secured over the assets concerned.

Included within creditors are amounts deferred in relation to fees paid in advance as follows:

Advanced fees
At 31 July 2021
Released in year
Received in year
At 31 July 2022
Due within one year
Due outwith one year		 2022
£
109,916
(52,366)
146,399
_
203,949
98,846
105,103		 2021
£
139,865
(29,949)
-
_
109,916
33,809
76,107

28

Kilgraston School Trust

Notes to the financial statements (continued)

12
Funds
2022
Opening
balance at
1 August
2021
Net
(expenditure)
/income
Realised
and
unrealised
losses
£
£
£
Society donation fund
1,526,067
-
-
General reserves
2,108
(77,551)
(5,166)
Pension deficit
(108,906)
33,105
(46,373)
__
_
__
Total unrestricted
funds
1,419,269
(44,446)
(51,539)
Croftinloan fund
200,183
1,974
(11,939)
Swinton fund
24,380
661
(2,210)
Swimming pool fund
89,462
(4,948)
-
Hockey pitch fund
61,200
(1,116)
-
__
_
_
Total restricted funds
375,225
(3,429)
(14,149)
_
_
_
Total funds
1,794,494
(47,875)
(65,688)
Represented by
Tangible fixed assets
3,181,075
(29,848)
Investments
310,600
(8,046)
(19,315)
Net current liabilities
(477,237)
(70,300)
-
Long term liabilities
(1,219,944)
60,319
(46,373)
_
_
____
1,794,494
(47,875)
(65,688)		 Transfers
Closing
balance at
31 July
2022
£
£
-
1,526,067
(8,620)
(89,229)
-
(122,174)
_
_
(8,620)
1,314,664
6,701
196,919
1,919
24,750
-
84,514
-
60,084
_
_
8,620
366,267
_
__
-
1,680,931
-
3,151,227
-
283,239
-
(547,537)
-
(1,205,998)
_
__
-
1,680,931

29

Kilgraston School Trust

Notes to the financial statements (continued)

12
Funds (continued)
2021
Society donation fund
General reserves
Pension deficit
Total unrestricted
funds
Croftinloan fund
Swinton fund
Butterstone fund
Swimming pool fund
Hockey pitch fund
Total restricted funds
Total funds
Represented by
Tangible fixed assets
Investments
Net current lliabilities
Long term liabilities		 Opening
balance at
1 August
2020
Net
income/
(expenditure)
Realised
and
unrealised
gains
£
£
£
1,526,067
-
417,120
(465,078)
5,752
(92,583)
(17,068)
745
__
_
__
1,850,604
(482,146)
6,497
184,810
-
15,373
24,200
-
180
44,314
-
-
102,752
(13,290)
-
62,316
(1,116)
-
__
_
_
418,392
(14,406)
15,553
_
_
_
2,268,996
(496,552)
22,050
3,128,171
52,904
-
289,295
-
21,305
(512,213)
34,976
(636,257)
(584,432)
745
_
_
____
2,268,996
(496,552)
22,050		 Transfers
Closing
balance at
31 July
2021
£
£
-
1,526,067
44,314
2,108
-
(108,906)
_
__
44,314
1,419,269
-
200,183
-
24,380
(44,314)
-
-
89,462
-
61,200
_
__
(44,314)
375,225
_
__
-
1,794,494
-
3,181,075
-
310,600
-
(477,237)
-
(1,219,944)
_
__
-
1,794,494

Purpose of funds

Society donation fund

Established on the inception of the Trust and represents the excess of the contribution from the Society of Sacred Heart of property and other assets over the accumulated deficit of the predecessor Trust.

Croftinloan fund

Educational fund established on the transfer of the funds from the Croftinloan Foundation. The purpose of the funds is to fund bursaries out of the income generated for pupils preferably from the Pitlochry or within the Perth and Kinross area generally.

Swinton fund

Established on the transfer of funds from the Kilgraston Old Girls Association. The purpose of the fund is to support Kilgraston pupils with one off extra-curricular activities.

Butterstone fund

Established on the merger with Butterstone School. The funds were to be used in the interests of the Prep School. Given the need for these funds to support projects in the prior year, correspondence was obtained to facilitate the transfer of these funds into general reserves.

30

Kilgraston School Trust

Notes to the financial statements (continued)

12 Funds (continued)

Swimming pool fund Established from the fundraising activities associated with the swimming pool development.

Hockey Pitch fund Established from the fundraising activities associated with the hockey pitch development.

13 Operating lease commitments

At the reporting end date the school had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2022 2021
£ £
Within one year 13,238 13,238
Between two and five years 13,239 26,477
_ _
26,477 39,715

The operating leases represent office equipment leased from third parties.

14 Reconciliation of net expenditure to net cash inflow/(outflow)

2022 2021
£ £
Net expenditure in year (113,563) (474,502)
Unrealised loss/(gain) on investments 17,836 (21,305)
Loss on disposal of investments 1,479 -
Gain on disposal of assets - (2,000)
Interest paid 37,656 15,029
Interest and investment income (4,676) (2,460)
Depreciation 121,379 121,076
Increase in stock (1,247) (2,974)
Decrease/(increase) in debtors 4,324 (209,042)
Decrease in creditors (5,879) (13,721)
Increase in pension deficit 13,268 16,323
_ _
Net cash inflow/(outflow) from
operating activities 70,577 (573,576)

31

Kilgraston School Trust

Notes to the financial statements (continued)

15 Pension schemes

During the year the total of the pension contributions amounted to £427,023 (2021 - £ 416,938 ) . At the year end £51,387 (2021 - £ 48,478 ) of contributions were outstanding. This amount is included within other creditors due within one year.

STPS

The school participates in the Scottish Teachers’ Superannuation Scheme. The scheme is an unfunded statutory public service pension scheme with benefits underwritten by the UK Government. The scheme is financed by payments from employers and from those current employees who are members of the scheme and paying contributions at progressively higher marginal rates based on pensionable pay, as specified in the regulations. The rate of employer contributions is set with reference to a funding valuation undertaken by the scheme actuary. The last four-yearly valuation was undertaken as at 31 March 2016. This valuation informed an increase in the employer contribution rate from 17.2% to 23.0% of pensionable pay from September 2019 and an anticipated yield of 9.4% employees contributions.

The School has no liability for other employer’s obligations to the multi-employer scheme.

As the scheme is unfunded there can be no deficit or surplus to distribute on the wind-up of the scheme or withdrawal from the scheme.

The scheme is an unfunded multi-employer defined benefit scheme.

It is accepted that the scheme can be treated for accounting purposes as a defined contribution scheme in circumstances where the School is unable to identify its share of the underlying assets and liabilities of the scheme.

The employer contribution rate for the period from 1 April 2021 is 23% of pensionable pay. The employee rate applied is variable and is anticipated to provide a yield of 9.4% of pensionable pay.

While a valuation was carried out as at 31 March 2016, it is not possible to say what deficit or surplus may affect future contributions. Work on the valuation was suspended by the UK Government pending the decision from the Court of Appeal (McCloud (Judiciary scheme)/Sargeant (Firefighters’ Scheme) cases) that held that the transitional protections provided as part of the 2015 reforms was unlawfully discriminated on the grounds of age. Following consultation and an announcement in February 2022 on proposals to remedy the discrimination, the UK Government confirmed that the cost control element of the 2016 valuations could be completed. The UK Government has also asked the Government Actuary to review whether, and to what extent, the cost control mechanism is meeting its original objectives. The 2021 actuarial valuations will take the report’s findings into account. The interim report is complete (restricted) and is currently being finalised with a consultation. Alongside these announcements, the UK Government confirmed that current employer contribution rates would stay in force until 1 April 2024.

Employee contribution rates during the year were:

Pensionable Salary

Up to £29,186 - 7.2% £46,587 - £61,740 - 10.4% £29,187 - £39,289 - 8.7% £61,741 - £84,190 - 11.5% £39,290 - £46,586 - 9.7% £84,190 and above - 11.9%

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Kilgraston School Trust

Notes to the financial statements (continued)

15 Pension schemes (continued)

ISPS

The Pensions Trust offers five different benefit structures within the Independent Schools’ Pension Scheme. The School participated in two of these structures a) a defined benefit - final salary with a 1/60th accrual rate and b) a defined contribution. The defined benefit scheme closed on 31 August 2016, and all members transferred to the defined contribution scheme. The School introduced the new contribution rates to the defined contribution scheme that was originally introduced in 2015 to comply with auto-enrolment requirements.

a) Defined Benefit Scheme – Final salary

The School closed the defined benefit scheme at 31 August 2016. All member benefits accrued until that date have been preserved, therefore there is an ongoing liability for the School. The Trustees commission an actuarial valuation of the Scheme every three years. The main purpose of the valuation is to determine the financial position of the Scheme in order to determine the level of future contributions required, in respect of each benefit structure, so that the Scheme can meet its pension obligations as they fall due.

The actuarial valuation assesses whether the Scheme’s assets at the valuation date are likely to be sufficient to pay the pension benefits accrued by members as at the valuation date. Asset values are calculated by reference to market levels. Accrued pension benefits are valued by discounting expected future benefit payments using a discount rate calculated by reference to the expected future investment returns.

The last formal valuation of the Scheme was performed as at 30 September 2020 by a professionally qualified actuary using the Projected Unit Method. The market value of the Scheme’s assets at the valuation date was £201.1 million. The valuation revealed a shortfall of assets compared with the value of liabilities of £55.2 million, equivalent to a past service funding level of 78%.

The School was notified by ISPS that following the triennial valuation undertaken to 30 September 2020 it would be necessary to increase the funding contributions to £12,379 per annum payable for a ten year period increasing by 3% per annum resulting in a total repayment of £143,464. Since the contribution rates payable to the Scheme have been determined by reference to the last full actuarial valuation the following notes relate to the formal actuarial valuation as at 30 September 2020.

The financial assumptions underlying the valuation as at 30 September 2020 were as follows:

% p.a.
RPI Rate Gilt Inflation Curve at each
term (3.08%)
CPI Rate 1% below RPI (2.08%)
Rate of Salary increase CPI inflation at each term
Investment return 2.2
Pension increases % p.a.
Limited price indexation (5% cap) Derived each term using Black
Scholes Method with a volatility
assumption of 1.75% p.a.

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Kilgraston School Trust

Notes to the financial statements (continued)

15 Pension schemes (continued)

ISPS (continued)

The table below illustrates the assumed life expectancy in years for pension scheme members at age 65 using these mortality assumptions:

----- Start of picture text -----
Males Females
Assumed life Assumed life expectancy
expectancy in years at in years at age 65
age 65
Non-pensioners 23.88 26.01
Pensioners 22.24 24.56
----- End of picture text -----

The long-term joint contribution rates required from employers and members to meet the cost of future benefit accrual were assessed at:

Benefit structure Long term joint contribution rate (% of
pensionable salaries)
Final salary with a 1/60th accrual rate 48.6
Final salary with a 1/80thaccrual rate 36.6

If an actuarial valuation reveals a shortfall of assets compared to liabilities the Trustees must prepare a recovery plan setting out the steps to be taken to make up the shortfall.

Following the results of the previous actuarial valuation at 2017, It was agreed that the shortfall of £38.2 would be dealt with by the payment of deficit contributions of £2.4m from 1 September 2019 to 30 April 2030. The latest actuarial valuation at 2020 shows a shortfall of £55.2m and this will be dealt with by the payment of deficit contributions of £2.7m from 1 September 2022 to 30 June 2032.

The debt for the Scheme as a whole is calculated by comparing the liabilities for the Scheme (calculated on a buy-out basis i.e. the cost of securing benefits by purchasing annuity policies from an insurer, plus an allowance for expenses) with the assets of the Scheme. If the liabilities exceed assets there is a buy-out debt.

The leaving employer’s share of the buy-out debt is the proportion of the Scheme’s liabilities attributable to employment with the leaving employer compared to the total amount of the Scheme’s liabilities (relating to employment with all the currently participating employers). The leaving employer’s debt therefore includes a share of any ‘orphan’ liabilities in respect of previously participating employers. The amount of the debt therefore depends on many factors including total Scheme liabilities, Scheme investment performance, the liabilities in respect of current and former employees of the employer, financial conditions at the time of the cessation event and the insurance buy-out market. The amounts of debt can therefore be volatile over time.

b) Defined Contribution Scheme

Following the closure of the defined benefit scheme on 31 August 2016, the School offered two new levels of employee contribution into the defined contribution scheme, being 7% and 10%, both attracting an employer contribution of 13.55%. The existing option of 5% employee contribution continued, which is matched by an employer contribution of 10%.

Aegon Group Pension Scheme

The School also operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the School in an independently administered fund.

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Kilgraston School Trust

Notes to the financial statements (continued)

16 Post balance sheet events

On 24 June 2023 and further to the Trustees announcing their intention to close the School at the end of the term on the grounds that they considered it financially unviable to continue operating, the Trustees were pleased to enter into a contract with Achieve Education Limited to provide significant financial support, restore the financial stability of the School as a trade and help secure its long term future whilst maintaining the ethos of the School.

Simultaneously Achieve Education Limited assumed management of the School’s activities and the Governing Board stood down.

As part of the Trustees actions to support the cashflow of the School post year end, the decision was taken to realise cash through the sale of the investments during the 2023 financial year.

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