LCCM AU UK Ltd
Financial Statements
For the year ended 31 July 2023
Pages for Filing with Registrar
Company Registration No. 11147959 (England and Wales)
LCCM AU UK Ltd
Contents
Page
Balance sheet
1
Notes to the financial statements
2 - 10
LCCM AU UK Ltd
Balance Sheet
As at 31 July 2023
Page 1
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
5
164,312
205,390
Tangible assets
6
778,831
664,598
943,143
869,988
Current assets
Debtors
7
416,093
322,577
Cash at bank and in hand
729,734
68,324
1,145,827
390,901
Creditors: amounts falling due within one year
8
(9,002,336)
(6,944,015)
Net current liabilities
(7,856,509)
(6,553,114)
Total assets less current liabilities
(6,913,366)
(5,683,126)
Provisions for liabilities
(682,780)
(682,780)
Net liabilities
(7,596,146)
(6,365,906)
Capital and reserves
Called up share capital
100
100
Profit and loss reserves
(7,596,246)
(6,366,006)
Total equity
(7,596,146)
(6,365,906)

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 31 October 2024 and are signed on its behalf by:
E Groysman
Director
Company Registration No. 11147959
LCCM AU UK Ltd
Notes to the Financial Statements
For the year ended 31 July 2023
Page 2
1
Accounting policies
Company information

LCCM AU UK Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Buchanan House, 30 Holborn, London, EC1N 2HS.

1.1
Accounting convention

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

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

The financial statements have been prepared on a going concern basis which the Directors believe to be appropriate for the following reason. At the year end the company had net liabilities of £true7,635,038 (2022: £6,290,170). The company is reliant on the support of other group companies as a result of the way that the group is financed. Global University Systems Holding B.V. has issued a letter of support undertaking to continue to provide financial and other support to the company for the foreseeable future to enable it to continue to trade.

 

As a result, having assessed the response of the directors of Global University Systems Holding B.V., in light of its support and on the basis of their assessment of the company's financial position and Global University Systems Holding B.V.'s financial position, the Directors have a reasonable expectation that the company will be able to continue in operational existence for the foreseeable future and continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Revenue represents fees receivable for the provision of tuition and student services. Revenue is recognised on the basis of the estimated timing of delivery of the courses and the provision of student services. For certain courses delivery can vary on a student by student basis and therefore an estimation of the timing of the delivery is made on a course by course basis. Revenue in respect of student services is recognised on invoice.

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the balance sheet date. Deferred income represents amounts invoiced for which the service will be provided in future periods. Revenue is only recognised when the company has performed all of its required obligations and when all the following conditions are satisfied: the revenue can be measured reliably; it is possible that the economic benefits will flow to the company; the state of completion at the balance sheet date can be measure reliably; and the cost relating to the transaction can be measured reliably.

LCCM AU UK Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 July 2023
1
Accounting policies
(Continued)
Page 3
1.4
Intangible fixed assets - goodwill

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

 

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

1.5
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.

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 length of the lease
Fixtures and fittings
5 years straight line
Computers equipment
3 years straight line

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.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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.

LCCM AU UK Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 July 2023
1
Accounting policies
(Continued)
Page 4

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.

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.

LCCM AU UK Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 July 2023
1
Accounting policies
(Continued)
Page 5
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
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 company's provision relates to dilapidation obligations under a lease.

 

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.

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of 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.

1.12
Retirement benefits

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

1.13
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.

1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

LCCM AU UK Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 July 2023
Page 6
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The key judgement applied by management in preparing the financial statements is potential impairment of the company's intangible assets. The Directors consider the company's cash flow forecasts, and the wider economic environment in which the entities operate in order to assess if any impairment is required. As a result of the assessment performed in the period, no impairment has been identified.

3
Dilapidation provision

The company is subject to obligations, under an operation lease, to maintain leasehold properties to an agreed standard and remove any alternations made to the property prior to the termination of the lease. In estimating the necessary provision, management review a range of data sources including estimates prepared by surveyors for other similar properties owned in the group, actual payments on properties previously occupied, industry benchmarks and inflation and interest rate data and forecasts. The directors recognise a provision for such obligations based on the assessment of each of these factors. The dilapidation provision at the year end was £682,780 (2022: £682,780).

4
Employees

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

2023
2022
Number
Number
Total
22
19
LCCM AU UK Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 July 2023
Page 7
5
Intangible fixed assets
Goodwill
£
Cost
At 1 August 2022 and 31 July 2023
410,780
Amortisation and impairment
At 1 August 2022
205,390
Amortisation charged for the year
41,078
At 31 July 2023
246,468
Carrying amount
At 31 July 2023
164,312
At 31 July 2022
205,390
6
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Computers equipment
Total
£
£
£
£
Cost
At 1 August 2022
682,780
97,795
45,642
826,217
Additions
-
0
-
0
202,907
202,907
At 31 July 2023
682,780
97,795
248,549
1,029,124
Depreciation and impairment
At 1 August 2022
77,356
70,424
13,839
161,619
Depreciation charged in the year
23,670
16,560
48,444
88,674
At 31 July 2023
101,026
86,984
62,283
250,293
Carrying amount
At 31 July 2023
581,754
10,811
186,266
778,831
At 31 July 2022
605,424
27,371
31,803
664,598
LCCM AU UK Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 July 2023
Page 8
7
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
109,247
119,641
Bad debt provision
(81,433)
(90,441)
Other debtors
388,279
293,377
416,093
322,577
8
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
197,854
299,017
Amounts owed to group undertakings
5,990,424
4,144,779
Taxation and social security
40,811
17,745
Other creditors
2,773,247
2,482,474
9,002,336
6,944,015
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:

2023
2022
£
£
14,208,158
15,169,255
10
Audit report information

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified.

Statutory Auditor:
Moore Kingston Smith LLP
LCCM AU UK Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 July 2023
Page 9
11
Contingent liabilities

In 2018 HMRC opened an enquiry into historic VAT treatments applied by certain entities within the Global University Systems group, including LCCM AU UK Limited. The Board are of the view that directives relating to the application of VAT as it applies to education services is open to varying interpretations by HMRC, tax tribunals and courts. As at the year end and date of approval of the financial statements, appeals were continuing and so no final resolution had been reached in respect of the enquiries. Therefore the Director considers the outcome of the enquiry, which could include interest and penalties in addition to any assessed VAT liability, to be uncertain.

 

At year end and at the date of approval of the financial statements, an HMRC enquiry into certain historic loss allocations and corporate interest deductions within the Global University Systems group is ongoing. The enquiry may result in additional corporation tax, plus interest, becoming payable. However, the enquiry is ongoing and the Directors consider that the outcome is uncertain.

12
Events after the reporting date

The directors are of the opinion that there were no significant adjusting or non-adjusting events occurring after the reporting date.

13
Related party transactions

The company has taken advantage of the exemption allowed in FRS 102 and has not disclosed details of related party transactions with wholly-owned entities within the group.

14
Parent company

The immediate parent undertaking is UK Academic Holdings Ltd, a company incorporated in England and Wales.

The ultimate controlling party is The Heritage Trust, registered in Guernsey.

The smallest and largest group into which the entity is consolidated is Global University Systems Holding B.V., a company registered in The Netherlands. The registered office is Passeerdersgracht 23, 1016 XG Amsterdam, The Netherlands.

LCCM AU UK Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 July 2023
Page 10
15
Prior period adjustment
Changes to profit and loss
31 July 2022
31 July 2022
Signed accounts
Restatement
restated balance
£
£
£
Administrative expenditure
(3,010,261)
(75,736)
(3,085,997)
Changes to balance sheet
Other creditors
2,406,738
75,736
2,482,474
Retained earnings
(6,290,270)
(75,736)
(6,366,006)
A prior year adjustment has been processed to correct the value of the service charge expenditure for the prior period. Administrative expenditure, other creditors and retained earnings have all been restated accordingly.
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