Caseware UK (AP4) 2022.0.179 2022.0.179 2022-12-312022-05-012022-05-012022-05-012022-05-012022-12-31The principal activity of the company throughout the year continued to be that of the provision of English language courses and related travel services to foreign students.truefalse2022-01-013236false 03482623 2022-01-01 2022-12-31 03482623 2021-01-01 2021-12-31 03482623 2022-12-31 03482623 2021-12-31 03482623 c:Director1 2022-01-01 2022-12-31 03482623 c:Director4 2022-01-01 2022-12-31 03482623 c:Director5 2022-01-01 2022-12-31 03482623 c:Director5 2022-12-31 03482623 c:Director6 2022-01-01 2022-12-31 03482623 c:Director6 2022-12-31 03482623 c:RegisteredOffice 2022-01-01 2022-12-31 03482623 d:Buildings d:ShortLeaseholdAssets 2022-01-01 2022-12-31 03482623 d:Buildings d:ShortLeaseholdAssets 2022-12-31 03482623 d:Buildings d:ShortLeaseholdAssets 2021-12-31 03482623 d:FurnitureFittings 2022-01-01 2022-12-31 03482623 d:FurnitureFittings 2022-12-31 03482623 d:FurnitureFittings 2021-12-31 03482623 d:FurnitureFittings d:OwnedOrFreeholdAssets 2022-01-01 2022-12-31 03482623 d:OwnedOrFreeholdAssets 2022-01-01 2022-12-31 03482623 d:ComputerSoftware 2022-12-31 03482623 d:ComputerSoftware 2021-12-31 03482623 d:CurrentFinancialInstruments 2022-12-31 03482623 d:CurrentFinancialInstruments 2021-12-31 03482623 d:Non-currentFinancialInstruments 2022-12-31 03482623 d:Non-currentFinancialInstruments 2021-12-31 03482623 d:CurrentFinancialInstruments d:WithinOneYear 2022-12-31 03482623 d:CurrentFinancialInstruments d:WithinOneYear 2021-12-31 03482623 d:Non-currentFinancialInstruments d:AfterOneYear 2022-12-31 03482623 d:Non-currentFinancialInstruments d:AfterOneYear 2021-12-31 03482623 d:ShareCapital 2022-12-31 03482623 d:ShareCapital 2021-12-31 03482623 d:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 03482623 d:RetainedEarningsAccumulatedLosses 2022-12-31 03482623 d:RetainedEarningsAccumulatedLosses 2021-01-01 2021-12-31 03482623 d:RetainedEarningsAccumulatedLosses 2021-12-31 03482623 d:RetainedEarningsAccumulatedLosses 2021-01-01 03482623 d:FurtherSpecificTypeProvisionContingentLiability1ComponentTotalProvisionsContingentLiabilities 2022-01-01 2022-12-31 03482623 d:FurtherSpecificTypeProvisionContingentLiability1ComponentTotalProvisionsContingentLiabilities 2022-12-31 03482623 d:FurtherSpecificTypeProvisionContingentLiability1ComponentTotalProvisionsContingentLiabilities 2021-12-31 03482623 c:FRS102 2022-01-01 2022-12-31 03482623 c:Audited 2022-01-01 2022-12-31 03482623 c:FullAccounts 2022-01-01 2022-12-31 03482623 c:PrivateLimitedCompanyLtd 2022-01-01 2022-12-31 03482623 d:WithinOneYear 2022-12-31 03482623 d:WithinOneYear 2021-12-31 03482623 d:BetweenOneFiveYears 2022-12-31 03482623 d:BetweenOneFiveYears 2021-12-31 03482623 d:HirePurchaseContracts d:WithinOneYear 2022-12-31 03482623 d:HirePurchaseContracts d:WithinOneYear 2021-12-31 03482623 d:HirePurchaseContracts d:BetweenOneFiveYears 2022-12-31 03482623 d:HirePurchaseContracts d:BetweenOneFiveYears 2021-12-31 03482623 d:FurnitureFittings d:LeasedAssetsHeldAsLessee 2022-12-31 03482623 d:FurnitureFittings d:LeasedAssetsHeldAsLessee 2021-12-31 03482623 d:ComputerSoftware d:OwnedIntangibleAssets 2022-01-01 2022-12-31 iso4217:GBP xbrli:pure
Registered number: 03482623









EC ENGLISH LONDON LIMITED

DIRECTORS' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

 
EC ENGLISH LONDON LIMITED
 

COMPANY INFORMATION


Directors
A Mangion 
W W Tin 
M Vassallo (appointed 1 May 2022)
M Xuereb (resigned 1 May 2022)




Registered number
03482623



Registered office
Tennyson House
Cambridge Business Park

Cambridge

CB4 0WZ




Trading Address
Angel Corner House
1 Islington High Street

London

N1 9LQ






Independent auditors
Price Bailey LLP
Chartered Accountants & Statutory Auditors

Tennyson House

Cambridge Business Park

Cambridge

CB4 0WZ





 
EC ENGLISH LONDON LIMITED
 

CONTENTS



Page
Directors' Report
 
 
1 - 2
Independent Auditors' Report
 
 
3 - 6
Statement of Income and Retained Earnings
 
 
7
Balance Sheet
 
 
8
Notes to the Financial Statements
 
 
9 - 21


 
EC ENGLISH LONDON LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

The directors present their report and the financial statements for the year ended 31 December 2022.

Directors

The directors who served during the year were:

A Mangion 
W W Tin 
M Vassallo (appointed 1 May 2022)
M Xuereb (resigned 1 May 2022)

Directors' responsibilities statement

The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors 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 Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

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

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

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

Under section 487(2) of the Companies Act 2006Price Bailey LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

Page 1

 
EC ENGLISH LONDON LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022


Small companies note

In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.

This report was approved by the board on 29 September 2023 and signed on its behalf.
 





W W Tin
Director

Page 2

 
EC ENGLISH LONDON LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EC ENGLISH LONDON LIMITED
 

Opinion


We have audited the financial statements of EC English London Limited (the 'Company') for the year ended 31 December 2022, which comprise the Statement of Income and Retained Earnings, the Balance Sheet and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2022 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


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 Company 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.


Material uncertainty related to going concern


We draw attention to note 2.2 in the financial statements, which discusses the directors' assessment of the impact of COVID-19 on the Company's ability to continue as a going concern. The Company's projected financial results, cash flows and financial position, as well as the adequacy of funding, are dependent on the extent and timing of recovery from the adverse conditions currently being experienced. As stated in note 2.2, these events or conditions, along with the other matters as set forth in note 2.2, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Page 3

 
EC ENGLISH LONDON LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EC ENGLISH LONDON LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Directors' Report has been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' Report.


We have nothing to report in respect of the following matters in relation to which 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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Directors' Report and from the requirement to prepare a Strategic Report.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 1, the directors 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 directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 4

 
EC ENGLISH LONDON LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EC ENGLISH LONDON LIMITED (CONTINUED)


Auditors' responsibilities for the audit of the financial statements
 

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.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations. This included those regulations directly related to the financial statements, including financial reporting, tax legislation and distributable profits and industry regulations including GDPR, employment law and health and safety.
We communicated the identified laws and regulations with the audit team and remained alert to any indications of non-compliance throughout the audit. We carried out specific procedures to address the risks identified.
These included the following:
- agreeing the financial statement disclosures to underlying supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
- enquiries of management including those responsible for key regulations; and
- performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.
In addressing the risk of management override of controls, we carried out testing of journal entries and other adjustments for appropriateness, assessing whether the judgements made in making accounting estimates are indicative of a potential bias and evaluating the business rationale of significant transactions outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


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.


Page 5

 
EC ENGLISH LONDON LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EC ENGLISH LONDON LIMITED (CONTINUED)


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the 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 Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Andrew Booth (Senior Statutory Auditor)
  
for and on behalf of
Price Bailey LLP
 
Chartered Accountants
Statutory Auditors
  
Tennyson House
Cambridge Business Park
Cambridge
CB4 0WZ

29 September 2023
Page 6

 
EC ENGLISH LONDON LIMITED
 

STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2022

2022
2021
Note
£
£

  

Turnover
  
5,003,730
1,700,133

Cost of sales
  
(3,419,628)
(1,622,770)

Gross profit
  
1,584,102
77,363

Administrative expenses
  
(1,179,572)
(1,847,738)

Other operating income
 3 
-
319,976

Operating profit/(loss)
  
404,530
(1,450,399)

Tax on profit/(loss)
 6 
(12,073)
(2,018)

Profit/(loss) after tax
  
392,457
(1,452,417)

  

  

Retained earnings at the beginning of the year
  
2,336,024
3,788,441

Profit/(loss) for the year
  
392,457
(1,452,417)

Retained earnings at the end of the year
  
2,728,481
2,336,024
The notes on pages 9 to 21 form part of these financial statements.

Page 7

 
EC ENGLISH LONDON LIMITED
REGISTERED NUMBER: 03482623

BALANCE SHEET
AS AT 31 DECEMBER 2022

2022
2021
Note
£
£

Fixed assets
  

Tangible fixed assets
  
489,751
37,457

Intangible fixed assets
  
450
957

  
490,201
38,414

Current assets
  

Stocks
  
21,846
25,250

Debtors
 9 
24,018,702
19,109,165

Cash at bank and in hand
 10 
87,498
204,521

  
24,128,046
19,338,936

Creditors: amounts falling due within one year
 11 
(21,421,438)
(16,753,391)

Net current assets
  
 
 
2,706,608
 
 
2,585,545

Total assets less current liabilities
  
3,196,809
2,623,959

Creditors: amounts falling due after more than one year
 12 
(113,628)
(22,935)

Provisions for liabilities
  

Dilapidations provision
  
(353,700)
(264,000)

Net assets
  
2,729,481
2,337,024


Capital and reserves
  

Called up share capital 
  
1,000
1,000

Profit and loss account
  
2,728,481
2,336,024

  
2,729,481
2,337,024


The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.

The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 






W W Tin
Director
Date: 29 September 2023

The notes on pages 9 to 21 form part of these financial statements.

Page 8

 
EC ENGLISH LONDON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

EC English London Limited is a private company limited by shares incorporated in England in the United Kingdom. The registered office is Tennyson House, Cambridge Business Park, Cambridge, CB4 0WZ.
The principal activity of the Company throughout the year continued to be that of the provision of English language courses and related travel services to foreign students.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The following principal accounting policies have been applied:

 
2.2

Going concern

EC English London Limited forms part of the EC Group.
The Group saw continued recovery during 2022, following the significant impact in recent years of the Covid-19 pandemic, and expects to further recover in 2023 and beyond. However, in common with businesses operating in the same or similarly impacted sectors, all forecasts reached at this stage remain subject to a significant degree of underlying uncertainty in a period of considerable macroeconomic and geopolitical volatility.
 
The global economy has also witnessed a substantial rise in inflation rates over the past year. This inflationary trend has been driven by several factors, including increased commodity prices, supply chain disruptions, and changes in government policies. As a multinational company with operations spanning across various regions, the Group has not been immune to these inflationary pressures. To mitigate the potential risks associated with global inflation, management has intensified the focus on operational efficiency and cost control measures. The group has also reviewed the pricing strategies and adjusted them accordingly while aiming to maintain competitive pricing.
The Directors and senior management continue to closely monitor developments in all areas of the business and to react in an agile and decisive manner to ensure the Group’s continued viability and to manage the Group’s liquidity demands within its resources.
It is the Directors’ intention that EC English London Limited will continue to receive support from the group as required.
 
Based on the above, and while there remains a material uncertainty that may cast significant doubt upon the ability of the company to continue as a going concern, the directors consider that it continues to be appropriate to adopt the going concern basis of accounting and the financial statements do not include any adjustments should this basis not be appropriate.

Page 9

 
EC ENGLISH LONDON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.3

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Tuition revenue - Course fees are brought to account when service is provided and is spread evenly over the duration of the course. Discounts and bursaries given to students are netted against tuition revenue.
Accommodation revenue - Accommodation revenue is recognised as the accommodation service is provided.
Other revenue - Other revenue is recognised when the amount can be reliably measured and it is probable that future economic benefits will flow to the entity.

 
2.4

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Income and Retained Earnings in the same period as the related expenditure.

 
2.5

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is  Sterling, rounded to the nearest pound.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Page 10

 
EC ENGLISH LONDON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.6

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Computer Software - 5 years straight line

 
2.7

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Depreciation is provided on the following basis:

Leasehold improvements
-
Over the term of the lease of between 2 and 15 years.
Fixtures, fittings & equipment
-
Between 15% - 33% per annum on a straight line basis

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.8

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.9

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

  
2.10

Debtors

Short term debtors are measured at transaction price, less any impairment.

Page 11

 
EC ENGLISH LONDON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.11

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.12

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Company's Balance Sheet when the Company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The
Page 12

 
EC ENGLISH LONDON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.12
Financial instruments (continued)

impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.

 
2.13

Creditors

Short-term creditors are measured at the transaction price.

Page 13

 
EC ENGLISH LONDON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.14

Leased assets: the Company as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

 
2.15

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.16

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

Page 14

 
EC ENGLISH LONDON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.17

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


3.


Other operating income

2022
2021
£
£

Coronavirus job retention scheme
-
319,976



4.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2022
2021
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
11,309
29,148


5.


Employees

During the year, no director received any emoluments (2021 - £Nil).

The average monthly number of employees, including directors, during the year was 32 (2021 - 36).

Page 15

 
EC ENGLISH LONDON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

6.


Taxation


2022
2021
£
£



Deferred tax


Origination and reversal of timing differences
12,073
2,018


Taxation on profit on ordinary activities
12,073
2,018

Factors affecting tax charge for the year

The Company has estimated tax losses of  £1,024,000 (2021: £1,320,698) available to carry forward against future profits.






7.


Intangible assets




Computer software

£



Cost


At 1 January 2022
2,496



At 31 December 2022

2,496



Amortisation


At 1 January 2022
1,539


Charge for the year on owned assets
507



At 31 December 2022

2,046



Net book value



At 31 December 2022
450



At 31 December 2021
957



Page 16

 
EC ENGLISH LONDON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

8.


Tangible fixed assets





Leasehold Improvement
Fixtures, fittings & equipment
Total

£
£
£



Cost 


At 1 January 2022
1,302,467
577,430
1,879,897


Additions
413,050
80,316
493,366



At 31 December 2022

1,715,517
657,746
2,373,263



Depreciation


At 1 January 2022
1,293,215
549,225
1,842,440


Charge for the year on owned assets
17,836
23,236
41,072



At 31 December 2022

1,311,051
572,461
1,883,512



Net book value



At 31 December 2022
404,466
85,285
489,751



At 31 December 2021
9,252
28,205
37,457

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2022
2021
£
£



Furniture, fittings and equipment
9,416
23,540

Page 17

 
EC ENGLISH LONDON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

9.


Debtors


2022
2021
£
£

Due after more than one year

Other debtors
211,105
16,105

Due within one year

Trade debtors
40,756
89,902

Amounts owed by group undertakings
23,517,524
18,589,732

Other debtors
7,651
22,952

Prepayments and accrued income
229,019
365,754

Deferred taxation
12,647
24,720

24,018,702
19,109,165



10.


Cash and cash equivalents

2022
2021
£
£

Cash at bank and in hand
87,498
204,521



11.


Creditors: Amounts falling due within one year

2022
2021
£
£

Payments received on account
130,056
136,504

Trade creditors
418,418
1,746,841

Amounts owed to group undertakings
19,277,237
12,858,455

Corporation tax
-
87,124

Other taxation and social security
299,266
753,800

Obligations under finance lease and hire purchase contracts
11,476
29,425

Other creditors
9,876
73,819

Accruals and deferred income
1,275,109
1,067,423

21,421,438
16,753,391


Page 18

 
EC ENGLISH LONDON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

12.


Creditors: Amounts falling due after more than one year

2022
2021
£
£

Net obligations under finance leases and hire purchase contracts
-
12,654

Accruals and deferred income
113,628
10,281

113,628
22,935


The following liabilities were secured:

2022
2021
£
£



Net obligations under finance leases and hire purchase contracts
11,476
42,079

Details of security provided:

The security provided is a fixed charge on the assets financed as disclosed in the tangible asset note.


13.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

2022
2021
£
£


Within one year
11,476
29,425

Between 1-5 years
-
12,654

11,476
42,079


14.


Provisions




Dilapidations

£





At 1 January 2022
264,000


Charged to profit or loss
89,700



At 31 December 2022
353,700

Page 19

 
EC ENGLISH LONDON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

15.


Contingent liabilities

A fellow subsidiary, EC English Bristol Limited, entered into an operating lease for the building 63 Queen Square with an annual commitment of £110,110. A guarantee on this building was provided by EC English London Limited. The lease terms is ten years from 2021.
A fellow subsidiary undertaking, EC English Bristol Limited, made use of the Coronavirus Large Business Interruption Loan Scheme made available by the UK Government in response to COVID-19 pandemic.  In respect of this EC English London Limited acts as a guarantor. The directors do not expect that EC English London Limited will be required to make payments in their role as guarantor; however, the possibility of outflows exist under the terms of the guarantee. EC English London Limited has given a guarantee for the full amount of this loan which was £3,000,000 at the year end. Any possible outflow by EC English London Limited as a guarantor to the loan is expected to be limited by virtue of  the following fellow subsidiaries also acting as joint guarantors: EC English Cambridge Limited, House of English Limited, EC English Manchester Limited, EC English Oxford Limited and Embassy Educational Services (UK) Limited. 


16.


Pension commitments

The company operated a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounts to £14,246 (2021 - £12,862). There were £3,126 of contributions outstanding at the year end (2021 - £2,785).


17.


Commitments under operating leases

At 31 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
£
£


Not later than 1 year
130,000
780,260

Later than 1 year and not later than 5 years
1,706,250
166,136

1,836,250
946,396

Page 20

 
EC ENGLISH LONDON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

18.


Related party transactions

The Company recieved recharged amounts of £27,898 from EC English Holdings Limited. In 2021 the Company paid recharged amounts of £68,940 to to EC English Holdings Limited in respect of central overheads.
At 31 December 2022 the Company was owed by/(to) the following fellow group entities:


2022
2021
£
£

EC English Cambridge Limited
(15,298,065)
11,645,435
European Language Centre Limited
(243,029)
1,000
EC English Bristol Limited
(2,945,042)
2,166,092
House of English Limited
(578,078)
(1,697,658)
EC English Oxford Limited
(3,585,384)
3,496,671
EC English Manchester Limited
1,352,519
(931,286)
EC English Dublin Limited
(172,378)
123,376
EC USA Holdings Inc
(296,268)
296,594
EC English Cape Town (Pty) Limited
(25,640)
15,871
EC Vancouver
(4,146)
1,187
Language Studies Canada 'EC Toronto'
81,289
(82,240)
EC UK Investments Limited
(123,973)
123,973
Zamma Holdings Limited
(300,000)
300,000
EC English Holdings Limited
24,825,722
(9,732,435)
EC English Malta Limited
53,107
(106,272)
EC Boston Inc
(80,031)
70,408
EC San Diego Language Center Inc
(47,470)
44,475
EC San Francisco Language Center Inc
(10,812)
9,435
SUNY Fredonia
(40)
40
Oswego Campus
(40)
40
EC New York Inc
(4,124)
2,431
EC Miami Language Center Inc
162
(140)
EC Washington DC
3,826
(3,826)
EC Holdings Ltd
(4,500)
(243,029)
EC Los Angeles Inc
(6,290)
3,784
Embassy Educational Services Limited
1,684,578
193,718
EC English Australia Pty Ltd
(34,436)
34,402
EC Montreal Language Centre Ltd
(1,170)
(444)
-
-
4,240,287
5,731,602


19.


Controlling party

The Company's immediate parent undertaking is EC English Holdings Limited, a company incorporated in Malta.
The consolidated financial statements of EC Global Limited, the parent of EC English Holdings Limited, can be requested from its registered office at Language House, M. Mangion Street, St Julians, Malta.
The ultimate controlling party is Zamma Holdings Limited, a company incorporated in Malta.


Page 21