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Registered number: 11637771









KAPLAN SQE LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
KAPLAN SQE LIMITED
 
 
COMPANY INFORMATION


Directors
Z V Robinson 
K A Walton (appointed on 15 March 2024) 




Registered number
11637771



Registered office
179-191 Borough High Street

London

England

SE1 1HR




Independent auditor
Barnes Roffe LLP
Chartered Accountants
Statutory Auditor

Leytonstone House

Leytonstone

London

E11 1GA





 
KAPLAN SQE LIMITED
 

CONTENTS



Page
Strategic report
 
1 - 2
Directors' report
 
3 - 4
Independent auditor's report
 
5 - 8
Statement of comprehensive income
 
9
Balance sheet
 
10
Statement of changes in equity
 
11
Notes to the financial statements
 
12 - 25

 
KAPLAN SQE LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present their Strategic Report on the company for the year ended 31 December 2023.

Business review
 
Turnover has increased this year to £26,158,536 (2022: £15,606,935) a rise of 68%. Gross profit has increased to £15,337,283 (2022: £12,250,594) an increase of 25%, and profit before tax has also increased to £5,678,476 (2022: £4,546,963) an increase of 25%.

Principal risks and uncertainties

The directors recognise that the company faces a number of business risks and uncertainties. The principal risks facing the company are brand reputation, the economy and changes in laws, regulations and government policies.
The process of risk management is addressed through a framework of policies, procedures and internal control. All policies are subject to approval by the directors and are reviewed on an ongoing basis by management. Compliance with laws, regulations and government policies is a high priority for the company and is reviewed regularly by senior management and the finance department.

Brand Reputation Risk

Kaplan’s brand is one of the most established and reputable brands in the sector. To prevent brand reputational damage, the company ensures assessments are delivered to high standard benchmarks. The company strives to provide the best candidate journey experience possible, and to build strong working relationship with key suppliers. 

Economy

The general economy is another risk that the company faces, given the current uncertainty of the global economy.

Changes in laws, regulations and government policies

The company operates in highly regulated markets where changes to government policies can impact the business. The directors proactively review regulations and policies to ensure compliance and have mechanisms in place to manage and adapt as appropriate.

Financial risk management

Financial risk management is necessary to ensure the success of future operations whilst protecting against potential losses resulting from changing market conditions. The principal risks facing the company are that of credit, liquidity and cash flow. 

Credit risk

Credit risk is the potential exposure of the company to loss in the event of non-performance by a counterparty. Credit risk is managed in relation to specific credit limits. These limits are set based on a combination of payment history and reputation. Regular review, based on ageing debt and collection history, is used to ensure the level of debts outstanding remain within reasonable ranges.

Page 1

 
KAPLAN SQE LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Liquidity and cash flow risk

Liquidity and cash flow risk reflects the potential that insufficient working capital will be generated by the company’s business activities and that in this event suitable sources of funding may not be available. The company mitigates this risk by exercising effective credit management and receiving sufficient funding from its parent company for operations and long-term investment plans. There is no commercial borrowing.

Financial key performance indicators
 
The directors actively review the monthly management accounts and candidate numbers as key indicators to monitor the performance of the company. 

The financial key performance indicators have been identified as turnover and operating profit. Turnover this year was £26,158,536 versus £15,606,935 last year, an increase of 68%. Operating profit was £5,678,476 versus £4,546,963 last year, an increase of 25%. The increase in profit is due to the increase in candidate numbers during 2023.

Other key performance indicators
 
The directors also review the number of candidates sitting assessments as a key performance indicator. The number of candidates sitting the SQE was nearly 3 times the number sitting in 2022.


This report was approved by the board on 20 September 2024 and signed on its behalf.



Z V Robinson
Director
Page 2

 
KAPLAN SQE LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

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

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

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


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

make judgments and accounting estimates that are reasonable and prudent;

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

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

Results and dividends

The profit for the year, after taxation, amounted to £3,504,685 (2022 - £4,541,400).

During the year the Company paid dividends of £5,000,000 (2022 - £Nil). There were no further dividends recommended to be paid.

Directors

The directors who served during the year were:

R V Dupont (resigned 4 April 2023)
P M Houillon (resigned 15 March 2024)
Z V Robinson (appointed 4 April 2023)

K A Walton was appointed as director on 15 March 2024.

Future developments

The Company continues to invest in new technologies, business relationships, and customer needs to ensure that it continues to deliver assessments of the highest standards.

Page 3

 
KAPLAN SQE LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Disclosure of information to auditor

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

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

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditor

The auditor, Barnes Roffe LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 20 September 2024 and signed on its behalf.
 





Z V Robinson
Director

Page 4

 
KAPLAN SQE LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KAPLAN SQE LIMITED
 

Opinion


We have audited the financial statements of Kaplan SQE Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


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 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.


Page 5

 
KAPLAN SQE LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KAPLAN SQE LIMITED (CONTINUED)


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 ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Opinion on other matters prescribed by the Companies Act 2006
 

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


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


Matters on which we are required to report by exception
 

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


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 3, 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 are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


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


Page 6

 
KAPLAN SQE LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KAPLAN SQE LIMITED (CONTINUED)


Auditor's responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


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

Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities we considered the following:
Obtained an understanding of the nature of the industry and sector, including the legal and regulatory frameworks that the Company operates in and how the Company is complying with the legal and regulatory
frameworks;
Enquired with management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
Discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.

Any instances of non-compliance with laws and regulations identified and communicated were considered in our audit approach. The most significant laws and regulations were determined as follows:
UK GAAP FRS 102 and Companies Act;
Tax compliance regulations; and
The key contract held by the Company.

Additional audit procedures performed by the audit engagement team included:
Review of the financial statement disclosures and testing to supporting documentation;
Review of the terms of the key contract and comparison to the account;
Completion of disclosure checklists to identify areas of non-compliance.

The areas that we identified as being susceptible to material misstatement due to fraud were:
Revenue Recognition;
Management Override;
Going Concern.

Audit procedures in response to the identified areas above:
Obtaining an understanding of the processes and controls around revenue recognition;
Analytically testing revenue against the key contract;
Detailed discussions with management and review of post year end management information;
Evaluation of the appropriateness of the accounting policies;
Testing the appropriateness of journal entries and other adjustments;
Assessing whether the judgements made in making accounting estimates are indicative of a potential bias;
Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

 
Page 7

 
KAPLAN SQE LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KAPLAN SQE LIMITED (CONTINUED)


We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's report.


Use of our report
 

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





Stuart Moon (Senior statutory auditor)
for and on behalf of
Barnes Roffe LLP
Chartered Accountants
Statutory Auditor
Leytonstone House
Leytonstone
London
E11 1GA

 
Date: 
23 September 2024
Page 8

 
KAPLAN SQE LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

  

Turnover
 4 
26,158,536
15,606,935

Cost of sales
  
(10,821,253)
(3,356,341)

Gross profit
  
15,337,283
12,250,594

Administrative expenses
  
(9,658,807)
(7,703,631)

Operating profit
 5 
5,678,476
4,546,963

Tax on profit
 9 
(2,173,791)
(5,563)

Profit for the financial year
  
3,504,685
4,541,400

  

Total comprehensive income for the year
  
3,504,685
4,541,400

There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.

The notes on pages 12 to 25 form part of these financial statements.
Page 9

 
KAPLAN SQE LIMITED
REGISTERED NUMBER: 11637771

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 11 
2,072,414
2,188,199

Tangible assets
 12 
148,748
82,711

  
2,221,162
2,270,910

Current assets
  

Debtors: amounts falling due within one year
 13 
34,539,394
24,467,140

Cash at bank and in hand
 14 
1,361,454
2,356,910

  
35,900,848
26,824,050

Creditors: amounts falling due within one year
 15 
(32,709,824)
(22,211,922)

Net current assets
  
 
 
3,191,024
 
 
4,612,128

Total assets less current liabilities
  
5,412,186
6,883,038

Provisions for liabilities
  

Deferred tax
 16 
(31,366)
(6,903)

Net assets
  
5,380,820
6,876,135


Capital and reserves
  

Called up share capital 
 17 
1
1

Profit and loss account
 18 
5,380,819
6,876,134

  
5,380,820
6,876,135


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 20 September 2024.




Z V Robinson
Director

The notes on pages 12 to 25 form part of these financial statements.
Page 10

 
KAPLAN SQE LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2022
1
2,334,734
2,334,735



Profit for the year
-
4,541,400
4,541,400



At 1 January 2023
1
6,876,134
6,876,135



Profit for the year
-
3,504,685
3,504,685

Dividends: Equity capital
-
(5,000,000)
(5,000,000)


At 31 December 2023
1
5,380,819
5,380,820


The notes on pages 12 to 25 form part of these financial statements.
Page 11

 
KAPLAN SQE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Kaplan SQE Limited ("the Company") is a private company limited by shares, incorporated in England and Wales. Its registered office is 179-191 Borough High Street, London, England, SE1 1HR.
The principle activity of the company is the provision of post-graduate level examinations.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Graham Holdings Company as at 31 December 2023 and these financial statements may be obtained from 179-191 Borough High Street, London, England, SE1 1HR.

 
2.3

Going concern

The directors pay careful attention to the cost base of the Company ensuring not only that it is kept at a level to satisfy the commercial requirements but also that it remains appropriate to the level of activity of the Company and the financial resources available to it.
The company has a creditors of £11,924,881 owed to group companies. A letter of support has been provided, by these group companies. 
Based on the above, the directors expect the Company to have adequate resources to continue to adopt the going concern basis of accounting in preparing these financial statements.

Page 12

 
KAPLAN SQE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

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

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

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

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

 
2.5

Revenue

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

Rendering of services
Revenue from a contract to provide services is recognised based on the Company's input to deliver the performance obligations to date on a pro rata basis and is allocated to the distinct performance obligations based on a cost plus margin basis allocated proportionately to each performance obligation. 
Revenue is recognised when all of the following conditions are satisfied:
 
the amount of revenue can be measured reliably (see Note 3 for further information);
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

Page 13

 
KAPLAN SQE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.6

Pensions

Defined contribution pension plan

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

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

 
2.7

Current and deferred taxation

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

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

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

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

 
2.8

Intangible assets

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

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

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

Page 14

 
KAPLAN SQE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.9

Tangible fixed assets

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

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Office equipment
-
3 years

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

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

 
2.10

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.11

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.12

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.
Page 15

 
KAPLAN SQE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.13

Financial instruments

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

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

Basic financial assets

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

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

Impairment of financial assets

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

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

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

Financial liabilities

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

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

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

Page 16

 
KAPLAN SQE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.13
Financial instruments (continued)

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

Derecognition of financial instruments

Derecognition of financial assets

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

Derecognition of financial liabilities

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

 
2.14

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In the application of the Company’s accounting policies, which are described in Note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
i) Revenue recognition 
The Company's main contract includes variable consideration such that the Company has estimated the transaction price of the contract based on the most likely amount in a range of possible consideration amounts to be allocated in accordance with the accounting policy outlined in Note 2.5. 

Page 17

 
KAPLAN SQE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Turnover

The whole of the turnover is attributable to the provision of post-graduate level examinations.

All turnover arose within the United Kingdom.


5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Exchange differences
(7,250)
(1,737)

Depreciation of tangible assets
55,570
20,957

Amortisation of intangible assets
799,698
607,498


6.


Auditor's remuneration

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


2023
2022
£
£

Fees payable to the Company's auditor for the audit of the Company's financial statements
17,000
20,000

Page 18

 
KAPLAN SQE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
3,712,869
3,189,176

Social security costs
521,777
543,773

Cost of defined contribution scheme
375,531
302,188

4,610,177
4,035,137


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Administration
9
9



Operations
74
56

83
65


8.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
179,650
152,602



9.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
1,295,224
-

Adjustments in respect of previous periods
854,104
-


Total current tax
2,149,328
-

Deferred tax


Origination and reversal of timing differences
24,463
5,563


Tax on profit
2,173,791
5,563
Page 19

 
KAPLAN SQE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
9.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
5,678,476
4,546,963


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
1,335,609
863,923

Effects of:


Expenses not deductible for tax purposes
288
135

Fixed asset differences
(234)
(4,901)

Adjustments to tax charge in respect of prior periods
854,104
-

Remeasurement of deferred tax for changes in tax rates
1,293
1,335

Group relief
-
(854,929)

Other differences leading to a decrease in tax charge
(17,269)
-

Total tax charge for the year
2,173,791
5,563


Factors that may affect future tax charges

There were no factors that may affect future tax charges.


10.


Dividends

2023
2022
£
£


Ordinary dividends paid
5,000,000
-

Page 20

 
KAPLAN SQE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Intangible assets




Computer Software
Computer software (assets under construction)
Total

£
£
£



Cost


At 1 January 2023
2,969,018
12,801
2,981,819


Additions
384,976
390,517
775,493


Additions - internal
-
(12,801)
(12,801)


Disposals
(78,779)
-
(78,779)



At 31 December 2023

3,275,215
390,517
3,665,732



Amortisation


At 1 January 2023
793,620
-
793,620


Charge for the year on owned assets
810,639
-
810,639


On disposals
(10,941)
-
(10,941)



At 31 December 2023

1,593,318
-
1,593,318



Net book value



At 31 December 2023
1,681,897
390,517
2,072,414



At 31 December 2022
2,175,398
12,801
2,188,199

Computer software includes an asset under construction. The asset will be amortised once brought into use. Amortisation expense accumulates in the year under administrative expenses in the statement of comprehensive income.



Page 21

 
KAPLAN SQE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Tangible fixed assets





Office equipment

£



Cost or valuation


At 1 January 2023
103,684


Additions
108,806


Transfers between classes
12,801



At 31 December 2023

225,291



Depreciation


At 1 January 2023
20,973


Charge for the year on owned assets
55,570



At 31 December 2023

76,543



Net book value



At 31 December 2023
148,748



At 31 December 2022
82,711
Page 22

 
KAPLAN SQE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Debtors

2023
2022
£
£


Trade debtors
2,448,664
391,282

Prepayments and accrued income
32,090,730
24,075,858

34,539,394
24,467,140


14.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
1,361,454
2,356,910



15.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
2,080,042
13,884

Amounts owed to group undertakings
11,924,881
11,393,806

Corporation tax
146,224
825

Other taxation and social security
400,733
220,967

Other creditors
17,093,577
9,412,907

Accruals and deferred income
1,064,367
1,169,533

32,709,824
22,211,922


Amounts owed to group undertakings are unsecured, non-interest bearing and repayable on demand. 
Included within other creditors are amounts of £16,431,287 
(2022 - £9,142,760) which relate to cash received held as agent.

Page 23

 
KAPLAN SQE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Deferred taxation




2023


£






At beginning of year
6,903


Charged to profit or loss
24,463



At end of year
31,366

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Fixed asset timing differences
35,116
18,153

Short term timing differences
(3,750)
(11,250)

31,366
6,903


17.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



1 (2022 - 1) Ordinary share of £1.00
1
1



18.


Reserves

Profit and loss account

The profit and loss account consists of distributable reserves arising from cumulative historical profits and losses less any distributions made.


19.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £375,531 (2022 - £302,188). No contributions were payable to the fund at the balance sheet date (2022 - £Nil).

Page 24

 
KAPLAN SQE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.


Related party transactions

The Company has taken advantage of the exemption under FRS 102 paragraph 1.12 and paragraph 33.1A from disclosing transactions with key management and from other related party transactions with other companies wholly owned within the Group.


21.


Controlling party

The immediate parent company is Kaplan Financial Limited. The only group in which the results of the Company are consolidated is that headed by The Graham Holdings Company, being the ultimate parent company and controlling party, which is incorporated in the US. Copies of its consolidated financial statements can be obtained from the Company's director, 179 - 191 Borough High Street, London, England, SE1 1HR.

 
Page 25