THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
Consolidated Financial Statements And Directors’ Report for the year ended 31 July 2020
Charity registration number: SC016999
THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
CONSOLIDATED FINANCIAL STATEMENTS AND DIRECTORS’ REPORT
for the year ended 31 July 2020
CONTENTS PAGE
Directors’ Report 1
Independent Auditor’s Report 17
Consolidated Statement of Financial Activities 20
School Statement of Financial Activities 21
Balance Sheets 22
Consolidated Statement of Cash Flows 23
Notes to the Financial Statements 24
THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
DIRECTORS’ REPORT
for the year ended 31 July 2020
The Directors present their report and the audited financial statements for the year ended 31 July 2020. This report has been prepared in accordance with current statutory requirements applicable to charities.
GLOBAL PANDEMIC
Impact on the Edinburgh Academy
The Edinburgh Academy, along with the rest of the country watched the spread of COVID across the UK and the world in March 2020. The School had a few weeks of preparation to move to remote learning and teaching before the Scottish Government announced that schools would be closed from 20th March 2020 and that the certificate exams for 2020 had been cancelled and that the pupils would be graded on teacher assessments of their work. At this time the pupils in these certificate years were to be allowed into the School for 2 weeks to allow more evidence to be gathered to support their exam grades. This fast moving situation then changed again on Sunday 22 March 2020 when the Deputy First Minister made an announcement that no pupils were to attend school with immediate effect.
In line with the Scottish Government directive the School remained open for the education of children of Key Workers throughout the lockdown and, as a registered provider with the Care Inspectorate, volunteered to host additional children with Edinburgh City Council in case there was a shortage of Nursery provision for the children of Key Workers.
The School swiftly adapted its plan and started to provide remote home learning to all year groups whilst also collating the evidence required to support the exam estimates that the teaching staff were preparing for submission to SQA. This process took place over the two weeks before the Easter Holiday.
After the Easter holiday the focus for teaching staff was to ensure that the pupils continued to receive a first class education. This was a steep learning curve for all as lessons were delivered in a wide variety of methods to suit the age and stage of the pupils. These ranged from live lessons using Microsoft Teams to recorded lessons but the overall aim was that pupils and teachers had live interaction in every school day. The whole staff worked hard together to ensure that learning and teaching continued throughout the lockdown period. The School managed to conduct its first set of remote exams with the Fourths being tested. This was an excellent proof of concept which may be used again if the restrictions require it.
It was disappointing that due to the lockdown lasting beyond the end of the Summer Term all the normal Summer Term activities were cancelled, a loss which was felt by all at the School. It impacted the leavers hardest, as they were unable to join together to celebrate their time at the School in the usual manner. However the Divisional Competition was completed with remote competitions and Exhibition for both the Junior and Senior Schools was pre-recorded and the made available for all pupils, parents and staff to watch.
During lockdown the School continued to provide public benefit by supporting the local community at this time of national crisis.The Design and Manufacture Department produced plastic face masks which were given to care homes and other organisations who were desperately short of PPE when the country entered lockdown. The School also supported the Scran Academy, a local charity providing meals to vulnerable people. This support took the form of providing kitchens for the preparation of food and the use of the dining room in which to package it. This initative was supported by 15 of our senior pupils who volunteered between April and July to pack and deliver meals. They formed a formidable work force and packed over 50,000 meals. This was great testimony to their own resilience and sense of duty that, in a time of adversity, they stepped forward to help others.
The publication of the exam results in August 2020 was a fraught time as the examination boards were forced to change how they had interpreted the evidence given to them to support the pupil grades and to revert back to the assessments that the teachers had originally submitted. Details of these results are discussed later in this report.
The Court took swift decisions to deal with the financial uncertainty that came with the lockdown. It immediately created a hardship fund to assist those families who found themselves in severe financial difficulties as a result of the lockdown. The Court decided to give a summer term discount on tuition fees to both the Nursery and to Sevenths.
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DIRECTORS’ REPORT
for the year ended 31 July 2020
A scheduled pay award of 2% to all staff due to be made in April 2020 was cancelled and the Court cancelled or postponed all but essential spending. A major casualty in this was the postponement of the building plan to extend the Science Centre and the Library. It had been hoped this would commence in July 2020. However, whilst this building plan remains central to our plans for the future development of the Senior School, the Court is considering carefully when it will appropriate to start it.
The Court announced in April 2020, to both staff and parents, that there would be fee and pay freeze for the 2020/21 academic year. The Court of Directors was concerned that the impact of the lockdown could result in a withdrawal of pupils. It is pleasing, however, to report that this has not occurred and the excellent efforts of the teaching staff to continue to evolve how they delivered remote education were rewarded with the pupil numbers remaining strong, and in fact growing. When the School re-opened on 19th August 2020 the Senior School opened with 655 pupils and the Junior School with 393 and waiting lists at all major entry points.
The new academic session has started with many measures in place to ensure that the School is fully compliant with Government legislation and guidance to limit the spread of COVID. The pupils and staff have displayed great resilience and flexibility in how they have adapted to this new environment which has quickly become the new normal. Whilst competitive sport is yet to start and some communal activities cannot yet take place, the School is delivering the full range of education and activities that would normally be expected.
Further funding has been made available to assist families who find themselves in financial hardship due to the economic impact of the crisis. This support is being offered on a means tested basis. The Court has ensured that appropriate controls and procedures are in place to monitor the impact of the recession on the School and to ensure the financial integrity of the School for the future.
Whilst it is recognised that this remains a fast-moving situation the Court of Directors is convinced that the School is extremely well placed to meet these challenges and to continue to deliver a first class education to all our pupils.
OBJECTIVES
The Edinburgh Academy is regarded as one of the leading independent schools in Scotland. We offer an impressive range of opportunities for our pupils. A generous staff to pupil ratio enables staff quickly to come to know the pupils and recognise their individual needs. Individuality is nurtured within the context of a caring community. The staff seek to foster in all pupils a vision and an ambition for themselves as a foundation for life, which will enable them to realise their full potential.
The Royal Charter was originally granted in 1824 with the most recent amendment made by a supplementary Charter in 2017. The purpose behind the amendment of the Charter in 2017 has been to ensure:
(a) that the objects and powers of the Academy are appropriate for the current activities and operation of the school; (b) that the objects and powers are in compliance with the legislation relating to charities and trustees and in particular the Charities and Trustee Investment (Scotland) Act 2005 (“the 2005 Act”); (c) that the governance arrangements comply with relevant legislation, the recommendations of Office of the Scottish Charity Regulator (OSCR) and best practice.
As part of the amendment to the Royal Charter the Court, on the recommendation of the Chair, may from time to time, elect persons to be Fellows of The Edinburgh Academy where it is recognised that they have made a significant contribution to the furtherance of the objects of The Edinburgh Academy or have otherwise rendered benefits to The Edinburgh Academy. This year the Court approved the election of the former Chair of the Court, , as a Fellow.
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DIRECTORS’ REPORT
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OBJECTIVES (continued)
The School’s Charitable Objective is:
the provision of education in Scotland and in particular at The Edinburgh Academy including all aspects of nursery, primary and secondary education and the provision of all facilities to achieve that;
the furtherance of that and a contribution to the educational life of Scotland in its widest sense and the provision of benefits related to the purposes of The Edinburgh Academy for those who may not be enrolled pupils at the Edinburgh Academy
In support of the Charitable Object, the School has certain fundamental aims which are set out in The Edinburgh Academy Vision Statement. These are summarised as:
To strive for academic excellence and aim to realise the potential of all our pupils. We reward and celebrate high standards of scholarship and study, and provide a challenging and enriching academic curriculum that stretches the ability of all.
To provide a rounded and fulfilling education which enhances each pupil’s social, emotional and spiritual capacity, fitting them for citizenship in a challenging and changing world. The Edinburgh Academy believes in a balance of academic and co-curricular activities and offers a wide range of opportunities to participate and represent the School in sport, music and a variety of expressive and creative arts.
To seek to ensure that our pupils are proud to be members of The Edinburgh Academy and express this in their service to the School and to the community whilst at the School and in later life. We equip our pupils to make their mark in whatever field they choose and to become citizens of the world.
To promote opportunities and values by ensuring that the School is open to those with talent and ability irrespective of their financial position through bursary provision. Our pupils, teaching staff and the School engage meaningfully in serving our community through use of energy, time, creativity and facilities to the benefit of our society.
To take pride in our traditions and history which we seek to renew and evolve through our relationships with our parent body, former pupils and other friends throughout the world. In our staff, we support opportunities for career and personal development to provide the best education for our pupils. We link to other schools, communities and cultures throughout the world. We look for the best inside and outside Scotland for inspiration in all that can be achieved in education and life.
The principal elements in achieving these aims are:
A commitment to a culture of praise.
The quality of the teaching staff and their continued professional development and training.
The provision of the resources which teachers require to fulfil their tasks effectively.
The involvement of, and communication with, parents and nurturing the triangle of responsibility involving pupils, parents and teachers.
The commitment of the Court.
PUBLIC BENEFIT
Bursary and Scholarship Provision
For the academic session 2019/20 the School provided a total of £932,462 (2019: £736,122) in means tested bursary and harship support to pupils. Currently there are four sources of funds utilised to provide bursary support. Firstly, the School is very grateful to the Eric H Stevenson Charitable Trust which made a generous
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DIRECTORS’ REPORT
for the year ended 31 July 2020 donation of £400,000 to support bursaries directly. The second component is income generated from the School’s Bursary and Scholarship Fund. This year no withdrawals were made in support of bursaries. The EA Foundation and other private donors provided £10,000 to support bursaries. The shortfall of £447,462 is provided by the School from unrestricted income. Included in the means tested support offered to pupils is an emergency hardship fund created by the School in response to the severe financial difficulty that a number of families of the School found themselves in as a result of the lockdown. This fund has been utilised to support the continuation of education for the pupils affected.
The level of bursarial support provided equates to 6% of the total School income as disclosed in the statement of financial activities. A total of 64 pupils at the School were supported in this manner with the balance of support remaining weighted towards the Senior School. This is based on the rationale that funding support at this level has the greatest impact on reducing the financial barriers to entry to the School as fees in the Senior School are higher than in the Junior School. Pupils receiving some level of support account for 10.9% of Senior School pupils (2019: 10.9%). Across the whole School, 6% of the School roll at the start of the 2018 session was provided with bursarial support.
A detailed financial assessment is carried out for each bursarial application. The financial assessment is undertaken and measured against criteria based on: annual household income; expenditure and disposable income; capital; and household liabilities. Detailed original documentation is required to support each assessment.
The following table sets out the number of means tested awards provided by the School in a range of value bands over the last 2 years:-
% Award 2019-20 2018-19 Number Awarded % Awarded Number Awarded % Awarded 100% 27 42% 31 44% 80% - 99% 19 30% 16 21% 60% - 79% 6 9.% 9 14% 40% - 59% 8 13% 8 10% 0% - 39% 4 6% 5 11%
Total 64 100 69 100%
Other Public Benefit
As reported by OSCR, when it tested the School’s charitable status in 2014, the School takes its responsibility as a registered charity to provide additional public benefit, above that of providing increased access to the School, very seriously. In line with our objective of providing education, The Edinburgh Academy undertakes a wide range of activities to benefit wider society as is described below:
In the past year, staff at The Edinburgh Academy worked with examination boards north and south of the border, and assistance was provided in respect of setting public examinations. In normal circumstances the School would be involved in the marking and moderation of exams.
In addition, two staff sit on education advisory bodies (Biological Society and Royal Meteorological Society), and so contribute to national educational debate and direction. One member of staff is an associate lecturer at the Open University. We also work with neighbouring schools in the maintained sector providing Oxbridge support.
The Edinburgh Academy has also taken a significant part in the provisioning of student teaching places in liaison with the General Teaching Council for Scotland. In the last 9 years 63 such places have been provided with 8 in the year to 31 July 2020. The School also offered taster days for people who asked to observe teaching days in school prior to applying to teacher training college.
The School provides a Youth Sports Development Officer to work in four local schools over 4/5 mornings each week, averaging 19 hours per week of free PE lessons to these local schools. In addition to this a youth sports development programme which is open to the local community as well as pupils of the School is run (term time only) within the School. This equates to 10 classes a week, Monday to Friday and two on the weekend.
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DIRECTORS’ REPORT
for the year ended 31 July 2020
The School offers the use of its facilities to a number of organisations free of charge or at substantially reduced rates. These include various charities including the British Heart Foundation and The Edinburgh and Lothians Regional Equality Council (ELREC).
The School also subsidises local community group use of our facilities by offering between 35% - 50% discount off the normal rental price to the following organisations:
Salle Holyrood Fencing Stockbridge Primary School Edinburgh Academical Football Club Edinburgh Academical Cricket Club Inverleith Hockey Club Loud and Proud Choir and Edinburgh Gay Men’s Chorus Early Dance Circle Scottish Opera The Robert Louis Stevenson Club
The School takes part in hosting a cross-school lecture on application to Oxbridge, and continues to provide access to Cambridge Admissions Tutors through this to the City of Edinburgh Council schools, as well as offering individual support to their pupils.
At the Senior School the Charities Committee raised £7,504, with the money being donated to a number of Charities including; Shelter, The Wee Sleep Out and the Sea Life Trust.
The Music Department hosts and trains a community choir with concerts held annually at the School and at the Usher Hall.
The Nursery has hosted training for staff from the private and public sectors looking at how to use both the outdoors and educational technology to enhance the children’s experience. The ‘Wild Wood’ has been used by a nursery from an area of high deprivation with a specialist member of staff provided. Junior School children and staff have been involved in a tidy-up of Inverleith Park, planting in Starbank Community Garden, collecting and gifting books for children in an area of high deprivation and volunteering and befriending in a local care home. The Junior School also provides bike training for children in the local community.
The Junior School enterprise project saw the children manufacturing and selling soap at a Christmas market with the proceeds going to Dementia UK. In total in the two terms before COVID closure, the Junior School raised £9,486 or provided goods for a number of charities including MacMillan Cancer Research, It’s Good to Give, MND Scotland, Save the Children, Poppy Scotland, Edinburgh Food Bank, CFA Australia, WWF, Children in Need and Cancer Research.
The Head of the Junior School is the Chairman of the charity Scottish Outdoor Education Centres which provides residential outdoor experiences for around 2000 children annually.
ACTIVITIES, ACHIEVEMENTS AND PERFORMANCE
School roll The Directors are pleased to report that the School roll has continued to show a steady planned growth with the opening numbers, excluding Nursery pupils, for the academic session in 2020 at 1,048 having risen from 1,037 in 2019, an increase of 11 (1%). Demand for places continues to be strong for this session and the School has developed waiting lists for all the key entry points. Following the successful move to becoming a fully co- educational School the balance of boys to girls across the School remains broadly 55/45.
The School has continued to enjoy success both within and out with the classroom.
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for the year ended 31 July 2020
Academic achievements
As noted in the opening statement to this report the national exams in the summer were cancelled and pupils were awarded exam grades based on teacher led assessments. The Directors are very pleased to report that the pupils of the School have had another successful set of exam results in 2020. In a key measure of individual as well as collective success, 64% of all grades at SQA Higher were at A grade. 100% of all grades were at A- C from within our 6ths year (94% in 2019). In our presentations at National 5 in our 5ths, 71% of grades were at A (72% in 2019), and 100% of all grades were at A-C (99% in 2019).
The Directors are also pleased to report the achievement of the cohort of pupils who sat the SQA Advanced Highers. 63% were A grade (66% in 2019) and 100% A-C grade (96% in 2019).
As in previous years, the Leavers from our final two year groups are moving onto a diverse range of destinations, whether in Higher or Further Education, entering the world of work or seeking experience during a year out. Our leavers have been incredibly well-prepared to take their next steps, successfully applying to a range of institutions and for a wide range of subjects. 95 applications were made, and included 3 successful applicants to Oxford and one to Cambridge. One Oxford offer was rejected by the candidate in favour of St Andrews, which was the overwhelmingly popular destination for this cohort: 16 candidates will be taking up places there. Edinburgh was the second most popular choice, at 13, with 6 to Newcastle, Glasgow and Aberdeen, 5 to Leeds and 3 each to Bristol, Durham, Exeter, Napier and Northumbria. In short, while Scotland remains the most favoured destination, the geographical reach of our pupils’ aspirations is wide.
The range of courses which candidates applied for is similarly a testament to the broad curriculum on offer and the inspiration of a range of Departments at the school, who nurture pupils’ interests and intellect. Written candidates’ most popular fields were that of Finance / Business / Economics; 6 candidates successfully applied for courses in History; 5 each for Geography and Mathematics; and 4 for each of Medicine (including Nursing and Pharmacology), Product Design, Fine Art or Photography, Geography, English (plus a further candidate for Drama and one for Film) and Computer Science.
This year saw the School had two pupils study for the Scottish Baccalaureate which is the first time the Scool has delivered this course. Both were awarded their Baccalaureate, one with Distinction.
It was pleasing to see the consolidation of the SQA Leadership Qualification which the School offered to pupils for the first time in 2019 and this reporting period saw 34 pupils successfully complete the course.
Our senior curriculum, primarily focused on Advanced Highers and Highers, continues to offer our pupils significant flexibility in their choice of university across the UK and beyond.
For those taking a year out, unfortunately their ambitious plans for travel and adventure have been severely hampered and curtailed by the world wide pandemic.
Co-curriculum achievements
The 2019/20 year was incredibly busy outside the classroom, with a great many wonderful achievements by our students, who continue to impress with their ability to juggle a myriad of different activities and be successful across the board.
Despite the restrictions in the later part of the year the School had a very successful Music Programme. Once again the School held its own in a variety of locations. In the October break, a smaller Chamber Choir took part, for the first time ever, in the Royal National Mòd, held this year, in Glasgow’s Royal Concert Hall and won the Thompson Cup for Under 19 harmony singing in Gaelic. As a result of that win the Choir appeared on the BBC Alba Mòd highlights programme and one of our two pieces remain on the BBC iPlayer. The packed houses of Stockbridge Parish Church played host to the Autumn Concert and Division Music with a pupil cast of 300 at each event. In the Spring our Flute Group and our Chamber Ensemble in a particularly competitive field both won first place in the Edinburgh Competition Festival. And although the Summer term was, unsurprisingly, quieter, the School’s first attempt at a Virtual Choir was most successfully pulled together for the Senior School Exhibition. A performance that has attracted over 7,000 on-line views to date, and has received much praise.
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for the year ended 31 July 2020
In Drama, we enjoyed another successful Division Competition and ‘A Night at the Theatre’, with an expanded programme and greater numbers of pupils from across all year groups participating. Plans were also drawn up for a large, whole-school production of a musical – the first in some time – which unfortunately had to be cancelled. LAMDA was offered on a more substantial basis with more pupils taking up this opportunity.
The Art department had a strong cohort at A Level with four pupils going on to Glasgow School of Art; one to Edinburgh College of Art and two to Edinburgh College. The A Level, GCSE and Photography courses were all particular strong this year and it is a pity that they did not get the opportunity to exhibit in the traditional manner. The theme of 'Absence Presence’ proved particularly appropriate. However the department produced an innovative virtual interactive exhibition which attracted 1400 views - more than would normally get to see the work. The A Level group had a residential trip to Glenalmond College along with Martha Ellis as Artist in Residence who produced some fantastic work as part of her residency.
During 2019/20 it has become very clear that the outdoor adventure space is an environment where a wide range of life skills are developed. Looking at the attributes we need to thrive in the world become the foundations of the work we do and the opportunities we offer. Using the framework of People, Place and Purpose along with our mindsets model of the 4 P’s we continued to build experiences that we hope our EA learners can use as blueprints for life’s challenges.
Pre COVID we had achieved a huge amount in terms of Gold DofE delivery of expeditions with 4 qualifying expeditions being completed in September and October 2019. This facilitated the chance for pupils to go on to complete their award before leaving school. We also enjoyed a DofE assessors’ hill day and it was brilliant to bring together our team of volunteers and share ideas and reflect on the year.
As the situation with COVID developed we worked with our providers of year group adventure trips to postpone residential trips and re schedule wherever possible to ensure that pupils do not miss out on these life enhancing experiences.
This theme of thrive and resilience inspired our Head of Outdoor Education during lockdown to step back from our traditional model of outdoor education and look at what we are trying to achieve. Giving our pupils a range of skills and experiences that allow them to be proactive and responsive in their own lives became a theme as the School constructed a “Skills for life” course which became a 12 week online course delivered using 24 short films we created. This was available on the EA YouTube channel for the public and DofE nationally picked it up, promoted it as a learning resource for their participants and cited it as an example of good practice.
SCIS asked the Head of Outdoor Education to work with Emma Bell (Author of Thrive and a well-known business coach) to develop 3 workshops on resilience. This was aimed at pupils leaving school and was for the SCIS community. While creating this course it became apparent that we were looking at something really special and important, a core theme for a learning opportunity which could be considered essential in all young people’s lives. This theme is now being developed collaboratively with School Colleagues, Emma Bell and SCIS to develop a qualification centred on Thrive and Resilience which would help the lives of any young person in Scotland. This is an ambitious plan but one that fits perfectly with the vision and values of The Edinburgh Academy. Making the most of the DofE with a difference we encouraged our 3rds to start their Bronze award on the 1st June (3 months earlier than normal enrolment time) to help them have lots of activities to do over the summer while lockdown continued.
Spending time planning and rewriting our protocols over the summer has resulted in us being able to very quickly return to some planned activities as government advice changed. For Geits and Seconds they have had their adventure days in September and there is a full programme of expeditions scheduled in for Bronze, Silver and Gold pupils between now and Christmas.
During 2019/20 we have the following DofE awards
13 Gold + 3 pending approval 7 Silver - completion pending expeditions which should explain low numbers for Silver 59 Bronze
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for the year ended 31 July 2020
Currently we have the following numbers associated with the award:-
56 new Bronze pupils in 4ths 71 Bronze pupils in 5ths 50 Silver pupils in 6ths 28 Gold pupils in 7ths
In summary, the role of outdoor education has continued to develop and respond to the changes we are seeing within the world, our vision to give our pupils opportunities to shape their own lives through the experience of adventure stays true, being informed all the time by influences and events locally, nationally and globally!
Sporting achievements
Sport continues to play a major role in the life of our young students and physical activity is vital to creating a healthy lifestyle. The refurbishment of the fitness rooms at the Sports Centre has proved very successful, resulting in an increased usage during games time and the implementation of strength and conditioning sessions for our athletes. The School were very competitive in the SRU top conference with a number of very encouraging performances. The U15 squad, in particular, was very impressive. Most A teams are competing well, but strength in depth is lacking with it proving difficult to field regular B teams at some levels. This can prove costly in the Conference table, where fielding two teams at each year group scores valuable points. The 1st XV had a good season winning 11 out of 17 matches with some particularly impressive performances against Strathallan, Merchiston and Watsons in the Conference. There was a victory away at Strathallan and the team could have won against both Merchiston and Watsons in two very tight matches. The 1st XV reached the Cup semi-final losing out to Watsons at Myreside in a hard fought match. The U16 squad had a tough season, but made it to the Cup quarterfinals before losing to the eventual winners. There was only one round of the Sevens series before Coronavirus hit sending us into lockdown. It caused the postponement of the tour to South Africa scheduled for July 2020, which hopefully will now take place in July 2021 with the exciting possibility of going to a British Lions match. The SRU national programme was cancelled. The School had a number of players who were due to be involved at U18 and U17 level.
Numerous representative honours have also been collected again by members of our hockey teams this year. Hockey continues to thrive and grow at the Academy and our players are enjoying a great deal of success. We currently possess eleven international squad members. This includes: ten male international players (5 Under 16 & 5 Under 18), alongside our first female international, who is in the Scotland Under 16 setup. These eleven, alongside 12 others across male & female hockey, were selected into the district squads at Under 14, 16 & 18 age grades. From a team perspective, our boys’ 1st XI reached the Scottish Schools Cup Semi-Final again only to lose out to Loretto & the girls U15 were victorious in the Scottish Schools' Bowl Competition, beating Fettes in the final.
We have a number of our pupils currently swimming in clubs out with the school. Pre COVID restrictions the pupils involved in elite groups were managing 8 sessions a week which is a huge time commitment they have to factor into their day either before or after school. One such senior boy has qualified for the British National Championships (postponed this summer) and has been ranked as high as 14th in GB for the 400IM at his age group. Twenty six of our pupils attended the Edinburgh Schools Championships last November. Results included a silver medal for our P7 (Geits) girls swim team. The pupils secured 3 golds (two by the same 4ths girl in the 100 and 400 freestyle), 5 more silvers and 6 bronze medals. This resulted in 5 of our swimmers securing swims at the Scottish Schools Championships in Glasgow. This is a huge achievement swimming with the best that Scotland has to offer.
Unfortunately due to COVID the Athletics Season was cancelled. One of our pupils in 5ths has been selected to run in the World Youth Championships in the summer of 2020 which was a magnificent achievement in itself but unfortunately along with all the others this event was cancelled.
Fives at E.A. had another successful year until the curtailing of the season due to COVID19. Numbers across year groups for boys and girls remained high with the positive issue of finding enough time on court for everyone proving ever more difficult. The development of the courts’ enclosure has greatly improved the spectator experience and provided a space for pupils to watch safely whilst off-court. Removing the chicken wire is the
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for the year ended 31 July 2020 final step in this process, before looking at possible ways to improve the on-court experience by levelling the floors. The ever expanding Jesters Tour in January was its usual celebration of Scottish Fives.
Despite the truncated season meaning our annual tours to London and Marlborough had to be cancelled, it has been another very enjoyable and successful one for Fives at the school. The usual round of fixtures against the other Edinburgh schools were supplemented with new ones against visiting sides from Sedbergh, Bedford Modern and Strathallan schools. It was great for our pupils to expand their experience of playing with and against other Fives enthusiasts. A superb season for our younger boys saw them unbeaten at U14 level with ten different players all playing their part and the U16s won six of their seven fixtures.
For the girls we struggled to find enough fixtures for them but had a very enjoyable trip to Durham where they picked up two silver medals and a second trip to Manchester for the National Ladies’ Championships where E.A. pupils won both the Plate Singles and Doubles competitions.
Estate improvements
During the reporting period all capital projects were cancelled or postponed due to the lock down. As reported last year the School had hoped to commence the extension building to the Science Centre and the Library. This project remains central to the School’s immediate plans and will be a significant enhancement to our facilities in creating an innovative learning space where a broad spectrum of subjects can be taught and studied whilst also expanding the School’s capacity for the teaching of science. The Court of Directors are reviewing when this project should proceed.
Another project delayed from June 2020 but due to commence in October 2020 is work to properly unite the two halves of the Senior School with the demolition of Room 19 and landscaping work to create a broad walkway that will link the Donaldson’s side of the School. This will have a dramatic impact on the Senior School site in reducing the travel time for pupils and staff when moving between classes and is particularly important during these COVID times.
As previously reported, across the whole School site, but particularly at the Senior School where the majority of the School heritage listed buildings are located, work continues to improve the buildings whilst respecting the integrity and heritage of the School estate. The next major project is to modernise the heating systems across the whole school. This started with a £200k project to replace the boilers in the Main Building at the Senior School but the whole project is expected to take another 7 years at a cost of approximately £1.7m. The aim of this continues to be to ensure that future generations of Academy pupils can gain the benefit of learning in this beautiful and historical setting.
FINANCIAL REVIEW
The School’s fee income totalled £14,029,162 (2019: £13,456,008) for the year. Other income brought the group’s total income for the year to £15,630,171 (2019: £14,758,043).
After deduction of all expenditure comprised principally of salaries, and inclusion of gains and losses on investments, the net movement in group funds for the year was a surplus of £134,965 (2019: £612,738). The net decrease on unrestricted funds for the year amounted to £123,237 (2019: increase of £347,794), and unrestricted funds now total £19,935,936 (2019: £20,059,173). It should be noted that of the total unrestricted funds, £20,825,928 (2019: £20,643,286) is represented by fixed assets.
The total net assets figure at 31 July 2020 was £23,333,718 (2019: £23,198,753) which was made up of unrestricted funds of £19,935,936 (2019: £20,059,173) and restricted funds of £3,397,782 (2019: £3,139,580).
Financial Strategic Direction of School
It was reported last year that over the last decade and against a backdrop of steadily increasing costs, the School has faced a number of increasing additional demands on its finances from the provision of additional educational facilities to increasing resources being devoted to means-tested bursaries, for which it has seen increasing demand in recent years and a considerable investment in renovating its Grade A listed site at Henderson Row.
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for the year ended 31 July 2020
The School continues to face this challenge through rigorous cost control as well as changing the educational model in operation at the Senior School. The change has seen the School roll increase significantly; it has waiting lists in all the main entry points and it has significantly increased its expenditure on means-tested bursaries over the last five years. This has been balanced with cautious fee increases for the last five years to try and close the affordability gap. External surveys have indicated that it has been successful in minimising fee increases relative to its peer group. The Court of Directors made the decision not to increase fees for the School session 2020 – 21.
Last year it was reported that the School was entering a period of significant and unprecedented financial uncertainty and pressure in the independent education sector. In September 2019, the employers’ contribution to the Teachers’ Pension Scheme in Scotland increased from 17.2% to 23 %. This has resulted in an annual increase in cost of £350k. The Scottish Government is progressing the legislation required to remove Business Rates Relief from Independent Schools and it has now been confirmed that this will be introduced on April 2021 having been delayed by 8 months due to the pandemic. It is estimated that the loss of business rates relief will cost the School £320K per annum. Added to this is the harsh economic situation developing in the UK as the country comes to terms with the impact of the lock down and the continuing restrictions imposed by the government as it seeks to stop the spread of COVID.
In overseeing the School as a Scottish Charity, the Court of Directors has a comprehensive risk mitigation programme in place. It remains acutely aware of the affordability of independent education and the ability of parents to pay significant additional costs. As a result, all aspects of the School’s business plan from the cost base to alternative revenue streams are being reviewed. Included in this review will be an assessment of the viability of continuing the means-tested bursary programme at its current level.
Future Plans
The Court of Directors recognises that the principal aim of the School remains the delivery and development of education to its pupils. The Court of Directors will support:
The development of every pupil to their maximum potential in all areas of the curriculum.
Promotion and improvement of the School’s record of success in public examinations and the wide breadth of co-curricular activities available to pupils.
The Court of Directors also wishes to put the School on the soundest financial footing for the future that it can. As noted previously in this report there are a number of external financial pressures that are being imposed on the School and so growing revenue from both fees and other sources has been given the highest priority by the Court of Directors. To this end the Directors plan to:
Consolidate on the successful implementation of the 96 model which has seen the Senior School grow to 655 in 2019 from 462 in 2008. The implementation of the 96 model has been achieved 2 years ahead of schedule.
Expand the activities of Edinburgh Academy Trading Company during 2020/21 to maximise the return to the School as well as developing other income streams so that the School can reduce its dependency on fee income.
Conduct a comprehensive review of its cost base and operations to ensure the School is operating in as cost effective a manner as possible. The clear direction given is that this review must not compromise the education of the pupils and the ethos within which that is delivered.
Investment Policy
In accordance with the Royal Charter, the Court is empowered to invest in such stocks, shares, investments and property in the UK as it considers appropriate. Brewin Dolphin continue in the role as the School’s fund managers.
The policy is to adopt a moderate risk investment strategy, currently 6 on a scale of 1 -10 with 10 being the highest risk. The Court is satisfied with the investment performance during the year considering the harsh
10 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
DIRECTORS’ REPORT
for the year ended 31 July 2020 economic environment and turbulence in financial markets caused by COVID, which has shown an unrealised loss during the period.
Reserves Policy and Going Concern
As at 31 July 2020, the Group’s free reserves, being unrestricted funds not tied up in tangible fixed assets or investments, were in deficit of £1,101,561 (2019: deficit of £795,682). The School has an aspiration to hold free reserves of 3 months’ operating costs. This ties in to the policy of parents being required to give a term’s notice of the intention to withdraw a pupil from the School. The immediate reserves have been utilised for capital development and refurbishment of the School over the last 9 years. It is the intention of the Directors to build up the free reserves in line with the reserves policy over the next three years.
In the year to 31 July 2020, the Group made a cash surplus from its operating activities of £1,426,889 (2019: £1,317,322) and the Group is forecasting to make an unrestricted surplus in the year to 31 July 2021 with a view to increasing free reserves. In the interim period the Directors are satisfied that they have the ability to utilise some of the £2.5m held in investments as a reserve without compromising the restricted funds liquidity, should the requirement arise.
The School continues to be strongly supported by the Eric H Stevenson Charitable Trust whose charitable purpose is to support the Edinburgh Academy. The Charitable Trust holds investment assets of over £16m.
In addition to the free reserves, the Group holds a number of restricted funds, details of which are provided in the notes to the financial statements.
Bursary and Scholarship Funds
The Bursary and Scholarship Fund represents accumulated funds to be spent on scholarship and bursary awards. The Directors are actively seeking to increase this fund with a view to the fund eventually covering all expenses incurred in the provision of the Bursaries and Scholarships. The Directors note the decrease to the fund due to movement in the financial markets. As this Fund is invested on a long term basis to provide an annual income to support bursaries, it is expected over time that the financial markets will recover. Funds have decreased by 5.1% from £2,492,913 to £2,364,973 in the year.
Funds Held on Behalf of Others
The School holds funds of £28,081 (2019: £28,081) in a separate bank account for The Edinburgh Academy CCF, a separately constituted organisation out with the group.
Risk Management
The Directors have a risk management strategy which comprises of:
annual health and safety inspections and advice from a professionally qualified consultant who visits the School; the School’s Health & Safety Committee meets three times a year and reports to the Education & Policy Committee; Health and Safety reports are then presented and reviewed at every Court meeting; regular reviews of the principal business risks and uncertainties, these are conducted by the Education & Policy Committee and the Finance, Audit & Risk Committee; an annual review of the School’s risk register by the full Court of Directors; the establishment of policies, systems and procedures to mitigate those risks identified in the annual review; and the implementation of procedures designed to minimise or manage any potential impact on the School should those risks materialise.
The risk management strategy identified the following as being the three most significant risks faced by the School and has taken steps to mitigate the risks as far as possible:
1. Insufficient financial resources to operate effectively. The School recognises that it operates in an extremely competitive market and that there are a number of external pressures on its cost base over
11 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
DIRECTORS’ REPORT
for the year ended 31 July 2020
which it has no control which is combined with an economy that has moved into recession due to the impact of the global pandemic. As indicated elsewhere in this Report, the proposal to remove business rates relief and the increase to the employers’ contributions to the teachers’ pension schemes have had a significant impact on the School’s financial model. To reduce the impact of this the School is extremely careful in its financial planning and has sought to reduce the costs within its control as far as is feasible without compromising the delivery of first class education. The School is evolving its business model so that the financial base is more robust.
2. VAT being added to tuition fees which would effectively add 20% onto the cost of education to parents resulting in an affordability gap which may lead to reduced pupil numbers and therefore insufficient financial resources to operate effectively. The School is actively researching other income streams to reduce the dependency on fee income and to create the ability to reduce the affordability gap.
3. Failure to safeguard pupils against internet and other IT abuse - including cyberspace bullying. Within all educational establishments, combatting this risk is recognised as a high priority and many measures are in place to reduce the risk of failures occurring.
The Court of Directors is in the process of conducting a review of its Committee Structure. The first phase has been the updating of the Terms of Reference for the Finance & General Purposes (F&GP) Committee better reflect its core function and it was renamed the Finance, Audit and Risk Committee (FARC). The FARC considers all budget proposals and the risk profile of the School. It then puts forward its recommendations on these for approval by the whole Court of Directors. The FARC and, subsequently, the Court, receive regular management accounts. In addition to its scheduled meetings, the Court holds an annual strategic planning day. At this meeting, the Directors routinely examine, in detail, the 5 year financial budget forecast. The Directors consider that this procedure enables the Court to take strategic decisions to ensure the continued good financial health of the School. Unfortunately the annual planning day was unable to take place this year due to COVID restrictions.
The Court has delegated authority to the Safeguarding Committee to oversee matters relating to wellbeing and child protection matters for existing staff and pupils. This Committee also has responsibility for the review and management of any historic allegations as received by the School and, where deemed appropriate, take the lead in oversight and management of follow-up actions deemed necessary.
The Court of Directors established a Staff Affairs Committee during 2012 to deal with staff welfare matters. A report of the meetings of this committee is made to the Education & Policy (E&P) Committee. The E&P is responsible for monitoring and advising on all matters concerning the education of pupils at the School, staff and pupil welfare including Health and Safety and all policies relating to staff and pupil matters and educational provision.
STRUCTURE, GOVERNANCE AND MANAGEMENT
Governing Document
The Edinburgh Academy is a charity incorporated as a Body Corporate under a Royal Charter dated 6 February 1824 and, as such, has no shareholders. Supplementary Charters have been granted, with the most recent as noted earlier in this Report being approved by the Privy Council on 11 October 2017.
Recruitment, Appointment and Training of Trustees
The Court of Directors of the Edinburgh Academy is the School’s Governing Body. Directors are the equivalent of Governors in other Schools and are Charity Trustees for the purposes of charity law.
Elected Directors are normally recruited by a process of application, which involves an interview with the Nominations Committee and then successful applicants being elected by the whole Court. The Academical Club Council is entitled to nominate up to two Representative Directors to be elected by the Court. Under the terms of the Royal Charter as amended in 2017, Directors are elected for a period of 4 years and then eligible for re- election for a further 4 years. No Director appointed after October 2017 may serve for longer than 12 years unless chairing the Court or a Sub-Committee.
12 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
DIRECTORS’ REPORT
for the year ended 31 July 2020
Newly appointed Directors are invited to attend an afternoon at the School where they are briefed by the Rector and the Bursar who is also Clerk to the Court of Directors. Copies of documents relevant to their appointment as a Director and copies of the minutes of recent Court and Committee meetings are provided to them. Subsequently, Directors are encouraged to attend Governors’ Seminars and other briefings available through the Independent Schools’ Council, the Association of Governing Bodies of Independent Schools and the Scottish Council of Independent Schools.
Directors’ Liability insurance cover in respect of the Court is reviewed annually to ensure it is maintained at an appropriate level.
Organisational Structure
The Court is responsible for the strategic direction of the School and associated decisions and routinely meets four times a year, with one additional Strategy meeting.
The Court is supported by an Executive Committee, an Education & Policy Committee, a Finance, Audit and Risk Committee, a Property Committee, a Safeguarding Committee, a Staff Affairs Committee and a Nominations Committee. Such Committees are empowered both to make decisions and provide recommendations to the Court. Formal agendas are prepared and minutes written for all Committee meetings. The Committees act within established Terms of Reference.
The day-to-day leadership and administration of the School is delegated to the School’s Rector and the Headmaster of the Junior School. The Bursar is the Clerk to the Court of Directors.
The Court of Directors has delegated authority for the setting of the remuneration of Key Management Personnel to its Remuneration Committee which comprises of the Chairman of the Court of Directors, the Chairman of the Finance, Audit and Risk Committee, the Chairman of the Education and Policy Committee and the Chairman of the Safeguarding Committee. This Committee reviews the remuneration packages of Key Management Personnel on an annual basis. In this review, consideration is given to the following factors: benchmark data such as the Salary Survey provided by AGBIS; overall performance of the School; and the affordability of any pay award when considered in line with the annual budgeting process.
Group Structure and Relationships
The Edinburgh Academy is a charity and is the focus for all supporting and subsidiary activities. Its subsidiary entities are:
Edinburgh Academy Trading Limited Edinburgh Academy Trading Limited is a company trading in support of the School through: the letting of sports facilities to the community and the provision of sports activity programmes; the letting of the School’s facilities when they are not required for use by the School; a programme of community use of the School’s facilities. Profit is gift-aided to the School. Edinburgh Academy Enterprises Limited Edinburgh Academy Enterprises Limited is now dormant, subsequent to a transfer of its business operations into Edinburgh Academy Trading Limited on 31 March 2017.
13
THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
DIRECTORS’ REPORT
for the year ended 31 July 2020
Key Management Personnel
Rector Head Teacher Secretary & Bursar Director of Development
Deputy Rector Deputy Head Teacher Financial Controller
e
Registered Office and Operational Address Independent Auditor Investment Managers The Edinburgh Academy Azets Audit Services Brewin Dolphin 42 Henderson Row Exchange Place 3 Sixth Floor, Atria One Edinburgh EH3 5BL Semple Street 144 Morrison Street Edinburgh EH3 8BL Edinburgh EH3 8EX
Solicitors Solicitors Bankers MBM Commercial LLP Morton Fraser Bank of Scotland 5th Floor, 125 Princes Street Quartermile 2 38 St Andrew Square Edinburgh EH2 4AD 2 Lister Square Edinburgh EH2 2YR Edinburgh EH3 9GL
15 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
DIRECTORS’ REPORT
for the year ended 31 July 2020
STATEMENT OF RESPONSIBILITIES OF THE COURT OF DIRECTORS
The Court is required by charity law to prepare financial statements for each financial year that gives a true and fair view of the state of affairs of group and School as at the balance sheet date and of its incoming resources and application of resources, including income and expenditure, for the financial year. In preparing these financial statements the Court is required to:
Select suitable accounting policies and then apply them consistently.
Observe the methods and principles of the Charities SORP.
Make judgements and estimates that are reasonable and prudent.
State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements.
Prepare the financial statements on a going concern basis unless it is inappropriate to presume that The Edinburgh Academy will continue in business.
The Court is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of group and School and to enable them to ensure that the financial statements comply with the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 (as amended). They are also responsible for safeguarding the assets of The Edinburgh Academy and hence for taking steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions.
STATEMENT AS TO DISCLOSURE TO AUDITOR
So far as the Directors are aware, there is no relevant audit information of which the group and School’s auditor is unaware, and each Director has taken all the steps they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the group and School’s auditor is aware of that information.
By order of the Court
Bursar & Clerk to the Court
Date: 7 October 2020
16 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
INDEPENDENT AUDITORS REPORT
for the year ended 31 July 2020
Opinion
We have audited the financial statements of The Edinburgh Academy (the School) and its subsidiary companies (the group) for the year ended 31 July 2020 which comprise the Consolidated and School Statement of Financial Activities, the Consolidated and School Balance Sheet, the Consolidated and School Statement of Cash Flows and the notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
give a true and fair view of the state of the group’s and School’s affairs as at 31 July 2020 and of the group’s and School’s income and expenditure for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Charities and Trustee Investment (Scotland) Act 2005 and regulations 6 and 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our 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 audit opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in which the ISAs (UK) require us to report to you where:
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group’s or the School’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
17 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
INDEPENDENT AUDITORS REPORT
for the year ended 31 July 2020
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our Auditor’s Report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Charities Accounts (Scotland) Regulations 2006 (as amended) require us to report to you if, in our opinion:
the information given in the financial statements is inconsistent in any material respect with the Directors’ Report; or
proper accounting records have not been kept by the School; or
the School financial statements are not in agreement with the accounting records; or
we have not received all the information and explanations we require for our audit.
Responsibilities of the directors
As explained more fully in the Statement of Responsibilities of the Court of Directors set out on page 16, the Court of Directors are responsible for the preparation of the financial statements which give a true and fair view, and for such internal control as the directors 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 directors are responsible for assessing the group’s and 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 directors 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 the Act and relevant regulations made or having effect thereunder.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
18 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
INDEPENDENT AUDITORS REPORT
for the year ended 31 July 2020
Auditor’s responsibilities for the audit of the financial statements (continued)
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the School’s directors, as a body, in accordance with regulation 10 of the Charities Accounts (Scotland) Regulations 2006 (as amended).
Our audit work has been undertaken so that we might state to the School’s directors as a body, 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 the School’s directors, as a body, for our audit work, for this report, or for the opinions we have formed.
Azets Audit Services, Statutory Auditor Exchange Place 3 Semple Street Edinburgh EH3 8BL
Date: 7 October 2020
19 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES
for the year ended 31 July 2020
2020 2019 Unrestricted Restricted Total Total Note Funds Funds Funds Funds £ £ £ £ Income and endowments from: Donations and legacies 5 435,000 424,000 859,000 765,178 Charitable activities 6 14,029,162 - 14,029,162 13,456,008 Other trading activities 7 268,655 - 268,655 445,549 Investments - 74,718 74,718 80,451 Other 398,636 - 398,636 10,857 ─────── ─────── ─────── ─────── Total income 15,131,453 498,718 15,630,171 14,758,043 ─────── ─────── ─────── ───────
Expenditure on: Raising funds (230,590) (15,964) (246,554) (293,809) Charitable activities: 8 Teaching and care of children (10,231,291) (36,070) (10,267,361) (9,246,703) Running costs of school (2,366,965) - (2,366,965) (2,427,836) School administration and support (2,425,844) - (2,425,844) (2,232,320) ─────── ─────── ─────── ─────── Total expenditure (15,254,690) (52,034) (15,306,724) (14,200,668) ─────── ─────── ─────── ───────
Net (losses)/gains on investments 14 - (188,482) (188,482) 55,363 ─────── ─────── ─────── ───────
Net (expenditure)/income (123,237) 258,202 134,965 612,738
─────── ─────── ─────── ─────── Net movement in funds (123,237) 258,202 134,965 612,738
Reconciliation of funds: Total funds at 1 August 2019 20,059,173 3,139,580 23,198,753 22,586,015 ─────── ─────── ─────── ─────── Total funds at 31 July 2020 20 19,935,936 3,397,782 23,333,718 23,198,753 ═══════ ═══════ ═══════ ═══════
All activities relate to continuing operations. The charity has no recognised gains or losses other than the results for the period as set out above.
The notes on pages 24 to 48 form part of these financial statements
20 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
SCHOOL STATEMENT OF FINANCIAL ACTIVITIES
for the year ended 31 July 2020
2020 2019 Unrestricted Restricted Total Total Note Funds Funds Funds Funds £ £ £ £ Income and endowments from: Donations and legacies 5 435,000 424,000 859,000 765,178 Charitable activities 6 14,029,162 - 14,029,162 13,456,008 Other trading activities 7 87,270 - 87,270 174,059 Investments - 74,718 74,718 80,451 Other 398,636 - 398,636 10,857 ─────── ─────── ─────── ─────── Total 14,950,068 498,718 15,448,786 14,486,553 ─────── ─────── ─────── ─────── Expenditure on: Raising funds - Investment management costs - (15,964) (15,964) (16,352) Charitable activities: Expenditure on education & care of children 8 Teaching and care of children (10,231,291) (36,070) (10,267,361) (9,246,703) Running costs of school (2,366,965) - (2,366,965) (2,427,836) School administration and support (2,425,844) - (2,425,844) (2,232,320) ─────── ─────── ─────── ─────── Total (15,024,100) (52,034) (15,076,134) (13,923,211) ─────── ─────── ─────── ───────
Net (losses)/gains on investments 14 - (188,482) (188,482) 55,363 ─────── ─────── ─────── ─────── Net (expenditure)/income (74,032) 258,202 184,170 618,705
─────── ─────── ─────── ─────── Net movement in funds for the period (74,032) 258,202 184,170 618,705
Reconciliation of funds: Fund balances at 1 August 2019 20,052,974 3,139,580 23,192,554 22,573,849 ─────── ─────── ─────── ─────── Fund balances at 31 July 2020 20 19,978,942 3,397,782 23,376,724 23,192,554 ═══════ ═══════ ═══════ ═══════
All activities relate to continuing operations. The charity has no recognised gains or losses other than the results for the period as set out above.
The notes on pages 24 to 48 form part of these financial statement
21 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
BALANCE SHEETS
as at 31 July 2020
Consolidated School
2020 2019 2020 2019 Note £ £ £ £
Fixed assets Tangible assets 13 20,825,928 20,643,286 20,802,175 20,629,806 Investments 14 2,504,447 2,634,191 2,504,547 2,634,291 ─────── ─────── ─────── ─────── Total fixed assets 23,330,375 23,277,477 23,306,722 23,264,097 ─────── ─────── ─────── ───────
Current assets Stocks 10,657 7,712 8,912 5,967 Debtors 15 380,191 569,045 448,734 585,680 Cash at bank and in hand 16 901,650 458,113 837,990 418,798 ─────── ─────── ─────── ─────── Total current assets 1,292,498 1,034,870 1,295,636 1,010,445
Creditors Amounts falling due within one year 17 (1,260,118) (1,071,512) (1,196,597) (1,040,043) ─────── ─────── ─────── ─────── Net current assets/(liabilities) 32,380 (36,642) 99,039 (29,598) ─────── ─────── ─────── ─────── Creditors Amounts falling due after more than one year 18 (29,037) (41,945) (29,037) (41,945)
Provisions for liabilities and charges - (137) - -
─────── ─────── ─────── ─────── Net assets 21 23,333,718 23,198,753 23,376,724 23,192,554 ═══════ ═══════ ═══════ ═══════ The funds of the charity:
Unrestricted funds General funds 20 (1,101,561) (795,682) (1,034,802) (788,401) Designated funds 20 21,037,497 20,854,855 21,013,744 20,841,375 ─────── ─────── ─────── ───────
Total unrestricted funds 19,935,936 20,059,173 19,978,942 20,052,974
Restricted funds 20 3,397,782 3,139,580 3,397,782 3,139,580 ─────── ─────── ─────── ─────── Total funds 23,333,718 23,198,753 23,376,724 23,192,554 ═══════ ═══════ ═══════ ═══════
The financial statements were approved and authorised for issue on 7 October 2020 and signed on behalf of the Court of Directors by:
Chair
The notes on pages 24 to 48 form part of these financial statements
22 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 July 2020
Consolidated School Note 2020 2019 2020 2019 £ £ £ £
Cash flows from operating activities 22 1,426,889 1,317,322 1,386,736 1,341,474
Cash flows from investing activities: Dividends, interest and rents from investments 74,718 80,451 74,718 80,451 Purchase of property, plant and equipment (989,243) (1,054,260) (973,435) (1,052,588) Proceeds from sale of investments 493,395 340,140 493,395 340,140 Purchase of investments (520,833) (336,036) (520,833) (336,036) ─────── ─────── ─────── ─────── Net cash used in investing activities (941,963) (969,705) (926,155) (968,033) ─────── ─────── ─────── ───────
Cash flows from financing activities: Repayment of finance leases (10,089) (40,358) (10,089) (40,358) ─────── ─────── ─────── ─────── Net cash used in financing activities (10,089) (40,358) (10,089) (40,358) ─────── ─────── ─────── ───────
Change in cash and cash equivalents in the reporting period 474,837 307,259 450,492 333,083
Cash and cash equivalents at the beginning of the reporting period 503,441 196,182 464,126 131,043 ─────── ─────── ─────── ─────── Cash and cash equivalents at the end of the reporting period 16 978,278 503,441 914,618 464,126 ═══════ ═══════ ═══════ ═══════
The notes on pages 24 to 48 form part of these financial statements
23 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
1. General information
The Edinburgh Academy is a charitable company incorporated under Royal Charter in the United Kingdom and does not have any share capital. The registered office is 42 Henderson Row, Edinburgh, EH3 8BL. The principal activity of The Edinburgh Academy is the running of a leading independent school within Scotland.
2. Principal accounting policies
Basis of accounting The financial statements have been prepared in accordance with the Financial Reporting Standard 102, as issued by the Financial Reporting Council, and the Statement of Recommended Practice (SORP) “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)”.
The Edinburgh Academy meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.
These financial statements are presented in pounds sterling (GBP) as that is the currency in which the charitable company’s transactions are denominated.
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires directors to exercise their judgement in the process of applying the accounting policies. Use of available information and application of judgement are inherent in the formation of estimates. Actual outcomes in the future could differ from such estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.
Going concern The directors are of the opinion that the group can continue to meet its obligations as they fall due for the foreseeable future. The charitable company is forecast to generate a surplus in the year to 31 July 2021 and to generate positive cash flows in the year to 31 July 2021 and beyond. Whilst the Directors are acutely aware of the economic impact of the COVID pandemic and the financial risks associated with this. Measures have been put in place to mitigate the potential impact of these risks on the School. The School has a strong cash position as it moves into the new financial year and pupil recruitment remains strong with waiting lists at all major entry points to the School. Should a second lock down occur the Court are confident that the teaching staff can build on their experience from the Summer Term of 2020 and quickly revert to high quality remote teaching which will enable the School to continue to deliver education to all at the School.
In addition to this the charitable company is strongly supported by the Eric H Stevenson Charitable Trust which holds investment assets in excess of £16m. This is an independent Trust whose charitable purpose is to the support the Edinburgh Academy.
The Directors are confident that should an exceptional matter occur which is out with the current reserves of the charitable company then they would be able to request the assistance of the Eric H Stevenson Charitable Trust. As a consequence, the directors have prepared the financial statements under the going concern assumption.
Basis of consolidation The financial statements consolidate the results of the charity and its two wholly owned trading subsidiaries Edinburgh Academy Trading Limited (Company Number SC167036) and Edinburgh Academy Enterprises Limited (Company Number SC130146) on a line by line basis. The charity together with the two subsidiaries comprises the Group.
24 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
Recognition and allocation of income Income is recognised when the charitable company has legal entitlement to the funds, the receipt is probable and the amount can be measured reliably. Where practicable, income is related to the operating activities of the charitable company.
Where there are performance conditions attached to any grants and donations, income is recognised when the conditions have been met or when meeting the conditions are within the charitable company’s control and there is sufficient evidence that they have been met or will be met. Where a grant condition allows for the recovery of any unexpended grant, a liability is recognised when repayment becomes probable.
2. Principal accounting policies (continued)
Recognition and allocation of income (continued) Where there are terms placed on income that limit the charitable company’s discretion over how that income can be used, that income is shown as restricted income in the accounts.
Entitlement to legacies and donations exists when the charitable company has sufficient evidence that a gift has been left, the executor is satisfied that the gift will not be required to satisfy claims on the estate and any conditions are within the control of the charitable company or have been met. Legacy income is measured at fair value, generally the cash amount receivable, and is discounted if deferred for more than 12 months. The unwinding of the discount is recognised as interest receivable.
Income from charitable activities includes fee and other income and is recognised when the charitable company earns the right to consideration by its performance.
Dividends and interest income are credited to revenue when the right to receipt is established and is measured at fair value, generally the transaction value.
Other trading activities are credited to revenue when the right to receipt is established.
Income received by the School in an agency role, together with the related expenditure, is excluded from the financial statements in accordance with the requirements of the Statement of Recommended Practice for Accounting and Reporting by Charities.
Recognition and allocation of expenditure All expenditure is included on an accruals basis and is recognised when there is a legal or constructive obligation to pay for it. The charitable company is not registered for VAT and accordingly costs are shown gross of irrecoverable VAT. All costs are allocated directly between the expenditure categories of the statement of financial activities on a basis designed to reflect the use of the resource.
Raising funds comprises those costs which are associated with the generation of income from sources other than from undertaking charitable activities, and includes costs of attracting sponsorship and other private donations and trading costs.
Charitable expenditure comprises those costs incurred by the charitable company in the delivery of its charitable activities and services.
Governance costs include those costs associated with meeting the constitutional and statutory requirements of the charitable company, such as audit fees.
Funds Unrestricted funds are school fees and other incoming resources generated for the objects of the charity without further specified purpose and are available as general funds.
Designated funds are unrestricted funds earmarked by the Court of Directors for particular purposes.
25 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
Restricted funds are to be used for specific purposes as laid down by the donor. Expenditure that meets these criteria is charged to the fund.
Tangible fixed assets Items of equipment are capitalised and written off over their expected useful lives. Equipment costing under £1,000 is not capitalised in the balance sheet and is written off to revenue when the expenditure is incurred. All fixed assets are initially recorded at cost.
Gifts or bequests of pictures and trophies are not included in the financial statements.
2. Principal accounting policies (continued)
Depreciation The cost of tangible fixed assets is written off using the straight-line method at the following rates:
Heritable property 2% Motor vehicles and plant 20 – 25% Computer equipment 25 – 33% Fixtures and fittings 5 – 25%
Assets under construction are not depreciated. On completion they are transferred to the relevant asset category at cost then depreciated at the above rates.
Investments Investments in securities are measured initially at cost and subsequently at fair value at each reporting date. Fair value is taken as the mid-market value of the investment report by the investment manager at the reporting date. Realised and unrealised gains and losses are recognised in the income and expenditure account and statement of financial activities in the year in which they arise.
Stock Stock is valued at the lower of cost and estimated net realisable value, after making due allowance for obsolete and slow moving items.
Debtors Fee debtors are amounts due from students attending the school in respect of their tuition fees. Fee debtors are recognised at the undiscounted amount of cash receivable, which is normally the invoiced amount, less any allowance for doubtful debts.
Cash and cash equivalents Cash and cash equivalents consist of cash in hand and balances with banks and investment managers which are readily convertible.
Creditors Trade creditors are obligations to pay for goods or services that have been acquired. Accounts payable are classified as creditors falling due within one year if payment is due within one year or less. If not, they are presented as creditors falling due after one year.
Trade creditors are recognised at the undiscounted amount owed to the supplier, which is normally the invoice price.
Financial assets and financial liabilities Financial instruments are recognised in the statements of financial activities when the charitable company becomes a party to the contractual provisions of the instrument. Financial instruments are initially measured at transaction price unless the arrangement constitutes a financing transaction which includes transaction costs for financial instruments not subsequently measured at fair value. Subsequent to initial recognition, they are accounted for as set out below. A financing transaction is measured at the present value of the future payments discounted at the market rate of interest for similar debt instrument.
26 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
Financial instruments are classified as either ‘basic’ or ‘other’ in accordance with Chapter 11 of FRS 102.
At the end of each reporting period, basic financial instruments are measured at amortised cost using the effective interest rate method. All financial instruments not classified as basic are measured at fair value at the end of the reporting period with the resulting changes recognised in income or expenditure. Where the fair value cannot be reliably measured, they are recognised at cost less impairment.
2. Principal accounting policies (continued)
Financial assets and financial liabilities (continued) Financial asset are derecognised when the contractual rights to the cash flows from the asset expire, or when the charitable company has transferred substantially all the risks and rewards of ownership. Financial liabilities are derecognised only once the liability has been extinguished through discharge, cancellation or expiry.
Pension costs The charity contributes to the Scottish Office Superannuation Pension Scheme (“The Scheme”) at rates set by the Scheme Actuary and advised to the Court of Directors by the Scheme Administrator. The Scheme is a multi-employer pension scheme and it is not possible to identify the assets and liabilities of the scheme which are attributable to the school. Therefore, in accordance with FRS 102, the scheme is accounted for as a defined contribution scheme.
The charity also contributes to a defined contribution scheme for non-academic staff.
Contributions to both schemes are charged in the Statement of Financial Activities as they become payable in accordance with the rules of the schemes.
Operating leases Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged to the Statement of Financial Activities on a straight line basis over the period of the lease.
3. Critical judgements and estimates
In preparing the financial statements directors make estimates and assumptions which affect reported results, financial position and disclosure of contingencies. Use of available information and application of judgement are inherent in the formation of the estimates, together with past experience and expectations of future events that are believed to be reasonable under the circumstances. Actual results in the future could differ from such estimates.
The estimates and assumptions with a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are:
Legacy income is measured at fair value, but where part of a legacy left to the charitable company includes property or shares to be sold, judgement is used to estimate the amount receivable.
The directors are satisfied that the depreciation rates used are appropriate for each class of asset.
27 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
4. Comparative Statement of Financial Activities
Group 2019 2019 2019 Unrestricted Restricted Total Note Funds Funds Funds £ £ £ Income and endowments from: Donations and legacies 5 479,200 285,978 765,178 Charitable activities 6 13,456,008 - 13,456,008 Other trading activities 7 445,549 - 445,549 Investments 225 80,226 80,451 Other 7,857 3,000 10,857 ─────── ─────── ─────── Total income 14,388,839 369,204 14,758,043 ─────── ─────── ───────
Expenditure on: Raising funds (277,457) (16,352) (293,809) Charitable activities: 8 Teaching and care of children (9,102,922) (143,781) (9,246,703) Running costs of school (2,427,836) - (2,427,836) School administration and support (2,232,320) - (2,232,320) ─────── ─────── ─────── Total expenditure (14,040,535) (160,133) (14,200,668) ─────── ─────── ───────
Net gains on investments 14 - 55,363 55,363 ─────── ─────── ───────
Net income 348,304 264,434 612,738
Transfers between funds (510) 510 - ─────── ─────── ─────── Net movement in funds 347,794 264,944 612,738 ═══════ ═══════ ═══════
28 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
4. Comparative Statement of Financial Activities (continued)
School 2019 2019 2019 Unrestricted Restricted Total Note Funds Funds Funds £ £ £
Income and endowments from: Donations and legacies 5 479,200 285,978 765,178 Charitable activities 6 13,456,008 - 13,456,008 Other trading activities 7 174,059 - 174,059 Investments 225 80,226 80,451 Other 7,857 3,000 10,857 ──────── ──────── ──────── Total income 14,117,349 369,204 14,486,553 ──────── ──────── ────────
Expenditure on: Raising funds - (16,352) (16,352) Charitable activities: 8 Teaching and care of children (9,102,922) (143,781) (9,246,703) Running costs of school (2,427,836) - - (2,427,836) School administration and support (2,232,320) (2,232,320) ──────── ──────── ──────── Total expenditure (13,763,078) (160,133) (13,923,211) ──────── ──────── ────────
Net gains on investments 14 - 55,363 55,363 ──────── ──────── ──────── Net income 354,271 264,434 618,705
Transfers between funds (510) 510 - ──────── ──────── ──────── Net movement in funds 353,761 264,944 618,705 ════════ ════════ ════════
29 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
5. Donations and legacies (Group and School)
2020 2020 Unrestricted Restricted Total £ £ £
The Edinburgh Academy Foundation - 64,000 64,000 The Eric H. Stevenson Charitable Trust 400,000 - 400,000 Other donations 35,000 360,000 395,000 ─────── ─────── ─────── 435,000 424,000 859,000 ═══════ ═══════ ═══════ 2019
2019 Unrestricted Restricted Total £ £ £
The Edinburgh Academy Foundation - 100,367 100,367 The Eric H. Stevenson Charitable Trust 390,000 - 390,000 Other donations 89,201 185,611 274,812 ─────── ─────── ─────── 479,201 285,978 765,179 ═══════ ═══════ ═══════
6. Charitable Activities – Income from education & care of children (Group and School)
2020 2019 Unrestricted Unrestricted Total Total £ £
Fees 14,421,030 13,329,646 Discounts (1,090,991) (743,225) Catering 500,604 690,815 Optional Activities 198,519 178,772 ─────── ─────── 14,029,162 13,456,008 ═══════ ═══════
7. Other trading income (Group & School)
Edinburgh Academy Trading income for the group and school totalled £238,655 (2019: £403,549) and £57,270 (2019: £132,059) respectively.
30 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
8. Charitable activities - Expenditure on education & care of children
(a) Teaching and care of children (Group and School)
2020 2020 Unrestricted Restricted Total £ £ £
Teaching and support staff 8,034,559 - 8,034,559 Books, apparatus and stationery 382,252 - 382,252 Food 491,522 - 491,522 Sports and recreation 390,496 - 390,496 Bursaries awarded 932,462 - 932,462 Other Scholarship and Bursary Fund awards - 34,355 34,355 Other restricted fund expenditure - 1,715 1,715 ─────── ─────── ─────── 10,231,291 36,070 10,267,361 ═══════ ═══════ ═══════
2019 2019 Unrestricted Restricted Total £ £ £
Teaching and support staff 7,193,988 - 7,193,988 Books, apparatus and stationery 482,645 - 482,645 Food 610,268 - 610,268 Sports and recreation 154,899 - 154,899 Bursaries awarded 661,122 75,000 736,122 Other Scholarship and Bursary Fund awards - 64,986 64,986 Other restricted fund expenditure - 3,795 3,795 ─────── ─────── ─────── 9,102,922 143,781 9,246,703 ═══════ ═══════ ═══════
(b) Running costs and maintenance of school (Group and School)
2020 2019 Unrestricted Unrestricted Total Total £ £
Insurance 100,726 138,323 Fuel, light and rates 294,713 332,259 Cleaning 235,889 282,317 Maintenance and repairs etc. 644,486 470,465 Building projects revenue expenditure 57,480 83,439 Transport 27,138 32,452 General expenses 181,249 234,676 Depreciation 800,866 826,738 Central CPD 24,418 27,167 ─────── ─────── 2,366,965 2,427,836 ═══════ ═══════
31 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
8. Charitable activities - Expenditure on education & care of children (continued)
(c) School administration and support (Group and School)
2020 2019 Unrestricted Unrestricted Total Total £ £
Salaries 1,811,551 1,855,117 Bursar’s department expenses 531,834 270,969 Legal and professional expenses 54,026 71,974 Governance costs (Note 9) 28,433 34,260 ─────── ─────── 2,425,844 2,232,320 ═══════ ═══════
All charitable expenditure relates to the one charitable activity of the group, the running of an Independent School within Scotland.
9. Governance costs (Group and School)
2020 2019 Unrestricted Unrestricted Total Total £ £
Audit fees and related costs 19,320 18,512 Court expenses 9,113 15,748 ─────── ─────── 28,433 34,260 ═══════ ═══════
10. Net income
Net income for the year is stated after charging/(crediting):
Group School 2020 2019 2020 2019 Total Total Total Total £ £ £ £
Depreciation 806,601 832,114 801,866 826,738 Auditor’s remuneration – audit fee 21,950 21,280 16,100 15,590 Auditor’s remuneration – tax fees 1,030 1,000 - - Auditor’s remuneration – other fees 7,065 7,000 7,065 7,000 Operating lease charges – equipment 18,068 53,963 3,008 38,903 ═══════ ═══════ ═══════ ═══════
32 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
11. Staff costs (Group)
2020 2019 Total Total £ £
Wages and salaries 7,615,406 7,194,394 Social Security costs 751,520 711,874 Other pension costs 1,479,183 1,142,837 ─────── ─────── 9,846,109 9,049,105 ═══════ ═══════
The Directors did not receive any remuneration during the year (2019: £nil), nor were they reimbursed any expenses (2019: £nil).
The average monthly number of employees during the year was:
2020 2019 Number Number
Teaching and support staff 120 115 Administration and ancillary staff 115 107 ─────── ─────── 235 222 ═══════ ═══════
The number of employees earning more than £60,000 per annum can be analysed as follows:
2020 2019 Number Number
£60,000 - £69,999 3 3 £70,000 - £79,999 1 1 £80,000 - £89,999 2 2 £110,000 - £119,999 1 1 ══════ ══════
In addition to the remuneration disclosed above, the Rector received a rent benefit equivalent to £24,000 (2019: £24,000) under the terms of his employment as a result of changes incurred when the school ceased boarding.
The total employment benefits, including salary, employer pension, national insurance contributions and rent benefit, of the 10 (2019: 11) key management personnel were £957,949 (2019: £901,422).
33 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
11. Staff costs (Group) (continued)
Pensions
The Edinburgh Academy contributes to two pension arrangements for its employees.
Past and present teaching staff are members of 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 Edinburgh Academy has no liability for other employers 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 Edinburgh Academy 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 2019 is 17.2% increasing from 1 September to 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. The cost cap will be reconsidered once the final decision on a remedy and how this affects the Scottish Teachers’ Pension Scheme is known and its impact fully assessed in relation to any additional costs to the scheme.
The Edinburgh Academy’s level of participation in the scheme is 0.20% based on the proportion of employer contributions paid in 2018-19.
The charge included in the financial statements for the current year amounted to £1,217,087 (2019: £892,593), being the contribution payable by The Edinburgh Academy for the year.
The Edinburgh Academy also contributes to a defined contribution scheme operated through Scottish Widows for all non-academic staff. The charges included in these accounts amount to £262,096 (2019: £250,244) being the contributions payable by The Edinburgh Academy for the year. The charity provides no other post-retirement benefits to employees.
A defined contribution pension scheme also exists for Edinburgh Academy Trading Limited. The charge included in the financial statements for the current year is £10,854 (2019: £9,813).
34 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
12. Taxation (School)
The Edinburgh Academy is recognised as a charity for taxation purposes and is in general exempt from Corporation Tax and Capital Gains Tax.
13. Tangible fixed assets (School)
Assets Heritable under Motor Computer Fixtures property construction vehicles equipment and fittings Total £ £ £ £ £ £ Cost At 1 August 2019 24,109,071 570,750 263,795 1,926,889 2,140,451 29,010,956 Additions 744 647,049 13,500 175,360 136,782 973,435 Transfers between fixed asset classes 680,860 (680,860) - - - - ─────── ─────── ─────── ─────── ─────── ─────── At 31 July 2020 24,790,675 536,939 277,295 2,102,249 2,277,233 29,984,391 ─────── ─────── ─────── ─────── ─────── ───────
Depreciation At 1 August 2019 5,173,108 - 210,406 1,604,500 1,393,136 8,381,150 Charge for year 498,021 - 13,777 153,130 136,138 801,066 ─────── ─────── ─────── ─────── ─────── ─────── At 31 July 2020 5,671,129 - 224,183 1,757,630 1,529,274 9,182,216 ─────── ─────── ─────── ─────── ─────── ───────
Net book value At 31 July 2020 19,119,546 536,939 53,112 344,619 747,959 20,802,175 ═══════ ═══════ ═══════ ═══════ ═══════ ═══════
At 31 July 2019 18,935,963 570,750 53,389 322,389 747,315 20,629,806 ═══════ ═══════ ═══════ ═══════ ═══════ ═══════
Assets under construction at the year-end comprised the science/ library extension and a number of smaller projects. Assets under construction are transferred into the relevant category upon practical completion. During the year, phase 1 of the science/library extension was transferred to heritable property along with a number of smaller projects which have been completed and are now operational. Computer equipment includes assets held on finance lease with a net book value of £96,973 as at 31 July 2020 (2019: £52,527).
35 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
13. Tangible fixed assets (Group) Assets Heritable under Sports Computer Fixtures and property construction equipment Motor vehicles equipment fittings Total £ £ £ £ £ £ £ Cost At 1 August 2019 24,579,405 570,750 107,636 263,795 1,939,097 2,149,919 29,610,602 Additions 744 647,049 - 13,500 182,835 145,115 989,243 Transfers between fixed asset classes 680,860 (680,860) - - - - - ──────── ──────── ──────── ──────── ──────── ──────── ──────── At 31 July 2020 25,261,009 536,939 107,636 277,295 2,121,932 2,295,034 30,599,845 ──────── ──────── ──────── ──────── ──────── ──────── ────────
Depreciation At 1 August 2019 5,643,112 - 94,780 210,406 1,616,708 1,402,310 8,967,316 Charge for year 498,021 - 5,183 13,777 153,130 136,490 806,601 ──────── ──────── ──────── ──────── ──────── ──────── ──────── At 31 July 2020 6,141,133 - 99,963 224,183 1,769,838 1,538,800 9,773,917 ──────── ──────── ──────── ──────── ──────── ──────── ────────
Net book value At 31 July 2020 19,119,876 536,939 7,673 53,112 352,094 756,234 20,825,928 ════════ ════════ ════════ ════════ ════════ ════════ ════════ At 31 July 2019 18,936,293 570,750 12,856 53,389 322,389 747,609 20,643,286 ════════ ════════ ════════ ════════ ════════ ════════ ════════
Assets under construction at the year-end comprised the science/ library extension and a number of smaller projects. Assets under construction are transferred into the relevant category upon practical completion. During the year, phase 1 of the science/library extension was transferred to heritable property along with a number of smaller projects which have been completed and are now operational. Computer equipment includes assets held on finance lease with a net book value of £96,973 as at 31 July 2020 (2019: £52,257).
36 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
14. Investments
Group School 2020 2019 2020 2019 £ £ £ £ Quoted investments and cash: Market value 1 August 2019 2,588,863 2,537,604 2,588,863 2,537,604 Purchases and donations 520,833 336,036 520,833 336,036 Disposals (493,395) (340,140) (493,395) (340,140) Net (loss)/gain on investments (188,482) 55,363 (188,482) 55,363 ────── ────── ────── ────── Market value 31 July 2020 2,427,819 2,588,863 2,427,819 2,588,863
Cash held as part of investment portfolio 76,628 45,328 76,628 45,328
Unquoted investments in subsidiaries at cost - - 100 100 ─────── ─────── ─────── ─────── 2,504,447 2,634,191 2,504,547 2,634,291 ═══════ ═══════ ═══════ ═══════
The quoted investments are held for the purpose of the Scholarship and Bursary Fund, which is a restricted fund as disclosed in Note 20.
The Edinburgh Academy has two wholly owned trading subsidiaries incorporated in the United Kingdom. Any taxable profits are gift aided to The Edinburgh Academy. A summary of the trading results of the subsidiaries is detailed below. The audited financial statements of the subsidiaries are filed with the Registrar of Companies.
Edinburgh Academy Enterprises Limited
The Edinburgh Academy owns 100% of the 100 ordinary shares of £1 each in Edinburgh Academy Enterprises Limited, a company registered in Scotland, which was dormant in the current year and prior period. Aggregate share capital and reserves was £100 at 31 July 2020 (2019: £100).
Edinburgh Academy Trading Limited
The Edinburgh Academy controls Edinburgh Academy Trading Limited a company limited by guarantee, which is registered in Scotland and is involved in the operation of a Sports Centre and in the hiring to third parties the facilities of The Edinburgh Academy. The Academy is the sole member of Edinburgh Academy Trading Limited and all board positions in the subsidiary are held by Academy directors or employees.
Net assets of Edinburgh Academy Trading Limited at 31st July 2020 totalled £64,157 (2019: £56,092) which comprised fixed assets of £23,753 (2019: £13,480), current assets of £103,925 (2019: £92,898) and creditors due within one year of £63,521 (2019: £50,286).
37 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
14. Investments (continued)
Edinburgh Academy Trading Limited (continued) Relevant financial information regarding Edinburgh Academy Trading Limited for the year ended 31 July 2020 is as follows:
2020 2019 £ £ Turnover 250,655 415,549 Cost of sales (168,626) (201,467) ─────── ─────── Gross profit 82,029 214,082 Administrative expenses (73,964) (87,990) ─────── ─────── Profit after tax 8,065 126,092 ═══════ ═══════
15. Debtors
Group School 2020 2019 2020 2019 £ £ £ £
Fee debtors 92,355 383,755 74,948 331,917 Amounts owed by subsidiary undertakings - - 101,490 68,473 Other debtors 128,794 35,033 128,794 35,033 Prepayments 145,163 100,257 143,502 100,257 Accrued income 13,879 50,000 - 50,000 ─────── ─────── ─────── ─────── 380,191 569,045 448,734 585,680 ═══════ ═══════ ═══════ ═══════
16. Cash and cash equivalents
Group School 2020 2019 2020 2019 £ £ £ £
Cash at bank and in hand 901,650 458,113 837,990 418,798 Cash held as part of investment portfolio 76,628 45,328 76,628 45,328 ─────── ─────── ─────── ─────── 978,278 503,441 914,618 464,126 ═══════ ═══════ ═══════ ═══════
38 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
17. Creditors: amounts falling due within one year
Group School 2020 2019 2020 2019 £ £ £ £
Trade creditors 175,415 163,141 166,899 161,920 Assets under construction creditors 4,450 20,878 4,450 20,878 Taxation and social security 208,638 191,720 208,638 182,043 Pension contributions 118,718 107,607 118,718 107,607 Other creditors 192,201 158,811 167,486 156,907 Accruals 337,421 181,886 318,820 163,758 Deferred income 223,275 237,380 211,586 236,841 Hire purchase contracts - 10,089 - 10,089 ─────── ─────── ─────── ─────── 1,260,118 1,071,512 1,196,597 1,040,043 ═══════ ═══════ ═══════ ═══════
Fee Income in Fee Income Advance in Advance (Group) (School) £ £ Deferred income Balance at 1 August 2019 237,380 236,841 Income received and deferred in year 223,275 211,586 Release in year (237,380) (236,841) ─────── ─────── Balance at 31 July 2020 223,275 211,586 ═══════ ═══════
18. Creditors: amount falling due in more than one year (Group and School)
2020 2019 £ £ Solar panels loan 29,037 41,945 ─────── ─────── 29,037 41,945 ═══════ ═══════
19. Obligations under hire purchase
The maturity of obligations under hire purchase contracts Group and School is as follows: 2020 2019 £ £
Within one year - 10,089 ─────── ─────── - 10,089 ═══════ ═══════
39 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
20. Statement of funds
2020 Investment At 31 At 1 August gains/ July Group 2019 Income Expenditure Transfers (losses) 2020 £ £ £ £ £ £ Unrestricted funds Designated funds: Heritable property and assets under construction 19,507,043 - (498,021) 647,793 - 19,656,815 Other fixed assets 1,136,243 35,000 (308,580) 306,450 - 1,169,113 Spirit of Adventure 161,569 - - - - 161,569 TO24 50,000 - - - - 50,000 ─────── ─────── ─────── ────── ────── ─────── Total designated funds 20,854,855 35,000 (806,601) 954,243 - 21,037,497
General fund (795,682) 15,096,453 (14,448,089) (954,243) - (1,101,561) ─────── ─────── ─────── ────── ────── ─────── Total unrestricted funds 20,059,173 15,131,453 (15,254,690) - - 19,935,936 ─────── ─────── ─────── ────── ────── ───────
Restricted funds Scholarship and Bursary funds: General 1,446,865 57,819 (19,387) - (155,088) 1,330,209 Cay fund 667,423 20,174 (4,310) - (30,055) 653,232 TD White 198,625 6,725 (479) - (3,339) 201,532 Mckechie fund 180,000 - - - - 180,000 Cambridge Scholarship 369,554 54,000 (27,858) - - 395,696 Rugby fund 33,276 - - - - 33,276 TO24 185,611 360,000 - - - 545,611 New Field 18,447 - - - - 18,447 Other restricted funds 39,779 - - - - 39,779 ─────── ─────── ─────── ────── ────── ─────── Total restricted funds 3,139,580 498,718 (52,034) - (188,482) 3,397,782 ─────── ─────── ─────── ────── ────── ───────
─────── ─────── ─────── ────── ────── ─────── Total funds 23,198,753 15,630,171 (15,306,724) - (188,482) 23,333,718 ═══════ ═══════ ═══════ ══════ ══════ ═══════
40 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
20. Statement of funds (continued)
2019 Investment At 31 At 1 August gains/ July Group 2018 Income Expenditure Transfers (losses) 2019 £ £ £ £ £ £ Unrestricted funds Designated funds: Heritable property and assets under construction 19,563,027 - (496,480) 440,496 - 19,507,043 Other fixed assets 857,902 - (335,634) 613,975 - 1,136,243 Capital grant 211 - - (211) - - Spirit of Adventure 161,569 - - - - 161,569 TO24 - 50,000 - - - 50,000 ─────── ─────── ─────── ────── ────── ─────── Total designated funds 20,582,709 50,000 (832,114) 1,054,260 - 20,854,855
General fund (871,330) 14,338,839 (13,208,421) (1,054,770) - (795,682) ─────── ─────── ─────── ────── ────── ─────── Total unrestricted funds 19,711,379 14,388,839 (14,040,535) (510) - 20,059,173 ─────── ─────── ─────── ────── ────── ───────
Restricted funds Scholarship and Bursary funds: General 1,433,148 133,265 (141,517) - 21,969 1,446,865 Cay fund 620,136 21,661 (4,429) - 30,055 667,423 TD White 188,558 7,220 (492) - 3,339 198,625 Mckechie fund 180,000 - - - - 180,000 Cambridge Scholarship 379,454 - (9,900) - - 369,554 Rugby fund 33,276 - - - - 33,276 TO24 - 185,611 - - - 185,611 New Field - 18,447 - - - 18,447 Other restricted funds 40,064 3,000 (3,795) 510 - 39,779 ─────── ─────── ─────── ────── ────── ─────── Total restricted funds 2,874,636 369,204 (160,133) 510 55,363 3,139,580 ─────── ─────── ─────── ────── ────── ───────
─────── ─────── ─────── ────── ────── ─────── Total funds 22,586,015 14,758,043 (14,200,668) - 55,363 23,198,753 ═══════ ═══════ ═══════ ══════ ══════ ═══════
41 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
20. Statement of funds (continued)
2020
School Investment At 31 At 1 August gains/ July 2019 Income Expenditure Transfers (losses) 2020 £ £ £ £ £ £ Unrestricted funds Designated funds: Heritable property and assets under construction 19,506,712 - (498,021) 647,794 - 19,656,485 Other fixed assets 1,123,094 35,000 (303,045) 290,641 - 1,145,690 Spirit of Adventure 161,569 - - - - 161,569 TO24 50,000 - - - - 50,000 ─────── ─────── ─────── ────── ────── ─────── Total designated funds 20,841,375 35,000 (801,066) 938,435 - 21,013,744
General fund (788,401) 14,915,068 (14,223,034) (938,435) - (1,034,802) ─────── ─────── ─────── ────── ────── ─────── Total unrestricted funds 20,052,974 14,950,068 (15,024,100) - - 19,978,942 ─────── ─────── ─────── ────── ────── ───────
Restricted funds Scholarship and Bursary funds: General 1,626,865 57,819 (19,387) - (155,088) 1,510,209 Cay fund 667,423 20,174 (4,310) - (30,055) 653,232 TD White 198,625 6,725 (479) - (3,339) 201,532 Cambridge Scholarship 369,554 54,000 (27,858) - - 395,696 Rugby fund 33,276 - - - - 33,276 TO24 185,611 360,000 - - - 545,611 New Field 18,447 - - - - 18,447 Other restricted funds 39,779 - - - - 39,779 ─────── ─────── ─────── ────── ────── ─────── Total restricted funds 3,139,580 498,718 (52,034) - (188,482) 3,397,782 ─────── ─────── ─────── ────── ────── ───────
─────── ─────── ─────── ────── ────── ─────── Total funds 23,192,554 15,448,786 (15,076,134) - (188,482) 23,376,724 ═══════ ═══════ ═══════ ══════ ══════ ═══════
42 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
20. Statement of funds (continued)
2019
School Investment At 31 At 1 August gains/ July 2018 Income Expenditure Transfers (losses) 2019 £ £ £ £ £ £ Unrestricted funds Designated funds: Heritable property and assets under construction 19,563,239 - (496,810) 440,283 - 19,506,712 Other fixed assets 840,717 - (329,928) 612,305 - 1,123,094 Spirit of Adventure 161,569 - - - - 161,569 TO24 - 50,000 - - - 50,000 ─────── ─────── ─────── ────── ────── ─────── Total designated funds 20,565,525 50,000 (826,738) 1,052,588 - 20,841,375
General fund (866,312) 14,067,349 (12,936,340) (1,053,098) - (788,401) ─────── ─────── ─────── ────── ────── ─────── Total unrestricted funds 19,699,213 14,117,349 (13,763,078) (510) - 20,052,974 ─────── ─────── ─────── ────── ────── ───────
Restricted funds Scholarship and Bursary funds: General 1,613,148 133,265 (141,517) - 21,969 1,626,865 Cay fund 620,136 21,661 (4,429) - 30,055 667,423 TD White 188,558 7,220 (492) - 3,339 198,625 Cambridge Scholarship 379,454 - (9,900) - - 369,554 Rugby fund 33,276 - - - - 33,276 TO24 - 185,611 - - - 185,611 New Field - 18,447 - - - 18,447 Other restricted funds 40,064 3,000 (3,795) 510 - 39,779 ─────── ─────── ─────── ────── ────── ─────── Total restricted funds 2,874,636 369,204 (160,133) 510 55,363 3,139,580 ─────── ─────── ─────── ────── ────── ───────
─────── ─────── ─────── ────── ────── ─────── Total funds 22,573,849 14,486,553 (13,923,211) - 55,363 23,192,554 ═══════ ═══════ ═══════ ══════ ══════ ═══════
Transfers
The transfer to designated funds during the year represents the value of additions to and disposals of fixed assets. Full details of the other transfers are available on request.
Designated funds
Designated asset funds represent the net book value of fixed assets, as they are not available for working capital. Transfers to designated funds in the year represent the value of additions to and disposals of fixed assets.
In 1997 Edinburgh Academy Trading Limited received a capital grant from the National Lottery for the construction of the sports centre.
The Spirit of Adventure fund represents the proceeds from the sale of Blair House which were designated and invested by the Court for the provision of outdoor education. 43 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
20. Statement of funds (continued)
Designated funds (continued) The TO24 fund represents a new Campaign introduced in 2013 to raise £24m for endowment for Scholarships & Bursaries and for capital funds. Included in this are funds towards Phase 1 of the development to extend the Edinburgh Academy library and the James Clerk Maxwell Science Centre. Amounts earmarked by the trustees for this purpose are held in the TO24 Campaign Designated fund.
Restricted funds Bursary and Scholarship funds The School holds a certain fund for bursaries, hardship awards, scholarships, exhibitions and prizes. Included within the Bursary and Scholarship funds is:
The Cay Family fund This fund is to be used to assist pupils who may be in need for financial assistance in order to undertake study at the school, recognising the family name Cay in the award.
The TD White Sporting fund This fund represents financial assistance to be awarded to pupils aged 11 or above who excel in the sports of rugby union or cricket and may be financially disadvantaged. The Mckechie fund This fund is to be used towards bursaries. The Cambridge Scholarship fund This fund is to be used towards support pupils of the Edinburgh Academy moving onto study at Cambridge University. Rugby fund The School holds monies raised for rugby tours.
TO24 The TO24 fund represents a campaign introduced in October 2013 to raise £24m for endowment, for Scholarships & Bursaries and for capital builds. Included within this are funds towards Phase 1 of the development to extend the Edinburgh Academy Library and the James Clerk Maxwell Science Centre.
New Field The New Field campaign is to raise £1.5m for New Field Pavilions. Amounts received specifically for this purpose are held in the New Field restricted fund.
Other restricted funds Throughout the year, the school receives a number of donations for various specific projects relating to sports and education. Full details of the individual restricted funds are available on request from the registered office.
44 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
21. Analysis of net assets by funds
2020
Group Unrestricted Restricted Total £ £ £
Fixed assets 20,825,928 - 20,825,928 Investments - 2,504,447 2,504,447 Current (liabilities)/assets (860,955) 893,335 32,380 Creditors: amounts falling due in more than one year (29,037) - (29,037) ─────── ─────── ─────── 19,935,936 3,397,782 23,333,718 ═══════ ═══════ ═══════
2019
Group Unrestricted Restricted Total £ £ £
Fixed assets 20,643,286 - 20,643,286 Investments - 2,634,191 2,634,191 Current (liabilities)/assets (542,031) 505,389 (36,642) Provisions for liabilities and charges (137) - (137) Creditors: amounts falling due in more than one year (41,945) - (41,945) ─────── ─────── ─────── 20,059,173 3,139,580 23,198,753 ═══════ ═══════ ═══════
2020
School Unrestricted Restricted Total £ £ £
Fixed assets 20,802,175 - 20,802,175 Investments 100 2,504,447 2,504,547 Current (liabilities)/assets (794,296) 893,335 99,039 Creditors: amounts falling due in more than one year (29,037) - (29,037) ─────── ─────── ─────── 19,978,942 3,397,782 23,376,724 ═══════ ═══════ ═══════
2019
School Unrestricted Restricted Total £ £ £
Fixed assets 20,629,806 - 20,629,806 Investments 100 2,634,191 2,634,291 Current (liabilities)/assets (534,987) 505,389 (29,598) Creditors: amounts falling due in more than one year (41,945) - (41,945) ─────── ─────── ─────── 20,052,974 3,139,580 23,192,554 ═══════ ═══════ ═══════ 45 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
22. Reconciliation of net income to net cash flow from operating activities
Group School 2020 2019 2020 2019 £ £ £ £ Net income for the reporting period 134,965 612,738 184,170 618,705
Adjustments for: Investment income (74,718) (80,451) (74,718) (80,451) Depreciation 806,601 832,114 801,066 826,738 Loss/(gain) on investments 188,482 (55,363) 188,482 (55,363) (Increase)/decrease in stocks (2,945) 16,036 (2,945) 1,101 Decrease in debtors 188,854 75,606 136,946 91,048 Increase/(decrease) in creditors 185,650 (83,358) 153,735 (60,304)
─────── ─────── ─────── ─────── Net cash provided by operating activities 1,426,889 1,317,322 1,386,736 1,341,474 ═══════ ═══════ ═══════ ═══════
23. Reconciliation of net debt
Group At 1 August Cash flows At 31 July 2019 2020 £ £ £
Cash and cash equivalents 503,441 474,837 978,278 Hire purchase obligations (10,089) 10,089 - ─────── ─────── ─────── 493,352 484,926 978,278 ═══════ ═══════ ═══════
School At 1 August Cash flows At 31 July 2019 2020 £ £ £
Cash and cash equivalents 464,126 450,492 914,618 Hire purchase obligations (10,089) 10,089 - ─────── ─────── ─────── 454,037 460,581 914,618 ═══════ ═══════ ═══════
24. Financial assets held at fair value through net income
Group and School 2020 2019 £ £ Quoted investment portfolio 2,427,819 2,588,863 ═══════ ═══════
46 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
25. Operating leases
The payments due under non-cancellable operating leases are as follows:
Group School 2020 2019 2020 2019 Equipment Equipment Equipment Equipment £ £ £ £
Less than one year 58,512 69,023 43,452 38,903 Between one and two years 30,433 26,222 30,433 26,222 Between two and five years 1,436 13,203 1,436 13,203 ─────── ─────── ─────── ─────── 90,381 108,448 75,321 78,328 ═══════ ═══════ ═══════ ═══════
Within the Group and School lease payments of £18,068 (2019: £53,963) were recognised as an expense during the year.
26. Capital commitments
At the year end the Edinburgh Academy had no material contractual commitments for capital works (2019: £511,482).
27. Related party transactions and ultimate controlling party (Group and School)
Donations of £Nil (2019: £143,362) were received during the year from The Edinburgh Academy Foundation. Staff costs totalling £Nil (2019: £54,067) were donated to The Edinburgh Academy Foundation during the year. £Nil was due from (2019: £37 due from) The Edinburgh Academy Foundation at the year end. The Edinburgh Academy Foundation is a related party by virtue of the Academy’s representation on the Board of Directors and the administration of the company by employees of the Academy.
Donations and other income of £760,000 (2019: £523,616) were received from The Eric H Stevenson Charitable Trust. £Nil was due from (2019: £15 due from) The Eric H Stevenson Charitable Trust at the year end. The Eric H Stevenson Charitable Trust is a related party by virtue of the Academy’s representation on the Board of Directors and the administration of the company by employees of the Academy.
The Directors have taken advantage of the exemption conferred by Financial Reporting Standard 102 Section 33 “Related Parties” not to disclose transactions between the Academy and their two wholly owned subsidiaries. No other transactions required separate disclosure.
The Directors consider there to be no ultimate controlling party of the group, by virtue of its constitution.
47 THE EDINBURGH ACADEMY AND SUBSIDIARY COMPANIES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 July 2020
28. Agency related income and expenditure (Group and School)
During the year income and expenditure relating to music lessons, the sale of books and school trips were identified as falling under an agency relationship. These amounts, detailed below, were collected from parents and paid over to third party providers. In accordance with the requirements of the Statement of Recommended Practice 2015, these amounts have been excluded from the income and expenditure of the School. At the year-end there was £65,826 (2019: £20,010) due by the School.
2020 2019 £ £
Music lessons 83,073 71,457 Books 1,337 10,136 School trips 288,854 474,798 ────── ────── 373,264 556,391 ══════ ══════
48