The Trustees present their annual report and financial statements for the year ended 31 August 2024.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charitable company's [governing document], the Companies Act 2006 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019).
Downham School Limited is a private company limited by guarantee and registered under the Companies Act 2006. It was incorporated in England and Wales. Its governing document is its Memorandum and Articles of Association. The company is a registered charity.
The principal objective of the charity is the provision for the advancement of education for Pre School children.
The Charitable Company commenced operating the Downham Pre School with effect from 1 September 2013 having entered into a written arrangement with the Downham School Trustees to occupy the Downham School premises from that date initially at a peppercorn rent with a rent of £6,000 per annum from 1 September 2019.
Activities for achieving objectives
During the year the company provided the advancement of education for Pre School Children.
Main activities undertaken to further the charity's purposes for public benefit
The Trustees confirm that they have paid due regard to the Charity Commission guidance on public benefit reporting in deciding what activities the charity should undertake. The remainder of this periodic report explains the charity's work during the year and how it has been carried out for the public benefit.
The Trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the charitable company should undertake.
Key financial performance indicators
The key performance indicator for the charity is the fees received from the various sources, LCC, pre-school and private fees, along with the staff and pre school costs.
Review of activities
The Pre-School began the academic year on 1 September 2023 continuing to operate at near capacity.
The pre-School income continues to be derived from the County Council grant funding for eligible children and fees from non-funded children (reviewed 1st September 2023 to £5.41 for 3 and 4 year olds and £7.10 for 2 year olds). The pre-School Group retain £0.35 per hour in respect of all children which is used for the purchase of teaching aids, materials etc.
The Directors/Trustees continue to be disappointed with the deficit position for the year. Fortunately, there are substantial reserves and the Trustees are confident that the position will recover. In particular, a review of School equipment continues which has facilitated the need for upgrade and improvement to various items. Various repairs have also been instigated.
At the start of the school year, there were six members of staff. During the course of the year this dropped to five, with one staff member moving on. This year the staff wage review date was changed from the 1st September to 1st April in line with the movement in the minimum wage levels. This allows the directors/trustees to ensure the minimum wage levels are in accordance with national indices.
Following the annual review meeting held after the end of the summer term, all relevant documentation has been reviewed and updated as appropriate. An update to Contracts of Employment and the Staff Handbook was completed during the year and this is now in place.
The prospects for the coming year from 1st September 2024 look good.
Going Concern
After making appropriate enquiries, the Trustees have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements. Further details regarding the adoption of the going concern basis can be found in the Accounting Policies.
Reserves policy
Whilst the Directors have not adopted a formal Reserve Policy and do not consider this is necessary, they feel that it will be prudent to seek to retain a minimum cash balance of £55,000 (approximately six months normal expenditure). This is a cushion in the event of a shortfall in LCC funding with a reduced number of children attending the pre school. It is also to cover redundancy costs in the event of a reduced staffing requirement or in extreme circumstances, the closure of the school
The Trustees have assessed the major risks to which the charitable company is exposed, and are satisfied that systems are in place to mitigate exposure to the major risks.
The company is registered as a charitable company limited by guarantee and was set up by a Memorandum and Articles of Association on 25 November 2011.
The company is constituted under a Memorandum and Articles of Association dated 25 November 2011 and is a registered charity number 1143504.
The Trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
Method of appointment or election of Trustees
The management of the company is the responsibility of the Trustees who are elected and co-opted under the terms of the Articles of Association.
The company's existing board of Trustees were individually appointed on the strength of their respective backgrounds and an obvious enthusiasm and commitment to support the company on an ongoing basis.
The board may from time to time and at any time appoint further members to the Board of Directors. The decision to elect new Trustees to the board is based upon the availability of suitable candidates with a requisite skills base together with an acknowledgement by the board that additional support would be beneficial in order to assist in the company's development.
When considering new trustees, the board has regard to the requirement for any specialist skills needed, for example to enhance the potential pool of trustees.
Organisational structure and decision making
The affairs of the company are administered by the Board of Directors, who are also the Trustees. The Directors meet as required to address specific governance/operational issues such as development, finance, risk management etc. Thomas Manson is the charity correspondent/company secretary and he has delegated authority approved by the other Trustees for operational matters including matters relating to the running of the charity and finance.
Policies adopted for the induction and training of Trustees
New Trustees are provided with information on their legal obligations under charity and company law, the content of the Memorandum and Articles of Association, the decision making processes, and recent financial performance of the company.
Related party relationships
Downham School Trust (Charity No. 526330) is a separate charity of which three of the four Trustees are also Trustees of Downham School Ltd. This trust regularly donates funds to Downham School Ltd. The Downham Trust (Charity no 1123342) also donates funds to Downham School Ltd occasionally and two of the four Trustees are also Trustees of Downham School Ltd.
There are no funds held as custodian.
The Trustees report was approved by the Board of Trustees.
The Trustees, who are also the directors of Downham School Limited for the purpose of company law, are responsible for preparing the Trustees Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company Law requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.
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 judgements 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 operation.
The Trustees are responsible for keeping adequate accounting records that 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. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
I report to the Trustees on my examination of the financial statements of Downham School Limited (the charitable company) for the year ended 31 August 2024.
Having satisfied myself that the financial statements of the charitable company are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of the charitable company’s financial statements carried out under section 145 of the Charities Act 2011 (the 2011 Act). In carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act.
I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
accounting records were not kept in respect of the charitable company as required by section 386 of the 2006 Act; or
the financial statements do not accord with those records; or
the financial statements do not comply with the accounting requirements of section 396 of the 2006 Act other than any requirement that the accounts give a true and fair view which is not a matter considered as part of an independent examination; or
the financial statements have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the financial statements to be reached.
Investments
The statement of financial activities includes all gains and losses recognised in the year.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
Downham School Limited is a private company limited by guarantee incorporated in England and Wales. The registered office is C/O Ingham & Yorke, Brookside Barn, Downham, Clitheroe, BB7 4BP.
The financial statements have been prepared in accordance with the charitable company's [governing document], the Companies Act 2006, FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019). The charitable company is a Public Benefit Entity as defined by FRS 102.
The charitable company has taken advantage of the provisions in the SORP for charities not to prepare a Statement of Cash Flows.
The financial statements are prepared in sterling, which is the functional currency of the charitable company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the Trustees have a reasonable expectation that the charitable company has adequate resources to continue in operational existence for the foreseeable future. Thus the Trustees continue to adopt the going concern basis of accounting in preparing the financial statements.
Unrestricted funds are available for use at the discretion of the Trustees in furtherance of their charitable objectives.
Restricted funds are subject to specific conditions by donors or grantors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Cash donations are recognised on receipt. Other donations are recognised once the charitable company has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset's use.
Costs of generating funds are costs incurred in attracting voluntary income, and those incurred in trading acrivities that raise funds.
Charitable activities and Governance costs are costs incurred on the company's educational operations, including support costs and costs relating top the governance of the company apportioned to charitable activities.
Interest receivable
Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the company; this is normally upon notification of the interest paid or payable by the bank.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
At each reporting end date, the charitable company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The charitable company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charitable company's balance sheet when the charitable company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the charitable company’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charitable company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Investments
None of the Trustees (or any persons connected with them) received any remuneration or benefits from the charitable company during the year.
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.
Downham School Limited paid £6,000 in rent for the premises to Downham School Trust. The Hon RC Assheton, the Hon Mrs O.S. Assheton and RM Parkinson are Trustees for the Downham School Trust whilst the Hon R.C. Assheton and R.M. Parkinson are also trustees of the Downham Trust.