THE ABBEY SCHOOL, READING

Registered No. 0133676 (England &Wales)Charity No. 309115

THE ABBEY SCHOOL, READING

(A company limited by guarantee)

ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTSfor fhe year ended 31 August 2018


ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 August 2018

Page

Report from the Chair of the Governors 1

Governors, officers &advisers 2 - 3

Report of the governors 4 - 10

Strategic report 11 - 14

Governors responsibilities 15

Report of the independent auditor 16 - 18

Statement of financial activities 2018 19

Statement of financial activities 2017 20

Balance sheet 21

Cash flow statement 22

Notes to the Financial Statements 23 - 39


REPORT OF THE CHAIR OF THE GOVERNORS


The annual Report and Accounts for The Abbey School 2017-2018 tell the story of a very successful year inour School's life.

The School continues to attract numerous top quality applicants for places and has continued to provideeducation of the highest standards, enabling our students to achieve remarkable academic results. Oursuperb teachers, backed up by our wonderful administrative teams, provide excellent support in all areas ofthe School's activity -academic, music, sport, adventure, drama, art, to name just some. And our facilitiescontinue to improve year by year.

Our outstanding Executive team, Mrs Cresswell, our Head of the Senior School, Mrs Dick-Cleland, our Headof the Junior School, Mrs Doble, our Head of Finance and Resources and Mr Andrew, our Head of ExternalRelations, are led with dynamism and distinction by Mrs Dent, our Head Teacher. Together they provide thechallenging and caring leadership that is taking The Abbey from strength to strength.

The members of the School's Governing Council are an extraordinarily talented and committed group of menand women who have given tirelessly and freely of their time this year to uphold our core values of courage,honesty and kindness, to set the overall direction of the school going forward, and to challenge and supportthe Executive in all the work they do.

What a year it has been. As recorded in our accounts for last year, the School had been the victim of aserious fraud, extending over several years. Once the fraud was discovered, just over a year ago, we placedit in the public record for 2016-2017, and we informed both our parents and our staff. We duly filed ouraudited accounts, showing a loss for the year, with the Charity Commission and with Companies House. Thefraudster, a previously trusted member of our administration staff, received a significant custodial sentence atOxford Crown Court. The investigation of the fraud, dealing with its impact on the small finance departmentand the School in general, the appointment of new auditors, and responding appropriately to the concerns ofpolice and others, required our senior leadership team and the Governing Council to handle a significantlyincreased work load in the most trying of circumstances. And all this had to be done with as little disruptionas possible to the daily life of everyone at the School and to our ambitious plans for the future.

What the following pages show is how splendidly everyone in the school has delivered exactly what wasneeded this year. I am grateful to all of them for their personal and collective endeavour that has delivered theexceptional results recorded in this Report and Accounts.

...............................................Elizabeth HarrisonChair of Governors

- ~ -


LEGAL AND ADMINISTRATIVE INFORMATION

GOVERNORS

The Governors of the school being also trustees of the charity and directors of the charitable company who

served during the year, unless otherwise stated, were as follows:

Mrs E A Harrison BA (Hons), MBA, JP 3, a, 5

Mrs J Anderson MA (Ed), BSc, PG DIP 2

Lady L Bell',3,5

Key:

Miss S E Burgess'

Mrs S Colebrook BSc PGCE 3

Mrs J L Cornell BA a, s, s

Mr S Dimmick LLB Z' 4

Mr M Emmanuel '~4

(Resigned 31 July 2018)

(Appointed 18 September 2017)

Mr N D Hopes BA, FCA'' 4 (Resigned 24 September 2018)

Dr I C Kemp MB MRCP MRCGP DCH Dobst RCOG ~'s'8

Mrs K Lane DPSE (SEN) 3'9 (Resigned 2 July 2018)

Dr C F Print DBA ADipC ACMA CGMA'~2'".6

Mr J R Sheehan 2 (Appointed 26 September 2017)

Mr P Uppal BSc, MEng a,s

Mrs E West (Appointed 2 July 2018)

1 Members of the Finance and General Purposes Committee

2 Members of the Risk, Audit and Compliance Committee

3 Members of the Leadership in Girls Education Committee

4 Members of the Estates Development Committee

5 Members of the Community Committee

6 Members of the Governance Committee

7 Lead Governor for Human Resources

8 Lead Governor for Health and Safety

9 Lead Governor for Child Protection

Nominee members of the Council

The Bishop of Oxford

Rev A Templeman MA, PGCE (Resigned 24 September 2018)

Governors are appointed by the board of governors normally at the annual general meeting for a term of three

years, but are eligible for re-election. At the annual general meeting held on 4 December 2017 the following

governors retired by rotation and were re-elected:

Mrs S Colebrook, Mrs J L Cornell, Mr M Emmanuel, Dr i C Kemp, Dr C F Print and Mr P Uppal

- 2-


GOVERNORS, OFFICERS &ADVISERS (cont'd)

OFFICERS

The Executive Head

Head of Finance and Resources

Head of Senior School

Head of Junior School

Head of External Relations

ADDRESSES

Registered office

ADVISERS

BANKERS:

SOLICITORS:

AUDITORS:

INVESTMENT PROVIDERS:

INSURANCE BROKERS:

Mrs Rachel Dent BA (Southampton), QTS (Reading)

Mrs Nadine Doble BSC (Cardiff), ACMA

Mrs Jan Cresswell BA (Durham)

Mrs Nicola Dick-Cleland BA (Hons) Oxon, GTP/QTS (Reading)

Mr Craig Andrew BA Hons, HDE MBA, LVO

Senior School Junior School (Years 2-6)17 Kendrick Road 30 Christchurch RoadReading ReadingRG1 5DZ RG2 7AR

Junior School (Reception &Year 1) Junior School (Nursery)12 Christchurch Gardens 2 Vicarage RoadReading ReadingRG2 7AH RG2 7AJ

17 Kendrick RoadReadingRG1 5DZ

Coutts & Co440 StrandLondonWC2R OQS

HSBC UK Bank plc26 Broad StreetReadingRG1 2BU

Blandy & Blandy1 Friar StreetReadingRG 1 1 DA

Moore Stephens LLPR+, 2 Blagrave StreetReadingRG1 1AZ

Charles Stanley &Company LtdDukes Bridge Chambers1 Duke StreetReadingRG1 4SA

Marsh Brokers LtdSchools DivisionCapital House1-5 Perrymount RoadHaywards HeathWest SussexRH 16 3SY

~c~

THE ABBEY SCHOOL, READINGREPORT OF THE GOVERNORS


The Governors of The Abbey School, Reading present their annual report for the year ended 31 August 2018under the Companies Act 2006 and the Charities Act 2011, together with the audited accounts for the year,and confirm that the latter comply with the requirements of the Act, the Trust Deed and the Charities SORP2015.

REFERENCE AND ADMINISTRATIVE INFORMATION

The Abbey School, Reading is a Company Limited by Guarantee and was registered on 31 January 1914.The Company registration number is 133676.

It is also a Charity, registration number 309115.

The Governors, Officers, Key Addresses and Advisers are set out on Pages 1 and 2.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing documentThe School is governed by its Memorandum and Articles of Association, dated 4 December 2006 as amended

by special resolution dated 7T" December 2015.

Governing Body

The Governors are all Directors of the company and appoint new Governors either to fill a casual vacancy orby way of additions to the board. The total number of Governors shall be not less than twelve and not morethan twenty-four. As far as practicable, one Governor shall be the nominee of The Bishop of Oxford, one anominee to represent the alumnae of the school and one a nominee of the parents of girls at the school. Thenominee positions are ratified at a full Governors' meeting. Each Governor, other than the nominees, iselected to serve for four years and retiring Governors can stand for re-election for a further term at the nextAnnual General Meeting.

Those who held office during the year are listed on Page 1.

Recruitment and training of Governors

Potential Governors are identified by the Governance Committee and considered against its specificationsconcerning eligibility, competence, specialist skills and availability. New Governors are inducted into theworkings of the School, including board policy and procedures. An induction pack is given to new Governors.Training is regularly offered to all Governors and bespoke courses are held in addition to Governors' meetingsin order to address particular areas.

-4-

THE ABBEY SCHOOL, READINGREPORT OF THE GOVERNORS (cont'd)For the year ended 31 August 2018

Organisational management

The members of the Governing Body are legally responsible for the overall management and control of the School.The Governing Body meets at least three times a year. Much of the preparation for these meetings is undertaken bythe Finance and General Purposes Committee (F&GP Committee) which meets before each Governors' meeting.The Chairman of the F&GP Committee is Dr C F Print. The other principal committees are:

The Abbey Community Committee chaired by Mrs J L Cornell,Estates Development Committee chaired by Mr M Emmanuel,Governance Committee chaired by Dr I C Kemp,Leadership in Girls Education Committee chaired by Mrs S Colebrook,Risk, Audit and Compliance Committee (RAC) chaired by Mrs J Anderson.

In addition to these committees three Governors support the school by taking the lead on Child Protection, HumanResources and Health &Safety.

Committee members and Lead Governors are listed on Page 1.

The day to day running of the School is delegated to the Head who is assisted in this by the Executive Board: TheHead of Senior School, Head of Junior School, Head of Finance and Resources and the Head of External Relations.The Head and members of the Executive Board attend meetings of the Governing Body and its Committees.

The remuneration policy for key management personnel is set by the Governing Body with the policy objective ofproviding appropriate incentives to encourage enhanced performance and of rewarding them fairly and responsibly fortheir individual contributions to the Company's success. The appropriateness and relevance of the remunerationpolicy is reviewed annually, including reference to comparisons with other independent schools to ensure that TheAbbey remains sensitive to the broader issues of pay and employment conditions elsewhere, especially as the schoolis located in the South East where there are significant costs in relation to housing.

Delivery of The Abbey's charitable vision and purpose is primarily dependent on our key management personnel andstaff costs are the largest single element of our charitable expenditure.

Organisational structure and relationships

The School has a wholly owned subsidiary, Abbey Commercial Enterprises Limited, the School's trading arm.

The School is an active member of the Headmasters and Headmistresses Conference (HMC), the Giris' SchoolsAssociation, the Independent Association of Prep Schools (ZAPS), the Association of the Governing Bodies ofIndependent Schools and the Independent Schools' Bursars Association.

The Head sits on the Reading Pan Berkshire Safeguarding Board, representing all the Independent Schools within theCounty.

Volunteers

There is no shortage of volunteer support throughout the School, from parents assisting in reading classes in theJunior School, to helping out in the second hand clothes shop, in the library and on School trips. Former pupils,Governors and other interested adults have also given freely of their time. All of this is very much valued by theSchool. Governors take this opportunity to say how much they appreciate the continuing and valuable support ofvolunteers to the School.

s-

THE ABBEY SCHOOL, READINGREPORT OF THE GOVERNORS (cont'd)


Grant making policy

The Head has the authority to award Scholarships to very able pupils. Parents who cannot afford to pay the

fees in full or in part can apply for ameans-tested Abbey School Financial Bursary. The Abbey School

Scholarship and Bursary policy allows up to a total of 6% of the current level of annual gross fee income for

these awards. All awards are tenable subject to satisfactory attendance, conduct and progress.

Temporary financial assistance may be available to parents who find themselves with short term financial

difficulties. This is means-tested and offered at the discretion of the Head.

A sum sufficient to maintain the Bursary Fund at £1 million will be transferred each year from unrestricted funds

to designated funds.

Further information on the Bursary Scheme can be found under Operational Performance.

Staff fee discounts

A fee discount of up to 30% is offered to staff with daughters being educated from Preparatory to Upper 6. 31

members of staff received this discount in 2017/2018 (2016/2017: 32), at a total value of £172,318

(2016/2017: £ 193,398) .

Staff and Pupil BenefitsThe Childcare Vouchers Scheme is available to staff. A third sibling discount is also available, at a total value

of £5,129 (2016/2017: £6,451) for the year.

A salary sacrifice scheme for School fees is also available. This was taken up by 22 members of staff in

2017/18 (2016/2017: 24 members of staff). The scheme is now closed to new members, existing agreements

are protected until April 2021 when it will cease, in accordance with HMRC regulations.

Income from investments

Income from investments is reinvested, while operating surplus is used to maintain the scholarship and bursary

funds, including temporary financial assistance. The investment fund is available to support the bursary fund

when required.

OBJECTS, AIMS, OBJECTIVES AND ACTIVITIES

Charitable objectivesThe objects of the School are set out in the Memorandum of Association. The main object is summarised as

the running of a School to provide a general education which includes religious instruction in the doctrines and

duties of the Church of England.

The School promotes pupil involvement in outside charities that fulfil their own charitable objectives and

passes on any financial contributions received from this to the outside charities.

Strategic aims and intended objectives7 he Abbey School's aim as an educational charity for girls aged 3 — 18 is to provide a community for its pupils

and staff in which learning flourishes and where all pupils reach the highest standards academically and

personally. The School aims for the highest quality of academic tuition and the development of wider sporting,

artistic and social skills in all its pupils. The School offers an environment where every girl can develop and

fulfil their potential in order to help build their self-confidence and also to gain a lifelong desire to contribute to

the wider community.

-6-


Strategies to achieve the year's objectivesThe School's strategy aims to achieve the highest academic performance commensurate with cultivating awell-rounded development of the personality in its pupils. It is also to widen public access as much aspossible to its system of Schooling, within the constraints of its funding as an independent education

The School's strategy also includes personal tutoring. All pupils are encouraged to become involved inextra-curricular activities with a focus on the provision of public benefit at all levels of society.

Principal activifyThe principal activity of the School may be summarised as the provision of a general education for girlsaged 3 -18. Church of England by foundation, The Abbey retains its Christian tradition, while embracing thediversity of its multi-cultural pupil body.

The Abbey is a school where academic success, at whatever level, is valued and celebrated. Abbey girlsare expected and encouraged to give of their best in their academic studies as well as in all the other variedaspects of school life.

PUBLIC BENEFITIn furtherance of these objectives the Governors, as charity trustees, have complied with their duty insection 17(5) of the Charities Act 2011 to have due regard to the Charity Commission's published generalguidance concerning the operation of the public benefit requirement under that Act.

The School has a policy on financial assistance, including bursaries of up to 100%, and this is advertised onits website, and at open days. The Bursary Fund was established over 30 years ago with the specific aim ofgenerating funds in order to offer places to pupils who would otherwise not have access to education at theschool. The value of the fund is £1 million and will be maintained at this figure.

Wider access to Schooling was achieved in 2017/18 with a total of £311,202 (2016/17: £293,995) awardedin scholarships, grants, prizes and other awards. 59 hardship cases received financial support amounting to£616,102 (2016/17: £592,620) towards fees, equivalent to 36.5 (2016/17: 37.7) full senior fee places.

32% of the pupils of the senior School (2016/17 41 %) received some form of financial assistance with theirfees. This figure does not include staff discounts.

Academic scholarships worth 10% of tuition fees are offered (which can be supplemented with a means-tested Bursary). Specialist scholarships are offered at the point of entry to the Senior School. Thisscholarship programme will be reviewed during the coming year.

In addition to this The Abbey School delivers outstanding academic results, and in 2017/18 educated 1071pupils, at no cost to the state.


Community LinksWe are a member of the Reading Civic Society, which is an organisation encouraging good design of new localdevelopments and protects the historic elements of Reading.

The Museum of English Rural Life is a local museum in Reading dedicated to recording the changing face offarming and the countryside in England. The museum helped us with the layout of our new Turret Museum andThe Abbey School sends pupils to the facility throughout the year.

The 1887 Lecture series is a series of three lectures encompassing the Annual Humanities Lecture, the Annual

Music Showcase and Lecture and the Jo Trott Annual Memorial Lecture. All these events are open to thegeneral public to attend.

PartnershipsThe Abbey School has appointed two Partnership Coordinators whose role is to develop links within the local

school community. Achievements in 2017-2018 have been:

Junior School• Berkshire Junior Chess Events: Two events held in Autumn 2017 for 7-11 year olds from the Berkshire

area who play chess. The Abbey provided a venue free of charge for the Berkshire Chess Association

who are all volunteers.

Association of Teachers of Maths and Mathematics Association CPD: In March 2018 The Abbey

provided a venue free of charge so the local schools could share resources.

The opening of The Little Free Library with Whitley Park School and John Madejski Academy. Families

and staff from both The Abbey Senior School and Junior School gathered books they had at home

which were no longer wanted and donated these to Whitley Park School to go into their `Little Free

Library'. The purpose of the project was to encourage books into the homes of families at Whitley Park.

A number of the Junior School Council team attended the launch alongside a few members of the staff

team.

A partnership theatre visit to ̀ Rufus Longbottom and the Space Rabbit' was held at South Street Arts

Centre: 36 theatre seats were offered to local state junior schools, Whitley Park Junior School, Shinfield

St Mary's and Grazeley Primary School. Our UII girls also attended.

Senior School• Continued curriculum assistance was offered to the History department at Brakenhale Academy as well

as UCAS/Oxbridge information, events and assistance offered to students in their 6th form.

• A Geography teacher from Brakenhale taught at the Abbey in order to complete the PGCE.

• Members of the Sixth Form volunteered at the Met club in Wokingham, where they help young people

with disabilities.

• Students on the IB course all complete 50 hours of volunteering as part of the CAS, ̀Creativity, Activity

and Service' component. This takes many forms: helping with litter picks, one-off charitable events e.g.

sponsored swims and bake sales and helping at the Junior School or with homework club.

• The Abbey School PE department supported New Christ Church School, a local primary with their

provision of compulsory KS2 swimming lessons. Two hours a week for Year 5 pupils, with the provision

of teaching staff and facilities.

• The partnership co-ordinators for Junior School and Senior School attended the second annual

'School's Together' conference.

a-


CHARITABLE INVOLVEMENTPupiis and staff at the Abbey school are strongly encouraged to be involved in supporting outside charities.Many fundraising events and activities are arranged throughout the year supporting charities such as Jeansfor Genes, Children in Need, Macmillan, St Mungo's, Launchpad, Comic Relief and Mary's Meals. Our UIVyear group run a Charity challenge where girls raise money in their form groups for a four week period. Thisyear they raised close to £1,000 for Mary's Meals.

The Ulil girls once again took part in the annual Microloan competition for Year 7 girls. This runs throughoutNovember and this year generated nearly £2,000. Ail of the profits earned by the girls are donated to theMicroloan Foundation, an organisation that offers small business loans to women in Africa who are aiming tobring their families out of poverty by running home businesses.

The Christmas fair was run by LIV and LV raise money for homeless charities, Shelter and Launchpad.

The Sixth Form charity quiz night raised approximately £4,000 for two charities: Kids for kids (which works inDarfur) and the Alexander Devine Children's Hospice.

Water Aid: The Charity prefects alongside an ex-teacher led a WaterAid afternoon to a local junior school.They are developing material to be rolled out by WaterAid nationally.

Reading Refugee SupportThe Abbey continued to offer a homework club to support the children of refugee families in the Reading area.It is run in conjunction with the Reading Refugee Support Group and supports up to 20 children and theirparents. The children come to The Abbey twice a week (girls and boys) to receive support from our UV andSixth Form students. While the children are working, their parents are offered refreshments and take theopportunity to socialise. This is a highly valued service that delivers real educational benefit for the pupilsattending, who often cannot receive the support they need at home due to language difficulties and thechallenge of understanding the British curriculum.

Senior SchoolThe Abbey School continues to share the school's sports facilities including the all-weather hockey pitches,gymnasium and use of the indoor swimming pool with local schools and community groups. in additionswimming lessons are offered to Katesgrove Primary and Addington Special Needs School.

We have renewed our Formal Partnership with South Street Theatre, where our students interact with SouthStreet Theatre Group each week during term time and they in turn involve our pupils in community workshopactivities.

The Duke of Edinburgh's Award Scheme includes a volunteering strand. This year we had 96 girls takingSilver and approximately 36 taking Gold. This includes 6 months of volunteering for Silver and 12 months forGold. Girls undertake a variety of activities, depending on their personal interests. Popular activities arevolunteering at the refugee homework club and working in a charity shop at the weekend.

In total, the Senior School raised £11,000 for various charities throughout 2017-18.

9 -

THE ABBEY SCHOOL, READINGREPORT OF THE GOVERNORS (cont'd)


Junior SchoolStay and Play in our Junior School takes place three times each term. Parents and children from the local

community come to school for play sessions and educational activities with members of our staff. Parents

and children, (girls and boys) receive refreshments and educational fulfilment during their stay with us.

At the end of the Harvest Festival Service the fresh produce was taken to 'The Three Cooks', in

Northumberland Avenue who produce nutritious meals for the elderly and vulnerable members of the

community. Readifood happily received dried and tinned goods which will help to provide food for those in

need in the Reading area.

At the St Edwards Home Christmas Event, approximately 50 people who had bought houses from St

Edward's home attended. Twenty one members of the Chamber Choir sang at the event and received a

donation of £200 for the Rosie's Rainbow Charity.

In total, the Junior School raised £7,000 for various charities throughout 2017-18.

Community Use of facilitiesThe Abbey School supports its charitable objects within the community by making its facilities available for

public benefit including:

Swim England Synchro AssessmentsBerkshire Junior ChessReading University Mixed Hockey TeamSchools linkai Judo TournamentHockey for HeroesReading University Hockey TeamATM/MA Group Meridian Branch meeting (Maths Association}

Association of Teachers of Mathematics/Maths Association Meridian CPD

GB Paralympic Rowing TeamReading Bowling ClubPhoenix and Ranelagh Hockey ClubSpanish Embassy ALCE ProgrammeKatesgrove Primary and Addington Special Needs School

REVIEW OF ACHIEVEMENTS AND PERFORMANCE FOR THE YEAR

The Abbey is a selective all-girls school for girls aged 3 -18. The school has at present over 1060 girls and is

a lively, vibrant learning environment. The school considers itself to be exceptional in the importance it

places on the relationship between the teachers and the girls.

The school offers both the IB Diploma Programme and A levels within the Sixth Form. The school is able to

support a wide range of girls who are categorised as Gifted and Talented. This includes a number of girls

who are competing at national levels in their sports as well as striving for academic excellence. Active

participation in some form of extra-curricular activity is encouraged with particularly strong emphasis on art,

drama and music. A source of pride to the school is the quality of its teaching and within that its active focus

on pedagogy; this can be evidenced in a very active Learning Innovation Group.

THE ABBEY SCHOOL, READINGSTRATEGIC REPORT


The school focuses specifically and clearly on the individual's enrichment and personal development.Academic success is evident throughout the school but this is also very much balanced with a need tounderstand one's ̀ best self' and to instill intellectual thirst, as seen for example in the themed 'curiosityweeks'. Despite being already exceptional in their individual academic ability, all girls achieve a level of addedvalue during their time in the school.

The Abbey remains a school delivering a world class education. This year's International BaccalaureateDiploma results were outstanding, with almost half the girls scoring 40 points or more out of a maximum of45. The school average score was 39 points (versus the Diploma average of 30).

This year's A Level results were also a record with 92% of entries gaining A*-B and 64% of entries at A~-A.Similarly at GCSE with 88% of entries achieving A -̀A/9-7 and 98%gaining A"-B/9-6.

The School and the Head remain very active members within HMC and GSA. The Head is joint Chair of theHMC/GSA university committee and a member of the GSA council. As well as representing the InternationalBaccalaureate on various education committees.

The Head's Executive Board continues to lead the school; the Head and the Executive Board have workedwith the Governing Body to implement a rolling 5-year plan for the Abbey School. The plan focuses on 4 keybusiness priorities: to energise our people, enable our business, engage our stakeholders and enhance ourenvironment.

The school has undertaken and completed a space audit and masterplan for the senior school which willallow strategic forward thinking before future decisions are made with regard to the estate. There is also arolling refurbishment programme which has resulted in the refurbishment of junior school classrooms, thesenior school lecture theatre and some of the senior school science laboratories. The school has alsocreated its own bespoke art gallery within Turret House.

The school has also undertaken its first telethon as part of a bigger strategic development plan to raise fundsto ensure that girls can continue in the future to enjoy an Abbey education whatever their financialcircumstances.

The school is very proud of its history and this is reflected in the opening of the Abbey Museum.

Investment pertormance againsf objectivesThe overall investment objectives of the School are to create sufficient funds through income and capital inorder to enable the School to carry out its purposes consistently, year by year, and with due and properconsideration for future needs. They include the maintenance of and, if possible, enhancement of the valueof the invested funds while they are retained.

The School's investment pertormance is measured regularly against the MSCI WMA Private InvestorBalanced Index and for this year our total return of 3.84% compares to the index which was 5.59%. Theequity content of the School's investment portfolio increased by 5.83% compared to an increase of 4.13% inthe FTSE 100 index.

The School's investments are managed by Charles Stanley and Company Limited under the supervision ofGovernors. At 31 August 2018 listed investments, of which the majority were UK equities, with a marketvalue of £1,408,478 (2017: £1,326,469), represented designated funds. Their market value at 31 August2078 resulted in a net investment gain of £15,122 (2016/2017: £99,122).

->>-

THE ABBEY SCHOOL, READINGSTRATEGIC REPORT (cont'd)


FINANCIAL REVIEW AND RESULTS FOR THE YEAR

Our accounts for 2017 reported the discovery of a significant fraud, the impact of £512,786 was recorded in

the accounts for that period. The accounts for this period include an amount £30,171 relating to fraud

perpetrated before discovery in October 2017. The criminal proceedings relating to this matter have

concluded with a conviction. Further action will now be taken under the Proceeds of Crime Act, this in due

course may lead to the recovery of some funds. £100,000 was recovered under Fiduciary Insurance claim

and is recorded in the accounts for this period. Additional unanticipated costs relating to staffing and

investigatory matters were incurred during the year as a response to the fraud.

The consolidated Statement of Financial Activities on page 19 shows the Net Movement in Funds for 2018 as

a surplus of £473,031 (2016/17: a deficit of £357,272). The surplus before depreciation and interest is 10.4%

(2017: deficit 5.1%). The increase in surplus, net of the impact of the previous year's fraud, was £347,688

and is attributed to an increase in income, partially offset by increased costs.

The consolidated Balance Sheet on Page 21 shows Net Current Liabilities of £4,032,010 (2016/17:

£3,000,912}. This increase is explained by a change in financing arrangements during the period. During

the year, and following an extensive review of banking and finance arrangements, we were pleased to enter

into a relationship with HSBC. During this transition a fixed term loan with Coutts was repaid, and an

extended overdraft entered into with HSBC. Our relationship with HSBC will be key to securing credit for

future development plans at a reasonable cost and reducing day to day charges.

In the opinion of the Governors the market value of the land and buildings of the School is not less than the

book value in the accounts.

The Governors are authorised by the Memorandum of Association to invest monies not immediately required

for the School's purposes in investments, securities or property as may be thought fit.

Reserves policyThe Governors' policy is to build up funds out of annual operating surpluses, subject to the prior demands of

further capital expenditure to equip the School with the up to date facilities needed to maintain the standard of

educational services currently provided.

The Governors aim to maintain general reserves equivalent to at least 3 months of operating expenditure for

the school. After taking into account the designated Bursary Reserve of £1 m, general reserves at 31 August

2018 were £14.1 m, which represents just under ten months of unrestricted operating expenditure. These

reserves ensure the school can fulfil and complete its charitable obligations and commitments.

Notes 22 to 25 show the allocation of the reserves between those designated for specific purposes and those

available for the day to day requirements of the School.

PRINCIPAL RISKS AND UNCERTAINTIES

The Governing Body considers that over-optimistic financial planning, is one of the most significant risks as

this could lead to inappropriate investment decisions being made. A regular review of pupil numbers provides

a check that our longer term pupil roll plan is on track. Any significant reduction would prompt immediate

remedial action.

~ z-



The Governing Body recognizes that the outcome of the Referendum on the UK's membership of theEuropean Union may have an impact for the school. The full economic impact is as yet unknown, althougheconomic uncertainty is a significant factor for parents considering education in the Independent SchoolSector. The RAC Committee will monitor this potential risk, and all committees, as a standing item, willconsider any impact of Brexit on their area of responsibility.

Health and Safety is always a significant area for risk management. The risks range from fire and otherdamage to infrastructure to personal risks (most notably when away from the campus on trips andexpeditions). There is a regular risk audit and continuity plans are in place to ensure the school continues tofunction effectively in the event of a major incident such as fire or flood.

The Governing Body is satisfied that for all major risks identified for the group, appropriate controls havebeen put in place and maintained to mitigate those risks adequately. It is recognised that systems canprovide only reasonable but not absolute assurance that major risks have been managed.

Risk ManagementThe Governing Body is responsible for ensuring that the risks faced by the School are properly assessed andis aware of the importance of protecting the business from operational and reputational damage, as well asfrom unpredictable crisis and disaster risks as far as is possible. It is the policy and practice of The AbbeySchool to assess and manage risk through regular identification and review.

The Risk, Audit and Compliance (RAC) Committee oversees the process of risk management, the ExecutiveBoard owns and regularly reviews the Risk Register and reports to RAC on the Risk Register.

The RAC Committee reports to the Governing body and meets three times per year. The Chairman of theCommittee is a Council member. Members comprise the Chair of F&GP Committee, two additionalGovernors, the Head and the Head of Finance and Resources. The Committee is authorised to seek outsideadvice as and when it is needed.

The generic controls used by the School to manage risk include:• Formal agendas and minutes to support decisions on all Committee and Governing Body activities.• Terms of Reference for all Committees.• Comprehensive strategic planning, budgeting and management accounting.• Established organisational and governance structure and lines of reporting.• Formal written policies.• Vetting procedures as required by law for the protection of vulnerable people.• Risk assessments for individual activities and departments.• `Across the board' membership of Committees.• Hierarchical authorisation and approval levels.

The above structure formalises the risk management processes established for the School. Nevertheless, itis recognised that such systems can provide only reasonable but not absolute assurance that major riskshave been adequately addressed and can be managed.

Through these processes, the major risks to which the School is exposed, as identified by the Governors,have been reviewed and systems or procedures have been established to manage those risks.

-13-



FUTURE PLANSThe Governors and the Executive Board look forward to the changes and challenges that lie ahead of us aswe meet our commitment that The Abbey remain at the forefront of education. With this in mind the five-yearrolling plan will continue to frame the School's development in physical, educational and philosophical terms.

This collaborative plan has been developed by the Executive Board, with significant contribution and supportfrom the Governors, and guided by input from parental surveys and staff participation in surveys and focusgroups.

Throughout the five-year period we will be focusing on four key areas, all underpinned by financial stability:

energizing our people and maintaining a culture that is ̀ Courageous, Honest and Kind';enhancing our environment so that the fabric of the School reflects the quality within it;engaging our stakeholders in The Abbey Community and beyond in marking our 130 years ofexperience in education;enabling our organisation to play an important role locally and nationally.

Developments will be undertaken to support all these areas. The plan reflects the importance of The AbbeyCommunity and in particular our teachers, our girls and our parents as well as our local community,particularly within Reading.

The objectives within the plan will allow us to:

Ensure that we continue to produce top results as a world-class educational establishment;Widen access to the School through our 1887 Fund for scholarships and bursaries and supportoutreach initiatives with our local communities;Continue to encourage innovation and provide breadth in education across the School.

-14-

THE ABBEY SCHOOL, READINGGOVERNORS RESPONSIBILITIESFor the year ended 31 August 2018

The Governors (who are also directors of The Abbey School Trust Limited for the purposes of company law)are responsible for preparing the Governors' Annual Report (incorporating the Strategic Report) and thefinancial statements in accordance with applicable law and United Kingdom Accounting Standards (UnitedKingdom Generally Accepted Accounting Practice).

Company law requires the Governors to prepare financial statements for each financial year. Under companylaw the Governors must not approve the financial statements unless they are satisfied that they give a trueand fair view of the charitable company's state of affairs and of its incoming resources and application ofresources, including income and expenditure, for the financial year. In preparing those financial statements,the governors are required to:

• Select suitable accounting policies and apply them consistently.• Observe the methods and principles in 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 the going concern basis unless it is inappropriate to presume thatthe charitable company will continue to operate.

The Governors are responsible for maintaining proper accounting records that are sufficient to show andexplain the charitable company's transactions, which disclose with reasonable accuracy at any time thefinancial position of the charitable company and to enable them to ensure that the financial statementscomply with the Companies Act 2006. The Governors are also responsible for safeguarding the assets of thecharitable company, and hence for taking reasonable steps for the prevention and detection of fraud andother irregularities.

The Governors confirm that they have complied with the duty in section 17 (5) of the Charities Act 2011 tohave due regard to the Charity Commission's general guidance on public benefit. The Governors havereferred to the guidance in the Charity's Commission general guidance on Public Benefit when reviewing theSchool's aims and objectives and in planning the school's future activities. In particular, the Governors haveconsidered how planned activities will contribute to the aims and objectives they have set.

The Governors confirm that so far as they are aware, there is no relevant audit information of which thecharitable company's auditors are unaware. They have taken all the steps that they ought to have taken asgovernors in order to make themselves aware of any relevant audit information and to establish that thecharitable company's auditors are aware of that information.

The Report (incorporating the Strategic Report) was approved by the Board of Governors onand signed on their behalf by: -

Mrs E AHarrison - Chair of Governors

\~~d ~~~'? ,1~2a~g

-15-


Report of the Independent Auditor to the Governors of The Abbey School, Reading

Opinion on financial statements

We have audited the financial statements of The Abbey School, Reading for the year ended 31 August 2018 whichcomprise the Consolidated Statement of Financial Activities (including the Income and Expenditure Account), theBalance Sheets, the Consolidated Cash Flow Statement and the related notes, including a summary of significantaccounting policies. The financial reporting framework that has been applied in their preparation is applicable lawand United Kingdom Accounting Standards, including FRS 102 "The Financial Reporting Standard applicable inthe 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 charitable group and parent affairs as at 31 August 2018and of its incoming resources and application of resources, including its income and expenditure, forthe year then ended;

■ have been properly prepared in accordance with the United Kingdom Generally Accepted AccountingPractice; and

■ have been properly prepared in accordance with the Companies Act 2006.

Basis for opinion

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

Conclusions relating to going concern

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

■ The Governors' use of the going concern basis of accounting in the preparation of the financialstatements is not appropriate; or

~ The Governors have not disclosed in the financial statements any identified material uncertainties thatmay cast significant doubt about the charitable company's ability to continue to adopt the goingconcern basis of accounting for a period of at least twelve months from the date when the financialstatements are authorised for issue.

-16-



Other information

The Governors are responsible for the other information. The other information comprises the information includedin the annual report, other than the financial statements and our auditor's report thereon. Our opinion on thefinancial statements does not cover the other information and, except to the extent otherwise explicitly stated in ourreport, 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, indoing so, consider whether the other information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such materialinconsistencies or apparent material misstatements, we are required to determine whether there is a materialmisstatement in the financial statements or a material misstatement of the other information. If, based on the workwe have performed, we conclude that there is a material misstatement of this other information, we are required toreport that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

■ the information given in the Report of the Governors (including the Strategic Report and the Directors'Report) for the financial year for which the financial statements are prepared is consistent with thefinancial statements; and

■ the Report of the Governors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requiresus to report to you if, in our opinion:

■ adequate and sufficient accounting records have not been kept, or returns adequate for our audit havenot been received from branches not visited by us; or

■ the financial statements are not in agreement with the accounting records and returns; or■ certain disclosures of Governors' remuneration specified by law are not made; or

■ we have not received all the information and explanations we require for our audit.

Responsibilities of trustees

As explained more fully in the Governors' Responsibilities Statement set out on page 15, the Governors (who arealso the directors of the charitable company for the purpose of company law) are responsible for the preparation ofthe financial statements and for being satisfied that they give a true and fair view, and for such internal control asthe Governors determine is necessary to enable the preparation of financial statements that are free from materialmisstatement, whether due to fraud or error.

_»_



In preparing the financial statements, the Governors are responsible for assessing the charitable company's ability

to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going

concern basis of accounting unless the Governors either intend to liquidate the charitable company or to ceaseoperations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance

with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or

error and are considered material if, individually or in the aggregate, they could reasonably be expected to

influence the economic decisions of users taken on the basis of these consolidated financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial

Reporting Councils 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 charitable company's members, as a body, in accordance with Chapter 3 of Part

16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable

company's members those matters we are required to state to them in an 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

charitable company and the charitable company's members as a body, for our audit work, for this report, or for the

opinions we have formed.

rn c~ off` S ~ti.~.~ L L;'............................................

Moore Stephens LLP

R+, 2 Blagrave Street

Reading

RG1 1AZ

Heather Wheelhouse (Senior Statutory Auditor)

for and on behalf of Moore Stephens LLP

Chartered Accountants

Statutory Auditors

Dated: ..~4-~~~,lC~''~ c~a~.................. . ......................

18-


CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES(incorporating an Income &Expenditure Account)


Unrestricted FundsGeneral Designated Restricted Total Total

Notes Funds Funds Funds 2018 2017£ £ £ £ £

INCOME AND ENDOWMENTS FROM:Charitable activitiesSchool fees 4a 16,092,326 - - 16,092,326 15,091,731Ancillary income 7 1,053,252 - - 1,053,252 908,638

Other trading activitiesIncome generated by AbbeyCommercial Enterprises Limited 14 86,618 - - 86,618 71,240Non-ancillary income 5 215,851 - - 215,851 93,390

Investments 6 - 43,154 - 43,154 41,824

Donations 11,782 - 16,107 27,889 12,425

Total income 17,459,829 43,154 16,107 17,519,090 16,219,248

EXPENDITURE ON:Charitable costs 8 16,143,141 620,510 16,107 16,779,758 16,420,733

Raising fundsCosts of Abbey CommercialEnterprises Limited 14 5,601 - - 5,601 8,262Portfolio management costs - 7,506 - 7,506 7,529Trading costs 162,794 - - 162,794 152,011Financing costs 9 105,522 - - 105,522 87,107

Total Expenditure 8 16,417,058 628,016 16,107 17,061,181 16,675,642

Net gains on investments 15 - 15,122 - 15,122 99,122

Net Income/(expenditure) 1,042,771 (569,740) - 473,031 (357,272)

Transfers between funds 23 (569,740) 569,740 - - -

Net movement in funds 473,031 - - 473,031 (357,272)

Total funds brought forward 13,675,225 1,000,000 14,675,225 15,032,497

Total funds carried forward 25a 14,148,256 1,000,000 - 15,148,256 14,675,225

All amounts relate to continuing activities. All gains and losses recognised in the year are included in the statement of financialactivities.

The charitable company has taken advantage of section 408 of the Companies Act 2006 not to publish its own profit and lossaccount. The parent company's net income for the year was £459,966(2017: (net expenditure) £407,724).

The notes on pages 23 to 39 form part of these accounts

19-


CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES

(incorporating an Income &Expenditure Account)


Unrestricted Funds

General Designated Restricted Total

Notes Funds Funds Funds 2017

£ £ £ £

INCOME AND ENDOWMENTS FROM:

Charitable activities

School fees 4a 15,091,731 - - 15,091,731

Ancillary income 7 908,638 - - 908,638

Other trading activities

Income generated by Abbey

Commercial Enterprises Limited 14 71,240 - - 71,240

Non-ancillary income 5 93,390 - - 93,390

Investments 6 - 41,824 - 41,824

Donations 5,150 - 7,275 12,425

Total income 16,170,149 41,824 7,275 16,219,248

EXPENDITURE ON:

Charitable costs 8 15,800,149 613,309 7,275 16,420,733

Raising funds:

Costs of Abbey Commercial

Enterprises Limited 14 8,262 - - 8,262

Portfolio management costs - 7,529 - 7,529

Trading costs 152,011 - - 152,011

Financing costs 9 87,107 - - 87,107

Total Expenditure 8 16,047,529 620,838 7,275 16,675,642

Net gains on investments 15 - 99,122 - 99,122

Net income/(expenditure) 122,620 (479,892) - (357,272)

Transfers between funds 23 (479,892) 479,892 -

Net movement in funds (357,272) - - (357,272)

Total funds brought forward 14,032,497 1,000,000 15,032,497

Total funds carried forward 25a 13,675,225 1,000,000 - 14,675,225

All amounts relate to continuing activities. All gains and losses recognised in the year are included in the statement

of financial activities.

The charitable company has taken advantage of section 408 of the Companies Act 2006 not to publish its own profit

and loss account.


- 20-


(Registered number: 0133676)BALANCE SHEET AT 31 AUGUST 2018

Group School

FIXED ASSETSTangible fixed assetsInvestments

CURRENT ASSETSDebtorsCash at bank and in hand

CREDITORS:Amounts falling due within one year

NET CURRENT LIABILITIES

TOTAL ASSETS LESS CURRENT LIABILITIES

CREDITORS:Amounts falling due after more than one year

NET ASSETS

FUNDSUnrestricted FundsRevenue accountDesignated funds

Restricted funds

2018 2017 2018 2017Notes £ £ £ £

13 17 , 92 8, 448 17 , 313 , 248 17, 928 , 448 17, 313 , 24815 1,408,478 1,326,469 1,408,480 1,326,471

19,336,926 18, 639,717 19,336,928 18, 639,719

16 537,995 771,026 531,195 744,828443,641 632,586 377,252 600,600

981,636 1,403,612 908,447 1,345,428

17 (5,013,646) (4,404,524) (5,003,978) (4,396,794)

(4,032,010) (3,000,912) (4,095,531) (3,051,366)

15,304,916 15,638,805 15,241,397 15,588,353

18 (156,660) (963,580) (156,660) (963,580)

15,148,256 14,675,225 15,084,737 14,624,773

22 14,148,256 13,675,225 14,084,737 13,624,77323 1,000,000 1,000,000 1,000,000 1,000,000

15,148,256 14,675,225 15,084,737 14,624,773

24 - - - -

25 15,148,256 14,675,225 15,084,737 14,624,773

The financial statements were approved and authorised for issue by the Board of Governors of The AbbeySchool, Reading on .....~. ~.~!~.l~.O~~ly......... and signed on their behalf by'

C~Z~-- .................................................... Mrs E A Harrison

.........~?~~4~ ..:........................... Dr C F Print


21 -


CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 Augusf 2018

Group

Cash flows from operating activatesNet cash provided by operating activities

Cash flows from investing activatesDividends and interestPurchase of tangible fixed assetsPurchase of investmentsReceipts from sale of investments

Cash used in investing activities

Cash flows from financing activitiesBank loan repaidInterest paid

Cash used in financing activities

2018 2017

Note £ £

29 1,917,215 952,983

43,154 41,824(1,842,801) (821,901)(358,145) (644,281)~A1 ~r,R R~4 ~R1

(937,500)(24,590)

(962,090)

(250,000)(29,328)

(279.328)

Decrease in cash and cash equivalents in the year (911,409) (116,442)

Cash and cash equivalents at the beginning of the year (976,957) (860,515)

Total cash and cash equivalents at the end of the year (1,888,366) (976,957)

At 31 August At 31 August

2018 2017

£ £

Cash at bank 443,641 632,586

Overdraft (2,332,007) (1,609,543)

Total cash and cash equivalents at the end of the year (1,888,366) (976,957)

22 -


NOTES FORMING PART OF THE FINANCIAL STATEMENTSFor fhe year ended 31 August 2018

COMPANY INFORMATIONThe Abbey School is a company limited by guarantee (registered number 0133676 and charity number309115), domiciled and incorporated in England and Wales. The registered office is 17 Kendrick Road,Reading, RG1 5DZ.

2 ACCOUNTING POLICIES

a) Basis of preparation

The financial statements of the charitable company have been prepared in accordance with the FinancialReporting Standard Applicable in the UK and Republic of Ireland (FRS102), the Accounting and Reportingby Charities: Statement of Recommended Practice applicable to charities preparing their accounts inaccordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)(Charities SORP (FRS102)) and the Companies Act 2006.

Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated.

Monetary amounts in these accounts are rounded to the nearest £except where otherwise indicated.

b) Going concernThe group has net current liabilities of £4,032,010 (2017: £3,00,912) at the balance sheet date. Inconsidering whether the going concern basis is appropriate, the Governors have considered the surplusand cash-flow projections prepared for future years. These indicate that the School will be able to meet itsliabilities as they fall due and together with arrangements with their bankers forecast that the School will beable to operate within the facilities currently available. The Governors have no reason to believe that thecurrent facilities will not be continued and confirm that there is no material uncertainty as to the future of theSchool.

Accordingly, they continue to adopt the going concern basis in preparing the financial statements asoutlined in the statement of Governors' responsibilities.

c) Fund accountingGeneral funds are unrestricted funds that are available for use at the discretion of the Governors infurtherance of the general objectives of the charitable company and have not been designated for otherpurposes.

Designated funds comprise unrestricted funds that have been set aside by the Governors for particularpurposes. Details of these reserves, as applicable to the charity, are set out in note 23.

Restricted funds are funds where specific conditions imposed by the donor would restrict the use ofunspent funds.

Investment income and gains are allocated to the appropriate fund.

d) Incoming resourcesAll incoming resources are included in the statement of financial activities when the charitable company islegally entitled to the income and the amount can be quantified with reasonable accuracy.

e) Fees and similar incomeFees receivable, charges for services and use of premises are accounted for in the period in which theservice is provided. Fees receivable are stated after deducting allowances, bursaries and other remissionsgranted by the school. Means tested bursaries which provide financial assistance to parents, is treated asexpenditure from the designated fund within the statement of financial activities.

Fees received for education to be provided in future years are carried forward as deferred income in thebalance sheet. These fees are released to the statement of financial activities over the period in which theschool provides the services in future years.

23 -


NOTES FORMING PART OF THE FINANCIAL STATEMENTS

For fhe year ended 31 August 2018 (cont'd)

f) DonationsDonations received for the general purposes of the School are credited to unrestricted funds. Donations

subject to specific wishes of the donors are credited to the relevant restricted fund.

g) Resources expended

Resources expended are accounted for on an accrual basis. Certain expenditure is apportioned to cost

categories based on the estimated amount attributable to that activity in the year. The irrecoverable element

of VAT is included within the item of expense to which it relates.

Expenditure in respect of the other support costs of the School includes school trips expenditure, recruitment

costs and general office costs including governance costs.

h) Scholarships and bursaries

Scholarships and bursaries are charged in the year when the offer is conveyed to the recipient except in

those cases where the offer is conditional. Such scholarships and bursaries are recognised as expenditure

when the conditions attached are fulfilled. Temporary financial assistance is charged to the statement of

financial activities in the year in which it is granted.

i) Depreciation

Depreciation is provided on all tangible fixed assets, except freehold land, in order to write off their cost less

residual value over their useful lives at the following annual rates:-

Straight line

basis

Freehold buildings 2% per annum on cost

Freehold improvements 10% per annum on cost

Motor Vehicles 25% per annum on cost

Equipment:

Computer equipment 33% per annum on cost

Other equipment 10% per annum on cost

Items costing less than £1,000 are written off as an expense as acquired

j) Investments

Investments are stated at market value with the gain or loss recognised in the statement of financial activities.

Income from investments is credited when received to unrestricted funds unless there is a restriction placed

on their application. Where an investment is quoted ex dividend at the year end, income is recognised on the

accruals basis. The net proceeds arising on the sale of investments are treated as realised and recognised in

the statement of financial activities.

k) Operating leases

Rentals applicable to operating leases are charged to the statement of financial activities on a straight line

basis over the period in which the cost is incurred.

I) Basis of consolidation

The group accounts consolidate the accounts of The Abbey School, Reading and its subsidiary undertaking,

Abbey Commercial Enterprises Limited on a line by line basis. The accounts are made up to 31 August 2018.

No separate statement of financial activities or income and expenditure has been presented for the charitable

company alone as permitted by the Companies Act 2006 and the 2015 Charities SORP. The parent

company's net income for the year is £459,966 (2017: (net expenditure) £407,724).

The results of the subsidiary undertaking for the year are disclosed in note 14 of the accounts.

- 2a-


NOTES FORMING PART OF THE FINANCIAL STATEMENTSFor the year ended 31 August 2018 (cont'd)

m) Financial lnstrumentsThe group has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12'Other Financial Instruments Issues' of FRS 102, in full, to all of its financial instruments.

Basic financial instruments include debtors and creditors. Debtors and creditors are initially recognised attransaction value and subsequently measured at amortised cost. Note 28 provides more information onfinancial instruments where future cash flows are anticipated, with financial assets referring to fixed assetinvestments and debtors balances excluding prepayments, and financial liabilities referring to all creditorbalances excluding deferred income.

Financial assets and financial liabilities are recognised when the group becomes a party to the contractualprovisions of the instrument, and are offset only when the group has a legal enforceable right to set off therecognised amounts and intends either to settle on a net basis, or to realise and settle the liabilitysimultaneously.

Financial assetsTrade, group and other debtors (including accrued income) which are receivable within one year and whichdo not constitute a financing transaction are initially measured at the transaction price and subsequentlymeasured at amortised cost, being the transaction price less any amounts settled and any impairments

A provision for impairment of trade debtors is established when there is objective evidence that the amountsdue will not be collected according to the original terms of the contract. Impairment losses are recognised inthe statement of financial activities.

Financial liabilitiesFinancial instruments are classified as liabilities according to the substance of the contractual arrangementsentered into. Trade, group and other creditors (including accruals) payable within one year that do notconstitute a financing transaction are initially measured at the transaction price and subsequently measuredat amortised cost, being transaction price less any amounts settled.

Where the arrangements with a creditor constitutes a financing transaction, the creditor is initially measuredat the present value of future payments discounted at a market rate of interest for a similar instrument andsubsequently measured at amortised cost.

Derecognising financial assets and liabilitiesA financial asset is derecognised only when the contractual rights to cash flows expire or are settled, orsubsequently all the risks and rewards of ownership are transferred to another party, or if some significantrisks or rewards of ownership are retained but control of the asset has transferred to another party that isable to sell the asset in its entirety to an unrelated third party. A financial liability (or part thereof) isderecognised when the obligation specified in the contract is discharged, cancelled or expires.

- 25-



For the year ended 31 August 2018 (conf'd)

n) Pension SchemeThe charitable company contributes to the Teachers' Pension Scheme, which is a defined benefit scheme,

at rates set by the Scheme Actuary and advised to the Board 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

attributable to the charitable company. In accordance with FRS 102 therefore, the scheme is accounted for

as a defined contribution scheme and contributions are accounted for when advised by the scheme

administrator.

The charitable company also contributes into a defined contribution scheme for non-teaching staff for which

the contributions are charged in the statement of financial activities in the year in which they are payable.

The pension costs charged in the year for the Teachers' Pension Scheme are based on the contributions

made to the centralised Government pension scheme run by the Department of Education as stated in note

27 to these financial statements.

o) Advance fee scheme

Amounts received under the school's former Advance Fee Scheme contracts for education not yet utilised to

settle school fees were recorded as deferred income and allocated as current liabilities where the education

will be provided 12 months from the reporting date and as long-term liabilities where the education was to be

provided in subsequent years.

p) Parents' deposits

The Governors have reviewed the contract terms under which pupil fee deposits are held by the school.

Although under normal circumstances these will be repaid over future years when the pupils complete their

education at the school, pupils can leave at earlier dates. The school does not therefore have an

unconditional right to retain the individual deposits for at least 12 months after the balance sheet date and, in

line with the requirements in FRS 102, the balance of the deposits held at 31 August 2018 have been

included within current liabilities. The prior year pupil fee deposits balance has been similarly represented.

3 SIGNIFICANT JUDGEMENTS AND ESTIMATES

Estimates and judgements are continually evaluated and are based on historical experience and other

factors, including expectations of future events that are believed to be reasonable under the circumstances.

The group makes estimates and assumptions concerning the future. The resulting accounting estimates and

assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that

have a significant risk of causing a material adjustments to the carrying amounts of assets and liabilities

within the next financial year are discussed below.

Significant estimates included within the financial statements include provision for fee debtors, which require

a judgement by management regarding the likelihood of recovery. Management review and assess fee

debtors on an individual basis and provide for fee debtors as appropriate.

Depreciation is another key estimate in the accounts which requires management judgement over the useful

life of the assets. The policy has been set out in the notes above.

26 -


NOTES FORMING PART OF THE FINANCIAL STATEMENTSFor the year ended 31 Augusf 2018 (conf'd.)

4a SCHOOL FEES

School fees receivable consist of:

Gross fees

Less: Scholarships and other awards

Net fees receivable

2018 2017

£ £

16,590,611 15,578,017

(498.2851 (486.286)

16,092,326 15,091,731

4b GRANTS AND AWARDS

in addition to the scholarships and other awards noted above, the School provided means-tested bursariesto provide financial assistance to parents.

The total awards are as follows:

2018 2017

£ £Revenue account (scholarships) 498,285 486,286Designated funds (means-tested bursaries) 620,510 613,309

Total grants and awards 1,118,795 1,099,595

5 NON ANCILLARY INCOME

2018 2017

£ £After school care 69,805 70,691Property rentals 11,650 19,715Miscellaneous income 134,396 2,984

6 INCOME FROM INVESTMENTS

215,851 93,390

2018 2017

£ £UK listed investments 43,154 41,824

7 ANCILLARY INCOME

2018 2017

£ £Travel and other charges 594,399 432,292Fees for examinations and extra-curricular courses 380,280 371,378Fees in lieu of notice 12,126 26,824Registration fees 35,823 42,551Tuck shop income 15,503 20,195Deposits retained (3,585) 904Miscellaneous income 18.706 14,494

1,053,252 908,638

- 27-



For the year ended 31 August 2018 (cont'd.)

8 TOTAL RESOURCES EXPENDED

Charitable activities

Teaching costs

Welfare costs

Premises costs

Support costs

Travel and other recharges

Grants, awards and prizes

Governance costs

Raising funds

Costs generated by AbbeyCommercial EnterprisesLimited

Portfolio management costs

Trading expenses

Financing costs

Total resources expended

9 FINANCING COSTS

Staff costs

7,802,742

83,165

725,553

1,759,856

10.371.316

Other

560,172

1,071,566

989,057

1,216,997

678,048

647,581

18,335

5,181,756

Depreciation

250,430

965,783

10,473

Total

2018

8,613,344

1,154,731

2,680,393

2,987,326

678,048

647,5811 R ~~5

Total

2017

8,436,236

1,083,967

2,504,665

3,158,580

496,655

717,652

22.978

1,226,686 16,779,758 16,420,733

- 5,601 - 5,601 8,262

- 7,506 - 7,506 7,529

- 162,794 - 162,794 152,011

- 105,522 - 105,522 87,107

- 281,423 - 281,423 254,909

10,371,316 5,463,179 1,226,686 17,061,181 16,675,642

Interest on bank loan

Interest on bank overdraft

Total interest payable

Bank charges

Bad debts (recovered)/written off

Total financing costs

2a -

24,590 29,327

33,106 16,880

47,826 40,900

105,522 87,107

2018 2017

£ £

18,164 26,642

6,426 2,685


NOTES FORMING PART OF THE FINANCIAL STATEMENTSFor fhe year ended 31 August 2018 (conf'd.)

10 STAFF COSTS

2018 2017

£ £Wages and salaries 8,230,540 8,228,041Social security 781,344 767,552Pension contributions 1,086,663 1,095,467Other non payroll staff costs 272,769 132,821

10,371,316 10,223,881

The number of employees whose emoluments (excluding pension contributions) exceeded £60,000was:

2018 2017

No. No.£60,000 - £70,000 4 3£70,000 - £80,000 1 4£80,000 - £90,000 2 -£120,000 - £130,000 1 1

The total employer contributions in the year towards pension scheme contributions for the above 8(2017: 8) staff members were £90,147 (2017: £89,679).

During the year, severance pay was awarded to three employees, with payments for compensation andpay in lieu of notice totalling £32,326 (2017: £nil)

The average number of employees during the year was as follows:

Teaching

Welfare

Premises

Support

2018 2017

No. No.

244 225

26 21

19 38

54 51

343 335

The split between part time and full time staff was as follows:

2018

No.

Full timeTeaching 111Welfare 6Premises 13Support 37

2017

No.

Part time Full time Part time

133 111 114

20 6 15

6 14 24

17 36 15

167 176 167 168

- 29-




10 STAFF COSTS (conYd)

Key management personnel, consist of the Governors and Officers listed on page 2. The Officers aggregate

remuneration was £539,750 (2017: £491,630).

None of the Governors received any remuneration for their involvement with the School. During the year 3

(2017:3) Governors were reimbursed expenses for travel totalling £797 (2017: £1,470).

11 AUDITOR'S REMUNERATION

Auditors' remuneration -Audit

Other

2018 ~ 2017

£ £

18,500 18,540

'a 7RR 1 ~~n

l'L,LtftS LU,UyU

12 TAXATION

The charitable company is a registered charity, and as such is entitled to tax exemptions on income and gains,

properly applied for its charitable purposes.

13 TANGIBLE ASSETS -Group and School

Freehold MotorProperty and Vehicles

Equipment Total

Improvements

£ £ £ £

COST -

At 1 September 2017 22,489,797 10,138 5,480,040 27,979,975

Additions 1,474,624 - 368,177 1,842,801

Disposals - - - -

At 31 August 2018 23,964,421 10,138 5,848,217 29,822,776

DEPRECIATION -

At 1 September 2017 6,419,164 10,138 4,237,425 10,666,727

Charge for the year 810,788 - 416,813 1,227,601

Disposals - - - -

At 31 August 2018 7,229,952 10,138 4,654,238 11,894,328

NET BOOK VALUE

At 31 August 2018 16,734,469 - 1,193,979 17,928,448

At 31 August 2017 16,070,633 - 1,242,615 17,313,248

i ~1 ,

THE ABBEY SCHOOL, READINGNOTES FORMING PART OF THE FINANCIAL STATEMENTS


14 SUBSIDARY UNDERTAKING

The Abbey School owns 100% of Abbey Commercial Enterprises Limited (company number 6334617).This company was established to carry out the non-educational activities associated with the School.Trading results extracted form its audited financial statements are shown below:

2018 2017

£ £Turnover 86,618 71,240Administration expenses (23,101) (20,788)

Profit on ordinary activities before taxation 63,517 50,452Tax on profit on ordinary activities - -

Profit on ordinary activities after taxation 63,517 50,452

Net assets 63,519 50,454

All activities have been consolidated on a line by line basis in the SOFA. Any taxable net profit is gifted tothe charity. The total expenses include a management charge paid by Abbey Commercial Enterprises of£17,500 (2017: £12,526), which is eliminated on consolidation. At the year end the balance outstandingwas a debtor in The Abbey School of £30,533 (2017: £13,033).

15 INVESTMENTSGroup

At 1 September 2017Additions

Disposals

Gain for the year

At 31 August 2018

Market CostValue

£ £1,326,469 1,081,948358,145 358,425(291,258) (253,897)

15,122 -

1,408,478 1,186,476

Investments which comprise more than 5% of the market value of investments are:

J P Morgan Asset Management UK Ltd US Equity

School

Listed investments (at market value - as per Group note)Abbey Commercial Enterprises Limited

Market CostValue

£ £74,773 60,692

2018 2017£ £

1,408,478 1,326,4692 2

1,408,480 1,326,471

- 31 -




15 INVESTMENTS (coned)2018 2017

£ £

Investment in subsidiary company

Country of

Company incorporation

Abbey CommercialEnterprises Limited England &Wales

2 2

Company Shares held

Number Class

06334617 Ordinary 100

16 DEBTORS

Group School

2018 2017 2018 2017

£ £ £ £

Trade debtors 155,821 249,133 116,001 209,902

Amounts due from own subsidiary - - 33,020 13,033

Other debtors 35,428 - 35,428 -

Prepayments 346,746 521,893 346,746 521,893

537,995 771,026 531,195 744,828

17 CREDITORS: Amounts falling due within less than one year

Group School

2018 2017 2018 2017

£ £ £ £

Bank overdraft 2,332,007 1,609,543 2,332,007 1,609,543

Bank loans (see Note 19) - 250,000 - 250,000

Trade creditors 801,376 607,504 801,376 607,504

Deposits held 654,334 533,500 654,334 533,500

Other taxes and social security cos 341,346 342,470 338,228 336,542

Other creditors 188,957 197,188 188,957 195,386

Accruals and deferred income 93,637 55,320 87,087 55,320

Advance fee payments (see Note ~ 127,731 203,345 127,731 203,345

Fees received in advance 474,258 605,654 474,258 605,654

5,013,646 4,404,524 5,003,978 4,396,794

Fees received in advance relates to fees for the next calendar year which some parents pay in advance.

Deposits held relate to acceptance deposits which are considered as owed within one year given that

only one terms notice is required to be given by pupils.

32 -


For fhe year ended 31 Augusf 2018 (conf'd.)

18 CREDITORS: Amounts falling due after more than one year

Bank loans (see Note 19)

Advance fee payments (see Note 20)

19 LOAN CREDITOR

Group School2018 2017 2018 2017

£ £ £ £

- 687,500 - 687,500

156,660 276,080 156,660 276,080

156,660 963,580 156,660 963,580

Bank loans are repayable as follows: 2018 2017

£ £In less than one year - 250,000In more than one year but less than two years - 250,000In more than two years but less than five years - 437,500After more than five years - -

- 937,500

At the end of 2017, there was a bank overdraft and loan with Coutts and Co, which were secured by legalcharges over the freehold properties. During the current year these were repaid using an overdraft facilityentered into with HSBC.

20 ADVANCE FEE PAYMENTS -Group and School

Parents historically have deposited a lump sum with the School as an advance on future fees. This option isno longer available to parents. Each arrangement is in respect of an agreed amount to be credited againstfuture fee bills for an agreed number of terms. The unused balance of the advance is repayable on request. Itis intended that the advance fees will be applied as follows:

2018 2017

£ £Within 1 year 127,731 203,345Within 2 to 5 years 156,660 276,080

284,391 479,425

The figures for advanced fee payments are included within the balance sheet for school fees paid in advance(notes 17 and 18). The balance represents the accrued liability under these arrangements. Movements duringthe year were:

£ £Balance at 1 September 2017 479,425 432,593Amounts received - 239,272Amounts utilised in the payment of fees (195,034) (192,440)

Balance at 31 August 2018 284,391 479,425

Qexs




21 OTHER FINANCIAL COMMITMENTS

At 31 August 2018 the School had total future minimum lease payments under non-cancellable operating

leases as follows:

Due within one year

Due between one and five years

Due after five years

The operating lease charge for the year was £76,762 (2017: £192,167).

22 UNRESTRICTED FUNDS

2018 2017

£ £

55,117 114,898

58,214 110,658

1 13,331 225,556

2018 2017

£ £

Revenue Account

Balance at 1 September 2017

Income

Expenditure

Transfers

Balance 31 August 2018

13, 675, 225 14, 032, 497

17,459,829 16,170,149

(16,417,058) (16,047,529)

(569,740) (479,892)

14,148,256 13,675,225

- 34-


For the year ended 37 August 2018 (conf'd.)

23 DESIGNATED FUNDS

Group and School

2018 2017The Bursary Fund: £ £ £

IncomeInterest and investment income 43,154 41,824

ExpenditureBursaries granted (616,102) (592,621)Temporary financial assistance (4,408) (20,688)Portfolio management charges (7,506) (7,529)

(628,016) (620,838)

(584,862) (579,014)

Revaluation gains 15,122 99,122

Transfer from School funds 569,740 479,892

Net movement in funds - -

Balance at 1 September 2017 1,000,000 1,000,000

Balance at 31 August 2018 1,000,000 1,000,000

Income from The Bursary Fund is used to offer financial assistance to individual pupils when necessary.

The Governors have decided to make an annual transfer from the unrestricted funds so that a balance of £1million remains earmarked for use on bursaries within this fund.

24 RESTRICTED FUNDS

Group and School

2018 2017£ £

IncomeDonations 16,107 7,275

Expenditure

Donations spent during year (16,107) (7,275)

Net movement in funds - -

Balance at 1 September 2017 -

Balance at 31 August 2018 - -

Restricted funds are those received for specific purposes including donations received for building appeals,various teaching departments and fixed assets. Once the restriction has been fulfilled than a transfer fromrestricted to unrestricted funds is made.

-35-




25a ANALYSIS OF NET ASSETS BETWEEN FUNDS -Group

2018 Fixed Net Current Long Term 2018

Assets Investments Liabilities Liabilities Total

£ £ £ £ £

Unrestricted funds:

Revenue account 17,928,448 - (3,623,532) (156,660) 14,148,256

Designated funds - 1,408,478 (408,478) - 1,000,000

17,928,448 1,408,478 (4,032,010) (156,660) 15,148,256



£ £ £ £ £

Unrestricted funds:

Revenue account 17,313,248 - (2,674,443) (963,580) 13,675,225


17,313,248 1,326,469 (3,000,912) (963,580) 14,675,225

25b ANALYSIS OF NET ASSETS BETWEEN FUNDS -School



£ £ E £ £

Unrestricted funds:

Revenue account 17,928,448 - (3,687,051) (156,660) 14,084,737


17,928,448 1,408,480 (4,095,531) (156,660) 15,084,737



£ £ £ £ £

Unrestricted funds:

Revenue account 17,313,248 - (2,724,895) (963,580) 13,624,773


17,313,248 1,326,471 (3,051,366) (963,580) 14,624,773

36 -


NOTES FORMING PART OF THE FINANCIAL STATEMENTSFor the year ended 31 August 2018 (cont'd.)

26 RELATED PARTY TRANSACTIONS

Transactions with Governors

Owing to the nature of the school's operations and the composition of its governing body being drawn fromlocal public and private sector organisations, it is inevitable that transactions will take place withorganisations with which a Governor may have an interest. All transactions involving these organisations arein accordance with the school's normal procedures.

Mr S Dimmick is a partner at the school's Solicitors, Blandy & Blandy. During the year the school wasinvoiced £50,515 (2017: £36,566) by Blandy & Blandy for legal work carried out on the school's behalf. At theyear-end £2,400 (2017: £Nil) was owed to Blandy & Blandy.

27 PENSIONS

a) Teachers' Pension Scheme

The school participates in the Teachers' Pension Scheme ("the TPS") for its teaching staff. The pensioncharge for the year includes contributions payable to the TPS of £871,958 (2017: £831,311) and at the year-end £118,010 (2017: £119,133) was payable in respect of contributions to this scheme.

The TPS is an unfunded multi-employer defined benefits pension scheme governed by the Teachers'Pension Scheme Regulations 2010 (as amended) and The Teachers' Pension Scheme Regulations 2014(as amended). Members contribute on a "pay as you go" basis with contributions from members and theemployer being credited to the Exchequer. Retirement and other pension benefits are paid by public fundsprovided by Parliament.

The employer contribution rate is set by the Secretary of State following scheme valuations undertaken bythe Government Actuary's Department. The most recent actuarial valuation of the TPS was prepared as at31 March 2012 and the valuation report, which was published in June 2014, confirmed an employercontribution rate for the TPS of 16.4% from 1 September 2015. Employers are also required to pay ascheme administration levy of 0.08% giving a total employer contribution rate of 16.48%.

This employer rate will be payable until the completion and outcome of the next actuarial valuation which isbeing prepared as at 31 March 2016. Her Majesty's Treasury published draft Directions for the TPS on 6September 2018 to allow the Department for Education to finalise this valuation. It has been announced thatthe now completed valuation will result in an increase to 23.6% as the amount employers will be required topay towards the scheme from September 2019.

There are also indications that the protections in the new cost cap mechanism required by the Public ServicePensions Act 2013 mean public sector workers will get improved pension benefits for employment over theperiod April 2019 to March 2023.

b) Other schemes

The Company also makes contributions for non-teaching staff into a separately administered definedcontribution scheme. Employers contributions totalling £214,705 (2017: £264,156) were payable to this fundfor the year. Contributions totalling £22,822 (2017: £22,386) were unpaid at the year end and are includedwithin creditors.

-37-




28 FINANCIAL INSTRUMENTS

Included within financial instruments held at amortised cost are trade debtors, other debtors, cash at bank,trade creditors, bank loans, bank overdrafts, other creditors and accruals.

Included within financial instruments held at fair value is investments

2018 2017

£ £

Group

Financial assets measured at amortised cost 634,890 881,719

Financial liabilities measured at amortised cost 4,070,311 3,940,555

Financial assets measured at fair value 1,408,478 1,326,469

The Group's income, expense, gains and losses in respect of financial instruments are summarised below:

2018 2017

£ £

Interest income and expense

Total interest income for financial assets held at amortised cost - -

Total interest expense for financial liabilities held at amortised cost 24,590 29,327

Impairment losses/(bad debts recovered) 77,997 40,900

2018 2017

£ £

School

Financial assets measured at amortised cost 561,701 823,535

Financial liabilities measured at amortised cost 4,063,761 3,938,753

Financial assets measured at fair value 1,408,480 1,326,471

The School's income, expenses gains and losses in respect of financial instruments are summarised below:

2018 2017

£ £

Interest income and expense

Total interest income for financial assets held at amortised cost

Total interest expense for financial liabilities held at amortised cost

I mpairment losses/(bad debts recovered)

24,590 29,327

77,997 40,900

- 38-


NOTES FORMING PART OF THE FINANCIAL STATEMENTSFor fhe year ended 31 August 2018 (cont'd.)

28 RECONCILIATION OF NET INCOME/(EXPENDITURE) TO NET CASH FLOW FROM OPERATINGACTIVITIES

Group

Net income/(expenditure) for the reporting period(as per the statement of financial activities)Adjustments for:

Depreciation

Gains on investments

Dividends and interest

interest payable

Decrease in debtors

Increase in creditors

Net cash provided by operating activities

Note 2018 2017£ £

473,031 (357,272)

13 1,227,601 1,128,164

15 (15,122) (91,593)

(43,154) (41,824)

24,590 29,328

233,031 44,581

17,238 241,599

1,917,215 952,983

39 -

THE ABBEY SCHOOL, READING

Documents

Transcript of THE ABBEY SCHOOL, READING