Company registration number 12489904 (England and Wales)
THINK ACADEMY INTERNATIONAL EDUCATION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
THINK ACADEMY INTERNATIONAL EDUCATION LIMITED
CONTENTS
Page
Statement of financial position
1
Notes to the financial statements
2 - 10
THINK ACADEMY INTERNATIONAL EDUCATION LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 1 -
2023
2022
Notes
£
£
Non-current assets
Property, plant and equipment
4
20,525
18,273
Current assets
Trade and other receivables
5
199,062
92,455
Cash and cash equivalents
914,491
827,220
1,113,553
919,675
Current liabilities
Trade and other payables
8
282,517
136,017
Borrowings
7
800,000
Deferred revenue
9
685,607
218,356
968,124
1,154,373
Net current assets/(liabilities)
145,429
(234,698)
Net assets/(liabilities)
165,954
(216,425)
Equity
Called up share capital
11
4,300,000
2,000,000
Retained earnings
(4,134,046)
(2,216,425)
Total equity
165,954
(216,425)
The notes on pages 2 to 10 form part of these financial statements.
The director of the company has elected not to include a copy of the income statement within the financial statements.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 23 August 2024 and are signed on its behalf by:
W Shi
Director
Company registration number 12489904 (England and Wales)
THINK ACADEMY INTERNATIONAL EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
1
Accounting policies
Company information
Think Academy International Education Limited is a private company limited by shares incorporated in England and Wales. The registered office is Suite 1, 7th Floor, 50 Broadway, London, SW1H 0BL. The principal place of business is One Canada Square, London, E14 5AA. The company's principal activities and nature of its operations are disclosed in the director's report.
1.1
Accounting convention
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The financial statements have been prepared on a going concern basis which assumes that the company willtrue continue in operational existence for the foreseeable future.
The validity of this assumption depends on the company being able to trade profitably in the future, and the continued support from its ultimate parent company, TAL Education Group. The financial statements do not include any adjustments that would result if the company continued to make losses and such support were withdrawn. If the company was unable to continue to trade, adjustments would have to be made to reduce the value of assets to their recoverable amounts, provide for further liabilities that may arise and to reclassify fixed assets and long term liabilities as current assets and liabilities. Its ultimate parent company has provided an undertaking to continue supporting the company for a period of at least 12 months from the date of signing of these financial statements and hence it is appropriate for the financial statements to be prepared on a going concern basis.
1.3
Revenue
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The company recognises revenue when it transfers control of a product or service to a customer.
Revenue is recognised when control of promised goods or services is transferred to the company’s customers in an amount of consideration to which the company expects to be entitled to in exchange for those goods or services. The company follows the five steps approach for revenue recognition under IFRS 15: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognise revenue when (or as) the company satisfies a performance obligation.
The company generated substantially all of its revenues through learning service with individual student in the UK, in which revenue is recognised over time. The company provides online education services, including live class and pre-recorded course content, to its students.
THINK ACADEMY INTERNATIONAL EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 3 -
Students enroll for online courses through the company's website or mobile apps by the use of prepaid study cards or payment to the company’s online accounts. Each contract of the online education service is accounted for as single performance obligation which is satisfied ratably over the service period. The proceeds collected are initially recorded as deferred revenue. For live class courses, revenues are recognised proportionately as the learning sessions are delivered. For pre-recorded course content, revenues are recognised on a straight line basis over the subscription period from the date in which the students activate the courses to the date in which the subscribed courses end. Refunds are provided to the students who decide to withdraw from the subscribed courses within the course offer period and a proportional refund is based on the percentage of untaken courses to the total courses purchased.
As a practical expedient, the company elects to record the incremental costs of obtaining a contract as an expense when incurred if the amortisation period of the asset that the entity otherwise would have recognised is one year or less. In addition, the company determines the transaction price to be earned by estimating the refund liability based on historical refund ratio on a portfolio basis using the expected value method. Reclassification was made from deferred revenue to refund liabilities, which was recorded under accrued expenses and other current liabilities, for tuition collected that expected to be refunded to the customers in the future if students withdraw from a course for the remaining classes.
1.4
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
Over 3 years
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
1.5
Impairment of tangible and intangible assets
At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
THINK ACADEMY INTERNATIONAL EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 4 -
1.6
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial assets
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
Financial assets at fair value through profit or loss
When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.
Impairment of financial assets
Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.
The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
1.8
Financial liabilities
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
THINK ACADEMY INTERNATIONAL EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 5 -
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
THINK ACADEMY INTERNATIONAL EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 6 -
1.13
Leases
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Adoption of new and revised standards and changes in accounting policies
In the current year, the following new and revised Standards and Interpretations have been adopted by the company and have no signficant effect on the current period or a prior period or on future periods:
- Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
- International Tax Reform—Pillar Two Model Rules (Amendments to IAS 12)
- Amendments to IAS 1 Presentation of Financial Statements
• Non-current Liabilities with Covenants
• Deferral of Effective Date Amendment (published 15 July 2020)
Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) (published 23 January 2020)
- Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
Standards which are in issue but not yet effective
At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective:
- Lack of Exchangeability (Amendments to IAS 21) - adoption date 15 July 2024
The director does not expect that the adoption of these standards will have a material impact on the financial statements of the company in the future periods.
THINK ACADEMY INTERNATIONAL EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Management
1
1
Teachers
30
14
Researchers
4
3
Administrative
3
4
Marketing
2
3
Total
40
25
4
Property, plant and equipment
Plant and equipment
£
Cost
At 1 January 2022
23,625
Additions
9,815
Disposals
(1,004)
At 31 December 2022
32,436
Additions
15,157
Disposals
(7,871)
At 31 December 2023
39,722
Accumulated depreciation and impairment
At 1 January 2022
5,468
Charge for the year
8,695
At 31 December 2022
14,163
Charge for the year
10,349
Eliminated on disposal
(5,315)
At 31 December 2023
19,197
Carrying amount
At 31 December 2023
20,525
At 31 December 2022
18,273
THINK ACADEMY INTERNATIONAL EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
5
Trade and other receivables
2023
2022
£
£
Other receivables
128,330
73,370
Prepayments
70,732
19,085
199,062
92,455
6
Trade receivables - credit risk
Fair value of trade receivables
The director considers that the carrying amount of trade and other receivables is approximately equal to their fair value.
No significant receivable balances are impaired at the reporting end date.
7
Borrowings
2023
2022
£
£
Borrowings held at amortised cost:
Loans from parent undertaking
-
800,000
-
800,000
8
Trade and other payables
2023
2022
£
£
Trade payables
5,819
168
Accruals
125,322
94,031
Social security and other taxation
119,177
37,001
Other payables
32,199
4,817
282,517
136,017
9
Deferred revenue
2023
2022
£
£
Arising from online education services
685,607
218,356
All deferred revenues are expected to be settled within 12 months from the reporting date.
As of the reporting period, the deferred revenue is the difference between the opening and closing balances of the company’s contract liabilities primarily results from the timing difference between the company's satisfaction of performance obligation and the customer’s payment.
THINK ACADEMY INTERNATIONAL EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
10
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
20,083
9,155
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
11
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
4,300,000
2,000,000
4,300,000
2,000,000
Reconciliation of movements during the year:
Number
At 1 January 2023
2,000,000
Issue of fully paid shares
2,300,000
At 31 December 2023
4,300,000
On 6 April 2023, by written resolution the company allotted 1,800,000 ordinary shares of £1 each with an aggregate nominal value of £1,800,000 of which £800,000 is by way of capitalisation of loan from its shareholder.
On 10 October 2023, by written resolution the company allotted 500,000 ordinary shares of £1 each with an aggregate nominal value of £500,000.
12
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Goh Yong Chong
Date of audit report:
23 August 2024
THINK ACADEMY INTERNATIONAL EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
13
Other leasing information
Lessee
Amounts recognised in profit or loss as an expense during the period in respect of lease arrangements are as follows:
2023
2022
£
£
Expense relating to short-term leases
347,000
202,000
14
Capital risk management
The company manages its capital to ensure that it will be able to continue as a going concern. The company manages its capital structure by making necessary adjustments to response to the changes in economic conditions.
The company is not subject to any externally imposed capital requirements.
15
Controlling party
From 29 April 2023, the immediate parent changed to Century TAL Holding PTE. Ltd., a company incorporated in Singapore.
The ultimate parent company is TAL Education Group, a company incorporated in Cayman Island.
The ultimate parent company prepared the consolidated financial statements which include the results of this company. Copies of TAL Education Group financial statements can be publicly obtained from en.100tal.com.
The ultimate controlling party is Mr Bangxin Zhang.
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