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Equitas Academies Trust

(A Company Limited by Guarantee)

Annual Report and Financial Statements

Year Ended 31 August 2014

Company Registration Number: 07662289 (England and Wales)

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Equitas Academies Trust Contents Reference and Administrative Details ..................................................................................................... 3

Trustees’ Report ...................................................................................................................................... 4

Governance Statement ......................................................................................................................... 10

Statement on Regularity, Propriety and Compliance ............................................................................ 14

Statement of Trustees’ Responsibilities ................................................................................................ 15

Independent Auditor’s Report to the Trustees of Equitas Academies Trust ......................................... 16

Independent Reporting Accountant’s Assurance Report on Regularity ............................................... 18

Statement of Financial Activities for the year ended 31 August 2014 .................................................. 20

Balance Sheet as at 31 August 2014 .................................................................................................... 21

Cash Flow Statement for the year ended 31 August 2014 ................................................................... 22

Notes to the Financial Statements, incorporating:

Statement of Accounting Policies ......................................................................................................... 23

Other Notes to the Financial Statements .............................................................................................. 27

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EQUITAS ACADEMIES TRUST

REFERENCE AND ADMINISTRATIVE DETAILS

Trustees R Linforth - Chair

S Spencer – Vice Chair

H Roberts* - Principal and Accounting Officer

C Davis – Head Teacher Chilwell Croft (Resigned

31.10.14)

K Davis - Vice Chair (Resigned 17.01.14)

A Lofthouse

Z Khan* (Appointed 24.03.14)

R Jesson* (Appointed 24.03.14)

D Carey (Appointed 24.03.14)

J Moore (Appointed 24.03.14)

M Bartley* (Appointed 24.03.14)

D Jones (Appointed 24.03.14)

V Camfield* (Appointed 24.03.14)

* members of the Finance and General Purposes Committee

Members R Linforth S Spencer H Roberts A Lofthouse

Senior Management Team: H Roberts – Executive Principal

C Salt – Headteacher (Appointed 01.05.14)

N Lambert – Headteacher (Appointed 01.09.14)

J Sweeney – Deputy Headteacher (Appointed 01.05.14)

C Page – Deputy Headteacher (Resigned 31.12.13)

C Simmons – Deputy Headteacher (Appointed 01.01.14)

Principal and Registered Office Phillips Street

Aston Birmingham

B6 4PZ

Company Registration Number 07662289 (England and Wales)

Independent Auditor Chantrey Vellacott DFK LLP

35 Calthorpe Road Edgbaston Birmingham B15 1TS

Bankers HSBC

130 New Street

Birmingham

B2 4JU

Solicitors Winkworth Sherwood

Minerva House

5 Montigue Close

London

SE1 9BB

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Trustees’ Report

The Trustees present their annual report together with the financial statements and auditors’ report of the charitable company for the year ended 31 August 2014. The annual report serves the purpose of both a trustees report, and a directors’ reports under company law. The trust operates 1 primary and 1 secondary academy in Birmingham. Its academies have a combined pupil capacity of 1370 and had a roll of 1291 in the school census on 16 June 2014.

Structure, Governance and Management Constitution

The Academy Trust is a company limited by guarantee and an exempt charity. The

Charitable Company’s Memorandum and Articles of Association are the primary governing

documents of the Academy Trust. The Trustees of Equitas Academies Trust and are also the directors of the Charitable Company for the purposes of company law. The Charitable Company is known as Equitas Academies Trust. The Trust comprises the following academy schools:

Aston Manor Academy

Chilwell Croft Academy

Details of the Trustees who served throughout the year, except as noted, are included in the Reference and Administrative Details on page 3. 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. Trustees’ Indemnities The Trust has purchased insurance to cover Governors and officers from claims arising from

negligent acts, errors or omissions occurring whilst on Trust business. Details of the costs

can be found in note 10 of the accounts.

Method of Recruitment and Appointment or Election of Trustees The members of the Trust are responsible for the appointment of Governors except two

parent Governors and two staff members who will be appointed through an election process

directed by the Governing Body. In the event that these are not filled, the members of the

trust are able to appoint to these positions. Policies and Procedures Adopted for the Induction and Training of Trustees Trustees are appointed based on the skills that they will bring to the Governing Body or based on a proposal to the Governing Body by representative groups. On appointment, Governors receive information relating to the Trust and attend a briefing and receive an induction pack on the role and responsibilities of Governors. Newly appointed Governors are also given a buddy governor.

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Trustees’ Report (continued)

During the year, Governors are offered all necessary training. Organisational Structure

The governance of the Trust is defined in the Memorandum and Articles of Association together with the funding agreement with the Department for Education. All Governors are members of the full Governing Body. In addition Governors are members of committees who report to the full Governing Body. The sub-committees of the Governing Body are the:

School Development

Finance and General Purposes

Audit

Premises and Health & Safety

Connected Organisations, including Related Party Relationships

During the year, the Trust continued to work with the Titan Partnership, which included training our own teachers through the Initial Teacher Training Programme.

Objectives and Activities Objects and Aims

The Trust’s object is to advance, for the public benefit, education for children aged 4 to 19

by establishing and maintaining, Academies which offer a broad and balanced curriculum.

The Trustees vision is to create a culture of success to extend lifetime opportunities for

young people and to do everything possible to encourage this. Aston Manor Academy is

recognised by Ofsted as good with outstanding features.

Students are offered a supportive, positive and dynamic learning environment that enables

them to focus on their studies and extra-curricular activities. As a result, students achieve

academic and technological advancement and extend their sporting, artistic and musical

accomplishments.

The Trust fosters personal development that helps students to find meaning in their lives

and respond with creativity and determination to the challenges that arise through the rapid

pace of social change.

Objectives, Strategies and Activities

The Trusts objectives for the year ending 31st August 2014 were to raise the attainment level

of all students through care and well-being, curriculum structure, teaching and learning, and

leadership development.

Student roll – the total number on roll for the year to 31st August 2014 was 911 for Aston

Manor Academy and 383 for Chilwell Croft Academy.

Admissions – Aston Manor Academy is currently over-subscribed with a waiting list for each

year group.

Attendance – the attendance level achieved for the period was 95.29% for Aston Manor

Academy and 94.69% for Chilwell Croft Academy.

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Trustees’ Report (continued)

Permanent exclusions – the aim is to have permanent exclusions only in exceptional

circumstances. Aston Manor Academy had no permanent exclusions during the year to 31st

August 2014 and Chilwell Croft Academy has 1.

Staffing – the average number of (full time equivalent) staff employed during the year to 31

August 2014 was 160.

Public Benefit

The Trust will promote for the benefit of community members of Aston/Newtown and the surrounding area the provision of facilities for recreation or other leisure time activities. The Academy already works in partnership with Phoenix United and Mount Zion Church in enabling them to use their facilities. The Multi Academy Trust Governors have complied with their duty to have due regard to the guidance on public benefit published by the Charity Commission in exercising their powers of duties. STRATEGIC REPORT Achievements and Performance

Tables 1, 2 and 3 below provide a summary of the Academy’s performance in the summer

2014 examination season.

Table 1. Summary of KS2 SAT examination results 2014

KS2 SAT results 2014

Achieving Level 4 or above in Reading/Writing/Maths 74%

Achieving Level 4 or above in Reading 82%

Achieving Level 4 or above in Writing 82%

Achieving Level 4 or above in Maths 82%

Making expected progress in Reading 94%

Making expected progress in Writing 97%

Making expected progress in Maths 89% Please note – These figures are provisional

Table 2. Summary of GCSE examination results 2014

GCSE 2014

5A*-C 72%

5A*-C Inc. English and Maths 56%

5A*-G 100%

5A*-G Inc. English and Maths 59%

1A*-G 100%

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EQUITAS ACADEMIES TRUST Trustees’ Report (continued) Table 2. Summary of A-Level and equivalent study examination results 2014

A Level 2014

Average points score per candidate 723.1

Average points score per entry 225.0

% of students achieving 3 A*- E grades 78%

% of students achieving 2 A* - E grades 98%

% of students achieving 1 A* - E grades 100% Please note – These figures are provisional

Key Performance Indicators

The key set of data that is used for Key Stage 4 performance and target setting is pupils’ Key

Stage 2 attainment. The Key Stage 2 levels which the pupils have achieved prior to joining

the Academy and we base our Key Stage 4 targets on four levels of progress from pupils’

Key Stage 2 levels. Our Key Stage 5 target setting process is based on the ALPS tool, which

generates aspirational targets for AS/A2 subjects based on the students Key Stage 4

average points score. The ALPS tool also compares our actual and forecasted performance

against averages.

Going Concern

After making appropriate enquiries, the Board of Trustees has a reasonable expectation that the Academy Trust has adequate resources to continue in operational existence for the foreseeable future. For this reason it continues 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 Statement of Accounting Policies. Financial Review

The Trust’s financial position demonstrates total income of £10,050,691 with a surplus at the 31 August of £682,885. The surplus has been allocated to reserves. The reserves will be utilised for continuous improvement and for projects for the repair and replacement of educational equipment and materials. Reserves will also be allocated to the repair, replacement and updating of the Trust’s buildings its plant, equipment and contents. The principal source of funding is derived from the EFA under the General Annual Grant. This totaled £7,540,890 across the Trust. A strategic school improvement plan is prepared and reviewed each year by the Governors in order that reserves can be prioritised and spent according to the needs of the Trust. The principal financial management policies adopted in the year are:

Conducting regular financial reviews of income and expenditure versus planned budgets at the Governors Finance Committee meetings.

Consideration as to whether the financial income demonstrates a robust and stable position enabling the provision of sufficient quality resources to fulfill the Trust’s educational obligations.

Reserves carried forward at 31 August will be utilised as part of the medium and long term plans of the Trust to improve and update its educational resources, materials and equipment, and additionally provide a continuous improvement plan to maintain and repair the site and facilities.

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EQUITAS ACADEMIES TRUST Trustees’ Report (continued) Reserves Policy

The level of reserves held at 31 August 2014 is £17,040,293. The value of free reserves held at 31 August 2014 is £563,285. The reserves will be allocated and spent as part of the Academy Improvement Plan to update, improve and maintain its facilities and resources. This reserve has been built up in order to provide sufficient working capital and to provide a cushion to deal with unexpected emergencies. In future years budgets are due to be decreased, we will use some of this reserve to support staff costs and avoid redundancies as far as possible. We also will endeavour to keep class sizes as small as possible in order to support the quality of learning.

Investment Policy

The Governors have decided that funds that the Trust does not immediately need to cover anticipated expenditure are invested in such a way as to maximise the Academy’s income but with minimal risk. The Academy does not consider the investment of surplus funds as a primary activity, rather as a result of good stewardship and as and when circumstances allow. The Trust had invested the sum of £500,540 in a HSBC Money Market account as at 31 August 2014. This is a short term investment. The object of this account is to hold the reserves at low risk. The Trust does not have any endowment funds.

Principal Risks and Uncertainties

The Trust has implemented a risk register and a risk review process that is reviewed termly. The objectives will be determined, and where it is considered necessary, measures of control and mitigation in order to manage risk will be put in place. The principal risks are the loss of reputation through falling standards, falling student rolls and failure to safeguard the students of the Trust. Key controls in place are:

An organised structure with defined roles, responsibilities and authorisation levels

Terms of Reference for the committees of the Governing Body

Financial planning, budgeting and regular management reporting highlighting areas of financial risk

Formal written and published policies for employees

Vetting procedures as required by law for the protection of the vulnerable. The Trust has recognised its share of the Local Government Pension Scheme (LGPS) assets and liabilities in accordance with Financial Reporting Standards no.17. A deficit has been recognised at 31 August 2014. Future contribution rates are adjusted so as to reduce this deficit. Risk Management

The Governors have assessed the major risks to which the Trust is exposed, in particular those related to the operations and finances of the Trust, and are satisfied that systems are in place to mitigate any exposure to major risks.

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EQUITAS ACADEMIES TRUST Trustees’ Report (continued) A formal review of the Trust’s risk management process is undertaken on an annual basis and key controls in place include:

Formal agendas for all committee activity

Terms of reference for all Governing Body delegated committees under the direction of the Governing Body

Pecuniary interests of Governors reviewed at each meeting

Comprehensive budgeting and management reporting

Established organisational structure and clear lines of reporting

Formal written policies

Clear authorisation and approval levels

Vetting procedures as required by law for the protection of the vulnerable It is recognised that systems can only provide reasonable but not absolute assurance that major risks have been adequately managed. Plans for Future Periods

The Trust strives to continually improve levels of attainment for all students, equipping them

with the qualifications, skills and character to follow their chosen pathway, whether it be into

further and higher education or employment.

The curriculum, the quality of teaching and learning and informed interventions are

consistently reviewed to help every child achieve their full potential.

The Trust believes that developing the whole child is critical to improving levels of attainment

and in developing broader skills and character that will develop students’ commitment to

lifelong learning and enrich their quality of life. To this extent, the Academy strives to

provide exceptional behaviour and attendance management support to its students and to

offer a broad range of extra-curricular activities.

Funds held as Custodian Trustee on behalf of others

Neither Equitas Academies Trust nor the Board of Directors/Trustees is acting as third party custodial trustees.

Auditor

In so far as the Trustees are aware:

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

the Trustees 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, Chantrey Vellacott DFK LLP, are willing to continue in office and a resolution to appoint them will be proposed at the Annual General Meeting.

Trustees’ report, incorporating a strategic report, approved by order of the board of trustees, as the company directors, on 08 December 2014 and signed on the boards behalf by:

Professor R.Linforth

Chair of Governors

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Governance Statement

Scope of Responsibility

As Trustees, we acknowledge we have overall responsibility for ensuring that Equitas Academies Trust 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 Executive 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 the Trust 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 Trustees’ Report and in the Statement of Governors/Trustees responsibilities. The Trust boards for both schools merged into one board on 24 March 2014. This resulted in a number of existing Trustees resigning and new Trustees appointed within the new Trust Board. Details of the significant changes are summarised in the tables below. The new Full Trust Board has formally met 2 times during the period. Attendance during the year at meetings of the Governing Body was as follows: Full Trust Board meetings

Governor Meetings attended

Out of a possible

R Linforth 2 2

S Spencer 2 2

A Lofthouse 2 2

Z Khan (Appointed 24.03.14) 2 2

R Jesson (Appointed 24.03.14) 2 2

D Carey (Appointed 24.03.14) 1 2

J Moore (Appointed 24.03.14) 0 2

M Bartley (Appointed 24.03.14) 2 2

D Jones (Appointed 24.03.14) 1 2

V Camfield (Appointed 24.03.14) 1 2

E Lawson (Appointed 07.07.14) 0 2

Aston Manor Full Governor meetings


Out of a possible

R Linforth 3 3

H Roberts 3 3

S Spencer 3 3

K Davies 1 3

A Lofthouse 3 3

K Osayande (Resigned 23.04.14) 0 3

B French (Resigned 23.04.14) 0 3

L Wickett (Resigned 23.04.14) 0 3

S Clarke (Resigned 23.04.14) 0 3

R Mahey (Resigned 23.04.14) 0 3

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Governance Statement

Scope of Responsibility (Continued) Chilwell Croft Full Governor meetings


Out of a possible

H Hector 1 2

M James (Resigned 23.03.14) 2 2

J Bennion (Resigned 23.03.13) 2 2

C Davis (Resigned 31.10.13) 1 2

K Davies (Resigned 17.01.14) 1 2

C Page (Resigned 31.12.13) 2 2

F Nwolisa (Resigned 23.03.14) 1 2

H Roberts 2 2

L Sula (Resigned 23.03.14) 1 2

J Young 2 2

D Carey 1 2

S Butt (Resigned 23.03.14) 0 2

Changes in the board of the trustees is detailed on page 3. Finance and General Purposes Committee – Equitas Academies Trust


Out of a possible

Z Khan 2 2

R Jesson 2 2

M Bartley 2 2

V Camfield 1 2

Finance and General Purposes Committee – Aston Manor Academy


Out of a possible

R Linforth 1 1

H Roberts 1 1

The clerk and Marion Lower (company secretary) were also present at every meeting. Finance and General Purposes Committee- Chilwell Croft Academy


Out of a possible

H Hector 0 1

C Davis (Resigned 31.10.13) 0 1

K Davies (Resigned 17.01.14) 0 1

F Nwolisa (Resigned 23.03.14) 1 1

H Roberts 1 1

D Carey 1 1

The Finance and General Purposes Committees are subcommittees of the main board of Trustees whose purpose is monitor the financial performance of the Academies in the Trust.

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EQUITAS ACADEMIES TRUST Statement of Internal Control 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 ongoing process designed to identify and prioritise the risks to the achievement of the academy trust 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 Equitas Academies Trust for the year ended 31 August 2014 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 ongoing process for identifying, evaluating and managing the Trust's significant risks that has been in place for the year ending 31 August 2014 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 Trust’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 Finance 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 J. McCullough and D Field, Schools Financial Services employees, as Responsible Officers. This role includes giving advice on financial matters and performing a range of checks on the Academy Trust’s financial systems. On a quarterly basis, the Responsible Officers (RO) report to the Governing Body on the operation of the systems of control and on the discharge of the Governing Body’s financial responsibilities.

Both Responsible Officers delivered their schedule of work as planned and no material control issues were noted.

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 Officers; 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.

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EQUITAS ACADEMIES TRUST Statement of Internal Control (continued) The Accounting Officer has been advised of the implications of the result of their review of the system of internal control by the Finance and General Purpose Committees 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 08 December 2014 and signed on its behalf by:

Professor R. Linforth Mrs. H. Roberts Chair of Governors Accounting Officer

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Statement on Regularity, Propriety and Compliance

As accounting officer of Equitas Academies Trust I have considered my responsibility to notify the academy trust board of trustees and the Education Funding Agency (EFA) of material irregularity, impropriety and non-compliance with EFA terms and conditions of funding, under the funding agreement in place between the academy trust 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 trust board are able to identify any material irregular or improper use of funds by the academy trust, or material non-compliance with the terms and conditions of funding under the academy trust’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. Mrs. H Roberts Accounting Officer

08 December 2014

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EQUITAS ACADMIES TRUST

Statement of Trustees’ Responsibilities

The Trustees (who act as Governors of Equitas Academies Trust and are also the directors of the charitable company for the purposes of company law) are responsible for preparing the Trustees’ report and the financial statements in accordance with the Annual Accounts Direction published by the Education Funding Agency (EFA), United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and applicable law and regulations.

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 of its incoming resources and application of resources, including its income and expenditure 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 and 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.

The trustees are responsible for ensuring that in its conduct and operation the charitable company applies financial and other controls, which conform with the requirements both of propriety and of good financial management. They are also responsible for ensuring grants received from the EFA/DfE have been applied for the purposes intended. The Governors are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and disseminations of financial statements may differ from legislation in other jurisdictions.

Approved by order of the members of the board of trustees on 08 December 2014 and signed on its behalf by:

Professor R. Linforth

Chair of Governors

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Independent Auditor’s Report to the Trustees of Equitas Academies Trust

We have audited the financial statements of Equitas Academies Trust for the year ended 31 August 2014 set out on pages 20 to 41. These financial statements have been prepared under the accounting policies set out therein. 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 auditors’ 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 its members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of Governors and auditors As explained more fully in the Governors' Responsibilities Statement, the Governors (who are also the directors of the company for the purposes 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 charitable company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Governors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Governors’ 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. In our opinion the financial statements:

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

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;

have been prepared in accordance with the requirements of the Companies Act 2006; and

have been prepared in accordance with the Academies: Accounts Direction 2014 issued by the Education Funding Agency

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Independent Auditor’s Report to the Trustees of Equitas Academies Trust (continued)

Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Governors' 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 returns adequate for our audit have not been received from branches not visited by us; or

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

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

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

WILLIAM DEVITT FCA (Senior Statutory Auditor) for and on behalf of CHANTREY VELLACOTT DFK LLP Chartered Accountants and Statutory Auditor Birmingham

08 December 2014

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Independent Reporting Accountant’s Assurance Report on Regularity to Equitas Academies Trust and the Education Funding Agency

In accordance with the terms of our engagement letter dated 28 June 2013 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 Equitas Academies 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 Equitas Academies Trust and the EFA in accordance with the terms of our engagement letter. Our work has been undertaken so that we might state to Equitas Academies 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 Equitas Academies Trust and the EFA, for our work, for this report, or for the conclusion we have formed. Respective responsibilities of Equitas Academies Trust’s accounting officer and the reporting accountant The accounting officer is responsible, under the requirements of Equitas Academies Trust’s funding agreement with the Secretary of State for Education dated 4 September 2012 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 or that 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 consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified 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. We have undertaken testing as appropriate in accordance with the Academies Accounts Direction 2013 to 2014. This includes an evaluation of the control environment of the school, enquiry, analytical review and substantive testing.

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Independent Reporting Accountant’s Assurance Report on Regularity to Equitas Academies Trust and the Education Funding Agency (continued)

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. Reporting Accountant Chantrey Vellacott DFK LLP

Chartered Accountants

Birmingham

08 December 2014

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Statement of Financial Activities for the year ended 31 August 2014

(including Income and Expenditure Account and Statement of Total Recognised Gains and Losses)

Note

Unrestricted Funds

£

Restricted General

Funds £

Restricted Fixed Asset

Funds £

Total 2014

£

Total 2013

£ Incoming resources Incoming resources from generated funds:

Voluntary income - - - - -

Transfer from Local Authority on conversion

27 - - - - 3,026,928

Activities for generating funds

2 198,292 17,828 - 216,120 191,855

Investment income 3 2,932 - - 2,932 273

Incoming resources from charitable activities:

Funding for the Academy's educational operations

4 - 8,802,743 1,028,896 9,831,639 8,707,594

Total incoming resources 201,224 8,820,571 1,028,896 10,050,691 11,926,650

Resources expended Cost of generating funds:

Costs of generating voluntary income

- - - - -

Fundraising trading 5 104,091 - - 104,091 181,242

Charitable activities:

Academy’s educational operations

5 - 8,374,906 730,651 9,105,557 8,169,324

Governance costs 7 - 158,158 - 158,158 182,479

Total resources expended 5 104,091 8,533,064 730,651 9,367,806 8,533,045

Net incoming / (outgoing) resources before transfers

97,133 287,507 298,245 682,885 3,393,605

Gross transfers between funds 15 - (410,210) 410,210 - -

Net income/(expenditure) for the year

97,133 (122,703) 708,455 682,885 3,393,605

Other recognised gains and losses

Actuarial gains/(losses) on defined benefit pension schemes

24 - 65,000 - 65,000 53,000

Net movement in funds 97,133 (57,703) 708,455 747,885 3,446,605 Reconciliation of funds Total funds brought forward at 1 September 2013

466,152 (349,959) 16,176,215 16,292,408 12,845,803

Total funds carried forward at 31 August 2014

563,285 (407,662) 16,884,670 17,040,293 16,292,408

The Trust’s activities derive from acquisitions and continuing operations in the above two financial periods. Further analysis is provided in note 26. A Statement of Total Recognised Gains and Losses is not required as all gains and losses are included in the Statement of Financial Activities.

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Balance Sheet as at 31 August 2014

Notes

2014 £

2014 £

2013 £

Fixed assets Tangible assets 11 16,807,560 16,127,372 Current assets Debtors 12 602,331 278,781 Cash at bank and in hand 1,574,187 1,487,067

2,176,518 1,765,848 Creditors: Amounts falling due within one year

13 (671,785)

(291,812)

Net current assets 1,504,733 1,474,036

Total assets less current liabilities

18,312,293

17,601,408

Long term liabilities 14 (40,000) (80,000)

Net assets excluding pension liability

18,272,293

17,521,408

Pension scheme liability 24 (1,232,000) (1,229,000)

Net assets including pension liability

17,040,293

16,292,408

Funds of the academy: Restricted funds

Fixed asset fund(s) 15

16,884,670

16,176,215

General fund(s) 15 824,338 879,041

Pension Reserve 15 (1,232,000) (1,229,000)

Total restricted funds

16,477,008 15,826,256

Unrestricted funds

General fund(s) 15 563,285 466,152

Total unrestricted funds 563,285 466,152

Total funds 17,040,293 16,292,408

The financial statements on pages 20 to 41 were approved by the Governors, and authorised for issue on 08 December 2014 and are signed on their behalf by: Professor R Linforth Chair Company Number 07662289

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Cash Flow Statement for the year ended 31 August 2014

Notes

2014 £

2013 £

Net cash inflow from operating activities

19 466,131

954,605

Returns on investments and servicing of finance 20 2,932 273 Capital expenditure 21 (381,943) (116,133) Cash inherited on conversion 27 - (119,411)

Increase in cash in the year 22 87,120 719,334

Reconciliation of net cash flow to movement in net funds

Increase in cash in the year Net funds at 1 September 2013

87,120

1,487,067

719,334

767,733

Net funds at 31 August 2014 1,574,187 1,487,067

All of the cash flows are derived from continuing activities in the current period, and continuing activities and acquisitions in the previous financial period.

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Notes to the Financial Statements for the Year Ended 31 August 2014

1. Statement of 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 2013 to 2014 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.

Going Concern

The Trustees assess whether the use of going concern is appropriate, i.e. 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 Trustees 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 Trust has entitlement to the funds, certainty of receipt and the amount can be measured with sufficient reliability.

Grants receivable Grants 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. Where income is received in advance of entitlement of receipt its recognition is deferred and included in creditors as deferred income. Where entitlement occurs before income is received, the income is accrued.

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 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 in the restricted fixed asset fund.

Sponsorship income Sponsorship income provided to the Academy Trust which amounts to a donation is recognised in the Statement of Financial Activities in the period in which it is receivable, where there is certainty of receipt.

Donations Donations are recognised on a receivable basis where there is certainty of receipt and the amount can be reliably measured.

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1. Statement of Accounting Policies (continued)

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.

Donated Services and gifts in kind The value of donated services and gifts in kind provided to the Academy Trust are recognised at their open market value in the period in which they are receivable as incoming resources, where the benefit to the Academy Trust 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 Academy Trust‘s policies.

Interest Receivable

Interest receivable is included in the Statement of Financial Activities on an accruals basis.

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 particular headings they have been allocated on a basis that is 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.

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 trust’s educational operations.

Governance Costs Governance costs include the costs attributable to the Academy’s compliance with constitutional and statutory requirements, including audit, strategic management and Governors’ meetings and reimbursed expenses.

All resources expended are inclusive of irrecoverable VAT.

Tangible Fixed Assets

Assets costing £1,000 or more are capitalised as tangible fixed assets and are carried at cost, net of depreciation and any provision for impairment. The assets acquired on conversion to academy status have been capitalised at their net book value brought forward and depreciation has continued to be provided over the original estimated life on the original cost price.

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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 their 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 Trust’s depreciation policy. Where tangible fixed assets have been acquired with unrestricted funds, depreciation on such assets is charged to the unrestricted fund. 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 economic life, as follows:

Freehold Buildings 4.75% Leasehold Land and Buildings Term of lease Fixtures, fittings and equipment 10% ICT equipment 33% Motor Vehicles 20%

Depreciation is charged to the academy’s profit and loss account on an annual basis and a full year’s depreciation is charged in the year of acquisition, regardless of the timing of acquisition. 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 applicable to operating leases where substantially all the benefits and risks of ownership remain with the lessor are charged to the Statement of Financial Activities on a straight line basis over the lease term.

Taxation

The Academy is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore 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.

Pensions Benefits

Retirement benefits to employees of the Academy Trust are provided by the Teachers’ Pension scheme (‘TPS’) and the Local Government Pension Scheme (‘LGPS’). These are defined benefit schemes, are contracted out of the State Earnings-Related Pension Scheme (‘SERPS’), and the assets are held separately from those of the Academy Trust.

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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 Trust 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 24, the TPS is a multi employer scheme and the Academy Trust 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. 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.

Fund Accounting

Unrestricted income funds represent those resources which may be used towards meeting any of the charitable objects of the Academy Trust at the discretion of the governors. Restricted fixed asset funds are resources which are to be applied to specific capital purposes imposed by the Education Funding Agency/Department for Education where the asset acquired or created is held for a specific purpose. Restricted general funds comprise all other restricted funds received and include grants from the Education Funding Agency/Department for Education.

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2. Activities for Generating Funds

Unrestricted Restricted Total Total Funds

£ Funds

£ 2014

£ 2013

£ Catering Income 73,648 - 73,648 72,144

Trips income - 17,828 17,828 13,455

Other activities 124,644 - 124,644 106,256

198,292 17,828 216,120 191,855

3. Investment Income


£ Funds

£ 2014

£ 2013

£ Short term deposits 2,932 - 2,932 273

2,932 - 2,932 273

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4. Funding for Academy's educational operations

Unrestricted Restricted

Total Total

Funds £

Funds £

2014 £

2013 £

DfE / EFA revenue grants

General Annual Grant (GAG) - 7,540,890 7,540,890 7,098,451

LACSEG - 178,800 178,800 356,630

7,719,690 7,719,690 7,455,081

Other DfE/EFA grants

Pupil Premium Grants - 934,823 934,823 583,034

Insurance Grant - - - 79,008

Capital Grants - 1,028,896 1,028,896 256,717

Other DfE / EFA Grants - 80,729 80,729 113,806

2,044,448 2,044,448 1,032,565 Other Government grants

Local authority Grant - 67,501 67,501 219,948

- 67,501 67,501 219,948

- 9,831,639 9,831,639 8,707,594

5. Resources Expended Staff Non Pay Expenditure Total Total Costs

£ Premises

£ Other Costs

£ 2014

£ 2013

£ Costs of activities for generating funds - - 104,091 104,091 181,242

Academy's educational operations

Direct costs 4,885,177 645,238 726,754 6,257,169 5,401,602

Allocated support costs 1,326,673 713,917 807,798 2,848,388 2,767,722

6,211,850 1,359,155 1,534,552 9,105,557 8,169,324

Governance costs including allocated support costs

27,075 - 131,083 158,158 182,479

6,238,925 1,359,155 1,769,726 9,367,806 8,533,045

Resources expended for the period include:

2014 £

2013 £

Operating leases – other 14,519 17,439 Fees payable to auditor – audit 13,500 13,500 - other services 15,700 10,500

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5. Resources expended (continued)

Included within resources expended are the following transactions. Individual transactions exceeding £5,000 are identified separately: Individual

Total £

Items Above £5,000 Reason

Ex-gratia/compensation payments 35,556 35,556 Exit package for staff member

6. Charitable Activities - Academy's educational operations

Unrestricted

Funds Restricted

Funds Total 2014

Total 2013

£ £ £ £ Direct costs Teaching and educational support staff costs

-

4,885,177

4,885,177

4,345,826

Depreciation - 645,238 645,238 589,188 Educational supplies - 520,878 520,878 250,373 Examination fees - 123,694 123,694 125,600 Staff development - 57,294 57,294 62,140 Other direct costs - 24,888 24,888 28,475

- 6,257,169 6,257,169 5,401,602

Allocated support costs Support staff costs - 1,326,673 1,326,673 1,374,794 Depreciation - 73,477 73,477 53,733 Maintenance of premises and equipment

- 337,178

337,178 302,136

Heat and light - 94,581 94,581 108,848 Cleaning - 151,067 151,067 142,323 Rates - 57,614 57,614 47,415 Insurance - 53,836 53,836 87,752 Travel expenses - 9,008 9,008 3,191 Motor Expenses - 20,436 20,436 12,234 Bank interest and charges - 70 70 839 Catering - 133,004 133,004 45,874 Other support costs - 591,444 591,444 588,583

- 2,848,388 2,848,388 2,767,722

- 9,105,557 9,105,557 8,169,324

7. Governance costs


£ Funds

£ 2014

£ 2013

£ Legal and professional fees - 101,883 101,883 130,422 Auditor’s remuneration

Audit of financial statements - 13,500 13,500 13,500

Other services - 15,700 15,700 10,500

Support costs - 27,075 27,075 28,057 Governors’ reimbursed expenses - - - -

- 158,158 158,158 182,479

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8. Staff costs

a. Staff costs during the period were: 2014

£ 2013

£ Wages and salaries 4,859,961 4,558,801 Social security costs 382,664 369,602 Pension costs 726,172 649,325

5,968,797 5,577,728 Supply teacher costs 148,600 93,680 Administration agency costs 63,067 77,269 Staff restructuring costs 58,461 -

6,238,925 5,748,677

b. Staff severance payments Included within staff costs are non statutory/non contractual severance payments totalling £48,908 (2013: £nil). One of the non-statutory/non-contractual payments exceeded £5,000. This was £35,556. c. Staff Numbers The average number of persons (including senior management team) employed by the Trust during the period expressed as full time equivalents was as follows:

2014

No. 2013

No. Charitable Activities: Teachers 77 84 Administration and support 70 63 Management 13 14

160 161

d. Higher Paid Staff The number of employees whose emoluments fell within the following bands was:

2014 No.

2013 No.

£60,001 - £70,000 2 3 £70,001 - £80,000 1 1 £80,001 - £90,000 - 1 £90,001 - £100,000 1 -

4 5

The above employees participated in the Teachers’ Pension Scheme. For the year ended 31 August 2014, pension contributions for these staff members amounted to £41,704 (2013 £88,759). N Lambert was in place as acting prinicpal for Chilwell Croft Academy from January 2014. This was on a consultancy basis incurring costs of £61,620 which are included within supply teacher costs.

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9. Related party transactions – Trustees’ remuneration & expenses

The principal and other staff trustees only receive remuneration in respect of services they provide undertaking the roles of principal and staff, and not in respect of their services as trustees. Other trustees did not receive any payments, other than expenses, from the academy trust in respect of their role as trustees. The value of trustees’ remuneration was as follows: H Roberts – Executive Principal £90k - £95k (2013 : £85k - £90k) C Davis – Principal £45k - £50k (2013 : £80k - £90k) C Davis ceased employment at Chilwell Croft Academy on 31 October 2014. Related party transactions involving the trustees are set out in note 25.

10. Trustees' 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 a £25,000,000 on any one claim and the cost for the year ended 31 August 2014 was £53,836 (2013: £87,752). The cost of this insurance is included in the total insurance cost.

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11. Tangible Fixed Assets

Freehold Land and Buildings

Leasehold Land and Buildings

Assets under Construction

Building

Refurbishments

Furniture and

Equipment

Motor Vehicles

Computer Equipment Total

£ £ £ £ £ £ £ £ Cost

At 1 September 2013 13,065,000

3,390,965

207,875

7,489 378,175

21,894

305,027 17,376,425

Additions - - 976,046 275,019 15,476 - 144,298 1,410,839 Transfers - - (450,246) 450,246 - - - - Disposals - - - - (14,607) - - (14,607)

At 31 August 2014 13,065,000 3,390,965 733,675 732,754 379,044 21,894 449,325 18,772,657

Depreciation At 1 September 2013 993,358 27,128 - 749 63,103 4,387 160,328 1,249,053 Charged in period 458,472 27,128 - 49,644 43,597 4,387 135,488 718,716 Disposals - - - - (2,672) - - (2,672)

At 31 August 2014 1,451,830 54,256 - 50,393 104,028 8,774 295,816 1,965,097

Net book values At 31 August 2014 11,613,170 3,336,709 733,675 682,361 275,016 13,120 153,509 16,807,560

At 31 August 2013 12,071,642 3,363,837 207,875 6,740 315,072 17,507 144,699 16,127,372

An independent professional valuation of the freehold land and buildings (Aston Manor) was performed by Cameron Butler BLE (Hons) MRICS as at 1 July 2011 for the purpose of valuing the assets transferred to the academy trust upon conversion. The basis of valuation was existing use value. An independent professional valuation of the leasehold land and buildings (Chilwell Croft) was performed by R Gulliani BSc (Hons) MRICS as at 1 September 2012 for the purpose of valuing the assets transferred to the academy trust upon conversion. The basis of valuation was existing use value.

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Notes to the Financial Statements for the Year Ended 31 August 2014 12. Debtors

2014

£

2013

£ Other debtors - 2,258 Prepayments and accrued income 423,125 93,423

VAT debtor 179,206 183,100

602,331 278,781

13. Creditors: amounts falling due within one year

2014

£ 2013

£ Trade creditors 514,065 127,040 Other creditors 75,677 74,148 Accruals and deferred income 82,043 90,624

671,785 291,812

Deferred income

2014

£ 2013

£ At 1 September 2013 10,589 - Amounts released from previous years (10,589) - Resources deferred in year 14,859 10,589

At 31 August 2014 14,859 10,589

Deferred income relates to universal infant free school meal income received in advance for the 2014/15 year (2013:Relates to rates income received in advance for the 2013/14 year).

14. Creditors: amounts falling due after one year

2014

£ 2013

£ Other Creditors 40,000 80,000

40,000 80,000

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EQUITAS ACADEMIES TRUST Notes to the Financial Statements for the Year Ended 31 August 2014

15. Funds

Balance at 1

September 2013

Incoming Resources

Resources Expended

Gains, Losses

and Transfers

Balance at 31 August

2014 £ £ £ £ £ Restricted general funds General Annual Grant (GAG)

879,041 7,687,495 (7,331,988) (410,210) 824,338

Other DfE/EFA grants - 1,047,747 (1,047,747) - - Other government grants - 67,501 (67,501) - - Private funds - 17,828 (17,828) - - Pension reserve (1,229,000) - (68,000) 65,000 (1,232,000)

(349,959) 8,820,571 (8,533,064) (345,210) (407,662)

Restricted fixed asset funds

DfE/EFA capital grants 48,842 996,702 (48,145) 207,875 1,205,274 Transfer on conversion 15,630,370 - (547,854) 82,094 15,164,610 Capital expenditure from GAG

497,003 32,194 (134,652) 120,241 514,786

16,176,215 1,028,896 (730,651) 410,210 16,884,670

Total restricted funds 15,826,256 9,849,467 (9,263,715) 65,000 16,477,008

The specific purposes for which the funds are to be applied are as follows: The General Annual Grant (GAG) has been provided by the DfE in order to fund the normal running costs of the Academy. During the period, the Academy’s GAG income exceeded GAG expenditure and the balance will be carried forward to apply in future years and enable the establishment of a minimum prudent level of reserves to manage risks and unforeseen costs. Under the funding agreement with the Secretary of State, the academy trust was not subject to a limit on the amount of GAG that it could carry forward at 31 August 2014. Other DfE/EFA grants include further grants received from the DfE/EFA including pupil premium, insurance grants and 16-19 Bursary income. All of the income received was fully expended during the period. Private funds – Trips represent the income and expenditure in relation to school trips that have been operated during the period. The restricted Pension reserve represents the deficit on the Academy’s share of the Local Government Pension Scheme as at 31 August 2014.

Unrestricted funds Unrestricted funds 466,152 201,224 (104,091) - 563,285

Total unrestricted funds 466,152 201,224 (104,091) - 563,285

Total funds 16,292,408 10,050,691 (9,367,806) 65,000 17,040,293

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EQUITAS ACADEMIES TRUST Notes to the Financial Statements for the Year Ended 31 August 2014 15. Funds (continued) Restricted fixed asset funds include the tangible fixed assets which were transferred from the local authority upon conversion to an Academy. They also include devolved formula capital grants provided by the local authority. Analysis of academies by fund balance Fund balances at 31 August 2014 were allocated as follows:

Total Funds

£ Aston Manor Academy 1,097,046

Chilwell Croft Academy 290,577

Total before fixed assets and pension reserve 1,387,623 Restricted fixed asset fund 16,884,670 Pension reserve (1,232,000)

Total 17,040,293

Analysis of academies by cost Expenditure incurred by each academy during the year was as follows: Teaching

and Educational

Support Staff Costs

Other Support

Staff Costs Educational

Supplies

Other Costs (excluding

Depreciation) Total £ £ £ £ £ Aston Manor Academy 3,761,865 975,530 468,769 1,405,872 6,612,036 Chilwell Croft Academy 1,165,475 452,349 52,249 527,547 2,197,620

4,927,340 1,427,879 521,018 1,933,419 8,809,656

16. Analysis of net assets between funds

Fund balances at 31 August 2014 are represented by:

Unrestricted Funds

Restricted General

Funds

Restricted Fixed Asset

Funds Total

Funds £ £ £ £ Tangible fixed assets - - 16,807,560 16,807,560 Current assets 563,285 1,519,477 93,756 2,176,518 Current liabilities - (655,139) (16,646) (671,785) Long term liabilities - (40,000) - (40,000) Pension scheme liability - (1,232,000) - (1,232,000)

Total net assets 563,285 (407,662) 16,884,670 17,040,293

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EQUITAS ACADEMIES TRUST Notes to the Financial Statements for the Year Ended 31 August 2014 17. Capital commitments

2014

£ 2013

£ Contracted for, but not provided in the financial statements 662,760 1,433,340 18. Financial commitments Operating leases At 31 August 2014 the Academy had annual commitments under non-cancellable operating leases as follows:

2014

£ 2013

£ Other Expiring within one year 1,866 993 Expiring within two and five years inclusive 11,267 7,294 Expiring in over five years - -

13,133 8,287

19. Reconciliation of net income to net cash inflow from operating activities

2014

£ 2013

£ Net income 682,885 3,393,605 Depreciation (note 11) 718,716 642,921 Loss on disposal of fixed assets 11,935 - Capital grants from DfE (1,028,896) (256,717) Transfer of Fixed Assets on conversion (excluding cash) - (3,026,928) Transfer of cash on conversion - - Interest receivable (note 3) (2,932) (273) FRS 17 pension cost less contributions payable (note 24) 68,000 84,000 Increase in debtors (311,665) (81,524) Increase in creditors 328,088 199,521 Net cash inflow from operating activities 466,131 954,605

20. Returns on investments and servicing of finance

Interest received 2,932 273 Net cash inflow from returns on investment and servicing of finance

2,932 273

21. Capital expenditure and financial investment

Purchase of tangible fixed assets (1,410,839) (372,850) Capital grants from DfE/EFA 1,028,896 256,717 Net cash outflow from capital expenditure and financial investment (381,943) (116,133)

22. Analysis of changes in net funds

At 1 September

2013 Cash flows

At 31 August

2014 £ £ Cash in hand and at bank 1,487,067 87,120 1,574,187

1,487,067 87,120 1,574,187

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23. Members' Liability

Each member of the charitable company undertakes to contribute to the assets of the company in the event of it being wound up while he/she is a member, or within one year after he/she ceases to be a member, such amount as may be required, not exceeding £10 for the debts and liabilities contracted before he/she ceases to be a member.

24. Pension 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 West Midlands Pension Fund. 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 31 March 2012 and of the LGPS 31 March 2013. Contributions amounting to £nil (2013: £10,250) were payable to the schemes at 31 August and are included within accruals. Contributions amounts £nil (2013: £9,742) were paid in advance to the schemes at 31 August and are included within prepayments. Teachers’ Pension Scheme Introduction 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 latest actuarial valuation of the TPS was carried out as at 31 March 2012 and in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014. The valuation report was published by the Department for Education on 9 June 2014. The key elements of the valuation and subsequent consultation are:

Employer contribution rates set at 16.48% of pensionable pay (including a 0.08% employer administration charge (currently 14.1%);

Total scheme liabilities for service to the effective date of £191,500 million, and notional assets of £176,600 million, giving a notional past service deficit of £14,900 million; and

An employer cost cap of 10.9% of pensionable pay will be applied to future valuations.

The new employer contribution rate is applicable from 1 April 2015 and will be implemented for the TPS from September 2015. A copy of the valuation report and supporting documentation is on the Teachers’ Pensions website (https://www.teacherspensions.co.uk/news/employers/2014/06/publication-of-the -valuation-report.aspx).

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EQUITAS ACADEMIES TRUST Notes to the Financial Statements for the Year Ended 31 August 2014 24. Pension 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 Trust has set out above the information available on the scheme.

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EQUITAS ACADEMIES TRUST Notes to the Financial Statements for the Year Ended 31 August 2014 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 £255,000, of which employer’s contributions totalled £190,000 and employees’ contributions totalled £65,000. The agreed contribution rates for future years are 16.9% and 13.5% for employers, for Aston Manor Academy and Chilwell Croft Academy respectively. Employees’ rates range between 5.5% to 12.5% for both schools. Parliament has agreed, at the request of the Secretary of State for Education, to a guarantee that, in the event of an 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

At 31 August

2014

At 31August

2013 Rate of increase in salaries 3.85% 4.15% Rate of increase for pensions in payment / inflation 2.1% 2.40% Discount rate for scheme liabilities 3.9% 4.50%* Inflation assumption (CPI) 2.1% 2.40% *Chilwell Croft Academy valuation recorded a discount rate of 4.60%. All other amounts were consistent with Aston Manor Academy. For the 31

st August 2014, the principal actuarial assumptions for Chilwell

Croft Academy were with 0.1% of the above rates. The current mortality assumptions include sufficient allowance for future improvements in mortality rates. The assumed life expectations on retirement age 65 are:

At 31 August

2014

At 31August

2013 Retiring today Males 22.9 22.1 Females 25.5 24.8 Retiring in 20 years Males 25.1 23.9 Females 27.8 26.7 The academy’s share of the assets and liabilities in the scheme and the expected rates of return were:

Expected return at 31

August 2014

Fair value

at 31August

2014

Expected return at 31

August 2013

Fair value at 31

August 2013

£ £ Equities 45.03% 711,000 42.42% 543,000 Government bonds 7.92% 125,000 8.36% 107,000 Other bonds 10.26% 162,000 11.25% 144,000 Property 8.68% 137,000 8.75% 112,000 Cash/liquidity 4.43% 70,000 4.06% 52,000 Other 23.69% 374,000 25.16% 322,000

Total market value of assets 1,579,000 1,280,000

Present value of scheme liabilities (2,811,000) (2,509,000) - Funded

Deficit in the scheme (1,232,000) (1,229,000)

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EQUITAS ACADEMIES TRUST Notes to the Financial Statements for the Year Ended 31 August 2014 24. Pension and similar obligations (continued) The expected rate of return on assets is assumed return the assets of the fund will achieve over the entire life of the related obligation based on the market expectations for each asset class as at the beginning of the period. The actual return on scheme assets was £149,000 (2013: £115,000). Amounts recognised in the statement of financial activities

2014

£ 2013

£ Current service cost (net of employee contributions) 68,000 84,000

Total operating charge 68,000 84,000

Analysis of pension finance income / (costs)

2014

£ 2013

£ Expected return on pension scheme assets 82,000 62,000 Interest on pension liabilities (120,000) (100,000)

Pension finance income / (costs) (38,000) (38,000)

The actuarial gains and losses for the current period are recognised in the statement of financial activities. The cumulative amount of actuarial gains and losses recognised in the statement of financial activities since the adoption of FRS 17 is a £30,000 loss (2013: £95,000 loss). Movements in the present value of defined benefit obligations were as follows:

2014

£ 2013

£ At 1 September 2013 Inherited at 1 September 2012

2,509,000 -

1,362,000 793,000

Current service cost 220,000 197,000 Interest cost 120,000 100,000 Employee contributions 65,000 60,000 Benefits/Transfers Paid - (3,000) Actuarial (gain)/loss (103,000) -

At 31 August 2014 2,811,000 2,509,000

Movements in the fair value of academy’s share of scheme assets:

2014

£ 2013

£ At 1 September 2013 1,280,000 632,000 Inherited at 1 September 2012 - 325,000 Expected return on assets 82,000 62,000 Actuarial gain/(loss) (38,000) 53,000 Employer contributions 190,000 151,000 Employee contributions 65,000 60,000 Benefits/Transfers Paid - (3,000)

At 31 August 2014 1,579,000 1,280,000

The estimated value of employer contributions for the year ended 31 August 2014 is £210,000.

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EQUITAS ACADEMIES TRUST Notes to the Financial Statements for the Year Ended 31 August 2014 24. Pension and similar obligations (continued) The five year history of experience adjustments is as follows: 2014 2013 2012 £ £ £

Present value of defined benefit obligations (2,811,000) (2,509,000) (1,362,000)

Fair value of share of scheme assets 1,579,000 1,280,000 632,000

Deficit in the scheme (1,232,000) (1,229,000) (730,000)

Experience adjustments on share of scheme assets Amount £ (38,000) 53,000 (30,000) Experience adjustments on scheme liabilities: Amount £ 217,000 - - 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. 25. Related Party Transactions Owing to the nature of the Academy’s operations and the composition of the board of governors being drawn from local public and private sector organisations, it is not unusual 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 arm’s length and in accordance with the Academy’s financial regulations and normal procurement procedures. The following related party transaction took place in the period of account: A Lofthouse (trustee) is a director of the Titan Partnership. Equitas Academies Trust incurred expenditure of £9,240 and received income of £29,709 with the Titan Partnership during the current year. There were no amounts outstanding at 31 August 2014. The trust made the purchase at arms’ length in accordance with its financial regulations, which A Lofthouse neither participated in nor influenced. In entering into the transaction the trust has complied with the requirements of the EFA’s Academies Financial Handbook. 26. Analysis of the Trust’s Activities 2014 2013 Continuing

Activities Total Acquired Activities

Continuing Activities Total

£ £ £ £ £ Incoming resources 10,050,691 10,050,691 5,143,293 6,783,357 11,926,650 Resources expended (9,367,806) (9,367,806) (1,835,068) (6,697,977) (8,533,045)

Net income for the year 682,885 682,885 3,308,225 85,380 3,393,605

27. New Academy 2012/13 On 1 September 2012 Chilwell Croft Academy became part of the academy trust and all the operations and assets and liabilities were transferred to Equitas Academies Trust from predecessor, Birmingham City Council, for £nil consideration. The transfer has been accounted for using the acquisition method. The assets and liabilities transferred were valued at their fair value and recognised in the balance sheet under the appropriate headings with a corresponding net amount as net income in the Statement of Financial Activities as voluntary income.

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