Registered number:
Charity number:
1048386
(A company limited by guarantee)
FOR THE YEAR ENDED 10 JULY 2020
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MARY HARE
(A company limited by guarantee)
CONTENTS
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MARY HARE
(A company limited by guarantee)
REFERENCE AND ADMINISTRATIVE DETAILS OF THE COMPANY, ITS GOVERNORS, DIRECTORS AND CHARITY TRUSTEES AND ADVISERS
FOR THE YEAR ENDED 10 JULY 2020
Governors, Directors and Charity Trustees
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MARY HARE
(A company limited by guarantee)
REFERENCE AND ADMINISTRATIVE DETAILS OF THE COMPANY, ITS GOVERNORS, DIRECTORS AND CHARITY TRUSTEES AND ADVISERS (CONTINUED)
FOR THE YEAR ENDED 10 JULY 2020
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MARY HARE
(A company limited by guarantee)
GOVERNORS' REPORT
FOR THE YEAR ENDED 10 JULY 2020
The Governors submit their report and the audited accounts for the year ended 10 July 2020 prepared in accordance with applicable accounting standards 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 2015).
Reference and Administrative Information Mary Hare Grammar School for the Deaf was established as a charity in the late 1940s in the form of a charitable trust. The charity was incorporated on 28 July 1995 under company number 3085006 and the name of the company was changed on 28 February 2005 to Mary Hare. The charity is registered with the Charity Commission under number 1048386. The Governors, Directors and Trustees, the principal Company officers, the registered office and the professional advisors are as shown on the Reference and Administrative details pages 1 and 2. STRUCTURE, GOVERNANCE AND MANAGEMENT Governing Documents On November 3rd, 2016, a Resolution was passed to approve the revised Articles of Association which were thereby adopted as the document under which the company is governed. These replaced the former Memorandum and Articles of Association. Governing Body The Governors are charity trustees, directors and members of the Company. The Governors are appointed by the Board of Governors, subject to retirement and re election procedures at the Annual General Meeting. Full details are in the company's Articles of Association. The Board of Governors has established sub committees to deal with certain specific aspects of Mary Hare's affairs. The principal sub committees and the chairs in the year were: Education & Care - J P Sharpe Finance - A J Strivens from 14th October 2019 (Acting), J R F J Fox until 14th October 2019 Business - A J Strivens from 5th March 2020 (Acting), J Podger until 5th March 2020 HR & Governance - A J Strivens Membership details of the sub committees are available from Mary Hare. New Governors are inducted into the workings of the charity on appointment and appropriate training is arranged. Organisation Mary Hare The Governors determine the general policy and strategy of Mary Hare, and have various duties in respect of appeals procedures and safeguarding. The Chief Executive Officer of Mary Hare coordinates total resources and activities across the range of Mary Hare interests and activities. Other senior roles also have responsibilities across the organisation, reflecting the broader structure of Mary Hare activities. Mary Hare School For the year ended 10 July 2020, the day to day management of Mary Hare School, was the responsibility of the Chief Executive Officer, P R Gale, working with his leadership team.
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MARY HARE
(A company limited by guarantee)
Mary Hare Professional Courses
This division coordinates the provision of training both in postgraduate education of teachers of the deaf and training of professionals and practitioners in deaf education and audiological science. As well as providing for a variety of award bearing courses, it runs a range of day courses and conferences. The Burwood Centre The Centre provides independent assessments for babies and children diagnosed with a hearing loss. The Centre's income is derived from fees paid by the families for assessments, charitable donations and support from unrestricted income. The reports produced are wholly independent, Mary Hare is determined to uphold the independence of the Burwood Centre. Mary Hare Services Limited The company is a wholly owned trading subsidiary of Mary Hare carrying out commercial activities to raise funds for Mary Hare. Activities include rental of facilities including the Arlington Arts Centre, and the use of the Mill Hall building for conducting weddings. It is not a registered charity. It draws up accounts to 10 July each year. Arlington Laboratories Limited Mary Hare has a 50% interest in this company. The company's investment takes the form of a share capital investment of £25,000. The company manufactures and sells earmoulds as well as hearing protection equipment on a commercial basis, mainly supplying NHS Trusts, and makes up accounts to 31 December each year. The accounts reflect Mary Hare's share of the retained profit, assets and liabilities of Arlington Laboratories for the period 1 July 2019 to 30 June 2020. The Mary Hare Foundation The Mary Hare Foundation is a charity established under a trust deed in 1991. The purpose of the Foundation is to raise significant funding for major capital and other projects undertaken by Mary Hare. OBJECTIVES AND ACTIVITIES Our Vision: Securing the future of deaf children and young people. Our Mission: Transforming the lives of deaf children and their families by providing: • an empowering and aspirational school where children, young people and adults are excited and proud to be • a centre of excellence with the needs of deaf students at its heart • an environment where children and young people build the language, confidence and resilience they need for success beyond school • a community of peers where enduring friendships are made Our Aims: 1. To provide exceptional education and care for all pupils 2. To provide an excellent environment for learning, living and working 3. To prepare all pupils for a successful transition into the wider community, able to meet challenges with confidence, resilience and determination 4. To promote Mary Hare and to establish the organisation as a key influence in the education of deaf children 5. Through empowering leadership at all levels, for staff to be skilled, well trained and highly motivated 6. To champion a culture of collaboration, innovation and excellence 7. To provide benefit for the local community where it supports our wider aims, sharing our facilities and expertise 8. To manage the charity, our businesses, risks and finances to ensure an enduring legacy for successive generations
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MARY HARE
(A company limited by guarantee)
Principal Activities The principal activity of Mary Hare is to provide education for deaf children using an auditory oral method with spoken and written English and the use of the best technology at its heart. Pupils come from a range of communication backgrounds, including total communication, sign bilingual and auditory /oral. Mary Hare is a Non Maintained Special School which caters for children and young people (4 – 20 years of age) with moderate, severe or profound hearing loss. Pupils come from all over the UK with a small number from overseas. The school has two campuses, one in Greenham for the primary aged pupils, while the secondary pupils are based at Snelsmore Common. Mary Hare’s Professional Courses Division trains teachers of the deaf through postgraduate courses provided in partnership with the University of Hertfordshire. This relationship continues to develop and the course has been ratified for a further five years. Commercial activities carried out in Mary Hare Services Ltd include the letting of school facilities for an international language school and to other organisations, and for weddings; the letting of the Swimming Pool for swimming lessons and various other community uses; and the letting of the Arlington Arts Centre for commercial theatre, conferences and other events. Income from all Mary Hare’s commercial activities provides the school with significant additional funds. STRATEGIC REPORT In February 2020 the school received a Section 8 Ofsted inspection and the outcome was ‘Good’ in all areas. Key findings included: ‘Pupils are proud of their school and talk with excitement and passion about all aspects of their education here. Their enthusiasm for learning and appreciation of the opportunities the school provides are both heartening and humbling.’ ‘Leaders and governors have worked hard to improve the school since the last inspection. They are determined that the school will not stand still. Plans to improve some aspects of provision are well developed. These include plans to provide new state-of-the-art facilities to improve the learning environment, resources and accommodation for primary-aged pupils.’ ‘The arrangements for safeguarding are effective. The culture to keep pupils safe is strong because staff understand the complex needs of pupils very well. Pastoral care and pupils’ social and emotional development are strong. Specialist staff are employed to support pupils’ access to the curriculum, as well as ensuring that the welfare, health and safety of pupils are given the highest priority. Partnerships with outside agencies are positive. Record-keeping is detailed and consistent. Policies and procedures are followed well. Staff training focuses on the right things, including identifying and understanding the very specific additional risks that pupils who attend this school face. The school is committed to seeking to achieve Outstanding. The project to build the new Primary School continues with detailed design work taking place with key stakeholders. We anticipate work to begin building in Spring 2021.
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MARY HARE
(A company limited by guarantee)
Like all schools, the most significant challenge, both in terms of strategy and operationally, was the Coronavirus epidemic. Mary Hare’s approach was to seek to deliver the whole curriculum in real time to pupils online for whom this was realistic. This continued for Key Stages 4 and 5 and was reduced following consultation with families for Key Stage 3. The primary school used a platform requiring less real time interaction in keeping with the age of the children. Mary Hare’s approach to learning at home was extremely well received by parents who sent countless messages of support and gratitude. Another principle was to continue to care for the whole child with the safeguarding and wellbeing teams kept in regular contact with pupils. The Principal sent regular subtitled assemblies for pupils to watch with their families.
Educational Achievements and Performance GCSE Mary Hare provides education to a wide range of deaf students, some, very able and others facing a range of challenges directly or indirectly caused by their deafness. Therefore, we celebrate the high grades at GCSE, which demonstrate our academic ambitions while equally celebrating the much more modest achievements of others remembering that these represent huge progress for the individual. Schools nationally are not publishing the same progress and outcome data for the qualifications this year as they were arrived at by teachers’ judgement, based on all the relevant information held by the school. It is worth noting the exceptional results of two students, one of whom achieved four 9’s, three 8’s and a 6, and the other, three 8’s, a 7 and five 6’s. Sixth Form Sixth Form results were very good and all going onto further and higher education were able to take up the places of their choice. The process was inevitably stressful for families and staff and was the latest blow to these young people who had already faced such a disappointing end to their schooling, having been unable to return since lockdown. There were some fully deserved, excellent results. One pupil achieved A*, A, A and C in Maths, Further Maths, Chemistry and Physics, another student achieved A*, A and B in Fine Art, Photography and Core Maths, two students achieved grade A in their Fine Art A level and one students was awarded a Distinction in IT. Financial Review
There was a modest rise in the pupil numbers from 224 at the beginning of the academic year 2019/20 to 233 at the end of the year. This small increase together with the continued initiatives to ensure we obtain full cost recovery of services offered resulted in an increase in fee income to £12.15m from £11.5m in the prior year.
There has been a continued focus on effectively managing costs. Excluding pension scheme costs the overall operating expenditure for the year reduced by 2.5%. This reduction was achieved despite staff numbers (FTE) remaining relatively static at 231 (2018/19 - 233). Mary Hare continued in 2019/20 with its multi-year major investment programme. Projects during the year included the continuation of upgrade work to the Mansell House and the Manor residential accommodations, investment in the IT server infrastructure, computers and whiteboards, further improvements to the canteen servery and a variety of works to upgrade bathroom facilities across the site.
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MARY HARE
(A company limited by guarantee)
The accounts in the year benefit again from the contribution from Mary Hare business activities and from the joint venture activities, however, these were significantly impacted in the latter months of the financial year with the arrival of the Covid-19 pandemic. During the national lockdown, nearly all commercial activities had to be suspended and businesses and the Arlington Arts venue had to cancel all bookings. The highly successful Summer English Language School for foreign students also had to be cancelled for this year. A significant impact on the overall financial result for the year is the pension scheme costs arising from the annual revaluation of Mary Hare's share in the Royal County of Berkshire Pension Scheme (RCBPS). Mary Hare employees participate in three pension schemes: • The Teachers' Pension defined benefit Scheme (TPS); • The RCBPS defined benefit Scheme (closed to new members from 31 December 2018) and • The People’s Pension defined contribution Scheme (established 1 January 2019 for all non teaching staff joining from that date onwards). The RCBPS scheme reflects the majority of Mary Hare’s pension obligations. Each financial year end under the requirements of FRS 102, the amount of money owed to meet our pension obligations under the RCBPS have to be recalculated and netted against the revised asset value, resulting in a net liability or surplus. Although the TPS is a multi employer defined benefits scheme, it is not possible or appropriate to split the assets or liabilities of TPS that are attributable to Mary Hare. As such under the requirements of FRS 102 Mary Hare accounts for this scheme as if it were a defined contribution scheme. For the year ended 10 July 2020, net pension scheme adjustments totalling £5,551k of cost were included, an increase of £3,537k from the prior year. The major driver was a negative £3,445k reflecting a reduction in the discount factor (investment return) that is applied to the scheme liabilities. This discount rate is provided by our pension advisers who refer to IBoxx AA rated over 15 years Corporate bond rates which have fallen reflecting global macroeconomic outlook. There was also a less material £416k positive contribution due to the improved demographic assumptions aligned to average life expectancy impacting the period members’ pensions are expected to be paid out for. Every three years a formal actuarial valuation of the entire RCBPS is undertaken. Its purpose is to value the assets and liabilities of each individual employer and the pension fund as a whole, with a view to setting employer contribution rates that will result in each employer’s liabilities becoming as close to fully funded as possible over the agreed recovery period usually several years away. The latest valuation has resulted in a small reduction in in the regular employer contribution rate, effective April 2020 and lump sum payments for the three years from 2020. These lump sum contributions were predicted in our financial strategy and reflected in our five year forecast projections. This year the accounts include further professional fees of £78k incurred to progress plans for the development of a new Primary School on the Mary Hare site. Development costs incurred in the prior year were £79k. The overall cash balance at the year end was £3,885k, an increase of £1,190k from the prior year. This was driven by operational cash flow inflows of £1,428k netted against investment cash outflows, primarily tangible fixed assets of £238k. Excluding the various FRS 102 pension adjustments, the one off new primary school development costs and reflecting the contribution of the business and joint venture activities, Mary Hare has returned an operating surplus of £541k. We continue to enjoy the benefit of support from the Mary Hare Foundation which further enhances our ability to offer value for money and invest in the School’s future. We are grateful to the Foundation and its supporters for the success in raising substantial funds towards the new primary school project.
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MARY HARE
(A company limited by guarantee)
Plans for the Future
Some things that we hoped to do last year were affected by the Covid-19 pandemic and will need to be revisited. These include our decision to seek to speak out more on key issues facing deaf children – the ongoing assumption that they should attend their local school and the increasing difficulty families face in seeking placement and even in getting an EHC Plan for their child. In school we will be focussing on the move to Outstanding and supporting students who have missed considerable time in school, particularly those who are now in Years 11 and 13. We are also continuing to raise vital funds towards the new Primary School build and additionally we need to build a new Vocational Centre to accommodate the number of courses we now offer. Principal Risks and Uncertainties The Governors regularly examine the major risks facing Mary Hare. There are systems to monitor and mitigate any impact they may have on Mary Hare. The Governors are satisfied that adequate systems are in place. Mary Hare relies on the funding of pupil places by Local Authorities. Therefore, we need to be aware of the financial situation in Local Authorities and any barriers to placement families may face. The Board is alert to the need to ensure the highest possible level of safeguarding for our pupils, which is of paramount importance in our setting. Our procedures and practices are regularly inspected by Governors, Ofsted, the pupils’ home local authorities and independent third parties and their reports are scrutinised by management and the Board. The direct effects of the Covid-19 pandemic on Mary Hare are not currently significant, however, school leaders are monitoring the ‘pipeline’ of prospective pupils carefully as normal recruitment events have had to be postponed or adapted to meet current circumstances. A full Covid-19 risk assessment has been carried out, and adaptations to the way the School operates and delivers its education and care have been implemented. The risks are regularly reviewed and adjustments made to reflect the current situation and latest guidance. Remuneration of Key Management Personnel Key Management Personnel are remunerated at appropriate levels taken from the NJC or school leadership scales. These are reviewed by the HR and Governance Committee of the Board of Governors. Reserves Policy Mary Hare aims to have free reserves that equate to three months’ running costs in line with market practice. The size of this reserve has been determined using a simple income and expenditure risk assessment. We believe that if our annual income were to be reduced suddenly in some way, for example a big reduction in pupil numbers or a significant change in the way Local Authorities or the Education and Skills Funding Agency (ESFA) fund our pupils, three months' running costs would give us the time to rescale our operations whilst we continue to educate the children in our care. Mary Hare currently holds reserves in the form of fixed assets, mostly buildings. However, these do not offer the same liquidity as free reserves as it would be impractical to dispose of them quickly in the event of an emergency. The current gap to our targeted free reserves figure is being closed by building surplus cash flow through a combination of looking to ensure healthy pupil numbers, addressing our fee structure, careful cost control and income from the Mary Hare Businesses. It is our policy that these reserves will only be spent in the event of a sudden or unforeseen loss or reduction in income that threatened the viability of the organisation. The Governors review the level of reserves required to be held in investments, cash and cash investments annually. The CEO presents annually to the Board of Governors with a draft document and supporting materials that enable the governing body to make an informed decision about the level of reserves which feeds into their approval of the Strategy and Annual Operating Budget. Public Benefit Mary Hare provides education to its pupils within the national curriculum and meets the standards set by Ofsted.
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MARY HARE
(A company limited by guarantee)
This meets a fundamental test for advancement of education for public benefit identified by the Charity Commission. The education is restricted to pupils who are moderately, severely or profoundly deaf or who have other hearing difficulties. This class of beneficiaries has a particular common charitable need which justifies restricting the benefit to them because of the special nature of the education required.
In setting our objectives and planning our activities, we have given careful consideration to the Charity Commission’s general guidance on public benefit. Environmental Initiatives Mary Hare continues to undertake a series of environmental initiatives. There have been a wide range of projects being rolled out recently to reduce energy consumption. These include investing in and upgrading our main central boiler house, installation of modern efficient light fittings, a programme to install new double glazing windows, and in our older boarding houses sensors and new radiator heat controls. Both our newer buildings are partly heated by solar panels and in both the newer houses, the highest levels of insulation have been incorporated. With our recent swimming pool refurbishment we included a new swimming pool cover. Additionally, the environment featured heavily in the designs for future buildings in our plans approved last year by West Berkshire. Our pupils have formed an environmental group and are leading some initiatives around school to encourage awareness but also to change some behaviours.
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MARY HARE
(A company limited by guarantee)
Accounting Responsibilities
The Governors (who are also directors of Mary Hare for the purposes of company law) are responsible for preparing the Governors' report (including the Group strategic report) and the accounts in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). Company law requires the Governors to prepare accounts for each financial year which give a true and fair view of the state of affairs of the group and of the incoming resources and application of resources, including the income and expenditure, of the group for that period. In preparing these accounts, the Governors are required to: • select suitable accounting policies and then apply them consistently; • observe the methods and principles in the Charities SORP; • make judgments and accounting 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 accounts; • prepare the accounts on the going concern basis unless it is inappropriate to presume that the group and company will continue in operation. The Governors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the financial position of the group and enable them to ensure that the accounts comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Statement of Disclosure So far as the Governors are aware, there is no relevant audit information of which the company's auditors are unaware. Auditor The auditors, James Cowper Kreston, will be proposed for reappointment in accordance with Section 485 of the Companies Act 2006. This report was approved by the Governors, on ................................................ Chair of Governors
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MARY HARE
(A company limited by guarantee)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MARY HARE
We have audited the financial statements of Mary Hare
(the 'parent charitable company') and its subsidiaries (the 'group') for the year ended
In our opinion the financial statements:
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙
the Governors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙
the Governors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's or the parent charitable company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
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MARY HARE
(A company limited by guarantee)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MARY HARE (CONTINUED)
The Governors are responsible for the other information. The other information comprises the information included in the Annual report, other than the financial statements and our Auditors' report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Governors' report including the Strategic report for the financial year for which the financial statements are prepared is consistent with the financial statements.
∙
the Governors' report and the Strategic report have been prepared in accordance with applicable legal requirements.
In the light of our knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Governors' report including the Strategic report.
We have nothing to report in respect of the following matters in relation to which Companies Act 2006 requires us to report to you if, in our opinion:
∙
the parent charitable company has not kept adequate and sufficient accounting records, or returns adequate for our audit have not been received from branches not visited by us; or
∙
the parent charitable company
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.
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MARY HARE
(A company limited by guarantee)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MARY HARE (CONTINUED)
As explained more fully in the Governors' responsibilities statement, the Governors (who are also the directors of the charitable 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, and for such internal control as the Governors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an 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.
for and on behalf of
Chartered Accountants and Statutory Auditor
2 Communications Road
Greenham Business Park
Greenham
Newbury
Berkshire
RG19 6AB
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MARY HARE
(A company limited by guarantee)
CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING INCOME AND EXPENDITURE ACCOUNT)
FOR THE YEAR ENDED 10 JULY 2020
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MARY HARE
(A company limited by guarantee)
CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING INCOME AND EXPENDITURE ACCOUNT) (CONTINUED)
FOR THE YEAR ENDED 10 JULY 2020
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MARY HARE
(A company limited by guarantee)
REGISTERED NUMBER:
3085006
CONSOLIDATED BALANCE SHEET
AS AT 10 JULY 2020
The financial statements were approved and authorised for issue by the Governors on
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MARY HARE
(A company limited by guarantee)
REGISTERED NUMBER:
3085006
COMPANY BALANCE SHEET
AS AT 10 JULY 2020
The financial statements were approved and authorised for issue by the Governors on
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MARY HARE
(A company limited by guarantee)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 10 JULY 2020
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
1.
Accounting policies
Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.
The Consolidated statement of financial activities (SOFA) and Consolidated balance sheet consolidate the financial statements of the company and its subsidiary undertaking. The results of the subsidiary are consolidated on a line by line basis.
The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of financial activities in these financial statements.
The Governors have considered the impact of the global Covid-19 pandemic on the ability of the charity to continue operating for the foreseeable future. This review has included considering the impact of the pandemic to the date of signing the financial statements and based on this review the Governors believe that the financial statements have been prepared appropriately on the going concern basis.
The nature and purpose of each fund are explained in note 16.
Fees
Fees receivable and charges for services and use of premises are accounted for in the period in which the service is provided. Donations and legacies Income from donations and legacies is recognised in the year in which the school becomes legally entitled to the relevant income and the amount can be quantified with reasonable certainty. Donations received for the general purposes of the charity are included within unrestricted funds. Donations for activities restricted by the provider are taken to restricted funds where these wishes are legally binding on the Governors. Donations in kind are reflected in the financial statements at their estimated value to Mary Hare. Grants receivable Grants are normally recognised as income in the period to which they relate. Grants received in respect of property or other fixed asset additions are credited to a fixed asset grant fund within restricted funds. An annual transfer to unrestricted funds is made in respect of the amortisation of the grants over the estimated useful life of the relevant asset.
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
1.
Accounting policies (continued)
Deferred income
Income is deferred for grants and other income where a deposit or receipt for a future service has been received.
All expenditure is included on an accruals basis and is recognised where there is a legal or constructive obligation to pay. Expenditure is shown gross of any irrecoverable VAT.
Fundraising and publicity costs Fundraising and publicity costs to promote the awareness of Mary Hare with the aim of generating fees and increasing donated income are treated as costs of generating funds. Other informative publicity is treated as charitable expenditure.
The financial statements consolidate the results of the charity, Mary Hare, and its wholly owned subsidiary, Mary Hare Services Ltd. The financial statements also reflect the group's share of the retained profit, assets and liabilities in respect of its investments in 50% joint ventures, Arlington Laboratories Ltd, the Hearing Aid Repair Shop (UK) Ltd, Mary Hare Total Hearing Solutions Ltd and Mary Hare Hearing Centres LLP, in accordance with the Charities SORP (FRS 102). The accounting treatment is to reflect these transactions, assets and liabilities on a gross basis. Income received by Mary Hare and Mary Hare Services Ltd as Gift Aid, management charges and rent is included as net income from investments in joint ventures.
Tangible fixed assets are initially recognised at cost. After recognition, under the cost model, tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. All costs incurred to bring a tangible fixed asset into its intended working condition should be included in the measurement of cost.
Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following bases:
Items costing in excess of £1,000 with an estimated useful life of several years are capitalised and depreciated. Items costing less than £1,000 are written off as an expense when acquired.
Page 20
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
1.
Accounting policies (continued)
Fixed asset investments are a form of financial instrument and are initially recognised at their transaction cost and subsequently measured at fair value at the Balance sheet date, unless the value cannot be measured reliably in which case it is measured at cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and presented as ‘Gains/(Losses) on investments’ in the Consolidated Statement of Financial Activities.
Investments in subsidiaries are valued at cost less provision for impairment.
Investments in joint ventures are stated at the amount of the group's share of net assets. The Consolidated Statement of Financial Activities includes the group's share of the joint ventures' net income or expenditure using the equity accounting basis.
Rentals paid under operating leases are charged to the Consolidated Statement of Financial Activities on a straight line basis over the lease term.
Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks.
Liabilities are recognised when there is an obligation at the Balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably.
Liabilities are recognised at the amount that the company anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.
The group only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
1.
Accounting policies (continued)
Teaching staff employed by Mary Hare are eligible for membership of the Teachers' Pension Scheme, which is a national, statutory contributory, unfunded defined benefit scheme administered by the Teachers Pension Agency, an executive agency of the Department for Education. Pension costs are assessed in accordance with the advice of the Government Actuary. As this is a multi-employer scheme whose assets and liabilities are not separately identifiable, under Charities SORP (FRS 102) it is treated as a defined contribution scheme with a charge to the financial statements for the contributions paid and relevant disclosures about the scheme as a whole provided in note 23.
Mary Hare has a funded defined benefit scheme for those members of staff who are not eligible to join the Teachers' Pension Scheme. The assets of this scheme are administered by the Royal County of Berkshire Pension Scheme. This is also a multi-employer scheme, but the assets and liabilities relating to Mary Hare are separately identifiable and are accounted for as belonging to Mary Hare. The financial statements take account of the annual valuation of the defined benefit scheme undertaken by the pension fund's actuaries. The scheme deficit is the shortfall of the value of the assets of the scheme compared with the present value of scheme liabilities. The deficit is shown as a liability in the balance sheet. The current service cost, expected return on pension scheme assets, interest on pension scheme liabilities and past service gains and costs are within the resources expended section of the Statement of Financial Activities. Actuarial gains and losses arising from updating the latest actuarial valuation to reflect conditions at the balance sheet date are recognised in the gains and losses section of the Statement of Financial Activities. More details are included in note 23.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions:
The company makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Critical areas of judgement:
Tangible fixed assets (see note 11)
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. Bad debts Using information available at the balance sheet date, the Charity makes judgements based on experience regarding the level of provision required to account for potentially uncollectible fees. Pensions (see note 23) Various assumptions are made in reporting the performance of the Charity's share of the pension scheme. A valuation is carried out for reporting purposes by a qualified independent actuary. The principal actuarial assumptions made are disclosed in note 23.
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
2.
Critical accounting estimates and areas of judgement
(continued)
Allocation of expenditure
Where expenditure is not directly attributable to activity categories, costs are apportioned on the basis of various factors such as staff numbers or by reference to the proportion of resources utilised.
Other trading activities represents the turnover of the trading subsidiary, Mary Hare Services Limited.
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
Page 24
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
Page 25
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
Page 26
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
9.
Staff costs
(continued)
The parent company has taken advantage of Section 408 Companies Act 2006 in not preparing its own Statement of Financial Activities.
The net deficit of the parent company was £4,894,000 (2019: £1,610,000).
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
Page 28
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
11.
Tangible fixed assets
(continued)
Page 29
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
11.
Tangible fixed assets
(continued)
Page 30
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
12.
Fixed asset investments
(continued)
Page 31
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
Page 32
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
The charitable group has adopted an amendment to the Charities SORP on recognition of gift aid donations from a trading subsidiary to a parent charity. Gift aid donations are no longer accrued unless a legal obligation is in existence, and are now recognised on the date of payment. A prior year adjustment is required in the financial statements of the company to restate the opening reserves at 11 July 2018 and the prior year comparative profit and loss account. The net impact on the financial statements is an decrease in the parent charity's profit of £190,799 in 2019. There is no impact on the consolidated financial statements.
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
Page 34
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
Page 35
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
Page 36
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
Page 37
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
Arts and design centre This represents donations received towards the arts and design centre. The fund is classified as a designated fund within unrestricted funds. Sixth form centre fund This represents donations received towards the sixth form centre. The fund is classified as a designated fund within unrestricted funds. Property grants fund Mary Hare has received various grants towards property expenditure. The fund is classified as a designated fund within unrestricted funds. Arlington Arts Centre This represents donations received towards the Arlington Arts Centre. Certain funds are classified as designated funds within unrestricted funds and other funds are classified as restricted funds. In respect of restricted funds, a transfer will be made from restricted to unrestricted funds over the useful economic life of the Centre. Burwood centre for childhood deafness Mary Hare operates the Burwood centre for childhood deafness, a facility which assesses the level of deafness in young children, while ensuring it maintains its professional independence. The centre exists on donations and invoiced services provided. Any deficit in annual running costs is funded from unrestricted reserves. Swimming pool This represents donations from the Mary Hare Foundation for the refurbishment of the swimming pool. A transfer will be made from restricted to unrestricted funds over the useful economic life of the asset. Devolved formula capital This income is to be spent on items deemed as capital by the Department of Education. The balance at the year end represents equipment for senior teachers purchased in previous periods. A transfer is made from restricted to unrestricted funds in respect of depreciation on equipment funded by the grant. Murray House This represents donations from the Mary Hare Foundation for the building of Murray House. A transfer will be made from restricted to unrestricted funds over the useful economic life of the property. Howard House II This represents donations from the Mary Hare Foundation for the building of Howard House II. A transfer will be made from restricted to unrestricted funds over the useful economic life of the property. Various other revenue grants and donations have been received during the year.
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
Page 39
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
18.
Analysis of net assets between funds
(continued)
Page 40
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
Page 41
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
The company participates in the Teachers’ Pension Scheme (England and Wales) (the "TPS") and the Royal County of Berkshire Pension Scheme (RCBPS). The company makes contributions to both in accordance with recommended rates. These are both defined benefit schemes. In 2020 the cost of pension contributions was £1,335,953 (2019: £1,183,694) including £623,447 (2018: £454,156) to the TPS and £712,506 (2019: £729,538) to the RCBPS. The schemes are accounted for differently as the assets and liabilities of the RCBPS scheme can be separately identified as belonging to Mary Hare. This is not the case for the TPS scheme and only summary information for the scheme as a whole is provided.
The Teachers’ Pension Scheme The Teachers' Pension Scheme (TPS) is a statutory, contributory, defined benefit scheme, governed by the Teachers’ Pension Scheme Regulations 2014. Membership is automatic for teachers in academies. All teachers have the option to opt-out of the TPS following enrolment. The TPS is an unfunded scheme to which both the member and employer makes contributions, as a percentage of salary - these contributions are credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament. Valuation of the Teachers’ Pension Scheme The Government Actuary, using normal actuarial principles, conducts a formal actuarial review of the TPS in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014 published by HM Treasury every 4 years. The aim of the review is to specify the level of future contributions. Actuarial scheme valuations are dependent on assumptions about the value of future costs, design of benefits and many other factors. The latest actuarial valuation of the TPS was carried out as at 31 March 2016. The valuation report was published by the Department for Education on 5 March 2019. The key elements of the valuation and subsequent consultation are: • employer contribution rates set at 23.68% of pensionable pay (including a 0.08% administration levy) • total scheme liabilities (pensions currently in payment and the estimated cost of future benefits) for service to the effective date of £218,100 million and notional assets (estimated future contributions together with the notional investments held at the valuation date) of £196,100 million, giving a notional past service deficit of £22,000 million • the SCAPE rate, set by HMT, is used to determine the notional investment return. The current SCAPE rate is 2.4% above the rate of CPI. assumed real rate of return is 2.4% in excess of prices and 2% in excess of earnings. The rate of real earnings growth is assumed to be 2.2%. The assumed nominal rate of return including earnings growth is 4.45%. The next valuation result is due to be implemented from 1 April 2023.
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
23.
Pension commitments
(continued)
The Royal County of Berkshire Pension Scheme
The group operates a defined benefit pension scheme, which has been closed to new members from 1 January 2019.
The last formal valuation on the assets and liabilities of the whole scheme was performed on 31 March 2019 and updated to 10 July 2020, identifying specific assets and liabilities relating to Mary Hare, by a qualified independent actuary. The major assumptions used by the actuary were:
Page 43
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
23.
Pension commitments
(continued)
Page 44
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
As noted in the Report of the Board of Governors, Mary Hare is associated with the Mary Hare Foundation, a charitable trust (Registration No. 1002680). The purpose of the Mary Hare Foundation is to raise significant funding for major capital and other projects undertaken by Mary Hare.
The Foundation financial statements are made up to 31 July. Its net assets at 31 July 2020 were £1,043,081 (2019: £806,741). Total funds raised in the year to 31 July 2020 were £700,709 (2019: £312,981). Mary Hare bears the administration costs of the Foundation. In the year to 10 July 2020 total costs were £85,483 (2019: £89,264). Further details of the Foundation can be obtained from Arlington Manor, Snelsmore Common, Newbury. During the year the Foundation has donated funds of £10,000 (2019: £10,460) to Mary Hare.
Mary Hare has a 50% interest in this company. The investment takes the form of issued share capital of £25,000. The company manufactures and sells earmoulds on a commercial basis, mainly supplying NHS Trusts.
Arlington Laboratories Limited was incorporated on 5 February 1997. It prepares accounts to 31 December. The information provided in respect of Mary Hare's share of retained profit, assets and liabilities is drawn from the statutory accounts for the year ended 31 December 2019 and management accounts for the period 1 January 2020 to 30 June 2020. During the year Mary Hare received £26,500 rent (2019: £36,552), £15,000 (2019: £15,000) as a management charge and a Gift aid donation of £50,000 (2019: £35,000) from Arlington Laboratories Limited.
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MARY HARE
(A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 10 JULY 2020
Mary Hare Services Ltd has investments in three other entities. Two are incorporated as limited companies in England and Wales, the Hearing Aid Repair Shop (UK) Ltd and Mary Hare Total Hearing Solutions Ltd. During the year ended 10 July 2008 a limited liability partnership venture was set up, Mary Hare Hearing Centres LLP. All are jointly managed and controlled by Mary Hare Services Ltd and a third party, with the risks and rewards of ownership split equally between these two parties. Therefore, in accordance with relevant accounting standards all have been treated as 50% joint ventures of Mary Hare Services Ltd.
The Hearing Aid Repair Shop (UK) Ltd Mary Hare Services Ltd has a 50% interest in this company by way of owning issued share capital of £1. The Hearing Aid Repair Shop (UK) Ltd was incorporated on 5 January 2001 with its principal activity being the repair of hearing aids. It prepares accounts to 31 December. For the year ended 31 December 2019 the company reported a profit of £8,628 (2018: £9,298) and as at 31 December 2019 had net assets of £48,420 (2018: £49,786). Mary Hare Total Hearing Solutions Ltd During the year ended 10 July 2008 the company transferred all assets and liabilities to the new joint venture partnership, Mary Hare Hearing Centres LLP, and is dormant, with net liabilities of £45,448 (2018: £45,448). Mary Hare Hearing Centres LLP Mary Hare Hearing Centres LLP commenced trading on 1 January 2008 with its principal activity being the assessment of hearing and provision of aids for the hearing impaired. It prepares accounts to 31 December. For the year ended 31 December 2019 the LLP reported a profit of £89,274 (2018: £74,139) and as at 31 December 2019 had net assets of £322,654 (2018: £233,380). Mary Hare Services Ltd has an interest in Mary Hare Hearing Centres LLP by way of a loan. As at 10 July 2020 the loan was £45,197 net of a £75,500 provision.
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