Registered number: 07800512
THE ETEACH GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
|
COMPANY INFORMATION
|
|
|
G Clarke (appointed 1 February 2023)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CLA Evelyn Partners Limited
|
|
Chartered Accountants & Statutory Auditor
|
|
|
|
|
|
|
|
|
|
|
|
CONTENTS
|
|
|
|
|
|
Directors' Responsibilities Statement
|
|
Independent Auditor's Report
|
|
Consolidated Statement of Comprehensive Income
|
|
Consolidated Balance Sheet
|
|
|
|
Consolidated Statement of Changes in Equity
|
|
Company Statement of Changes in Equity
|
|
Consolidated Statement of Cash Flows
|
|
Notes to the Financial Statements
|
|
|
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2022
The directors present the Group Strategic Report for the year ended 31 October 2022.
Principal activities
The principal activity of the Group continues to be that of the provision of specialist software, recruitment and advertising services for the education sector. The Group works with over 7,500 schools and colleges to deliver recruitment solutions which combine leading technology with sector knowledge and experience. The Group finds clients the right solution to deliver the best candidates and recruitment outcomes quickly, easily and cost effectively. Whilst there has been continued investment in, and development of, each of the Group’s key service areas there have been no changes in the Group's principal activities in the year under review.
Business Review
Our financials reflect the success of our operating strategies as shown by profitability growth. The directors consider that the key performance indicators of the group are earnings before interest, taxation, depreciation and amortisation (EBITDA), School and College licence sales and renewals, candidate traffic and outstanding website performance.
The Group's preferred measure of true profitability EBITDA was £715,087 for the year ended 31 October 2022, decreased from £1,180,129 for the year to 31 October 2021. The Group's profit and loss account shows turnover for the year of £7,549,997 (2021 - £7,712,788) and operating loss attributable to the Group of £4,472 (2021 operating profit - £402,068). The year-on-year decline in operating profit is largely due to increased investment in customer facing teams across the business with an emphasis on customer service and customer satisfaction resulting in an overall 95%+ renewal rate across our licensed customers. In addition, the Company has maintained its financial discipline by focusing on efficiency improvements across the entire cost base. The Company has additionally invested heavily into improving and upgrading our products and maintained investment in the development of our websites as well as investing in developing new innovative and industry leading products.
Eteach offers our clients a range of products, constantly adapting to the changing landscape of the education sector to ensure we offer an excellent, cost-effective solution, coupled with the latest innovative technology to help our customers make the best recruitment decisions.
Our strategy incorporates not only solutions for our customers, but assistance to our candidates by encouraging them to be proactive in their job search through providing free, immediate access to great jobs, easy-to-use online tools, resources and career advice. We also foster an international community of teachers through our site as well as social media, blogs and regular newsletters. We continue to deliver an excellent customer focused service, which is demonstrated in our licence product client renewal rates which continue to remain in excess of 95% as in prior years.
|
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
Candidate statistics
Over 2.4 million total candidates registered at end of October 2022 (2021 - 2.3 million)
More than 131,000 new candidates registered in the year (2021 - 129,000)
Visitors to our websites came from over 224 countries in the year (2021 - 235)
Organic traffic has grown on the new website to 49% (2021 - 45%)
Mobile traffic is growing and now above 74% (2021 - 61%)
Website performance
We advertised over 69,000 jobs on our website (2021 - 50,300)
7,500 schools advertised with us in 2022 (2021 - 7,500)
We have in excess of 10 million users (2021 - 8.7 million) and 38.5 million page views (2021 - 29.6 million)
Eteach has invested to strengthen its senior management and sales teams and with an experienced workforce and trusted partners positioned worldwide, the directors consider that Eteach is well-positioned to continue with its organic mode of growth.
The directors have decided not to declare a dividend in favour of reinvesting this year’s profits in the business to maximise potential and will utilise cash for future growth plans.
Principal risks and uncertainties
|
The Group's sole credit risk relates to its trade debtors. As well as ensuring Multi Academy Trust's, Local Authority's and individual schools adhere to the Government's published payment term policies, the Group operates a robust credit control procedure whereby payments received are matched against client receivables daily. Our collection procedures incorporate regular contact with our debtors to ensure timely payment is received, and prompt action is initiated when necessary. Cash flow is closely monitored, and effective controls are in place to ensure sufficient funds are always available.
The Group manages strategic and commercial risks through an ongoing systems development programme. to maintain and enhance its competitive market position and comprehensive technical platform. Operational and other financial risks and uncertainties are actively managed by regular management review of financial performance, client and candidate activity.
This report was approved by the board and signed on its behalf.
|
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2022
The directors present their report and the financial statements for the year ended 31 October 2022.
The profit for the year, after taxation and minority interests, amounted to £183,131 (2021 - £389,284).
Dividends of £1,000,000 were paid during the year (2021 - £Nil).
The director who served during the year was:
Matters covered in the Group Strategic Report
|
Where necessary, disclosures relating to future developments have been made in the Group Strategic Report and have not been repeated here in accordance with Section 414C of the Companies Act 2006.
Disclosure of information to auditor
|
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 and the Group's auditor is 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 and the Group's auditor is aware of that information.
Post balance sheet events
|
There have been no post balance sheet events.
The auditor, CLA Evelyn Partners Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
|
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2022
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
|
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE ETEACH GROUP LIMITED
Opinion
We have audited the financial statements of The Eteach Group Limited (the 'Parent Company') and it's subsidiaries (the "Group") for the year ended 31 October 2022 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Balance Sheets, Consolidated and Parent Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and the notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 Group's and of the Parent Company's affairs as at 31 October 2022 and of the Group's 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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’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.
Conclusions relating to going concern
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.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group and Parent Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
|
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE ETEACH GROUP LIMITED (CONTINUED)
Other information
The other information comprises the information included in the Annual Report and financial statements, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the Annual Report and financial statements. 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. 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.
|
Opinions 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 Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors’ Report have 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 Group and the Parent Company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or 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 Parent Company 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.
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 4, 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 Group's or Parent 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 Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
|
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE ETEACH GROUP LIMITED (CONTINUED)
Auditor’s 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 auditor’s 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 obtained a general understanding of the company's legal and regulatory framework through enquiry of management concerning their understanding of relevant laws and regulations and the entity's policies and procedures regarding compliance.
We understand the company complies with requirements of the framework through:
∙Updating operating procedures, manuals and internal controls as legal and regulatory requirements change;
∙The Directors' close involvement in the day-to-day running of the business, meaning that any litigation or claims would come to their attention directly.
In the context of the audit, we considered those laws and regulations which determine the form and content of the financial statements, which are central to the company's ability to conduct business and where failure to comply could result in material penalties. We have identified the following laws and regulations as being of significance in the context of the company:
∙The Companies Act 2006 and FRS 102 in respect of the preparation and presentation of the financial statements.
The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the entity's financial statements to material misstatement, including how fraud might occur. The key areas identified as part of the discussion were with regard to the manipulation of the financial statements through manual journals and incorrect recognition of revenue.
The procedures carried out to gain evidence in the above areas included;
∙Testing of revenue transactions to underlying documentation; and
∙Testing of manual journal entries, selected based on specific risk assessments applied based on the client processes and controls surrounding manual journals; and
∙Discussions with management and those charged with governance, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
|
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE ETEACH GROUP LIMITED (CONTINUED)
Use of our report
This report is made solely to the Parent 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 Parent Company’s members those matters we are required to state to them in an auditor’s 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 Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Nicholas Jacques (Senior Statutory Auditor)
for and on behalf of
CLA Evelyn Partners Limited
Chartered Accountants
Statutory Auditor
45 Gresham Street
London
EC2V 7BG
1 November 2023
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest receivable and similar income
|
|
|
|
Interest payable and similar expenses
|
|
|
|
(Loss)/profit before taxation
|
|
|
|
|
|
|
|
Profit for the financial year
|
|
|
|
Profit for the year attributable to:
|
|
|
|
Non-controlling interests
|
|
|
|
Owners of the parent Company
|
|
|
|
The notes on pages 17 to 36 form part of these financial statements.
|
|
|
|
|
THE ETEACH GROUP LIMITED
REGISTERED NUMBER:07800512
|
CONSOLIDATED BALANCE SHEET
AS AT 31 OCTOBER 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debtors: amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creditors: amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
Total assets less current liabilities
|
|
|
|
|
|
Creditors: amounts falling due after more than one year
|
|
|
|
|
|
Provisions for liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital redemption reserve
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE ETEACH GROUP LIMITED
REGISTERED NUMBER:07800512
|
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 OCTOBER 2022
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 36 form part of these financial statements.
|
|
|
|
THE ETEACH GROUP LIMITED
REGISTERED NUMBER:07800512
|
COMPANY BALANCE SHEET
AS AT 31 OCTOBER 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debtors: amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creditors: amounts falling due within one year
|
|
|
|
|
|
Net current (liabilities)/assets
|
|
|
|
|
|
Total assets less current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Creditors: amounts falling due after more than one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital redemption reserve
|
|
|
|
|
|
Profit and loss account carried forward
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own profit and loss in these financial statements. The loss after tax of the Company for the year was £26,497 (2021 - £16,097).
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 36 form part of these financial statements.
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2022
|
|
Capital redemption reserve
|
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest on acquisition
|
|
|
|
|
|
|
|
|
|
|
|
Reduction of share capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners
|
|
|
|
|
|
Dividends: Equity capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2022
|
|
Capital redemption reserve
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners
|
|
|
|
|
|
|
|
|
|
Reduction of share capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners
|
|
|
|
|
Dividends: Equity capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2022
Cash flows from operating activities
|
|
|
Profit for the financial year
|
|
|
|
|
|
Amortisation of intangible assets
|
|
|
Depreciation of tangible assets
|
|
|
|
|
|
|
|
|
|
|
|
Decrease/(increase) in debtors
|
|
|
Increase/(decrease) in creditors
|
|
|
|
|
|
|
|
|
Net cash generated from operating activities
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
Purchase of intangible fixed assets
|
|
|
Purchase of tangible fixed assets
|
|
|
|
|
|
Cash paid on acquisition of subsidiary (net of cash acquired)
|
|
|
Net cash used in investing activities
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
Net decrease in cash and cash equivalents
|
|
|
|
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
Cash and cash equivalents at the end of year
|
|
|
|
|
|
Cash and cash equivalents at the end of year comprise:
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
The Eteach Group Limited is a private company, limited by shares, domiciled and incorporated in England and Wales (registered number: 07800512). The registered office address is 1 Arlington Square, Downshire Way, Bracknell, RG12 1WA.
2.Accounting policies
|
|
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 Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
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 Comprehensive Income in these financial statements.
In preparing the separate financial statements of the Parent Company, advantage has been taken of the following disclosure exemptions available in FRS 102:
∙No Statement of Cash Flows has been presented for the Parent Company; and
∙No disclosures have been given for the aggregate remuneration of the key management personnel of the Parent Company as their remuneration is included in the totals for the Group as a whole.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained.
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
2.Accounting policies (continued)
The financial statements have been prepared on a going concern basis. The Group made a profit of £178,967 (2021 profit - £387,743) for the year ended 31 October 2022 and had net assets of £513,498 (2021 - £1,334,531) at the balance sheet date.
The financial statements have been prepared on a going concern basis. The results for the Group show a positive EBITDA for the year. The director has assessed, based on current projections, that there is reasonable assurance the Company and Group will have adequate resources to meet the on-going costs of the business for a minimum of 12 months from the date of signing the financial statements.
|
|
Foreign currency translation
|
Functional and presentation currency
The Company's functional and presentational currency is GBP.
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.
Turnover represents the total invoice value, excluding value added tax, of sales made during the year and derives from the provision of goods falling within the Group's ordinary activities. The two principal classes of turnover are as follows:
∙Provision of recruitment services for the education sector; revenue is recognised when the services are provided to the customer. Permanent revenue is recognised on start date of the candidate and temporary revenue is recognised based on approved time sheets. Amounts not yet invoiced are included in accrued income in the Balance Sheet; and
∙Subscription revenue is recognised on a straight-line basis over the term of the contract. Revenue not recognised in profit or loss is classified as deferred income in the Balance Sheet.
|
|
Operating leases: the Group as lessee
|
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
2.Accounting policies (continued)
Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in 'other operating income' over the period in which the related costs are recognised. A grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs is recognised in 'other operating income' in the period in which it becomes receivable. Grants relating to assets are recognised over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Comprehensive Income over its useful economic life of 5 years.
Website development costs
Website development costs are charged to profit or loss in the year of expenditure, unless individual projects satisfy all of the following criteria:
a) the project is clearly defined and related expenditure is separately identifiable;
b) the project is technically feasible and commercially viable;
c) current and future costs are expected to be exceeded by future sales; and
d) adequate resources exist for the project to be completed.
In such circumstances, the costs are capitalised and treated as an intangible fixed asset and amortised over a period of three years, commencing in the period the Group starts to benefit from the expenditure. Expenditure incurred on maintaining websites and expenditure incurred on developing website used only for advertising and promotional purposes is written off as incurred.
The expected useful economic life of developments costs are estimated based on the business plans which set out the development plan and time to market the associated project.
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
2.Accounting policies (continued)
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, using the straight-line method.
Depreciation is provided on the following 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.
Investments in subsidiaries are measured at cost less accumulated impairment.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 Group in independently administered funds.
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
2.Accounting policies (continued)
|
|
Provisions for liabilities
|
Provisions are made where an event has taken place that gives the Group 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 Group 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.
Financial assets and financial liabilities are recognised in the Balance Sheet when the Group becomes a party to the contractual provisions of the instrument.
Trade and other debtors and creditors are classified as basic financial instruments and measured on initial recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective evidence that the Group will not be able to collect all amounts due.
Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank, short-term bank deposits with an original maturity of three months or less and bank overdrafts which are an integral part of the Group's cash management.
Financial liabilities and equity instruments issued by the Group are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
2.Accounting policies (continued)
|
|
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 income 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 and the Group operate and generate 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;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
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.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
|
Judgements in applying accounting policies and key sources of estimation uncertainty
|
In the application of the Group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The directors consider that the following judgements have had the most significant effect on amounts recognised in the financial statements:
Impairment of fixed assets and goodwill
Assets that are subject to depreciation or amortisation are assess at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
The directors consider that the key sources of estimation uncertainty in preparing the financial statements are:
Intangible fixed assets
Intangible fixed assets are amortised 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. In re-assessing asset lives, factors such as technological innovation product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
Intangible asset recognition
Website development costs are charged to profit or loss in the year of expenditure unless individual projects satisfy certain criteria. Costs are typically made up of salaries and benefits and third-party service fees. When assessing whether website development costs meet the asset recognition criteria. management considers factors including the related sales and profit projections, market forecasts and historical experience.
Tangible fixed assets
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, in re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal value.
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
3.Judgements in applying accounting policies (continued)
Impairment of debtors
The Group makes an estimate of the recoverable value of trade and other debtors. When assessing the impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.
The whole of the turnover is attributable to the principal activity.
Analysis of turnover by country of destination:
|
Government grants receivable
|
|
|
|
|
|
|
|
|
|
|
|
In 2022, Government grants of £Nil (2021 - £56,067) were received under the Coronavirus Job Retention Scheme as part of a Government initiative to provide immediate financial support as a result of the COVID-19 pandemic to reimburse the Company for 80% of the wages of certain employees who were placed on a temporary period of absence but were kept on the payroll.
There were no future related costs in respect of these grants which were received solely as compensation for costs incurred in the year.
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
|
|
|
The operating (loss)/profit is stated after (crediting)/charging:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortisation of website development
|
|
|
|
Depreciation of tangible fixed assets
|
|
|
|
Other operating lease rentals
|
|
|
|
Fees payable to the Group's auditor and its associates for the audit of the Group's annual financial statements
|
|
|
|
|
|
Staff costs, including directors' remuneration, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of defined contribution scheme
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The average monthly number of employees, including the directors, during the year was as follows:
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
|
The highest paid director received remuneration of £120,000 (2021 - £120,000).
The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £Nil (2021 - £Nil).
There was no director in the Group's defined contribution pension scheme during the year (2021 - £Nil).
|
|
Interest payable and similar expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loan interest payable
|
|
|
|
|
|
|
|
Current tax on (losses)/profit for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Origination and reversal of timing differences
|
|
|
|
|
|
|
|
Taxation on (loss)/profit on ordinary activities
|
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
12.Taxation (continued)
|
Factors affecting tax credit for the year
|
|
The tax assessed for the year is lower than (2021 - lower than) the standard rate of corporation tax in the UK of19% (2021 -19%). The differences are explained below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit on ordinary activities before tax
|
|
|
|
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
|
|
|
|
|
|
|
|
Expenses not deductible for tax purposes
|
|
|
|
|
|
|
|
Adjustment in R&D tax credit
|
|
|
|
|
|
|
|
Adjustment to opening and closing deferred tax to average rate
|
|
|
|
Adjustments to tax charge in respect of prior periods
|
|
|
|
Deferred tax not recognised
|
|
|
|
Difference in overseas tax rates
|
|
|
|
Total tax charge for the year
|
|
|
|
The Group has approximately £928,995 (2021 - £928,995) of tax losses available for offset against future trading profits from a previously acquired trade, subject to agreement by HM Revenue and Customs.
Finance Bill 2021 includes legislation to increase the main rate of corporation tax from 19% to 25% from 1 April 2023. This change had been substantively enacted by the year end and therefore has been reflected in the deferred tax calculations for the year ended 31 October 2022.
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
|
|
Website development costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill arising on consolidation is being amortised over the directors' estimate of its useful life of 5 years. This estimate is based on a variety of factors such as the expected use of the acquired business, the expected useful life of the cash generating units to which the goodwill is attributed, any legal, regulatory or contractual provisions that can limit useful life and assumptions that market participants would consider in respect of similar businesses.
There are no intangible fixed assets held by the Company as at 31 October 2022 (2021 - £Nil).
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
|
|
|
|
|
Computer equipment and software
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There are no tangible fixed assets held by the Company as at 31 October 2022 (2021 - £Nil).
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
|
|
Investments in subsidiary companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Eteach Group Limited has provided a statutory guarantee to Education Boutique Ltd (Company number: 09940709) who has taken advantage of the exemption from audit for the year ended 31 October 2022 as conferred by section 479A of the Companies Act 2006 where such guarantees have been provided.
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
|
|
|
The following were subsidiary undertakings of the Company:
|
|
|
|
|
|
|
|
Eteach Group Services Limited
|
1 Arlington Square, Downshire Way, Bracknell, RG12 1WA
|
|
|
|
|
|
1 Arlington Square, Downshire Way, Bracknell, RG12 1WA
|
Recruitment for the education sector
|
|
|
|
Eteach International FZ LLC
|
Building 9, Office 304, Dubai Internet City
|
Recruitment for the education sector
|
|
|
|
|
1 Arlington Square, Downshire Way, Bracknell, RG12 1WA
|
|
|
|
|
Teach in Birmingham Limited
|
1 Arlington Square, Downshire Way, Bracknell, RG12 1WA
|
|
|
|
|
|
1 Arlington Square, Downshire Way, Bracknell, RG12 1WA
|
|
|
|
|
|
1 Arlington Square, Downshire Way, Bracknell, RG12 1WA
|
|
|
|
|
Eteach International Limited
|
1 Arlington Square, Downshire Way, Bracknell, RG12 1WA
|
|
|
|
|
|
1 Arlington Square, Downshire Way, Bracknell, RG12 1WA
|
|
|
|
|
|
1 Arlington Square, Downshire Way, Bracknell, RG12 1WA
|
|
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed by group undertakings
|
|
|
|
|
|
|
|
|
|
|
|
Prepayments and accrued income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included within other debtors is an amount of £554,202 (2021 - £1,083,650) which was owed to the Group by a director of the Company. See note 28 for further details.
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creditors: Amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed to group undertakings
|
|
|
|
|
|
Other taxation and social security
|
|
|
|
|
|
|
|
|
|
|
|
Accruals and deferred income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
|
Creditors: Amounts falling due after more than one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On 8 June 2020, the Company obtained a bank loan of £1m from Natwest Bank Plc, as part of the Government Coronavirus Business Interruption Loan Scheme. The loan was obtained at an interest rate of 2.34% over base rate and is repayable over a 6 year period, with the first payment being 12 months from drawdown date. There is a fixed and floating charge over the Company's assets as security for the bank loan.
In October 2019, a subsidiary within the Group obtained a loan of £53k from Funding Circle. The loan was obtained at an interest rate of 19.9% and is repayable over a 5 year period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charged to profit or loss
|
|
|
|
|
|
|
|
The deferred tax asset is made up as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated capital allowances
|
|
|
|
Tax losses carried forward
|
|
|
|
Short term timing differences
|
|
|
|
|
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
21.Deferred taxation (continued)
|
Fixed asset timing differences are expected to reverse in line with each corresponding fixed asset class and the classes depreciation rates, as noted in the accounting policies.
Losses and other deductions will continue to be utilised as future profits arise from the Company's ordinary course of business.
|
|
The provision is expected to reverse 6 years.
|
|
|
Allotted, called up and fully paid
|
|
|
|
|
|
|
|
|
|
9,668 (2021 - 9,668) Ordinary shares of £1.00 each
|
|
|
|
The Ordinary shares have attached to them full voting, dividend and capital distribution rights.
|
Capital redemption reserve
This reserve relates to the nominal value of shares that the Company has bought back.
Profit and loss account
This reserve relates to the cumulative retained earnings less amounts distributed to shareholders.
Non-controlling interests
This reserve relates to the cumulative retained earnings less distributions attributable to non-controlling interests.
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £77,330 (2021 - £78,284). Contributions totalling £17,024 (2021 - £664) were payable to the fund at the reporting date.
|
Commitments under operating leases
|
|
At 31 October 2022 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Later than 1 year and not later than 5 years
|
|
|
|
|
|
|
|
Related party transactions
|
|
Key management personnel include all directors of the main trading company of the Group, Eteach UK Limited who have the responsibility for planning, directing and controlling the activities of the Group. The total compensation paid to key management personnel for services provided to the Group was £120,000 (2021 - £120,000).
At 31 October 2022, an amount of £554,204 (2021 - £1,083,650) was owed to the Group by J P Howells, a director of the Company. No interest is charged on advances made to or on the balance owed by the director at the year end.
During the year, three family members of J P Howells, received remuneration totalling £252,020 (2021 - £227,572).
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
|
Post balance sheet events
|
There have been no post balance sheet events.
The ultimate controlling party is J P Howells, by virtue of his shareholding and directorship in the Company.
|