Company registration number 07049148 (England and Wales)
LCA EDUCATION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
LCA EDUCATION LIMITED
COMPANY INFORMATION
- 1 -
Director
Dr R Gill, OBE (Chairman)
Secretary
Mr W K Leung
Company number
07049148
Registered office
19 Charterhouse Street
London
UK
EC1N 6RA
Auditor
King & King Chartered Accountants
Chartered Accountants & Statutory Auditors
5th Floor, Watson House
54-60 Baker Street
London
W1U 7BU
Bankers
Barclays Bank Plc
1 Churchill Place
London
E14 5HP
Solicitors
Adams and Remers LLP
Chancery House
53-64 Chancery Lane
London
UK
WC2A 1QS
LCA EDUCATION LIMITED
CONTENTS
Page
Strategic report
2 - 3
Director's report
4 - 5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 23
LCA EDUCATION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The director presents the strategic report for the year ended 31 December 2023.
Principal activities
The principal activity of the company continues to be the provision of higher education.
Review of the business
The company commenced its business operations from February 2021 followed by the intake of students commenced from the academic year September 2021. The company introduced its teaching infrastructure to allow remote teaching and learning and to ensure that our students could, continue to receive excellent tuition whilst off campus. We invested heavily in IT hardware, support and personnel to enable us to remain competitive and minimise the impact on our student-facing services.
Students are at the heart of our offer and our company. We have greatly increased our focus on reinvestment back into the company to improve the students’ quality of life and learning. To support our students further, we put in place an Attendance Bursary. All were major financial help to our students during the year.
The company has continued to expand. It opened an extra building fully refurbished and equipped in the heart of east London in May 2021 to provide additional facilities for our growing student population. The company has further opened an extra building in Manchester in April 2023 by setting up two floors in Manchester and the company is also in the process of setting up a floor in east London in October 2023 to provide additional facilities to our growing student population. There is now over 80,400 sq.ft of administrative and teaching space in east London and central Manchester.The company has invested heavily in support for people with disabilities. And as mental health is a crucial part of student as well as staff well-being, the company has invested in a new well-being support department and support services. Employability services continues to be a focus for us, both during and post-degree to ensure the students are well equipped to enter and thrive in their chosen industry.
The company increased its turnover from £ 5.1 m to £ 9.9 m in the current financial year. In line with this, the gross profit of the company has improved. The state of affairs as at balance sheet date and the future prospects are steadily improving. The company had no bank borrowing or overdraft at the year end and it is being supported by parent company, LCAE Group Ltd for working capital management as required. Measures are being taken on an ongoing basis to address the key business risks and secure the company's business. This proactive approach has resulted in steady growth in revenue in the last financial year and this trend is expected to continue over the subsequent years.
The company is a wholly owned subsidiary of LCAE Group Limited with effect from 01 January 2023 with Dr R Gill being the ultimate beneficial owner of LCAE Group Limited.
Principal risks and uncertainties
The principal risks facing the company is the failure to recruit sufficient students at each recruitment cycle. The company mitigates this risk by closely monitoring the student recruitment numbers, introducing wider range of popular courses and discontinuing courses that are no longer in demand.
Due to close involvement of senior management, general business risk is identified and addressed on a regular basis. The board of directors review the risk assessment and the management response on a quarterly basis. The principal uncertainties facing the company are the general political and economic conditions.
The company uses various financial instruments including cash, debtors and creditors to manage the working capital of the company.
Liquidity risk
Liquidity risk is the risk that insufficient working capital will be generated by the company's and for liquidity risk management, the company is being supported by parent company, LCAE Group Ltd for working capital management as required.
LCA EDUCATION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Future developments
Directors continue to review their strategy and business models to improve the efficiency of the organisation, to invest in up to date facilities in order to enhance the students' learning experience and outcome. The plan going forward is to build upon efforts already made to increase the new range of course offering.
This has already resulted in an increase in student numbers since the year end and expected to continue to the next financial year. The company strives to provide high quality education and develop good relationship with students and lecturers.
In January 2024, LCA Education Ltd, entered into a new academic agreement with the University of Central Lancashire and started to offer courses.
Key performance indicators
The directors monitor the performance of the company by using a number of financial and non-financial performance indicators. These indicators are regularly reviewed to ensure that they remain appropriate and relevant to monitor the challenges, complexities and improvements in the business. An analysis using KPIs for an understanding of the development, performance and position of the business has been prepared. Due to commercial sensitivity these are not disclosed in the accounts. In any event the directors are of the opinion that the underlying financial statements would enable key financial KPI's to be evaluated.
The director monitors the performance of the company by using a number of financial and non-financial performance indicators. The turnover and student numbers are primary KPIs, regularly reviewed to ensure that they remain appropriate and relevant to monitor the challenges, complexities and improvements in the business.
| | | |
| | | |
Student no as at year end | | | |
In addition to these main KPIs, the following non-financial KPIs are closely reviewed to assess the progress of the company’s strategy and objectives.
Measured against expectations set by the board to ensure alignment with organizational goals.
Compared to forecast targets to assess enrolment performance.
Monitored against the budget to ensure financial health and operational efficiency.
Conducted on an ongoing basis to compare actual results against the budget, identifying discrepancies and areas for improvement.
Overseen to ensure compliance with the Office for Students
Dr R Gill, OBE (Chairman)
Director
17 September 2024
LCA EDUCATION LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The director presents his annual report and audited financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continues to be the provision of higher education.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Dr R Gill, OBE (Chairman)
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its director during the year. These provisions remain in force at the reporting date.
Business relationships
Details on how the company has fostered relationships with suppliers, customers and others can be found within the company’s Section 172 statement in the Strategic Report.
Post reporting date events
Post balance sheet events are set out in note 12 to the financial statements.
Future developments
The Company’s future developments are set out in the Future Development section of the Strategic Report.
Auditor
The auditor, King & King, Chartered Accountants and Statutory Auditor is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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 enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
LCA EDUCATION LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Strategic report
Directors are required to prepare "Strategic report" under section 414a of Companies Act 2006 (Strategic Report and Directors Report) Regulations 2013. Under that law directors have prepared the strategic report for the company. The directors have chosen to present the "Business review and the future development" and "Financial risk management objectives and policies" in the strategic report.
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 company’s auditor 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 company’s auditor is aware of that information.
Going concern
As at the reporting date the company's current liabilities exceeded the total assets resulting in a negative equity of the company as at the reporting date which stood at £2,121,120 (as at 31.12.2022: £1,532,357). The company's financial statements are prepared on the going concern basis. The Director has a reasonable expectation that the company will continue in operational existence for the foreseeable future. The director, Dr R Gill and the parent company, LCAE Group Limited has pledged to provide financial support for the seamless functioning of the company's operations as and when required in the future.
Small companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
On behalf of the board
Dr R Gill, OBE (Chairman)
Director
17 September 2024
LCA EDUCATION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF LCA EDUCATION LIMITED
- 6 -
Opinion
We have audited the financial statements of LCA Education Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss 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.
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 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 director's 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 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 director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
LCA EDUCATION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF LCA EDUCATION LIMITED (CONTINUED)
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the director's report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the director was not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the director's report.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has 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.
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatements in respect of irregularities including fraud and non-compliance with laws and regulations, we consider the following:
- Enquiry of management, those charged with governance and the entity’s solicitors around actual and potential litigation and claims.
- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
- Reviewing minutes of meetings of those charged with governance.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
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.
LCA EDUCATION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF LCA EDUCATION LIMITED (CONTINUED)
- 8 -
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Rajesh Patel
Senior Statutory Auditor
For and on behalf of King & King Chartered Accountants
17 September 2024
Statutory Auditor
5th Floor, Watson House
54-60 Baker Street
London
W1U 7BU
LCA EDUCATION LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Year
Period
ended
ended
31 December
31 December
2023
2022
as restated
£
£
Turnover
9,919,044
5,088,068
Cost of sales
(5,708,692)
(2,798,759)
Gross profit
4,210,352
2,289,309
Administrative expenses
(4,266,018)
(2,037,208)
Operating (loss)/profit
(55,666)
252,101
Interest receivable and similar income
46,616
510
Interest payable and similar expenses
(35,346)
(24,382)
(Loss)/profit before taxation
(44,396)
228,229
Tax on (loss)/profit
(544,367)
594,935
(Loss)/profit for the financial year
(588,763)
823,164
The profit and loss account has been prepared on the basis that all operations are continuing operations.
LCA EDUCATION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Year
Period
ended
ended
2023
2022
as restated
£
£
(Loss)/profit for the year
(588,763)
823,164
Other comprehensive income
-
-
Total comprehensive income for the year
(588,763)
823,164
LCA EDUCATION LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
4
8,320,202
3,734,780
Current assets
Debtors falling due after more than one year
5
2,585,743
1,585,743
Debtors falling due within one year
5
2,770,994
2,139,106
Cash at bank and in hand
1,603,378
337,137
6,960,115
4,061,986
Creditors: amounts falling due within one year
6
(15,763,556)
(8,608,125)
Net current liabilities
(8,803,441)
(4,546,139)
Total assets less current liabilities
(483,239)
(811,359)
Provisions for liabilities
7
(1,637,881)
(720,998)
Net liabilities
(2,121,120)
(1,532,357)
Capital and reserves
Called up share capital
1
1
Profit and loss reserves
(2,121,121)
(1,532,358)
Total equity
(2,121,120)
(1,532,357)
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved and signed by the director and authorised for issue on 17 September 2024
Dr R Gill, OBE (Chairman)
Director
Company registration number 07049148 (England and Wales)
LCA EDUCATION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 May 2022
1
(2,313,980)
(2,313,979)
Impact of correction of error
-
(41,542)
(41,542)
As restated
1
(2,355,522)
(2,355,521)
Period ended 31 December 2022:
Profit and total comprehensive income
-
823,164
823,164
Balance at 31 December 2022
1
(1,532,358)
(1,532,357)
Year ended 31 December 2023:
Loss and total comprehensive income
-
(588,763)
(588,763)
Balance at 31 December 2023
1
(2,121,121)
(2,121,120)
LCA EDUCATION LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
13
6,454,595
676,631
Investing activities
Purchase of tangible fixed assets
(5,234,970)
(963,208)
Interest received
46,616
510
Net cash used in investing activities
(5,188,354)
(962,698)
Net increase/(decrease) in cash and cash equivalents
1,266,241
(286,067)
Cash and cash equivalents at beginning of year
337,137
623,204
Cash and cash equivalents at end of year
1,603,378
337,137
LCA EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information
LCA Education Limited is a private company limited by shares incorporated in England and Wales. The registered office is 19 Charterhouse Street, London, UK, EC1N 6RA.
1.1
Reporting period
Current year financial statements cover a period of 12 months from 01.01.2023 to 31.12.2023.
The comparatives of the financial statements cover a period of 08 months from 01.05.2022 to 31.12.2022 as the company's year end shortened to 31 December.
1.2
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 £.
Prior period comparatives have been reclassified to align to the current period presentational approach.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.3
Going concern
As at the reporting date the company's current liabilities exceeded the total assets resulting in a negative equity of the company as at the reporting date which stood at (£1,900,855) (as at 31.12.2022 - (£1,421,540)). The company's financial statements are prepared on the going concern basis. The Director has a reasonable expectation that the company will continue in operational existence for the foreseeable future. The director, Dr R Gill and the parent company, LCAE Group Limited has pledged to provide financial support for the seamless functioning of the company's operations as and when required in the future.
1.4
Turnover
Turnover is recognised at the fair value of the consideration 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.
Turnover is measured at the fair value of the consideration receivable for higher educational and related services rendered, net of discounts. Where an element of the fees relates to services provided in the subsequent financial years, that proportion is accounted as deferred income and released to turnover when the courses and related services has been delivered.
1.5
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. Cost includes original purchase price, costs directly attributable to bringing the assets to its working condition for its intended use, dismantling and restoration costs.
LCA EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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:
Leasehold improvements
Over the lease term
Plant and equipment
20% Reducing balance
Fixtures and fittings
10% Reducing balance
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 credited or charged to profit or loss.
The asset's residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. The effect of any is accounted for prospectively.
1.6
Impairment of fixed assets
At each reporting period 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.
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.
1.7
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.
1.8
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
LCA EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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.
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 company after deducting all of its liabilities.
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.
1.9
Equity instruments
Equity instruments issued by the company 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 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 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
LCA EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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 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
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company 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.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
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 leases asset are consumed.
1.15
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.
LCA EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
Operating lease commitments
The group has entered into property leases. As management have determined that the group has not obtained substantially all the risks and rewards of ownership of these properties, the leases have been classified as operating leases and accounted for accordingly.
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.
Estimation of useful lives of assets
The group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the group considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Dilapidations provision
Provision is made for dilapidations. This requires management's best estimate of the expenditure that will be incurred based on contractual requirements. In addition, the timing of the cash flows and the discount rates used to establish net present value of the obligations require management's judgement.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
37
30
LCA EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
4
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 January 2023
1,652,393
484,530
2,163,409
4,300,332
Additions
4,527,608
381,569
325,793
5,234,970
At 31 December 2023
6,180,001
866,099
2,489,202
9,535,302
Depreciation and impairment
At 1 January 2023
178,232
108,752
278,568
565,552
Depreciation charged in the year
277,015
151,470
221,063
649,548
At 31 December 2023
455,247
260,222
499,631
1,215,100
Carrying amount
At 31 December 2023
5,724,754
605,877
1,989,571
8,320,202
At 31 December 2022
1,474,161
375,778
1,884,841
3,734,780
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,433,815
1,407,812
Other debtors
1,500
Prepayments
285,111
136,359
2,720,426
1,544,171
Deferred tax asset
50,568
594,935
2,770,994
2,139,106
2023
2022
Amounts falling due after more than one year:
£
£
Rent deposit
2,585,743
1,585,743
Total debtors
5,356,737
3,724,849
LCA EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
6
Creditors: amounts falling due within one year
2023
2022
£
£
Deferred income
159,583
68,629
Trade creditors
220,327
103,312
Amounts owed to group undertakings
11,875,493
6,975,493
Taxation and social security
55,630
28,904
Other creditors
924
1,194
Accruals
3,451,599
1,430,593
15,763,556
8,608,125
Last year, included in other creditors, is balance due to related parties amounting to £6,975,493. Current year there are no related parties balances.
7
Provisions for liabilities
2023
2022
£
£
Dilapidation cost liability
1,637,881
720,998
Movements on provisions:
Dilapidation cost liability
£
At 1 January 2023
756,344
Additional provisions in the year
881,537
At 31 December 2023
1,637,881
As part of the company's property leasing arrangements there is an obligation to repair damages which incur during the life of the lease, such as wear and tear. The cost is charged to profit and loss as the obligation arises. The provision is expected to be utilised between 2021 to 2036 as the leases terminate.
Due to a number of leased properties in the company and the difficulties in predicting expenditure that will be required on return of a property to the landlord many years in the future, the dilapidations provision is considered a source of significant estimation uncertainty. The provision has been calculated using historical experiences of actual expenditure incurred on dilapidations and estimated lease termination dates. The director considered the possible range of dilapidations provision at 31 December 2023 the most likely amount within the range has been recognised in the balance sheet.
8
Financial commitments, guarantees and contingent liabilities
The company did not have any other financial commitments, guarantees or contingent liabilities at year end other than those disclosed under contingencies.
LCA EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
9
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
Within one year
1,149,922
528,581
Between two and five years
7,278,795
3,696,156
In over five years
7,091,966
3,713,495
15,520,683
7,938,232
Operating lease rent recognised as expense in the year amount to £1,323,686 (30.04.2022 to 31.12.2022 - £668,129).
10
Capital commitments
There were no commitments or contingencies made at the reporting date that require adjustments or disclosure in the financial statements.
11
Events after the reporting date
There were no events or transactions occurred after the reporting date except the below that require adjustment or disclosure in the financial statements.
In January 2024, LCA Education Ltd, entered into a new academic agreement with the University of Central Lancashire and started to offer courses.
12
Parent company
The company is a 100% subsidiary of LCAE Group Ltd, a company incorporated in England.
The ultimate controlling party is Dr Ravi Gill who owns 100% of issued ordinary share capital of LCAE Group Ltd.
LCA EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
13
Cash generated from operations
2023
2022
£
£
(Loss)/profit for the year after tax
(588,763)
823,164
Adjustments for:
Taxation charged/(credited)
544,367
(594,935)
Finance costs
35,346
24,382
Investment income
(46,616)
(510)
Depreciation and impairment of tangible fixed assets
649,548
290,701
Increase in provisions
881,537
696,616
Movements in working capital:
Increase in debtors
(2,176,255)
(865,093)
Increase in creditors
7,155,431
302,306
Cash generated from operations
6,454,595
676,631
14
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
337,137
1,266,241
1,603,378
15
Prior period adjustment
Changes to the balance sheet
As previously reported
Adjustment
As restated at 31 Dec 2022
£
£
£
Fixed assets
Tangible assets
3,124,599
610,181
3,734,780
Provisions for liabilities
Other provisions
-
(720,998)
(720,998)
Net assets
(1,421,540)
(110,817)
(1,532,357)
Capital and reserves
Profit and loss reserves
(1,421,541)
(110,817)
(1,532,358)
LCA EDUCATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Prior period adjustment
(Continued)
- 23 -
Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 31 December 2022
£
£
£
Administrative expenses
(1,992,315)
(44,893)
(2,037,208)
Interest payable and similar expenses
-
(24,382)
(24,382)
Profit for the financial period
892,439
(69,275)
823,164
Reconciliation of changes in equity
1 May
31 December
2022
2022
£
£
Adjustments to prior year
Depreciation on leasehold asset
(27,182)
(72,075)
Unwinding of discount of provision
(14,360)
(38,742)
Total adjustments
(41,542)
(110,817)
Equity as previously reported
(2,313,979)
(1,421,540)
Equity as adjusted
(2,355,521)
(1,532,357)
Analysis of the effect upon equity
Profit and loss reserves
(41,542)
(110,817)
Reconciliation of changes in profit for the previous financial period
2022
£
Adjustments to prior year
Depreciation on leasehold asset
(44,893)
Unwinding of discount of provision
(24,382)
Total adjustments
(69,275)
Profit as previously reported
892,439
Profit as adjusted
823,164
Notes to reconciliation
Record of dilapidation cost - error correction
The company has not accounted for the estimated dilapidation cost related to the leasehold premises in its financial statements since the start of lease agreements. As a consequence, the dilapidation cost lability and related asset have been understated. As this omission has occurred before the prior period presented (2022), correction was done restating the opening balances of assets, liabilities and equity for the earliest prior period presented (01.01.2022).
2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2024.100Dr R Gill, OBE (Chairman)Mr W K Leungfalsefalse070491482023-01-012023-12-3107049148bus:Director12023-01-012023-12-3107049148bus:CompanySecretary12023-01-012023-12-3107049148bus:RegisteredOffice2023-01-012023-12-3107049148bus:Agent12023-01-012023-12-31070491482023-12-31070491482022-05-012022-12-3107049148core:ContinuingOperations2022-05-012022-12-3107049148core:RetainedEarningsAccumulatedLosses2022-05-012022-12-3107049148core:RetainedEarningsAccumulatedLosses2023-01-012023-12-31070491482022-12-3107049148core:LeaseholdImprovements2023-12-3107049148core:PlantMachinery2023-12-3107049148core:FurnitureFittings2023-12-3107049148core:LeaseholdImprovements2022-12-3107049148core:PlantMachinery2022-12-3107049148core:FurnitureFittings2022-12-3107049148core:Non-currentFinancialInstrumentscore:AfterOneYear2023-12-3107049148core:Non-currentFinancialInstrumentscore:AfterOneYear2022-12-3107049148core:CurrentFinancialInstrumentscore:WithinOneYear2023-12-3107049148core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3107049148core:CurrentFinancialInstruments2023-12-3107049148core:CurrentFinancialInstruments2022-12-3107049148core:ShareCapital2023-12-3107049148core:ShareCapital2022-12-3107049148core:RetainedEarningsAccumulatedLosses2023-12-3107049148core:RetainedEarningsAccumulatedLosses2022-12-3107049148core:RetainedEarningsAccumulatedLossescore:PriorPeriodIncreaseDecrease2022-04-3007049148core:ShareCapital2022-04-3007049148core:RetainedEarningsAccumulatedLosses2022-04-30070491482022-12-31070491482022-04-3007049148core:LeaseholdImprovements2023-01-012023-12-3107049148core:PlantMachinery2023-01-012023-12-3107049148core:FurnitureFittings2023-01-012023-12-3107049148core:LeaseholdImprovements2022-12-3107049148core:PlantMachinery2022-12-3107049148core:FurnitureFittings2022-12-3107049148core:Non-currentFinancialInstruments2023-12-3107049148core:Non-currentFinancialInstruments2022-12-3107049148core:WithinOneYear2023-12-3107049148core:WithinOneYear2022-12-3107049148core:BetweenTwoFiveYears2023-12-3107049148core:BetweenTwoFiveYears2022-12-3107049148core:MoreThanFiveYears2023-12-3107049148core:MoreThanFiveYears2022-12-3107049148bus:PrivateLimitedCompanyLtd2023-01-012023-12-3107049148bus:FRS1022023-01-012023-12-3107049148bus:Audited2023-01-012023-12-3107049148bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP