Company registration number 10382721 (England and Wales)
ZEN EDUCATE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ZEN EDUCATE LIMITED
COMPANY INFORMATION
Directors
V Kremerman
O Cohen
B Wirz
T Throsby
P Harrison
(Appointed 9 July 2024)
Secretary
OHS Secretaries Limited
Company number
10382721
Registered office
107 Cheapside
London
EC2V 6DN
Auditor
Alliotts LLP
3 London Square
Cross Lanes
Guildford
GU1 1UJ
ZEN EDUCATE LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Group statement of comprehensive income
7
Group balance sheet
8
Company balance sheet
9 - 10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Company statement of cash flows
14
Notes to the financial statements
15 - 35
ZEN EDUCATE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

Zen Educate provides a simple, streamlined platform for teachers and teaching assistants to find work in schools. Its smartphone app and online platform enables schools and teachers to connect and match with each other.

 

The overall group has seen significant growth in the year, net revenue was £7.9m for the year ending Dec 23, 2.4x year on year growth. The more schools and candidates use the platform, the easier it is for them to match with each other; these network effects provide the group with a solid foundation to continually leverage its growth.

 

Zen Educate UK net revenue was £7.1m for the year ending Dec 23, 2.4x YoY growth. There has been significant work during the year by the Zen Educate product team, increasing the functionality of the platform to further automate bookings of teachers and teaching assistants by schools. Regionally in the UK Zen Educate was already active in 6 cities. In 2023 Zen Educate Ltd acquired a traditional agency in the UK, in February 2023, gaining a presence 2 regions and launching in another.

 

The continued expansion in the United States in 2023 has further extended the reach and impact globally. Zen Educate US was already active in 2 states and launched in further cities in 2023. Overall net revenue of £0.5m, 2.5x year on year growth.

 

Zen Locum also saw continued growth in 2023. Net revenue was 440k for the year ending Dec 2023 1.7x YoY growth.

 

The overall operating loss for the year was £8.1m (2022 – £6.7m). At the year end, the company had net assets of £7.9m (2022 - £13.2m). The Directors have forecast that there are sufficient resources in the company to continue with its current strategy.

Principal risks and uncertainties

Activity from competitors:

Zen Educate has a leading technology platform to leverage its growth, it will continually improve and streamline its platform to consolidate its position in the market. Prices charged to schools are at the low end of the market, providing competitive advantage to Zen Educate within the market. This is in addition to the added automation and ease of booking provided by the platform.

 

Changes to regulation or legislation

Zen Educate continually monitors relevant regulation and legislation, to ensure appropriate action can be taken to mitigate possible impact.

Key performance indicators

                    2023        2022

Zen Educate Group        

Gross Revenue (£m)            37.3        18.3

Net Revenue (£m)            8.0        3.5

Operating Profit / (Loss) (£m)        (8.1)        (6.7)

Net Assets (£m)                7.9        13.2

On behalf of the board

V Kremerman
Director
16 September 2024
ZEN EDUCATE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of the development of a marketplace platform to connect teachers with temporary classroom roles.

Results and dividends

The results for the year are set out on page 7.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

V Kremerman
O Cohen
L A Cowles
(Resigned 9 July 2024)
B Wirz
T Throsby
P Harrison
(Appointed 9 July 2024)
Financial instruments
Liquidity risk

The Group manages liquidity risk by maintaining sufficient cash reserves, establishing credit facilities with reputable financial institutions. Additionally, the Group closely monitors its cash flow projections and maintains a robust liquidity management framework to ensure timely access to funding sources.

Price risk

Due to the nature of the financial instruments used by the company, there is no exposure to price risk.

Credit risk

Zen Educate is exposed to credit risk primarily through trade receivables. To manage credit risk effectively, the Group continuously monitors its exposure to aged debt and implements appropriate measures to mitigate potential losses. It should be noted that historically levels of bad debt are very low due to the nature of the customer base being largely schools supported by government funding.

Cash flow risk

Zen Educate actively manages cash flow risk by carrying out detailed short and long term cash flow forecasting. Zen Educate is supported by a strong group of investors and carefully monitors cashflow against timing of future fund raising activities.

 

The Board of Directors acknowledges the importance of effectively managing these financial risks to safeguard the Group's financial stability. The Group remains committed to implementing sound risk management practices and monitoring its exposure to credit risk, liquidity risk, and cash flow risk to mitigate potential adverse impacts on its financial performance and operations.

Post reporting date events

Zen Educate has raised further investment through Series B fundraise in February 2024 to support future growth of the business.

Future developments

Zen Educate plans to continue to grow in both the UK and US, building on its base of operations in 14 cities and by launching in new cities and regions.

ZEN EDUCATE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Auditor

The auditor, Alliotts LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

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

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
V Kremerman
Director
16 September 2024
ZEN EDUCATE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ZEN EDUCATE LIMITED
- 4 -
Opinion

We have audited the financial statements of Zen Educate Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and 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 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:

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's 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.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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 our audit:

ZEN EDUCATE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ZEN EDUCATE LIMITED
- 5 -
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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 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 parent company or to cease operations, or have no realistic alternative but to do so.

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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Extent to which the audit was considered captable of detecting irregularities, including fraud:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations was as follows:

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

ZEN EDUCATE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ZEN EDUCATE LIMITED
- 6 -
Audit response to risks identified:

To address the risk of fraud through management bias and override of controls, we:Ÿ

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures

which included, but were not limited to:

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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 2006. Our 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 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 company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Christopher Cairns BSc FCA (Senior Statutory Auditor)
For and on behalf of Alliotts LLP
16 September 2024
Chartered Accountants
Statutory Auditor
3 London Square
Cross Lanes
Guildford
GU1 1UJ
ZEN EDUCATE LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
37,254,315
18,270,120
Cost of sales
(29,812,271)
(14,941,709)
Gross profit
7,442,044
3,328,411
Administrative expenses
(15,552,385)
(10,123,199)
Operating loss
4
(8,110,341)
(6,794,788)
Interest receivable and similar income
8
201,522
74,291
Interest payable and similar expenses
9
(310,407)
-
0
Loss before taxation
(8,219,226)
(6,720,497)
Tax on loss
10
(335,676)
(32,815)
Loss for the financial year
(8,554,902)
(6,753,312)
Other comprehensive income
Currency translation gain/(loss) taken to retained earnings
63,331
(13,621)
Total comprehensive income for the year
(8,491,571)
(6,766,933)
Loss for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
ZEN EDUCATE LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
4,967,698
-
0
Tangible assets
12
285,411
209,560
5,253,109
209,560
Current assets
Debtors
15
4,349,948
2,796,190
Cash at bank and in hand
5,836,733
12,607,772
10,186,681
15,403,962
Creditors: amounts falling due within one year
16
(4,308,383)
(2,379,523)
Net current assets
5,878,298
13,024,439
Total assets less current liabilities
11,131,407
13,233,999
Creditors: amounts falling due after more than one year
17
(1,492,910)
(37,954)
Provisions for liabilities
Provisions
19
1,662,590
-
0
Deferred tax liability
20
33,182
32,430
(1,695,772)
(32,430)
Net assets
7,942,725
13,163,615
Capital and reserves
Called up share capital
24
-
0
-
0
Share premium account
30,370,701
29,167,686
Other reserves
2,044,702
-
0
Profit and loss reserves
(24,472,678)
(16,004,071)
Total equity
7,942,725
13,163,615

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

The financial statements were approved by the board of directors and authorised for issue on 16 September 2024 and are signed on its behalf by:
16 September 2024
V Kremerman
Director
Company registration number 10382721 (England and Wales)
ZEN EDUCATE LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
267,183
208,706
Investments
13
6,063,923
1
6,331,106
208,707
Current assets
Debtors
15
6,597,938
3,573,717
Cash at bank and in hand
5,237,863
12,335,419
11,835,801
15,909,136
Creditors: amounts falling due within one year
16
(4,315,238)
(2,356,340)
Net current assets
7,520,563
13,552,796
Total assets less current liabilities
13,851,669
13,761,503
Creditors: amounts falling due after more than one year
17
(1,492,910)
(37,954)
Provisions for liabilities
Provisions
19
1,662,590
-
0
Deferred tax liability
20
30,048
32,430
(1,692,638)
(32,430)
Net assets
10,666,121
13,691,119
Capital and reserves
Called up share capital
24
-
0
-
0
Share premium account
30,370,701
29,167,686
Other reserves
2,044,702
-
0
Profit and loss reserves
(21,749,282)
(15,476,567)
Total equity
10,666,121
13,691,119

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £6,295,679 (2022 - £6,239,429 loss).

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

ZEN EDUCATE LIMITED
COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
The financial statements were approved by the board of directors and authorised for issue on 16 September 2024 and are signed on its behalf by:
16 September 2024
V Kremerman
Director
Company registration number 10382721 (England and Wales)
ZEN EDUCATE LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium account
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
-
0
17,723,949
-
(9,284,785)
8,439,164
Year ended 31 December 2022:
Loss for the year
-
-
-
(6,753,312)
(6,753,312)
Other comprehensive income:
Currency translation differences
-
-
-
(13,621)
(13,621)
Total comprehensive income
-
-
-
(6,766,933)
(6,766,933)
Issue of share capital
24
-
0
11,443,737
-
-
11,443,737
Credit to equity for equity settled share-based payments
23
-
-
-
47,647
47,647
Balance at 31 December 2022
-
0
29,167,686
-
(16,004,071)
13,163,615
Year ended 31 December 2023:
Loss for the year
-
-
-
(8,554,902)
(8,554,902)
Other comprehensive income:
Currency translation differences
-
-
-
63,331
63,331
Total comprehensive income
-
-
-
(8,491,571)
(8,491,571)
Issue of share capital
24
-
0
3,018
-
-
3,018
Credit to equity for equity settled share-based payments
23
-
-
-
22,964
22,964
Issue of share captial (non-cash)
-
1,199,997
-
-
1,199,997
Contingent shares to be issued
-
-
1,933,701
-
1,933,701
Unwinding of discount on shares to be issued
-
-
111,001
-
111,001
Balance at 31 December 2023
-
0
30,370,701
2,044,702
(24,472,678)
7,942,725
ZEN EDUCATE LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Share premium account
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
-
0
17,723,949
-
(9,284,785)
8,439,164
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
-
(6,239,429)
(6,239,429)
Issue of share capital
24
-
0
11,443,737
-
-
11,443,737
Credit to equity for equity settled share-based payments
23
-
-
-
47,647
47,647
Balance at 31 December 2022
-
0
29,167,686
-
(15,476,567)
13,691,119
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
-
(6,295,679)
(6,295,679)
Issue of share capital
24
-
0
3,018
-
-
3,018
Credit to equity for equity settled share-based payments
23
-
-
-
22,964
22,964
Issue of share capital (non-cash)
-
1,199,997
-
-
1,199,997
Contingent shares to be issued
-
-
1,933,701
-
1,933,701
Unwinding of discount on contingent shares
-
-
111,001
-
111,001
Balance at 31 December 2023
-
0
30,370,701
2,044,702
(21,749,282)
10,666,121
ZEN EDUCATE LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
28
(7,151,262)
(6,626,632)
Interest paid
(109,481)
-
0
Income taxes paid
(11,150)
-
0
Net cash outflow from operating activities
(7,271,893)
(6,626,632)
Investing activities
Purchase of business
(997,504)
-
Purchase of tangible fixed assets
(224,473)
(223,118)
Proceeds from disposal of tangible fixed assets
50
796
Interest received
201,522
74,291
Net cash used in investing activities
(1,020,405)
(148,031)
Financing activities
Proceeds from issue of shares
3,018
11,443,737
Proceeds from borrowings
1,460,871
-
Repayment of bank loans
(5,915)
(5,915)
Net cash generated from financing activities
1,457,974
11,437,822
Net (decrease)/increase in cash and cash equivalents
(6,834,324)
4,663,159
Cash and cash equivalents at beginning of year
12,607,772
7,958,234
Effect of foreign exchange rates
63,285
(13,621)
Cash and cash equivalents at end of year
5,836,733
12,607,772
ZEN EDUCATE LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
29
(7,086,151)
(6,916,028)
Interest paid
(109,481)
-
0
Net cash outflow from operating activities
(7,195,632)
(6,916,028)
Investing activities
Purchase of tangible fixed assets
(218,468)
(222,227)
Proceeds from disposal of tangible fixed assets
50
796
Purchase of subsidiaries
(1,357,559)
(1)
Interest received
216,079
76,823
Net cash used in investing activities
(1,359,898)
(144,609)
Financing activities
Proceeds from issue of shares
3,018
11,443,737
Proceeds from borrowings
1,460,871
-
0
Repayment of bank loans
(5,915)
(5,915)
Net cash generated from financing activities
1,457,974
11,437,822
Net (decrease)/increase in cash and cash equivalents
(7,097,556)
4,377,185
Cash and cash equivalents at beginning of year
12,335,419
7,958,234
Cash and cash equivalents at end of year
5,237,863
12,335,419
ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
1
Accounting policies
Company information

Zen Educate Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 107 Cheapside, London, EC2V 6DN.

 

The group consists of Zen Educate Limited and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

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
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Zen Educate Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

At the time of approving the financial statements, the directors confidently affirm that after a recent fundraise, the company has sufficient resources to sustain operations. Consequently, the directors maintain their assurance in the company's ongoing viability, electing to adhere to the going concern basis of accounting in the preparation of the financial statements.

1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is ten years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.7
Tangible fixed assets

Tangible fixed assets 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:

Fixtures and fittings
33.3% on cost
Computers
50% on cost

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 profit and loss account.

ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.8
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.9
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. 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.

1.10
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and 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.

ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.11
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

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

ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

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

1.12
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.13
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 profit and loss account 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 group’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 liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing 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 profit and loss account, 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 if, and only if, there is 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.

ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.14
Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.15
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 stock or fixed 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.

1.16
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.17
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

1.18
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
2
Judgements 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Contingent consideration

In determining whether to recognise additional cost of purchasing a business during the period the directors have determined that amounts due under the share purchase agreement earn out clauses are likely to be met and therefore have recognised the expected future outflows as additional consideration in the purchase.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Useful economic life of goodwill

In determining the appropriate useful economic life of goodwill the directors are required to make an estimate of the likely future benefits arising from the acquisition and the period over which these will occur.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Education
36,813,775
18,016,531
Locum
440,540
253,589
37,254,315
18,270,120
2023
2022
£
£
Other revenue
Interest income
201,522
74,291

Turnover by geographical market has not been disclosed on the basis that in the opinion of the directors, the disclosure of this information would be seriously prejudicial to the interests of the company.

ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
4
Operating loss
2023
2022
£
£
Operating loss for the year is stated after charging/(crediting):
Exchange losses
118,014
3,108
Depreciation of owned tangible fixed assets
165,164
112,450
Profit on disposal of tangible fixed assets
(50)
(796)
Amortisation of intangible assets
501,327
-
Share-based payments
22,964
47,647
Operating lease charges
363,972
199,266
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
23,000
17,150
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Management
12
10
11
10
Sales, Marketing, and Customer Success
144
91
136
88
Product Development
17
11
16
11
Other
9
4
9
4
Total
182
116
172
113

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
9,678,953
6,152,302
8,822,536
6,014,656
Social security costs
872,947
547,475
855,650
547,475
Pension costs
189,914
118,082
191,097
118,082
10,741,814
6,817,859
9,869,283
6,680,213
ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
340,000
295,606
Company pension contributions to defined contribution schemes
10,200
8,850
350,200
304,456

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
170,000
153,630
Company pension contributions to defined contribution schemes
5,100
4,600
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
201,522
74,291
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
201,522
74,291
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
1,029
-
Other interest on financial liabilities
108,452
-
109,481
-
Other finance costs:
Unwinding of discount on provisions
200,926
-
Total finance costs
310,407
-
0
ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(15,634)
-
0
Adjustments in respect of prior periods
353,692
-
0
Total current tax
338,058
-
0
Deferred tax
Origination and reversal of timing differences
(2,382)
32,815
Total tax charge
335,676
32,815

The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Loss before taxation
(8,219,226)
(6,720,497)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(1,933,162)
(1,276,894)
Tax effect of expenses that are not deductible in determining taxable profit
60,265
9,576
Tax effect of income not taxable in determining taxable profit
(1,113)
-
0
Adjustments in respect of prior years
353,692
-
0
Other permanent differences
33
-
0
Foreign exchange differences
-
0
1,280
Fixed asset differences
(792)
(12,667)
Remeasurement of deferred tax for changes in tax rates
193,473
(277,016)
Movement in deferred tax not recognised
1,663,280
1,588,536
Taxation charge
335,676
32,815
ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
11
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 January 2023
-
0
Additions - business combinations
5,469,025
At 31 December 2023
5,469,025
Amortisation and impairment
At 1 January 2023
-
0
Amortisation charged for the year
501,327
At 31 December 2023
501,327
Carrying amount
At 31 December 2023
4,967,698
At 31 December 2022
-
0
The company had no intangible fixed assets at 31 December 2023 or 31 December 2022.
12
Tangible fixed assets
Group
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 January 2023
277,541
211,571
489,112
Additions
129,412
95,061
224,473
Business combinations
16,496
-
0
16,496
Disposals
-
0
(32,732)
(32,732)
At 31 December 2023
423,449
273,900
697,349
Depreciation and impairment
At 1 January 2023
158,241
121,311
279,552
Depreciation charged in the year
79,961
85,203
165,164
Eliminated in respect of disposals
-
0
(32,732)
(32,732)
Exchange adjustments
-
0
(46)
(46)
At 31 December 2023
238,202
173,736
411,938
Carrying amount
At 31 December 2023
185,247
100,164
285,411
At 31 December 2022
119,300
90,260
209,560
ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
Tangible fixed assets
(Continued)
- 26 -
Company
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 January 2023
277,541
210,680
488,221
Additions
129,412
89,056
218,468
Disposals
-
0
(32,732)
(32,732)
At 31 December 2023
406,953
267,004
673,957
Depreciation and impairment
At 1 January 2023
158,241
121,274
279,515
Depreciation charged in the year
76,662
83,329
159,991
Eliminated in respect of disposals
-
0
(32,732)
(32,732)
At 31 December 2023
234,903
171,871
406,774
Carrying amount
At 31 December 2023
172,050
95,133
267,183
At 31 December 2022
119,300
89,406
208,706
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
6,063,923
1
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
1
Additions
6,063,922
At 31 December 2023
6,063,923
Carrying amount
At 31 December 2023
6,063,923
At 31 December 2022
1
ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Zen Educate Inc.
251 Little Falls Drive, Wilmington, New Castle County, Delaware 19808-1674, United States
Ordinary
100.00
Inveniet Opus Ltd
9th Floor, 107 Cheapside, London, England, EC2V 6DN
Ordinary
100.00

The subsidiary company, Inveniet Opus Ltd (Company number: 09366604) has taken exemption from audit under section 479A of the Companies Act 2006 for the year ended 31 December 2023.

 

Zen Educate Limited will guarantee the debts and liabilities of Inveniet Opus Ltd which is claiming the statutory audit exemption at the balance sheet date in accordance with Section 479C of the Companies Act 2006. The Company has assessed the probability of loss under the guarantee as remote.

15
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
3,913,470
2,225,497
3,504,741
2,013,987
Corporation tax recoverable
-
0
353,693
-
0
353,693
Amounts owed by group undertakings
-
-
2,686,275
1,021,077
Other debtors
162,330
86,826
162,330
83,506
Prepayments and accrued income
274,148
130,174
244,592
101,454
4,349,948
2,796,190
6,597,938
3,573,717
16
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
18
5,914
5,914
5,914
5,914
Trade creditors
3,380,554
1,886,678
3,352,929
1,869,138
Amounts owed to group undertakings
-
0
-
0
62,792
-
0
Other taxation and social security
567,068
290,714
567,316
290,714
Deferred income
21
13,781
22,358
13,781
22,358
Other creditors
61,426
37,300
53,565
37,253
Accruals and deferred income
279,640
136,559
258,941
130,963
4,308,383
2,379,523
4,315,238
2,356,340
ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
17
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
18
32,039
37,954
32,039
37,954
Other borrowings
18
1,460,871
-
0
1,460,871
-
0
1,492,910
37,954
1,492,910
37,954
Amounts included above which fall due after five years are as follows:
Payable by instalments
-
14,294
-
14,294
18
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
37,953
43,868
37,953
43,868
Other loans
1,460,871
-
0
1,460,871
-
0
1,498,824
43,868
1,498,824
43,868
Payable within one year
5,914
5,914
5,914
5,914
Payable after one year
1,492,910
37,954
1,492,910
37,954

Borrowings relate to a Bounce Back Loan taken out in 2020 for £50,000. The loan is repayable over ten years, and interest is charged at a rate of 2.5%. During the first 12 months, interest payments were covered by the UK Governments Business Interruption Payment scheme.

 

Borrowings also include a loan taken out in 2023 for £1,460,871. The loan is repayable over four years, and interest is charged at the higher of 10.75% or 7.00% plus EURIBOR per annum. The loan is secured over a fixed and floating charge over the company's assets.

19
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Contingent consideration
1,662,590
-
1,662,590
-
ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
19
Provisions for liabilities
(Continued)
- 29 -
Movements on provisions:
Contingent consideration
Group
£
Additional provisions in the year
1,572,665
Unwinding of discount
89,925
At 31 December 2023
1,662,590
Contingent consideration
Company
£
Additional provisions in the year
1,572,665
Unwinding of discount
89,925
At 31 December 2023
1,662,590

Contingent consideration relates to amounts due in relation to the company's acquisition of Inveniet Opus Limited. The directors are of the opinion that it is likely the payments will be made and therefore a provision is recognised in this respect.

20
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
37,612
32,430
Short term timing differences
(4,430)
-
33,182
32,430
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
34,478
32,430
Short term timing differences
(4,430)
-
30,048
32,430
ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
20
Deferred taxation
(Continued)
- 30 -
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 January 2023
32,430
32,430
Credit to profit or loss
(2,382)
(2,382)
Other
3,134
-
Liability at 31 December 2023
33,182
30,048

Deferred tax of £34,478 included in the deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

Deferred tax is not recognised in respect of UK tax losses of £20,419,216 and US tax losses of $2,438,586 as it is not probable that they will be recovered in the short to medium term against the reversal of deferred tax liabilities or future taxable profits.

21
Deferred income
Group
Company
2023
2022
2023
2022
£
£
£
£
Other deferred income
13,781
22,358
13,781
22,358
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
189,914
118,082

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
23
Share-based payment transactions
Group and company
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 January 2023
825,671
650,287
0.71
0.66
Granted
115,411
198,081
1.18
0.86
Forfeited
(29,452)
(4,960)
0.85
0.72
Exercised
(2,205)
(17,737)
1.02
0.71
Outstanding at 31 December 2023
909,425
825,671
0.76
0.71
Exercisable at 31 December 2023
669,342
490,402
0.66
0.65

The options outstanding at 31 December 2023 had an exercise price ranging from £0.1045 to £1.18, and a remaining contractual life of 5-10 years.

 

The above table includes all options relating to the company's EMI scheme.

 

In addition, 7,714 share options relating to non-EMI schemes were granted during the year (2022: 10,828), nil share options were forfeited (2022: nil) and nil share options were exercised (2022: nil). The weighted average exercise price of all outstanding non-EMI share options was 0.025 (2022: 0.027).

Group and company

The fair value of options granted in the year was determined using the Black-Scholes option pricing model. The Black-Scholes model is considered to apply the most appropriate valuation method due to the relatively short contractual lives of the options and the requirement to exercise within a short period after the employee becomes entitled to the shares (the “vesting date”).

 

The expected life used in the model has been adjusted, based on management’s best estimate, for the effect of non-transferability, exercise restrictions, and behavioural considerations.

 

Non-vesting conditions and market conditions are taken into account when estimating the fair value of the option at grant date. Service conditions and non-market performance conditions are taken into account by adjusting the number of options expected to vest at each reporting date.

Group
Company
2023
2022
2023
2022
£
£
£
£
Expenses recognised in the year
Arising from equity settled share based payment transactions
22,964
47,647
22,964
47,647
ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
24
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.00001p each
3,615,985
3,409,414
-
-
series A1 ordinary shares of 0.00001p each
501,209
501,209
-
-
series A2 ordinary shares of 0.00001p each
497,735
497,735
-
-
series A3 ordinary shares of 0.00001p each
1,984,725
1,984,725
-
-
6,599,654
6,393,083
-
-
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
series A1 preference shares of 0.00001p each
637,194
637,194
-
-
series A2 preference shares of 0.00001p each
458,524
458,524
-
-
series A3 preference shares of 0.00001p each
1,893,724
1,893,724
-
-
2,989,442
2,989,442
-
-
25
Acquisition of a business

On 31 January 2023 the group acquired 100 percent of the issued capital of Inveniet Opus Ltd.

Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Property, plant and equipment
16,496
-
16,496
Trade and other receivables
793,322
-
793,322
Cash and cash equivalents
360,055
-
360,055
Trade and other payables
(191,364)
-
(191,364)
Tax liabilities
(380,476)
-
(380,476)
Deferred tax
(3,134)
-
(3,134)
Total identifiable net assets
594,899
-
594,899
Goodwill
5,469,023
Total consideration
6,063,922
The consideration was satisfied by:
£
Cash
1,357,559
Issue of shares
1,199,997
Deferred consideration
3,506,366
6,063,922
ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
25
Acquisition of a business
(Continued)
- 33 -
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
247,276
Loss after tax
(199,639)

The goodwill arising on the acquisition of the business is attributable to anticipated profitability of the expansion of the company's services in new markets.

26
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
392,730
201,988
392,730
201,988
Between two and five years
170,664
101,136
170,664
101,136
In over five years
348,750
-
348,750
-
912,144
303,124
912,144
303,124
27
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2023
2022
£
£
Aggregate compensation
1,222,604
915,871
ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 34 -
28
Cash absorbed by group operations
2023
2022
£
£
Loss for the year after tax
(8,554,904)
(6,753,312)
Adjustments for:
Taxation charged
335,676
32,815
Finance costs
310,407
-
0
Investment income
(201,522)
(74,291)
Gain on disposal of tangible fixed assets
(50)
(796)
Amortisation and impairment of intangible assets
501,327
-
Depreciation and impairment of tangible fixed assets
165,164
112,450
Equity settled share based payment expense
22,964
47,647
Movements in working capital:
Increase in debtors
(1,467,821)
(1,463,848)
Increase in creditors
1,746,074
1,454,845
(Decrease)/increase in deferred income
(8,577)
17,858
Cash absorbed by operations
(7,151,262)
(6,626,632)
29
Cash absorbed by operations - company
2023
2022
£
£
Loss for the year after tax
(6,295,679)
(6,239,429)
Adjustments for:
Taxation charged
351,310
32,815
Finance costs
310,407
-
0
Investment income
(216,079)
(76,823)
Gain on disposal of tangible fixed assets
(50)
(796)
Depreciation and impairment of tangible fixed assets
159,991
112,413
Equity settled share based payment expense
22,964
47,647
Movements in working capital:
Increase in debtors
(3,377,914)
(2,241,375)
Increase in creditors
1,967,476
1,431,662
(Decrease)/increase in deferred income
(8,577)
17,858
Cash absorbed by operations
(7,086,151)
(6,916,028)
ZEN EDUCATE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 35 -
30
Analysis of changes in net funds - group
1 January 2023
Cash flows
Exchange rate movements
31 December 2023
£
£
£
£
Cash at bank and in hand
12,607,772
(6,834,324)
63,285
5,836,733
Borrowings excluding overdrafts
(43,868)
(1,454,956)
-
(1,498,824)
12,563,904
(8,289,280)
63,285
4,337,909
31
Analysis of changes in net funds - company
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
12,335,419
(7,097,556)
5,237,863
Borrowings excluding overdrafts
(43,868)
(1,454,956)
(1,498,824)
12,291,551
(8,552,512)
3,739,039
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