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Registered number: 15722589 (England and Wales)
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
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MC SOCRATES MIDCO LIMITED
COMPANY INFORMATION
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MC SOCRATES MIDCO LIMITED
CONTENTS
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MC SOCRATES MIDCO LIMITED
GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 31 AUGUST 2024
The directors present their Strategic Report and audited consolidated financial statements for the period ended 31 August 2024 for MC Socrates Midco Limited ('the Company') and its subsidiaries ('the Group'). The period presented is a short period from 15 May 2024 to 31 August 2024.
MC Socrates Midco Limited was incorporated on 15 May 2024 to become the holding company of the MC Socrates group. The Company, via its wholly owned subsidiaries, acquired Forfar Education Ventures LLP and Forfar Education Limited on the 5 June 2024 (the “Forfar Group”). The Forfar Group comprised a perimeter of eight independent schools and one nursery in the United Kingdom. After the acquisition of Forfar Group, the Group made two further independent school acquisitions on 7 June 2024 and 25 July 2024, acquiring Colégio do Vale, in Portugal and St Helen’s College in the United Kingdom.
The Group is exposed to a range of risks and uncertainties that may impact its ability to deliver its strategic objectives. The Board regularly reviews the Group’s risk register and has appropriate processes in place to manage and mitigate risk.
Market and economic risk The business is affected by general economic conditions, customer confidence and market trends. A downturn in the independent education sector could impact demand for the Group's services. The Group mitigates this through diversification, active customer engagement and scenario planning. Credit risk There is a risk that customers may delay or default on payments. The Group has strong credit control processes in place and monitors customer balances regularly. Where necessary, provisions are made for doubtful debts. Operational risk Operational risks include system failures, service delivery issues, or supply chain disruptions. These are managed through robust internal controls, business continuity planning and regular performance monitoring. Regulatory and legal risk Compliance with applicable laws and regulations is critical. The Group keeps abreast of relevant changes through external advisors and has internal policies and training in place to ensure compliance across education, UKVI, health and safety and other key areas. Talent retention and people risk Attracting and retaining skilled staff is essential to the success of the Group. The business has focused on employee development, performance management and maintaining an inclusive culture to mitigate this risk and to support our teams to thrive.
The directors use a range of financial key performance indicators to monitor performance. In this initial period, the directors are satisfied with the turnover achieved being £5,815k which on an annualised based would provide £23,260k of turnover.
Measured against the number of full time students, this equates to £4k of income per head.
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MC SOCRATES MIDCO LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024
The directors consider pupil enrolment to be a key non-financial performance indicator. During the period, the group has 1,555 pupils enrolled which amounts to an enrolment utilisation of 79.5%. This was a satisfactory rate as the first period of trade.
In accordance with Section 172 of the Companies Act 2006, the directors of the Company confirm that they have acted in good faith to promote the success of the Company for the benefit of the members as a whole, while having due regard to the broader matters set out in Section 172. These include the interest of employees, the need to foster relationships with suppliers, customers and others, the impact of operations on the community and the environment and the importance of maintaing a reputation for high standards of business conduct.
The Board is mindful of the Company's purpose, values and long-term strategic priorities and these have shaped decision-making throughout the year. Directors receive regular updates on stakeholder interests and consider these when assessing opportunities and risks, making investments and reviewing the Company's financial and operational performance. Shareholders The Board maintains regular dialogue with the Company's shareholders, through scheduled board meetings, monthly reporting and regular updates. Strategic decisions, such as acquisitions, capital allocation, major operational changes and performance management, are made in alignment with shareholder expectations while maintaining a focus on sustainable value creation. Employees Our employees are critical to the ongoing success of the business. Engagement this year included regular town halls, staff surverys and enhanced internal communications. Key decisions during the year, including changes to team structures and investment in leadership development were made with the consideration of employee wellbeing, retention and development. Customers and suppliers The Company's commercial success depends on long-term, reliable relationships with its customers and suppliers. During the year, the Company prioritised open lines of communication and service excellence. Key decisions such as the rollout of a new customer support platform and supplier renegotiations were taken following detailed consultation and feedback to ensure mutual benefit and business continuity. Regulators and the wider community The Company is committed to acting responsibly and transparently. Compliance with regulatory requirements remains a priority and the directors consider the potential impact of Company activities on the environment and broader community. The directors recognise that stakeholder interests may not always be perfectly aligned. In such cases, the board aims to balance competing demands and take decisions that support the long-term success of the business.
This report was approved by the board and signed on its behalf.
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MC SOCRATES MIDCO LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 AUGUST 2024
The directors present their report and the financial statements for the period ended 31 August 2024.
The loss for the period, after taxation, amounted to £1,482 thousand.
The directors do not recommend the payment of a dividend and no dividends were paid.
The directors who served during the period were:
The Group expects to continue to grow its private education offering through strategic acquisitions and the consolidation of its position in the market.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies
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MC SOCRATES MIDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024
Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Employment of disabled persons
The Group is committed to promoting equal opportunities in employement in accordance with its Equal Opportinuties Policy. During the period, the Group has applied the following policies in relation to the employment of disabled persons:
∙The Group gives full and fair consideration to all job applications, including those from disabled persons, with due regard to the applicants' aptitudes and abilities. Recruitment and selection processes are conducted based on objective criteria and merit, ensuring non-discrimination on the grounds of disability or any other Protected Characteristic.
∙In cases where employees become disabled during their employment, the Group remains committed to their continued employment. Reasonable adjustments are considered and implemented where appropriate, to support such individuals in continuing to perform their roles.
∙Disabled employees are provided with equal access to training, career development and promotion opportunities. All aspects of employment, including pay, appraisals and conduct are administered without discrimination, in line with our policy and relevant legal obligations.
These policies reflect the Group's ongoing commitment to fostering an inclusive and accessible working environment for all.
Employee engagement The Group actively promotes employee engagement and involvement across all areas of its operations. During the period, the following actions were taken:
∙Information sharing: regular communication is maintained through weekly team meetings, monthly governance meetings with our schools and all-company townhall meetings. These forums ensure all employees are informed of matters affecting them and the business.
∙Consultation: employee views are regularly sought through direct dialogue and our annual staff engagement survey. Where decisions are likely to materially affect employee interests, appropriate consultations are undertaken, ensuring all voices are heard and considered.
∙Awareness of financial and economic factors: through the aforementioned communication channels, employees are kept informed about the Group's financial performance, strategic direction and key economic factors impacting operations.
Summary of director engagement
∙Engagement: directors have engaged with employees through structured communication and feedback mecahnisms, including regular meetings, governance sessions, townhalls and surveys.
∙Consideration of interests: the directors have had due regard to employee interests in their decision-making processes. Feedback obtained from engagement activities has directly influenced the implementation of initiatives such as SEN training and the introduction of townhall meetings, both of which respond to staff input and enhance alignment with the Group's vision and values.
These initiatives are underpinned by our Equal Opportunities Policy, which ensures that all employees, regardless of background or protected characteristic have equal access to information, opportunities and rewards.
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MC SOCRATES MIDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024
The Company's commercial success depends on long-term, reliable relationships with its customers and suppliers. During the year, the Company prioritised open lines of communication and service excellence. Key decisions such as the rollout of a new customer support platform and supplier renegotiations were taken following detailed consultation and feedback to ensure mutual benefit and business continuity.
Intensity ratio
The Group measures its intensity ratio as tCO2e emissions per pupil which during the period was 0.687 tCO2e. Efficiency narrative Due to this being a partial year report, and the first relating to a partial SECR disclosure, no energy efficiency actions are included. Although, the Group strives to ensure minimum wastage by ensuring lights, heaters and fans are only used in buildings and rooms as required.
Quantification and reporting methodology
The methodology used follows best practice and is based on HM Government Environmental Reporting Guidelines March 2019. All emissions factors are taken from UK Government GHG Conversion Factors for Company Reporting, version 2.0, 2024 factors. Scope 1 (natural gas) and Scope 2 consumption data (electricity) is taken from internal accounting systems.
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MC SOCRATES MIDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024
Scope 1 (burning oil, company owned cars and vans) is taken from internal accounting systems. Please note that gas and electricity consumption data was only available for the full year. As a result, annual consumption figures were pro-rated across the reporting period. This approach may introduce inaccuracies due to seasonal variations in prices.
In accordance with Section 414c (11) certain information required to be included in the Directors Report has otherwise been included in the Strategic Report, including information in respect of financial risk.
The auditors, ZEDRA Corporate Reporting Services (UK) Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
Except for those matters disclosed in note 28 to the financial statements, there have been no significant events affecting the Group since the period end.
This report was approved by the board and signed on its behalf.
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MC SOCRATES MIDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MC SOCRATES MIDCO LIMITED
We have audited the financial statements of MC Socrates Midco Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 August 2024, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of 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).
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group 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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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MC SOCRATES MIDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MC SOCRATES MIDCO LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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MC SOCRATES MIDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MC SOCRATES MIDCO LIMITED (CONTINUED)
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 Auditors' 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 Group 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.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
∙the responsible individual ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
∙we identified the laws and regulations applicable to the Group through discussions with directors and other management, and from our commercial knowledge and experience;
∙we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Group, including the Companies Act 2006 and taxation legislation;
∙we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
∙identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the Group’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
∙making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
∙considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
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MC SOCRATES MIDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MC SOCRATES MIDCO LIMITED (CONTINUED)
To address the risk of fraud through management bias and override of controls, we:
∙performed analytical procedures to identify any unusual or unexpected relationships;
∙tested journal entries to identify unusual transactions;
∙assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
∙investigated the rationale behind significant or unusual transactions.
We identified that fraud risk in relation to revenue recognition is a significant risk in line with ISA 240 and designed and implemented appropriate audit procedures in this area. Audit procedures included but were not limited to substantive testing from school registration records through to invoice and receipt, as well as performing appropriate year end cut off testing. We performed analytical reviews and proved school fee income in total on each trading school against an expectation of pupils enrolled and price lists.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
∙agreeing financial statement disclosures to underlying supporting documentation;
∙enquiring of management as to actual and potential litigation and claims; and
∙reviewing correspondence with HMRC, the Group’s legal advisors, OFSTED and the Independent Schools Inspectorate.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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 Auditors' Report.
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MC SOCRATES MIDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MC SOCRATES MIDCO LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants and Statutory Auditors
Birchin Court
5th Floor
19-25 Birchin Lane
United Kingdom
EC3V 9DU
29 May 2025
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MC SOCRATES MIDCO LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 AUGUST 2024
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MC SOCRATES MIDCO LIMITED
REGISTERED NUMBER: 15722589
CONSOLIDATED BALANCE SHEET
AS AT 31 AUGUST 2024
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MC SOCRATES MIDCO LIMITED
REGISTERED NUMBER: 15722589
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 AUGUST 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 20 to 46 form part of these financial statements.
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MC SOCRATES MIDCO LIMITED
REGISTERED NUMBER: 15722589
COMPANY BALANCE SHEET
AS AT 31 AUGUST 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 20 to 46 form part of these financial statements.
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MC SOCRATES MIDCO LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 AUGUST 2024
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MC SOCRATES MIDCO LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 AUGUST 2024
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MC SOCRATES MIDCO LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 AUGUST 2024
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MC SOCRATES MIDCO LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 31 AUGUST 2024
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
MC Socrates Midco Limited is a private company, limited by shares, incorporated in England and Wales under the Companies Act 2006. The registered office and registered number are shown on the company information page. The period presented is a short period from 15 May 2024 to 31 August 2024. The nature of the Group's operations are set out in the Directors' Report.
2.Accounting policies
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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
The Group is in a net asset position of £78m at the balance sheet date and a net current asset position of £1.3m. The directors have prepared cash flow forecasts for at least 12 months from the date of approval of these financial statements, which demonstrate that the Group has sufficient resources available to continue trading.
For this reason, the directors have prepared these financial statements on a going concern basis as they expect the Group and its subsidiaries to continue trading for a period of at least 12 months from the date of approval of these financial statements.
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
policies for discounts. The Group has four main revenue streams: School fees, Nursery fees, Clubs and Trips and other income.
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Invoicing occurs on the first day of each new term, deposits from customers in advance of the new term are recognised as deferred income and released over the duration of the term.
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Goodwill
Other intangible assets
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.
The estimated useful lives range as follows:
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:
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.
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
The Group 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 Group's Balance Sheet when the Group 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 trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
of financial assets that are subsequently measured at fair value through profit and loss) 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 Group's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
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 instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). 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.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors 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.
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
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 Group 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 Group 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 Group's contractual obligations expire or are discharged or cancelled.
Valuation and useful economic life of Goodwill Included within these financial statements is Goodwill arising on the acquisition of subsidiaries. In accordance with FRS 102, the directors are required to make an assessment of the useful economic life of Goodwill, together with an annual review for impairment. The directors have reviewed the expected useful life of the Goodwill and concluded that a useful economic life of 10 years is appropriate. This is based on the ability to accurately forecast forward looking information and identify the potential returns from acquired assets. Management acknowledges that this contains estimation uncertainty as well as being a significant judgement and therefore has the potential to cause material misstatement within these financial statements. Valuation and useful economic lives of tangible fixed assets The depreciation rates set out in note 2.11 of these financial statements have been determined using management's judgement of the useful economic lives of tangible fixed assets. There is some estimation uncertainty present in this assessment as assets' lives may be longer or shorter than described. In such cases, management determines where there is a need to impair these assets or make a reassessment of the useful economic lives of the assets in question. These judgements, individually and collectively, have the potential to cause material misstatement within the financial statements. Carrying values of investments Management consider each year whether investments should be impaired. This requires judgement based on current financial and non-financial information in relation to the recoverability of the investments. Management have reviewed the value of material investment by reference to their value in use for thegroup as a whole. These judgements could have a material effect on the carrying values of the investments.
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Analysis of turnover by country of destination:
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 29
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 30
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 31
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
10.Taxation (continued)
There were no factors that may affect future tax charges.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The loss after tax of the parent Company for the period was £
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 33
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 34
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 35
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Indirect subsidiary undertakings (continued)
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Indirect subsidiary undertakings (continued)
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 38
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 39
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
21.Share capital (continued)
On 25 July 2024, 14,958,831 Ordinary shares were issued at their par value of £1.
On 29 August 2024, 11,865,268 Ordinary shares were issued at their par value of £1.
Profit and loss account
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Intangible assets acquired were wholly goodwill as the businesses' primary value is in the freehold property which was acquired. As such the freehold property has been revalued in line with an appropriate valuation report conducted by a market leading expert. Subsequently, the Group acquired a Portuguese entity, J. Marques, Lda. (trading as Colegio do Vale) on 7 June 2024, as well as a further UK company and school, being St Helen's College Limited on 25 July 2024.
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
23.Business combinations (continued)
Page 42
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
23.Business combinations (continued)
Page 43
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
23.Business combinations (continued)
Page 44
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
23.Business combinations (continued)
Page 45
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MC SOCRATES MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
On 6 March 2025, in line with securing a £30,000k line of credit, the Company had a charge registered in favour of Kroll Trustee Services Limited, this was a fixed and floating charge covering the property or undertakings of the Company.
The immediate parent company is MC Socrates Topco Limited, a private company limited by shares, incorporated in England and Wales. The Company and the Group's ultimate controlling party is considered to be MC Private Equity IV UK (European Holdings) Limited, a company registered and incorporated in England and Wales.
On 24 October 2024, the Group acquired Finborough School Limited and Forchild Limited for a purchase price of £14,581k, this was a non-adjusting post balance sheet event. On 24 October 2024, 26,254,508 Ordinary shares were issues at their par value of £1. This was a non-adjusting post balance sheet event. On the 5 March 2025, the Group entered into an agreement for a facility commitment of £30,000k. At the date of signing of these financial statements, the Group had drawn £15,000k of this facility. On 6 May 2025 the Group acquired the British College of Andorra for an estimated purchase price of £10,978k, this was a non-adjusting post balance sheet event. There were no adjusting or other non-adjusting events occuring between the end of the reporting period and the date of approval of these financial statements.
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