john madejski academy (a company limited by ......bryan stabler mark stuart-thompson appointed 1...

Company Limited by Guarantee Registration number: 5319170 (England and Wales)

JOHN MADEJSKI ACADEMY

(A Company Limited by Guarantee)

REPORT AND FINANCIAL STATEMENTS

YEAR ENDED 31 AUGUST 2014

JOHN MADEJSKI ACADEMY (A company limited by guarantee)

CONTENTS

Reference and administration information

Report of the Governors

Governance Statement

Statement on regularity, proprietary and compliance

Statement of Trustees' responsibilities

Independent auditor's reports

Consolidated Statement of Financial Activities

Consolidated Balance Sheet

Academy Balance Sheet

Consolidated Cash flow statement

Principal accounting policies

Notes to the financial statements

Page

1-2

3-10

11-13

14

15

16-19

20

21

22

23

24-26

27-45

Board of Trustees

Governing Body

Secretary


REFERENCE AND ADMINISTRATIVE DETAILS

OF THE ACADEMY, ITS GOVERNORS AND ADVISORS

Sir John Madejski OBE, DL, DLitt Alex Bayliss Sir David Bell KCB Nigel Howe Steve Kirk Camilla Morris Bryan Stabler

Resigned 31 August 2014

Appointed 1 September 2014

Steve Kirk (Chair from 1 September 2014) Alex Bayliss (Chair until 31 August 2014) Peter Ashby Sir David Bell KCB Trevor Benstock Caroline Bolton Maria Dyball Simon Fox Richard Gordon Victoria Groulef Edward Holloway Natasha Kirby

Resigned 7 October 2013

Appointed 7 October 2013 AppOinted 7 October 2013

Appointed 29 September 2014

Nicola Maytum (Principal Accounting Officer) Mary Riall Bryan Stabler Mark Stuart-Thompson Appointed 1 December 2013

Ian Wood-Smith

Senior Management Team Nicola Maytum James Rodgers Chris Thomas

Principal

Registered Office

(resigned 31 December 2013) Ian Travis Natasha Ullah (resigned 31 August 2014)

Adam Bousfield (resigned 31 August 2014)

Tom Dore Stefan Merreywether Allan Todd Keith Eldridge

The Old Coroners Court No.1 London Street Reading Berkshire RG14QW

Senior Vice Principal Vice Principal

Vice Principal Vice Principal

Assistant Principal

Assistant Principal Assistant Principal Assistant Principal Finance Director

Page 1

Company Registration Number

Auditors

Bankers

Solicitors

Operating Address


REPORTOFTHEGOVERNORS

FOR THE YEAR ENDED 31 AUGUST 2014

5319170

Crowe Clark Whitehill LLP Aquis House 49-51 Blagrave Street Reading Berkshire RG1 1PL

HSBC Bank Pic 26-28 Broad Street Reading Berkshire RG12BU

Field Seymour Parkes The Old Coroners Court 1 London Street Reading Berkshire RG14QW

125 Hartland Road Reading Berkshire RG28AF

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REPORTOFTHEGOVERNORS


The Governors present their annual report together with the financial statements and auditor's report of the Charitable Company for the year ended 31 August 2014.

The financial statements have been prepared in accordance with the accounting policies on pages 23 to 26 of the financial statements, and comply with the Company's Memorandum and Articles of Association, the Companies Act 2006, and the requirements of the Statement of Recommended Practice "Accounting and Reporting by Charities," (SORP 2005), and the Academies Accounts Direction 2013.

John Madejski Academy is an academy for pupils aged 13 to 19 serving a catchment area in south Reading. It has a pupil capacity of 1,100 and had a roll of 925 in the school census on 2 October 2014.

Structure, Governance and Management

Constitution

John Madejski Academy is a company limited by guarantee with no share capital (registration no. 5319170) and an exempt charity. The Charitable Company's Memorandum and Articles of Association are the primary governing documents of the Academy.

Members of the Charity shall comprise the following:

• The Sponsor (Sir John Madejski) • Up to 4 persons appointed by the Sponsor • 1 person (if any) appointed by the Secretary of State • The Chairman • Any person the members may agree unanimously to appoint.

The Articles of Association require the members of the Charity to appoint at least three trustees to be responsible for the statutory and constitutional affairs of the Charity and the management of the Academy.

The members of the Board of Trustees act as the trustees for the charitable activities of John Madejski Academy and are also the directors of the charitable company for the purposes of company law.

Details of the trustees who served during the year are included in the Reference and Administrative Details on page 1.

Members' Liability

Each member of the Charitable Company undertakes to contribute to the assets of the Charitable Company in the event of it being wound up, while they are a member or within one year after they cease to be a member, such amount as may be required, not exceeding £10 for the debts and liabilities contracted before they ceased to be a member.

Governors' Indemnities

As disclosed in note 12, professional indemnity insurance is paid on behalf of the directors of the Academy.

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REPORT OF THE GOVERNORS


Method of Recruitment and Appointment or Election of Governors

All Governors are appointed at a general meeting of the Governing Body, which has been established by the Board of Trustees and whose responsibilities are described below. Two Staff Governors are elected by their colleagues and their appointments approved by the Governors in general meeting.

The term of office for any Governor shall be four years, save that this time limit shall not apply to either the Principal or the Sponsor (during any period that the Sponsor is a Trustee). Subject to remaining eligible to be a particular type of Trustee, any Trustee may be re-appointed or re-elected.

The Governors who were in office on 31 August 2014 and served throughout the year are listed on page 1.

Policies and Procedures Adopted for the Induction and Training of Governors

Each Governor is linked to a Directorate and makes regular monitoring visits. Training and induction provided for new Governors depends on their existing experience. Where necessary induction includes training on charity and educational legal and financial matters and governors support services are procured from Reading Borough Council. All new Governors are given a tour of the Academy and the chance to meet with staff and students. All Governors are provided with copies of policies, procedures, minutes, accounts, budgets, plans and other documents that they will need to undertake their role as Governors.

Organisation Structure

The structure of the Academy consists of the Board of Trustees and the Governing Body, including the Principal and Finance Director. An aim of this management structure is to distribute responsibility and accountability and to encourage involvement in decision making at all levels so that the Academy nurtures the talents of its entire staff to support continual improvement and excellence.

The Governors are responsible for setting the Academy's policies, adopting the Academy Development Plan and budget, monitoring performance against these plans and making major decisions about the direction of the Academy including its curriculum, the achievement and welfare of students and staffing.

The Principal and Senior Leadership Team control the Academy at an executive level, implementing the policies set by the Governors and reporting back to them.

The Governing Body has established three sub-committees. Each sub-committee has its own terms of reference detailing the responsibilities discharged to the sub-committee. The terms of reference and meeting frequency for each sub-committee is reviewed and approved by the Governors annually. The terms of reference for the Resources Committee detail the Academy's authorised spending limits.

The sub-committees of the Governing Body are the;

• Resources sub-committee • Curriculum & Standards sub-committee • Progress sub-committee

Groups of Governors may be formally organised outside of the sub-committee structure to support the Academy as required to consider other Academy matters.

Connected Organsations including Related Party Relationships

During the year the Academy worked with Reading FC Community Trust - a registered charity in which Mr B Stabler is a trustee. Further details of transactions that took place in the year can be found in Note 31.

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Objectives and Activities

Objectives and Aims of the Academy

In setting our objectives and planning our activities the Trustees have given careful consideration to the Charity Commission's general guidance on public benefit.

In accordance with the Articles of Association the Charity has adopted a "Scheme of Government" approved by the Secretary of State for Education. The Scheme of Government specifies, amongst other things, the basis for admitting students to the Academy, the catchment area from which the students are drawn, and that the curriculum should comply with the substance of the national curriculum with an emphasis on sport and its practical applications.

The main objectives of the Academy are:

To ensure that every child enjoys the same high quality education in terms of resourcing, tuition and care; To raise the standard of educational achievement of all students; To improve the effectiveness of the Academy by keeping the curriculum and organisational structure under continual review; To provide value for money for the funds expended; To comply with all appropriate statutory and curriculum requirements; To maintain close links with industry and commerce; and To conduct the Academy's business in accordance with the highest standards of integrity, probity and openness.

Strategies and Activities

Principal Activities

The Charitable Company's principal activity is the provision of education to 11 to 19 year olds in the local community with an emphasis on sport and its practical application.

The Academy's main strategy is encompassed in its mission statement which is to:

Create an environment for teaching and learning which encourages mutual respect and understanding throughout the community Enhance students' spiritual, moral, social and cultural development Provide equality of opportunity for all, therefore delivering the highest quality of education for each and every student Provide a learning environment that encourages high quality work Provide principles of care and development, which apply equally to students and staff Create policies, procedures and relationships which promote a school which is responsive, proactive and caring Encourage communication and consultation procedures which promote ownership and partnership and which empower staff colleagues and students

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Admissions policy




The Academy offers 180 places in Year 7. Up to 18 places are available through the Sports Specialism. The remaining places are allocated based on residence within a designated area as agreed with the Local Authority and on membership of sibling groups.

Equal opportunities policy

The Governors recognise that equal opportunities should be an integral part of good practice within the workplace. The Academy aims to establish equal opportunity in all areas of its activities including creating a working environment in which the contribution and needs of all people are fully valued.

Disabled persons

Lifts, ramps and disabled toilets are installed and door widths are adequate to enable wheelchair access to main areas of the Academy. The policy of the Academy is to support recruitment and retention of students and employees with disabilities. The Academy does this by adapting the physical environment, by making support resources available and through training and career development.

Public Benefit

In setting objectives and planning the Academy's activities, the Board of Directors have paid due regard to the published guidance from the Charity Commission regarding the principle of public benefit.

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Strategic Report




Achievements and Performance

The Academy opened in September 2006 and took occupation of a brand new purpose built site in February 2007. The Academy currently has approximately 930 students including 170 in the Sixth Form. The elite football studies and basketball programmes are a central part of the Academy's work to use its sports specialism to raise aspirations.

The Academy was inspected by Ofsted in December 2013 and was removed from special measures.

To ensure the raising of standards and achievement continues to be a priority, the Academy operates a rigorous system of monitoring, review and evaluation. This includes lesson observation and surveying the opinions of students and parents. Tight monitoring and student progress tracking takes place on a regular basis. The Academy uses student performance data to inform future learning priorities.

In 201439% of students gained 5A*-C grades including English and Maths and 80% 5+A*-C grades. At A Level and equivalent 43% of grades were A*-B and 100% were A*-E. 26 students from Year 13 took up their first choice places at university after receiving their A Level results in August. Exclusions, which had been high in 2012/13, are now significantly lower reflecting the Academy's revised behaviour management programme.

The Academy campus acts as a hub for the local community with a sports centre, 3G football pitch, multi-use games area and dance studio. During the year the Academy substantially completed the refurbishment of H Pod which will become fully operational in Spring 2015 as a Sixth Form and Inclusion centre.

Key Performance Indicators

The main financial indicator is the level of reserves held at the Balance Sheet date. In particular the management of spending against General Annual Grant (GAG) needs to be kept under review as the amount of carry forward is restricted. In the period of review there was no breach.

As funding is based on student numbers, this is also a key performance indicator. Pupil numbers for 2013/14 were 927 a decrease of 71 (7%) compared with 2012/13. It is anticipated that this number will be steady for 2014/15 and begin to rise thereafter.

Another key financial performance indicator is staffing costs as a percentage of income in Restricted General Funds. For 2013/14 this was 77% compared to 78% in 2012/13.

Going Concern

After consideration of the school's financial position, its financial plans, (including projected student numbers), the demand for places and the broader environment, the Board of Trustees have a reasonable expectation that the Academy has and will continue to have adequate resources to enable it to be a sustainable going concern in 2014/15 and for the foreseeable future. For this reason the Academy continues to adopt the Going Concern principle in preparing its financial statements. Further details regarding the adoption of the Going Concern basis can be found in the statement of accounting policies.

Financial Review

Key Financial Performance Indicators and Financial Review

The Academy received income into its Unrestricted General Fund, Restricted General Fund and Fixed Asset Fund during 2013/14:

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Restricted General Fund




The majority of the Academy's income was received through Education Funding Agency (EFA) recurrent revenue grants into the Restricted General Fund, the use of which is restricted to the Academy's charitable activities, its educational operations. These revenue grants, and the associated revenue expenditure made against them, are detailed in the SOFA. Restricted General Fund income for the year was £8,120,000; expenditure against the fund was £8,366,000, giving a restricted revenue fund carry forward deficit of £246,000 before transfers to Unrestricted General Funds and actuarial gains/losses on the pension scheme.

Unrestricted General Funds

Income received into the Unrestricted General Fund was £669,000. This was mainly attributable to trading turnover of AcademySport Leisure Centre Limited (after eliminations on consolidation for intragroup activity).

Restricted Fixed Asset Fund

The Restricted Fixed Asset Fund balance is reduced by an annual depreciation charge over the expected useful life of the assets concerned in line with the Academy's depreciation policy.

Income received into the fund was £532,000 and included Devloved Formula Capital Funding of £22,000 and £510,000 from Academies Capital Maintenance Fund, for refurbishment of the Academy's Sixth Form and Inclusion Centre.

The SOFA details a £292,000 deficit on the Restricted Fixed Asset Fund for the year.

Summary of Financial Performance

Total fund balances as at 31 st August 2014 were £21,302,000 comprising £316,000 unrestricted general fund surplus, £1,507,000 general fund deficit and £22,493,000 in Restricted Fixed Asset Funds.

Balance Sheet

The net book value of the Group's tangible fixed assets was £22,555,000 as at 31 st August 2014. The movement in this account is detailed in note 13.

Cash at Bank and in hand at 31 st August 2014 was £1 ,864,000.

The Reserves Policy is detailed below.

Reserves Policy

The Governors review the Academy's Reserve Policy periodically. The Governing Body has determined that the level of resources not invested in tangible fixed assets should be in the range of 7.5% of the General Annual Grant. The Academy's free reserves as at 31 August 2014 were £318,000.

The reason for this reserve is to provide sufficient working capital to cover delays between spending and receipt of grants and to provide a cushion to deal with unexpected emergencies such as urgent maintenance. The Academy's current level of resources not invested in tangible fixed assets is currently below this level but the Directors have agreed necessary budget projections and management actions in order to generate the required level of reserves over the medium term.

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Investment Policy




The Academy has invested the sum of £1 m with HSBC in a three month deposit account. This is a low risk short term investment. The objective of this account is to hold the Academy's reserve at low risk. The Academy does not have any endowment funds.

Financial and Risk Management Objectives and Policies

The objective of the Academy's Risk Management procedures are to identify the principal risks facing the Academy so that existing controls may be considered and further action taken if required, including external insurance.

The Governing Body has a comprehensive risk management process to identify and monitor the risks faced by the Academy.

The financial risks considered include: economic / financial uncertainty, liquidity and solvency, credit risk, the risk of fraud and compliance with financial/statutory requirements.

The valuation of the defined benefit pension scheme is a liability of £1,571,000. On the balance sheet, this is included within Academy's reserves.

Principal Risks and Uncertainties

The Governing Body has a comprehensive risk management process to identify and monitor the risks faced by the Academy. The principal risks identified include governance, statutory compliance, finance, insurance, attainment, attendance, behaviour, health and safety, organisation, operations, safeguarding, reputation, HR and ICT. A risk rating mechanism is in place with greater emphasis directed towards those identified higher risk areas.

Risk Management

The Governing Body has considered the major risks to which it is exposed, in particular those relating to governance, finance, insurance, attainment, attendance, behaviour, health and safety, organisation, operations, safeguarding, reputation, HR and ICT.

The Governing Body has implemented a number of systems to assess and reduce risks that the school faces, especially in operational areas in relation to teaching, health and safety, (including school trips and the school's minibuses), behaviour management, and in relation to the control of finances. They have introduced policies and systems for the recruitment, selection and vetting of new staff, continual professional development of staff, child protection, supervision of students around the school site and internal financial controls to minimise financial risk. Adequate insurance has been arranged where significant financial risk remains. The Academy has an effective system of internal financial control as explained in the Statement on Internal Control.

Plans for Future Periods

The Academy is focussed on growing in a planned manner by increasing pupil numbers, particularly in the Sixth Form where current demand is strongest and seeking reductions in the Academy's cost base whilst continuing to provide a high quality education to the community that the Academy serves.

Headline future aims

The Academy is in the third year of its development plan. Key themes for 2014/15 are:

(1) To ensure that learning experiences and interventions better meet the needs of Academy priority groups, in particular those students on School Action Plus and those with low prior attainment.

(2) To improve the quality of teaching to develop students' independent learning and extended writing skills.

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(3) To ensure greater consistency in behaviour management across the Academy and within classrooms. The priority for 2014-15 is to involve students and staff more closely in behaviour management.

(4) To train leaders at all levels in the Academy in better monitoring and evaluation of staff and activities to improve performance.

(5) To further improve the student and working environment. The refurbished Sixth Form and Inclusion Centre will be opened in Spring 2015. It also planned to upgrade and expand the Academy's technology hardware to support curriculum requirements in Computer Science, Visual Arts and A Level vocational courses.

Funds held as Custodian Trustee on behalf of others

Neither John Madejski Academy nor the Trustees/Governors are acting as third party custodial trustees.

Auditor

In so far as the Governors are aware:

• there is no relevant audit information of which the charitable company's auditor is unaware; and

• the Governors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

The auditors, Crowe Clark Whitehill LLP who were appointed during the year, are willing to continue in office and a resolution to appoint them will be proposed at the Annual General Meeting.

The report of the Directors, incorporating a strategic report, was approved by the members of the Governing Body on ................. I.c:,.t .. I.I.... and sl'gned on l'tS behalf by' ~ .. ................ .

c"_._~ / Si~~~·Ki~~············ .. ·

overnors

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Scope of Responsibility


GOVERNANCE STATEMENT FOR THE YEAR ENDED 31 AUGUST 2014

As Governors, we acknowledge we have overall responsibility for ensuring that John Madejski Academy has an effective and appropriate system of control, financial and otherwise. However such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss.

The Governing Body has delegated the day-to-day responsibility to the Principal, as Accounting Officer, for ensuring financial controls conform with the requirements of both propriety and good financial management and in accordance with the requirements and responsibilities assigned to it in the funding agreement between John Madejski Academy and the Secretary of State for Education. They are also responsible for reporting to the Governing Body any material weaknesses or breakdowns in internal control.

Governance

The information on governance included here supplements that described in the Governors' Report and in the Statement of Governors responsibilities. The Governing Body has formally met 5 times during the year. Attendance during the year at meetings of the Governing Body was as follows:

Governor Peter Ashby Alex Bayliss Sir David Bell Trevor Benstock Caroline Bolton Maria Dyball Simon Fox Richard Gordon Edward Holloway Steve Kirk Natasha Kirby Nicola Maytum Mary Riall Bryan Stabler Mark Stuart-Thompson

Governance Review

Meetings attended 5 5 2 2 4 1 3 4 4 1 2 5 3 4 1

Out of a possible 5 5 5 2 5 2 4 5 5 5 5 5 5 5 3

The Governors have not yet undertaken a full governance review, but intend to do so in 2014/15.

The Resources Committee is a sub-committee of the main Governing Body. Its purpose is to ensure the Academy manages its resources in line with the legal framework, the policies of the Academy and relevant regulations and legislation. Attendance at meetings in the year was as follows:

Governor Peter Ashby Alex Bayliss Richard Gordon Bryan Stabler

Meetings attended 4 4 4 3

Out of a possible 5 5 5 5

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The Purpose of the System of Internal Control

The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an on-going process designed to identify and prioritise the risks to the achievement of Academy policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. The system of internal control has been in place in John Madejski Academy for the year ended 31 August 2013 and up to the date of approval of the annual report and financial statements.

Capacity to Handle Risk

The Governing Body has reviewed the key risks to which the Academy is exposed together with the operating, financial and compliance controls that have been implemented to mitigate those risks. The Governing Body is of the view that there is a formal on-going process for identifying, evaluating and managing the Academy's significant risks that has been in place for the year ending 31 August 2013 and up to the date of approval of the annual report and financial statements. This process is regularly reviewed by the Governing Body.

The Risk and Control Framework

The Academy's system of internal financial control is based on a framework of regular management information and administrative procedures including the segregation of duties and a system of delegation and accountability. In particular, it includes:

• comprehensive budgeting and monitoring systems with an annual budget and periodic financial reports which are reviewed and agreed by the Governing Body;

• regular reviews by the Resources Committee of reports which indicate financial performance against the forecasts and of major purchase plans, capital works and expenditure programmes;

• setting targets to measure financial and other performance; • clearly defined purchasing (asset purchase or capital investment) guidelines. • delegation of authority and segregation of duties; • identification and management of risks.

The Governing Body has considered the need for a specific internal audit function and has decided not to appoint an internal auditor. However, the Governors have appointed Crowe Clark Whitehill as Responsible Officer ('RO') from 19 November 2012. The RO's role includes giving advice on financial matters and performing a range of checks on the Academy's financial systems. On a regular basis, the RO reports to the Governing Body on the operation of the systems of control and on the discharge of the Governing Body's financial responsibilities. There are no material control issues resulting from any of these reviews.

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Review of Effectiveness



As Accounting Officer, the Principal has responsibility for reviewing the effectiveness of the system of internal control. During the year in question the review has been informed by:

• the work of the Responsible Officer; • the work of the external auditor; • the financial management and governance self-assessment process; • the work of the executive managers within the Academy who have responsibility for the

development and maintenance of the internal control framework.

The Accounting Officer has been advised of the implications of the result of their review of the system of internal control by the Resources Committee and a plan to address weaknesses and ensure continuous improvement of the system is in place.

Approved by order of the members of the Governing Body on .. and signed on its behalf by:

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STATEMENT ON REGULARITY, PROPRIETY AND COMPLIANCE


As Accounting Officer of John Madejski Academy I have considered my responsibility to notify the Academy Governing Body and the Education Funding Agency of material irregularity, impropriety and non-compliance with EFA terms and conditions of funding, under the funding agreement in place between the Academy and the Secretary of State. As part of my consideration I have had due regard to the requirements of the Academies Financial Handbook.

I confirm that I and the Academy Governing Body are able to identify any material irregular or improper use of funds by the Academy, or material non-compliance with the terms and conditions of funding under the Academy's funding agreement and the Academies Financial Handbook.

I confirm that no instances of material irregularity, impropriety or funding non-compliance have been discovered to date. If any instances are identified after the date of this statement, these will be notified to the board of trustees and EFA.

Nicola May tum Accounting Date:

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STATEMENT OF TRUSTEES' RESPONSIBILITIES

Statement of trustees' responsibilities

The Trustees (who are also directors of John Madejski Academy for the purposes of company law) are responsible for preparing the Trustees' Annual Report and the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards).

Company law requires the Trustees to prepare financial statements for each financial year. Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and the group and of the incoming resources and application of resources, including the income and expenditure, of the charitable group for that period. In preparing these financial statements, the Trustees are required to:

• select suitable accounting policies and then apply them consistently;

• observe the methods and principles in the Charities SORP;

• make judgments and estimates that are reasonable and prudent;

• state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company's transactions, disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006 and the provisions of the charity's constitution. They are also responsible for safeguarding the assets of the charity and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Approved by order of the members of the Governing Body on .. signed on its behalf by:

Steve Chair of Governors

. ...... and

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INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF JOHN MADEJSKI ACADEMY

We have audited the group and charitable company financial statements of John Madejski Academy for the year ended 31 August 2014 which comprise the consolidated Statement of Financial Activities, the consolidated and parent company Balance Sheets, the consolidated Cash Flow Statement and the related notes numbered 1 to 31.

The financial reporting framework that has been applied in their preparation is applicable law, United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and the Annual Accounts Direction 2013 to 2014 issued by the Education Funding Agency.

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 company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Trustees and auditor

As explained more fully in the Statement of Governors' Responsibilities, the Governors (who are also the directors of the charitable company for the purpose of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements.

In addition, we read all the financial and non-financial information in the Trustees' Report and Strategic Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

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INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF JOHN MADEJSKI ACADEMY (CONTINUED)

Opinion on financial statements

In our opinion the financial statements:

• give a true and fair view of the state of the group and charitable company's affairs as at 31 August 2014 and of its incoming resources and application of resources, including its income and expenditure, for the period then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including the Annual Accounts Direction 2013 to 2014 issued by the Education Funding Agency; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Trustees Report for the financial period for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

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

• adequate accounting records have not been kept; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of Trustees' remuneration specified by law are not made; or

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

Janette Joyce Senior Statutory Auditor

For and on behalf of Crowe Clark Whitehill LLP Statutory Auditor Aquis House, 49-51 Blagrave Street Reading Berkshire RG11PL

15th December 2014

n ..... __ -17

INDEPENDENT AUDITOR'S REPORT ON REGULARITY TO THE GOVERNING BODY

OF JOHN MADEJSKI ACADEMY AND THE EDUCATION FUNDING AGENCY

In accordance with the terms of our engagement letter dated 20 June 2012 and further to the requirements of the Education Funding Agency (EFA) as included in the Academies: Accounts Direction 2013 to 2014, we have carried out an engagement to obtain limited assurance about whether, the expenditure disbursed and income received by the John Madejski Academy Trust during the period 1 September 2013 to 31 August 2014 have been applied to the purposes identified by Parliament and the financial transactions conform to the authorities which govern them.

This report is made solely to the governing body and the EFA in accordance with the terms of our engagement letter. Our work has been undertaken so that we might state to the John Madejski Academy Trust and the EFA those matters we are required to state in a 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 governing body and the EFA, for our review work, for this report, or for the conclusion we have formed.

Respective responsibilities of John Madejski Academy Trust's accounting officer and the reporting accountant

The accounting officer is responsible, under the requirements of John Madejski Academy Trust's funding agreement with the Secretary of State of Education and the Academies Financial Handbook, extant from 1 September 2013, for ensuring that expenditure disbursed and income received is applied for the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.

Our responsibilities for this engagement are established in the United Kingdom by our profession's ethical guidance and are to obtain limited assurance and report in accordance with our engagement letter and the requirements of the Academies Accounts Direction 2013 to 2014. We report to you whether anything has come to our attention in carrying out our work which suggests that in all material respects, expenditure disbursed and income received during the period 1 September 2013 to 31 August 2014 have not been applied to purposes intended by Parliament and the financial transactions do not conform to the authorities which govern them.

Approach

We conducted our engagement in accordance with the Academies Accounts Direction 2013 to 2014 issued by the EFA. We performed a limited assurance engagement as defined in our engagement letter.

The objective of a limited assurance engagement is to perform such procedures as to obtain information and explanations in order to provide us with sufficient appropriate evidence to express a negative conclusion on regularity.

A limited assurance engagement is more limited in scope than a reasonable assurance engagement and consequeotly does not enab),e us. to;;.-,Qbtain assurance that we would .. become aware of all significant matters that might be identifted in a reasonable assurance engagement. Accordingly, we do not express a positive opinion.

Our engagement includes examination, on a test basis, of evidence relevant to the regularity and propriety of the academy trust's income and expenditure. The work undertaken to draw to our conclusion includes a review of the design and implementation of the Academy's internal controls and review processes on regularity, supported by detailed tests on samples of costs incurred by the academy and specific transactions identified from our review.

Page 18

INDEPENDENT AUDITOR'S REPORT ON REGULARITY TO THE GOVERNING

BODY OF JOHN MADEJSKI ACADEMY AND THE EDUCATION FUNDING

AGENCY

Conclusion

In the course of our work nothing has come to our attention which suggests that in all material respects the expenditure disbursed and income received during the period 1 September 2013 to 31 August 2014 has not been applied to purposes intended by Parliament and the financial transactions do not conform to the authorities which govern them.

Crowe Clark Whitehill LLP Statutory Auditor Aquis House 49-51 Blagrave Street Reading Berkshire RG1 1PL

15th December 2014


CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES

FOR THE YEAR ENDED 31 AUGUST 2014 (Including an Income and Expenditure Account and Statement of Total Recognised Gains and Losses)

Restricted Total Total Unrestricted Restricted Fixed Funds Funds

General General Asset 31 August 31 August Notes Funds Funds Funds 2014 2013

£'OOOs £'OOOs £'OOOs £'OOOs £'OOOs

Incoming resources Incoming resources from generated funds

• Activities for generating funds 3 6 357 363 356 • Investment income 4 4 4 5

• Trading turnover -AcademySport Leisure Centre Limited 6 663 663 618

Incoming resources from charitable activities

• Funding for the Academy's 5 educational operations 7,759 532 8,291 8,386

Total incoming resources 669 8,120 532 91321 9,365

Resources expended Cost of generating funds

• Trading expenses -AcademySport Leisure Centre Limited 6 732 46 778 693

Charitable Activities

• Academy's educational operations 8 6 8,322 778 9,106 10,062

• Governance costs 9 3 44 47 44

Total resources expended 7 741 8,366 824 91931 10,799

Net (outgoing) resources before transfers (72) (246) (292) (610) (1,434)

Transfers between funds 20 28 (90) 62

Net income/(Expenditure) for the year (44) (336) (230) (610) (1,434)

Other recognised gains and losses

Actuarial (losses) on defined benefit scheme 30 (632) (632) (127)

Net movement in funds (44) (968) (230) {1,242) U,561)

Reconciliation of funds Funds brought forward at

1 September 2013 298 (539) 22,785 22,544 24,105

Funds carried forward at 31 August 2014 20 (1.507) 22555 21,302 22,544

All of the company's activities derive from continuing operations during the above two financial periods.

A Statement of Recognised Gains and Losses is not required as all gains and losses are included in the Statement of Financial Activities.

The notes on pages 24 to 45 form part of these financial statements

Page 20


(A company limited by guarantee)

CONSOLIDATED BALANCE SHEET

31 AUGUST 2014

Fixed Assets Tangible Assets

Current Assets Stock Debtors Cash at Bank and in hand

Current Liabilities

Company number: 5319170

Note

13

16 17

Creditors: Amounts falling due within one year 18

Net current assets

Total assets less current liabilities

Net assets excluding pension scheme liability

Pension scheme liability

Net assets including pension liability

Funds of the Academy:

Restricted income funds Fixed Asset Funds General Funds Pension Reserve

Total Restricted Funds

Unrestricted Funds General Funds

Total Unrestricted Funds

Total Funds

19

20 20 20

20

21

2014 £'OOOs

22,555

15 235

1,864

2,114

(1 ,796)

318

318

318

(1,571)

21.302

22,555 64

(1 ,571)

21,048

254

254

21.302

The financii;!l statep:lents were app~oved by the Governors and authorised for issue on

2013 £'OOOs

22,588

19 462

1,769

2,250

(1,506)

744

23,332

23,332

(788)

22,544

22,785 249 (788)

22,246

298

298

22,544

l~~ f! 1 U' ~'«« '< < lr<, d' d h' b h If b .............. Ll ....... . 1:: ~x: Lt...L~ .. l .............. an are slgne on t elr e a y:

it"···· '\ " ! /

...... ·~.5; < ....... ~ .............. . Steve Ki Chair of Governing Body


Page 21



ACADEMY BALANCE SHEET

31 AUGUST 2014

Company number: 5319170

Note

Fixed Assets Tangible Assets 14

Current Assets Stock 16 Debtors 17 Cash at Bank and in hand

Current Liabilities Creditors: Amounts falling due within one year 18

Net current assets

Total assets less current liabilities

Pension scheme liability

Net assets including pension liability

Funds of the Group:

Restricted income funds Fixed Asset Funds General Funds Pension Reserve

Total Restricted Funds

Unrestricted Funds General Funds

Total Unrestricted Funds

Total Funds

19

2014 £'OOOS

22,146

12 242

1,788

2,042

(1,726)

316

316

(1,571 )

20,891

22,146 64

(1 ,571)

20,639

252

252

20,891

The fingncial sJatements were approved by the Governors and authorised for issue on

2013 £'0005

22,169

17 530

1,527

2,074

(1,393)

681

22,850

(788)

22,062

22,367 249 (788)

21,828

234

234

22,062

l£~ r n I I,. l' , h 1'/ "'') rd' d h' b h If b ........ .I .. J.: ..... l).t: . .: : •. :~.i ...... ,L.,,,!. .. .............. an are slgne on t elr e a y:

Steve ~ ~-

!r~ ..... ! ............. ~ .................... . Sir J hn Madejski Trustee Chair of Governing Body


Page 22


CONSOLIDATED CASH FLOW STATEMENT


2014 Note £'OOOs

Net cash inflow/(outflow) from operating activities 24 350

Returns on investment and servicing of finance 25 4

Capital expenditure 26 (259)

Increase/(Oecrease) in cash in the year 95

Reconciliation of net cash flow to movement in net funds

Net funds at 1 September 2013 1,769

Net funds at 31 August 2014 27 :1,864


2013 £'OOOs

(505)

(39)

(544)

2,313

1,769

Page 23


PRINCIPAL ACCOUNTING POLICIES


1. ACCOUNTING POLICIES

Basis of preparation The financial statements have been prepared under the historical cost convention in accordance with applicable United Kingdom Accounting Standards, the Charity Commission 'Statement of Recommended Practice: Accounting and Reporting by Charities' ('SORP 2005'), the Academies Accounts Direction issued by the EFA and the Companies Act 2006. A summary of the principal accounting policies, which have been applied consistently, except where noted, is set out below.

Consolidated accounts have been prepared to include AcademySport Leisure Centre Limited, a wholly owned non-charitable subsidiary trading company. The results of AcademySport Leisure Centre Limited have been consolidated into the Statement of Financial Activities.

Going Concern The governors assess whether the use of going concern is appropriate, Le. whether there are any material uncertainties related to events or conditions that may cast significant doubt on the ability of the company to continue as a going concern. The governors make this assessment in respect of a period of one year from the date of approval of the financial statements.

Incoming resources All incoming resources are recognised when the Academy has entitlement to the funds, certainty of receipt and the amount can be measured with certainty.

Grants Receivable Grants receivable are included in the statement of financial activities on a receivable basis. The balance of income received for specific purposes but not expended during the period is shown in the relevant funds on the balance sheet.

General Annual Grant General Annual Grant is recognised in full in the year for which it is receivable and any unspent amount is reflected as a balance in the restricted general fund.

Capital Grants Capital grants are recognised when receivable and are not deferred over the life of the asset on which they are expended. Unspent amounts of capital grant are reflected in the Balance Sheet in the restricted fixed asset fund.

Sponsorship Income Sponsorship income provided to the Academy which amounts to a donation is recognised in the statement of financial activities in the period in which it is receivable.

Donations Donations are included in the statement of financial activities on a cash received basis or on an accruals basis where they are assured with reasonable certainty and are receivable at the balance sheet date.

Other income Other income, including the hire of facilities, is recognised in the period it is receivable and to the extent the goods have been provided or on completion of the service. Interest receivable is included within the statement of financial activities on a receivable basis.

Page 24




1. ACCOUNTING POLICIES (continued)

Incoming resources (continued)

Donated Services and gifts in kind The value of donated services and gifts in kind provided to the Academy are recognised at their open market value in the period in which are receivable as incoming resources, where the benefit to the Academy can be reliably measured. An equivalent amount is included as expenditure under the relevant heading in the Statement of Financial Activities, except where the gift in kind was a fixed asset in which case the amount is included in the appropriate fixed asset category and depreciated over the useful economic life in accordance with the Academy's policies.

Resources expended All expenditure is recognised in the period in which a liability is incurred and has been classified under headings that aggregate all costs related to that category. Where costs cannot be directly attributed to a particular heading they have been allocated on a basis consistent with the use of resources, with central staff costs allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset's use. Other support costs are allocated based on the spread of staff costs. All resources expended are inclusive of irrecoverable VAT.

Costs of generating funds These are costs incurred in attracting voluntary income, and those incurred in trading activities that raise funds.

Charitable activities These are costs incurred on the Academy's educational operations.

Governance costs These include the costs attributable to the Academy's compliance with constitutional and statutory requirements, including audit, strategic management and Governor's meetings and reimbursed expenses.

Fund accounting Unrestricted General Funds represent those resources which may be used towards meeting any of the objects of the Academy at the discretion of the Governors.

Restricted Fixed Asset Funds are resources which are to be applied to specific capital purposes imposed by the Department for Education or other funder where the asset acquired or created is held for a specific purpose.

Restricted General Funds comprise grants from the Education Funding Agency and other donors which are to be used for specific purposes.

Tangible Fixed Assets Assets costing £1,000 or more, which have been acquired since the Academy was established, are capitalised as tangible fixed assets and are carried at cost, net of depreciation and any provision for impairment. Freehold Land and Buildings that were acquired when the Academy was established are now valued at depreciated replacement cost. The Governors are not expected to revalue the property in the future.

Where tangible fixed assets have been acquired with the aid of specific grants, either from the Government or from the private sector, they are included in the Balance Sheet at cost and depreciated over the expected useful economic life. The related grants are credited to a restricted fixed asset fund in the Statement of Financial Activities and carried forward in the Balance Sheet. Depreciation on such assets is charged to the restricted fixed asset fund in the Statement of Financial Activities so as to reduce the fund over the useful economic life of the related asset on a basis consistent with the Academy's depreciation policy.

Page 25





Tangible Fixed Assets (continued) Depreciation is provided on all tangible fixed assets other than freehold land, at rates calculated to write off the cost of each asset on a straight line basis over its expected useful lives, as follows:

Freehold Buildings Fixtures and fittings Computer equipment and software

50 years straight line 7 years straight line 3 years straight line

Assets in the course of construction are included at cost. Depreciation on these assets is not charged until they are brought into use.

A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that the carrying value of any fixed asset may not be recoverable. Shortfalls between the carrying value of fixed assets and their recoverable amounts are recognised as impairments. Impairment losses are recognised in the Statement of Financial Activities.

Leased assets Rentals under operating leases are charged on straight line basis over the lease term. Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the group. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the Profit and Loss account and/or Statement of Financial Activities so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

Stock Unsold uniform and catering stocks are valued at the lower of cost and net realisable value.

Taxation The Academy is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the Academy is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.

Teachers' Pension Scheme Retirement benefits to employees of the Academy are provided by the Teachers' Pension Scheme ('TPS') and the Local Government Pension Scheme ('LGPS'). These are defined benefit schemes, and the assets are held separately from those of the Academy.

The TPS is an unfunded scheme and contributions are calculated so as to spread the cost of pensions over employees' working lives with the Academy in such a way that the pension cost is a substantially level percentage of current and future pensionable payroll. The contributions are determined by the Government Actuary on the basis of quinquennial valuations using a prospective benefit method. As stated in Note 29, the TPS is a mUlti-employer scheme and the Academy is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis. The TPS is therefore treated as a defined contribution scheme and the contributions recognised as they are paid each year.

Page 26


NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)



Local Government Pension Scheme The LGPS is a funded scheme and the assets are held separately from those of the Academy Trust in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a high quality corporate bond of equivalent term and currency to the liabilities. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date. The amounts charged to operating surplus are the current service costs and gains and losses on settlements and curtailments. They are included as part of staff costs. Past service costs are recognised immediately in the Statement of Financial Activities if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until vesting occurs. The expected return on assets and the interest cost are shown as a net finance amount of other finance costs or credits adjacent to interest. Actuarial gains and losses are recognised immediately in other gains and losses.

2. GENERAL ANNUAL GRANT (GAG)

Under the funding agreement with the Secretary of State the Academy Trust was subject to limits at 31 August 2014 on the amount of GAG that could be carried forward from one year to the next. An amount equal to 12% of GAG could be carried forward, of which up to 2% could be used for general recurrent purposes, with any balance being available for premises/capital purposes.

The Academy Trust has not exceeded these limits during the year ended 31 August 2014.

Page 27

5.




FUNDING FOR THE ACADEMY'S EDUCATIONAL OPERATIONS

Unrestricted Restricted Total Funds Funds 2014 £'OOOs £'OOOs £'OOOs

DfE/EFA capital grant Academies capital maintenance fund grant 510 510

Devolved formula capital grant 20 20

530 530

DfE/EFA revenue grants General Annual Grant (GAG) (note 2) 7,217 7,217 Pupil Premium 381 381

7,598 7,598

Other Government grants SEN income 51 51 Other grants 112 112

163 163

8,291 8,291

Total 2013

£'OOOs

206 21

227

7,563 323

7,886

171 102

273

8,3.8.6

6. INCOME FROM THE SUBSIDIARY'S TRADING ACTIVITIES

The Academy has a wholly owned trading subsidiary AcademySport Leisure Centre Limited which is incorporated in the United Kingdom. The subsidiary is limited by guarantee and, therefore, there are no shares. However, the charity has dominant influence and control over the company's activities. A summary of the company's trading results is shown below.

Turnover

Staff costs Depreciation Other administration costs Finance costs

Net (deficit) over income for the year

2014 £'OOOs

753

378 45

401

824

(71)

2013 £'OOOs

709

327 42

377 6

752

(43)

In the SoFA on page 20, eliminations in respect of intra-group hire of facilities and management fees have been made on consolidation.

Page 28

7.




RESOURCES EXPENDED

Staff Other Other Total Costs Premises costs 2014 £'OOOs £'OOOs £'OOOs £'OOOs

Academy's educational operations

Direct costs 4,768 866 897 6,531

Allocated support costs 1,068 498 1009 2=575

5,836 1,364 1,906 9,106

Resources expended - ASLC 378 158 242 778

Governance costs including allocated support costs 31 16 47

6,245 1,522 2,164 9=931

Total 2014

£'OOOs Outgoing resources for the year include

Operating leases 54

Fees payable to auditors - all 16 services

Total 2013

£'OOOs

7,333

2,729

10,062

693

44

10,799

Total 2013

£'OOOs

22

13

Page 29




8. CHARITABLE ACTIVITIES - ACADEMY'S EDUCATIONAL OPERATIONS - ACADEMY

Unrestricted Restricted Funds Funds Total 2014 2014 2014

£'OOOs £'OOOs £'OOOs

Direct costs Teaching and educational support staff costs 4,760 4,760 Staff development 38 38 Depreciation 778 778 Educational supplies 414 414 ICT expenditure 84 84 Examination fees 94 94 Free school meals 94 94 Hospitality meals Bursary to 6th Formers 12 12 Bought in services - educational 256 256

6,531 61531 Allocated support costs Support staff costs 946 946 Supply teacher costs 84 84 Agency staff 8 8 Indirect employee costs 6 114 120 Recruitment 112 112 Staff severance payments 37 37 Equal pay claim Pension liability - staff costs 123 123 Maintenance of premises and equipment 182 182 Light and heat 152 152 Rent and rates 63 63 Other occupation cost 190 190 Insurance 82 82 Catering 226 226 Bank charges 5 5 Pension liability finance cost 28 28 Administrative supplies 139 139 Bought in services 78

6 2,569 21575

Total 6 9,100 91106

Total 2013

£'OOOs

5,043 41

978 445 160 120 85

5 10

446

7,333

1,082 168

4 188 113

18 10

198 162 64 88 84

248 3

178 121

2,729

10,062

Page 30

9.




GOVERNANCE COSTS - GROUP Unrestricted Restricted Total

Funds Funds 2014 £'OOOs £'OOOs £'OOOs

Legal and professional fees Auditor's remuneration for the audit of the financial statements 3 9 12 Auditor's remuneration for non-audit services 4 4 Support staff costs 31 31 Governors' reimbursed expenses

44 41

Total 2013

£'OOOs

12

1 30

1

44

10. STAFF COSTS - GROUP

Staff costs during the period were:

Wages and Salaries Social security costs Other pension costs

Supply teacher costs Agency staff Staff severance payments

Staff severance payments

2014 £'OOOs

5,127 390 598

6,115

84 9

37

6,245

2013 £ 'ODDs

5,399 418 646

6,463

168 4

18

6,653

Included in staff severance payments are non-statutory/non contractual severance payments totalling £37,122 (2013: 17,750). Three of the non-statutory/non-contractual payments exceeded £5,000 individually, and these were for £17,070, £8,053 and £12,000.

The average number of persons (including senior management team) employed by the Academy during the period expressed as full time equivalents was as follows:

2014 2013 Number Number

Charitable Activities Teaching 76 79 Administration and Support 62 56

138 135

Page 31




10. STAFF COSTS - GROUP (continued)

The following employees received emoluments over £60,000 in the period (pro-rata equivalent):

2014 2013 No. No.

£60,001 - £70,000 3 2 £70,001 - £80,000 1 £80,001 - £90,000 1 £120,001 - £130,000 £130,001 - £140,000 1

Four employees above participated in the Teachers' Pension Scheme. During the year ended 31 August 2014 pension contributions for these staff amounted to £54,668 (2013: £47,868).

11. GOVERNORS' REMUNERATION AND EXPENSES

Principal and Staff Governors only receive remuneration in respect of services they provide undertaking the roles of Principal and staff and not in respect of their services as Governors. Other Governors did not receive any payments, other than expenses, from the Academy in respect of their role as Governors.

In accordance with the Accounts Direction 2013 no disclosure has been given in respect of Staff Governors as they are not trustees of the charitable company.

During the year ended 31 August 2014, travel and meeting expenses of £198 were incurred in respect of Governors (2013: £1,286).

During the year the Academy worked with Reading FC Community Trust - a registered charity in which Mr B Stabler is a trustee. Further details of transactions that took place in the year can be found in Note 31.

12. GOVERNORS' AND OFFICERS' INSURANCE

In accordance with normal commercial practice the Academy has purchased insurance to protect Governors and officers from claims arising from negligent acts, errors or omissions occurring whilst on Academy business. The insurance provides cover up to £2,000,000 on anyone claim and the cost for the year ended 31 August 2014 was £1,125 (2013: £1,268).

The cost of this insurance is included in the total insurance cost.

Page 32




13. TANGIBLE FIXED ASSETS - GROUP

Assets Leasehold under Land and Furniture Computer

construction buildings & Equipment Equipment Total £'0005 £'0005 £'0005 £'0005 £'0005

Cost At 1 September 2013 50 25,461 2,384 2,665 30,560 Additions 744 35 12 791

At 31 August 2014 794 25,461 2,419 2,677 31 1351

Depreciation At 31 August 2013 3,587 1,992 2,393 7,972 Provided during the year 517 147 160 824

At 31 August 2014 4,104 2,139 2,553 81796

Net book value At 31 August 2014 794 21.357 280 124 22.555

At 31 August 2013 5Q 21,874 3.92 272 22,58.8

14. TANGIBLE FIXED ASSETS - ACADEMY

Assets Leasehold under Land and Furniture Computer

construction buildings & Equipment Equipment Total £'0005 £'0005 £'0005 £'0005 £'0005

Cost At 1 September 2013 50 25,073 1,840 2,650 29,613 Additions 744 11 755

At 31 August 2014 794 25,073 1,840 2,661 301368

Depreciation At 1 September 2013 3,485 1,580 2,379 7,444 Provided during the

year 501 117 160 778

At 31 August 2014 3,986 1,697 2,539 81222

Net book value At 31 August 2014 794 21.087 143 122 22.146

At 31 August 2013 50 21,588 2(20 271 22,169

Page 33




15. INVESTMENTS - COMPANY

The charity is the sole member of Academy Sport Leisure Centre Limited, a not-for-profit organisation limited by guarantee and set up to provide leisure facilities.

16. STOCK

Group Academy Group Academy 2014 2014 2013 2013

£'OOOs £'OOOs £'0008 £'0008

Catering 10 7 10 8 Uniform 5 5 9 9

:15 :12 19 17

17. DEBTORS


£'OOOs £'OOOs £'0008 £'0008

Trade debtors 13 1 9 2 Prepayments 56 45 58 52 Other debtors 166 166 395 395 Amounts due from subsidiary 30 81

235 242 462 530

18. CREDITORS: Amounts falling due within one year


£'OOOs £'OOOs £'0008 £'0008

Trade creditors 694 682 360 322 Taxation 123 123 151 151 Accruals 99 86 902 846 Other creditors 880 835 93 74

11Z96 11Z26 1,506

Page 34

18.





CREDITORS: Amounts falling due within one year (continued)

Deferred Income Group Academy Group 2014 2014 2013

£'OOOs £'OOOs £ 'ODDs Deferred income at 1 September 2013 55 55 88

Resources deferred in the year (11) (11 ) (31) Amounts released from

previous years (2) (2) (2)

Deferred income at 31 August 2014 42 42 55

Academy 2013

£'OOOs

88 (31)

(2)

55

Opening deferred income arises from a grant received in the year ended 31 August 2007 deferred over the period of the contract (21 years). Pupil Premium and 16-19 bursary grants received in the year but relating to the following year have been deferred

19. CREDITORS: Amounts falling due after more than one year

Pension deficit obligation

Group 2014

£'OOOs

1,571

Academy 2014

£'OOOs

1.571

Group 2013

£'OOOs

788

Academy 2013

£ 'ODDs

788

Page 35

20.




STATEMENT OF FUNDS - GROUP

Balance at 1 Gains, September Incoming Resources Losses and

2013 Resources Expended Transfers £'OOOs £'OOOs £'OOOs £'OOOs

Restricted General Funds General Annual Grant 234 7,216 (7,315) (90)

(GAG) Other Grants 15 904 (900) Pension reserve (788) (151 ) (632)

(539) 8.120 (8.366) (722)

Restricted Fixed Asset Funds

Fixed Assets 22,587 (824) 792 Capital grants not yet spent 198 532 (730)

Total fixed asset funds 22.785 532 (824)

Unrestricted Funds Unrestricted Funds 298 669 (741) 28

Total funds 22'{5.44 9,321 (9,931 ) (632)

Balance at 31 August

2014 £'OOOs

45

19 (1,571)

(1.507)

22,555

22.555

254

21,3Q2

Page 36




21. ANALYSIS OF NET ASSETS BETWEEN FUNDS - GROUP

22.

Unrestricted Funds £'000

Tangible fixed assets Current assets 254 Current liabilities Pension scheme liability

254

CAPITAL COMMITMENTS

Contracted for, but not provided in the financial statements Authorised by governors, but not yet contracted

Restricted Restricted Fixed

General Asset Funds Fund Total £'000 £'000 £'000

22,555 22,555 1,798 2,052

(1,734) (1,734) (1 ,571) (1 ,571)

(1.507) 22,555 21.302

2014 2013 £'000 £'000

161 148

The Academy has sufficient funding to finance the balance of the construction costs as contracted for above.

23. FINANCIAL COMMITMENTS

The Academy has entered into operating lease commitments with annual costs as follows:

Expiring within one year Expiring within two and five years

Other 2014 2013 £'000 £'000

12 10

22

11 11

Page 37




24. RECONCILIATION OF NET INCOME TO NET CASH FLOW FROM OPERATING ACTIVITIES

Net income Depreciation Interest receivable Capital grants from DfE FRS17 - pension cost less contributions payable Decrease in stocks Decrease in debtors Increase/(decrease) in creditors

Net cash inflow/(outflow) from operating activities

25. RETURNS ON INVESTMENTS AND SERVICING OF FINANCE

2014 £'000

(610) 824

(4) (532) 150

5 227 290

350

2013 £'000

(1,434) 1,020

(227) 106

114 (84)

(505)

2014 2013 £'000 £'000

Interest received 4

Net cash inflow from returns on investment 4

26. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT

Purchase of tangible fixed assets Capital grants from DfE

Net cash outflow from capital expenditure

27. ANALYSIS OF CHANGES IN NET FUNDS

Cash at Bank and in hand

At 1 September 2013 £'000

1.769

2014 £'000

(791) 532

(259)

Cash Flows £'000

2013 £'000

(266) 227

(39)

At 31 August 2014 £'000

1.864

Page 38




28. CONTINGENT LIABILITIES

During the period of the Funding Agreement, in the event of the sale or disposal by other means of any asset for which a government capital grant was received, the Academy is required either to reinvest the proceeds or to repay to the Secretary of State the same proportion of the proceeds of the sale or disposal as equates with the proportion of the original cost met by the Secretary of State.

Upon termination of the Funding Agreement, whether as a result of the Secretary of State or the Academy serving notice, the Academy shall repay to the Secretary of State sums determined by reference to:-

a) the value at that time of the Academy's site and premises and other assets held for the purpose of the Academy.

b) the extent to which expenditure incurred in providing those assets was met by payments by the Secretary of State under the Funding Agreement.

29. MEMBERS' LIABILITIES

Every member of the charitable company undertakes such amount as may be required (such amount not exceeding £10) to the assets of the company in the event of it being wound up while he or she is a member or within one period after he or she ceases to be a member, for the payment of the Company's debts and liabilities before he or she ceases to be a member and of the costs charges and expenses of winding up and for the adjustment of the rights of contributions amongst themselves.

Page 39




30. PENSIONS AND SIMILAR OBLIGATIONS

The Academy's employees belong to two principal pension schemes: the Teachers' Pension Scheme England and Wales (TPS) for academic and related staff; and the Local Government Pension Scheme (LGPS) for non-teaching staff, which is managed by Royal County of Berkshire Pension Scheme. Both are defined-benefit schemes.

The pension costs are assessed in accordance with the advice of independent qualified actuaries. The latest actuarial valuation of the TPS was March 2004 and the LGPS, 31 March 2013.

The pension charge for the year includes pensions payable to the TPS of £408,850 (2013: £639,044). At the yearend £60,997 (2013 £nil) was accrued in respect of contributions due to this scheme.

Teachers' Pension Scheme

The Teachers' Pension Scheme (TPS) is a statutory, contributory, defined benefit scheme, governed by the Teachers' Pensions Regulations (2010) and, from 1 April 2014, by the Teachers' Pension Scheme Regulations 2014. Membership is automatic for full-time teachers in academies and, from 1 January 2007, automatic for teachers in part-time employment following appointment or a change of contract, although they are able to opt out.

The TPS is an unfunded scheme and members contribute on a 'pay as you go' basis - these contributions along with those made by employers are credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament.

The Teachers' Pensions Regulations require an annual account to be kept of receipts and expenditure (including the cost of pensions' increases). From 1 April 2001, the account has been credited with a real rate of return, which is equivalent to assuming that the balance in the account is invested in notional investments that produce that real rate of return.

Valuation of the Teachers' Pension Scheme

The employer contribution rate is set following scheme valuations undertaken by the Government Actuary Department. The latest valuation report in respect of the TPS was prepared at 31 March 2012 and was published in June 2014. This report confirmed that the employer contribution rate for the TPS will increase from 14.1 % to 16.4% although, recognising that teaching establishments work on an academic and not financial year, the Government has deferred the implementation of this increase to 1 September 2015.

The Department of Education is also proposing that scheme administration costs will be devolved to scheme employers in the form of an administration charge. The Department provisionally estimates that the administration charge will be 0.08% of the employers' salary costs which would increase the employer payment rate from 16.4% to 16.48%.

The next revision to the employer contribution rate is not expected to take effect until 1 April 2019. This will follow on from the next actuarial valuation which is due at 31 March 2016. This valuation will also determine the opening balance of the cost cap fund and provide an analysis of the cost cap as required by the Public Service Pensions Act 2013.

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30. PENSIONS AND SIMILAR OBLIGATIONS (CONTINUED)

Teachers' Pension Scheme Changes

Lord Hutton made recommendations in 2011 about how pensions can be made sustainable and affordable, whilst remaining fair to the workforce and the taxpayer. The Government accepted Lord Hutton's recommendations as the basis for consultation with trade unions and other representative bodies. In March 2012 the Department for Education published proposals for the design for a reformed TPS.

The key provisions of the reformed scheme include: a pension based on career average earnings; an accrual rate of 1/57th; and a Normal Pension Age equal to State Pension Age, but with options to enable members to retire earlier or later than their Normal Pension Age. Pension benefits built up before 1 April 2015 will be fully protected.

In addition, the proposed final agreement includes a Government commitment that those within 10 years of normal pension age on 1 April 2012 will see no change to the age at which they can retire, and no decrease in the amount of pension they receive when they retire. There will also be further transitional protection, tapered over a three and a half year period, for people who would fall up to three and a half years outside of the 10 year protection.

In his interim report of October 2010, Lord Hutton recommended that short-term savings were also required, and that the only realistic way of achieving these was to increase member contributions. At the Spending Review 2010 the Government announced an average increase of 3.2 percentage points on the contribution rates by 2014-15. The increases have been phased in since April 2012 on a 40:80:100% basis.

The Department for Education has continued to work closely with trade unions and other representatives bodies to develop the reformatted Teachers' Pension Scheme and regulations giving effect to it came into force on 1 April 2014. Communications are being rolled out and the reformatted scheme will commence on 1 April 2015.

Under the definitions set out in Financial Reporting Standard (FRS 17) Retirement Benefits, the TPS is a multi-employer pension scheme. The academy is unable to identify its share of the underlying assets and liabilities of the scheme. Accordingly, the academy has taken advantage of the exemption in FRS 17 and has accounted for its contributions to the scheme as if it were a defined contribution scheme. The academy has set out above the information available on the scheme.

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Local Government Pension Scheme

The LGPS is a funded defined-benefit scheme, with the assets held in separate trustee-administered funds. The total contribution made for the period ended 31 August 2014 was £283,000 of which employer's contributions totalled £197,000 and employees' contributions totalled £86,000. The agreed contribution rates for future years are 20.3 per cent for employers and from 5.5 to 7.5 per cent for employees depending on salary.

Parliament has agreed, at the request of the Secretary of State for Education, to a guarantee that, in the event of academy closure, outstanding Local Government Pension Scheme liabilities would be met by the Department for Education. The guarantee came into force on 18 July 2013.

Principal actuarial assumptions

Rate of increase in salaries Rate of increase of pensions in payment / inflation Discount rate for scheme liabilities Expected return on scheme assets at 31 August

At 31 August 2014 4.5% 2.7% 4% 5.9%

At 31 August 2013

4.85% 2.9% 4.7% 8.0%

The current mortality assumptions include sufficient allowance for future improvements in mortality rates. The assumed life expectations on retirement age 65 are:

Retiring today - males Retiring today - females Retiring in 20 years - males Retiring in 20 years - females

At 31 August 2014 22.7 26.0 24.9 28.3

At 31 August 2013 23.1 25.7 25.1 27.6

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The Academy's share of the assets and liabilities in the scheme and the expected rates of return were:

Equities Gilts Other bonds Property Cash Alternative assets Target return portfolio Commodities I nfrastructu re Longevity Insurance

Total market value of assets Present value of scheme liabilities - Funded

Surplus/{deficit) in the scheme

Expected return at 31 August 2014

6.7% 3.0% 3.6% 5.9% 2.9% nfa

6.7% 6.7% 3.6% 2.9%

The actual return on scheme assets was £210,000.

Fair value at 31 August

2014

£'000

835 22

291 239

67 nfa

330 168

87 (72)

1,967

(3,538)

{1 1571}

The amounts included within the Statement of Financial Activities would be as follows:

Current service cost Past service gai n

Total operating charge

Analysis of pension finance income / (costs)

Expected return on scheme assets Interest on pension liabilities

Pension finance income / (costs)

Expected return at 31

August 2013

6.3% 3.5% 4.4% 4.3% 0.5% 4.7% n/a n/a n/a n/a

Fair value at 31 August

2013

£'000

870 21

435 186 21

539

2,072

(2,860)

(788)

2014 2013 £'000 £'000

320

320

(115) 143

28

310

310

(74) 88

14

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Movements in the present value of defined benefit obligations were as follows:

At 1 September Current service cost Interest cost Estimated benefits paid net of transfers Contributions by Scheme participants Actuarialloss/(gain)

At 31 August

Movements in the fair value of the Academy's share of scheme assets:

At 1 September Expected return on assets Actuarial (loss) Employer contributions Employee contributions Estimated benefits paid net of transfers

At 31 August

2014 2013 £'000 £'000

2,860 1,922 320 310 143 88

(9) 265 86 85

138 190

3,538 2,860

2014 2013 £'000 £'000

2,072 115

(494) 197 86 (9)

1,967

1,367 74 63

218 85

265

2,072

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The history of experience adjustments is as follows:

2014

£'000

Present value of defined benefit obligations (3,538)

Fair value of share of scheme assets 1,967

Deficit in the scheme (1,571)

Experience adjustments on share of scheme assets

Amount £'000* (494)

Experience adjustments on scheme liabilities:

Amount £'000*

31. RELATED PARTY TRANSACTIONS

2013

£'000

(2,860)

2,072

(788)

63

Owing to the nature of the Academy's operations and the composition of the board of governors being linked to local public and private sector organisations, it is inevitable that transactions will take place with organisations in which a member of the board of governors may have an interest. All transactions involving such organisations are conducted at arms length and in accordance with the trust's financial regulations and normal procurement procedures. The following related party transaction took place in the year.

Reading FC Community Trust - a registered charity in which Mr B Stabler is a trustee:

• The Academy purchased football coaching services from Reading FC Community Trust totalling £73,700 (2013:£nil) during the year. There were no amounts outstanding at 31 August 2014 (2013: £nil).

• The Academy made the purchase at arms length following a tendering exercise in accordance with its financial regulations, which Mr Stabler neither participated in, nor influenced.

• In entering into the transaction the Academy has complied with the requirements of the EFA's Academies Financial Handbook.

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john madejski academy (a company limited by ......bryan stabler mark stuart-thompson appointed 1...

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