Teaching two grades in one room is what this school has always done, and for years we did it badly, so this is worth describing honestly.
The first arrangement taught the two grades together for everything, at the level of the older grade, with the younger children doing simpler versions of the same work. The younger children were lost for half of every day and the older ones were held back. Nobody in the room was being taught at their level for most of the week.
The second arrangement taught them separately for everything, in two groups, with one group given written work while the other was taught. That was better and it produced a different problem: the group doing written work was unsupervised for twenty five minutes at a time, and in grades one and two unsupervised written work at that age is mostly not work.
The third arrangement, which is what we do now, splits the subjects. Reading, writing and mathematics are taught separately, in two groups, in short blocks of twelve to fifteen minutes each, alternating, so no group is working alone for long. Islam, Dhivehi stories, art, the garden and physical activity are taught to both grades together, genuinely together, at a level both can do.
And the written work the independent group does was changed from worksheets to reading, which needs no supervision to be useful.
The reason it took three attempts is that nobody teaching here had been trained for multi grade work. We wrote it ourselves, and the third version came from a teacher who visited a school in another atoll for three days and came back with it.