Company registration number 06779528 (England and Wales)
LEARNDIRECT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2022
LEARNDIRECT LIMITED
COMPANY INFORMATION
Directors
W Janse van Rensburg
M J Beckett
Company number
06779528
Registered office
1st Floor Wilson House
Lorne Park Road
Bournemouth
England
BH11JN
Auditor
BHP LLP
2 Rutland Park
Sheffield
S10 2PD
LEARNDIRECT LIMITED
CONTENTS
Page
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
LEARNDIRECT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2022
- 1 -
The directors present the strategic report for the period ended 30 April 2022.
Fair review of the business
The group strategy is to grow both organically and through acquisition, building on core foundations of high-quality educational support solutions, offering best-in-class online platforms, and by leveraging its strong relationships with awarding bodies.
Principal risks and uncertainties
The principal risks and uncertainties affecting company are outlined below:
Price risk
The company is exposed to market price risk as a result of its operations. Market prices are continually monitored and proactively managed at both an operational and management level to mitigate the risk to earnings.
Credit risk
The group maintains a provisioning process to manage credit risk on receivables and also monitor high-risk accounts through dedicated customer liaison and collections functions.
There have been no material events impacting these financial statements since the balance sheet date. The company continues to trade profitably in line with its strategic aims.
Development and performance
Turnover for the year was £16,556,298 (2021: £15,641,596), operating profit was £3,240,538 (2021: £4,358,392 )and profit after tax was £2,884,083 (2021: £5,005,352). The company continues to trade profitably in line with the group's strategic aims.
M J Beckett
Director
30 November 2022
LEARNDIRECT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2022
- 2 -
The directors present their annual report and financial statements for the year ended 30 April 2022.
Principal activities
The principal activity of the company continued to be the provision of adult education courses including tutoring, training support for courses, and the delivery of online and offline commercial courses.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £5
,
000
,
000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
W Janse van Rensburg
M J Beckett
Auditor
The auditor, BHP LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the 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 and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The 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 enable them to ensure that the financial statements comply with the Companies Act 2006. They 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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
LEARNDIRECT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2022
- 3 -
On behalf of the board
M J Beckett
Director
30 November 2022
LEARNDIRECT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LEARNDIRECT LIMITED
- 4 -
Opinion
We have audited the financial statements of Learndirect Limited (the 'company') for the year ended 30 April 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 30 April 2022 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport 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.
LEARNDIRECT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LEARNDIRECT LIMITED
- 5 -
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 identifie
d
material misstatements in the strategic report or the directors'
r
eport
.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error. In preparing the
financial statements
, the
directors are
responsible for assessing the 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.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of such regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error.
We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with
management. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from
the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud.
We addressed the risk of management override of internal controls, including testing of journals and review of the nominal ledger. We evaluated whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
We have considered the risk of fraud in revenue and have carried out audit procedures to ensure that revenue is being recognised in accordance with appropriate accounting standards and therefore not materially misstated
.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
LEARNDIRECT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LEARNDIRECT LIMITED
- 6 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Philip Allsop
Senior Statutory Auditor
For and on behalf of BHP LLP
30 November 2022
Chartered Accountants
Statutory Auditor
2 Rutland Park
Sheffield
S10 2PD
LEARNDIRECT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2022
- 7 -
2022
2021
Notes
£
£
Turnover
3
16,556,298
15,641,596
Cost of sales
(8,472,678)
(4,422,538)
Gross profit
8,083,620
11,219,058
Administrative expenses
(4,789,095)
(6,870,666)
Other operating income
10,013
10,000
Operating profit
4
3,304,538
4,358,392
Interest receivable and similar income
7
1,542,767
Interest payable and similar expenses
8
(2,156)
Amounts written off investments
9
(608,890)
Profit before taxation
3,304,538
5,290,113
Tax on profit
10
(356,455)
(284,761)
Profit for the financial year
2,948,083
5,005,352
The profit and loss account has been prepared on the basis that all operations are continuing operations.
LEARNDIRECT LIMITED
BALANCE SHEET
AS AT
30 APRIL 2022
30 April 2022
- 8 -
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
13
716,240
38,501
Tangible assets
14
40,051
21,731
Investments
15
6,521,503
6,521,503
7,277,794
6,581,735
Current assets
Debtors
17
20,814,788
17,216,812
Cash at bank and in hand
2,601,491
3,176,924
23,416,279
20,393,736
Creditors: amounts falling due within one year
18
(20,218,747)
(14,561,228)
Net current assets
3,197,532
5,832,508
Total assets less current liabilities
10,475,326
12,414,243
Provisions for liabilities
Deferred tax liability
19
113,000
(113,000)
-
Net assets
10,362,326
12,414,243
Capital and reserves
Called up share capital
21
250
250
Share premium account
1,539,750
1,539,750
Profit and loss reserves
8,822,326
10,874,243
Total equity
10,362,326
12,414,243
The financial statements were approved by the board of directors and authorised for issue on 30 November 2022 and are signed on its behalf by:
M J Beckett
Director
Company Registration No. 06779528
LEARNDIRECT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2022
- 9 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 29 April 2020
250
1,539,750
5,868,891
7,408,891
Year ended 30 April 2021:
Profit and total comprehensive income for the year
-
-
5,005,352
5,005,352
Balance at 30 April 2021
250
1,539,750
10,874,243
12,414,243
Year ended 30 April 2022:
Profit and total comprehensive income for the year
-
-
2,948,083
2,948,083
Dividends
11
-
-
(5,000,000)
(5,000,000)
Balance at 30 April 2022
250
1,539,750
8,822,326
10,362,326
LEARNDIRECT LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2022
- 10 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
5,308,856
1,411,404
Interest paid
(2,156)
Income taxes paid
(63,280)
Net cash inflow from operating activities
5,245,576
1,409,248
Investing activities
Purchase of intangible assets
(795,990)
(38,848)
Purchase of tangible fixed assets
(25,019)
(23,490)
Proceeds from disposal of subsidiaries
(36,503)
Proceeds from disposal of investments
1,155,000
Repayment of loans
(283,890)
Dividends received
1,542,767
Net cash (used in)/generated from investing activities
(821,009)
2,315,036
Financing activities
Repayment of borrowings
(1,617,980)
Dividends paid
(5,000,000)
Net cash used in financing activities
(5,000,000)
(1,617,980)
Net (decrease)/increase in cash and cash equivalents
(575,433)
2,106,304
Cash and cash equivalents at beginning of year
3,176,924
1,070,620
Cash and cash equivalents at end of year
2,601,491
3,176,924
LEARNDIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2022
- 11 -
1
Accounting policies
Company information
Learndirect Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
1st Floor Wilson House, Lorne Park Road, Bournemouth, England, BH1 1JN.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
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
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents the value, net of value added tax and discounts, of adult educational courses including tutoring and training support provided to learners. Course revenues are recognised on delivery of the course materials. However, provision is made for the estimated future costs of learner support and accreditation.
Turnover
is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebate
s.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses 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 10 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.
LEARNDIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2022
1
Accounting policies
(Continued)
- 12 -
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
A number of intangible assets included within computer software are in relation to staff costs regarding the development of computer software to the extent that the technical, commercial and financial feasibility can be demonstrated. Likewise, staff costs in relation to course development expenditure
is capitalised
under the same con
d
itions. Research expenditure is written off against profits in the year in which it incurred.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Software
3 years straight line
Course development costs
3 years straight line
Intellectual property rights
10/3 years straight line
1.6
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures and fittings
5 years straight line
Office equipment
5 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
.
1.7
Fixed asset investments
Interests in subsidiaries
are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in
profit
or
loss
.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
1.8
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.
LEARNDIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2022
1
Accounting policies
(Continued)
- 13 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.9
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.
1.10
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
LEARNDIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2022
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the 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
paymen
ts 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. A
m
ounts 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
LEARNDIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2022
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.11
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.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Foreign exchange
Transactions in currencies other than
pounds sterling
are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
LEARNDIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2022
- 16 -
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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Bad debt provision
The bad debt provision is deemed to be a key estimate and judgement within the accounts and it is reflected in Trade Debtors (note 16). Across the Group the methodology for calculating the provision varies due to the differences in uncertainties in each group company.
In Learndirect Limited, the provision is made as a percentage of the debtors on the debtors ledger at the balance sheet date, stratified by ageing. This is reviewed against a bad debt provision model to ensure it is reasonable. The bad debt provision model considers the debtor ledger, balances where agreed payment plans are being actively adhered to and non-moving balances to establish the likely recoverability of debtors.
The organisation outsourced the collection of early customer arrears (default +9 days to default +45 days) in June 2022, as well as implementing a strategic relationship with an FCA regulated DCA (Debt Collection Agency), whose services include office based contact strategies, tracing of gone-aways, litigation, customer score-carding and field based collection activities.
Assessor and awarding bodies cost accrual
Revenue is recognised when learners gain access to courses and it is therefore appropriate to accrue the associated costs to match against the revenue. The accrual is calculated based on a percentage of monthly sales and is regularly reviewed to ensure that the level is appropriate.
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Education courses and services
16,556,298
15,641,596
2022
2021
£
£
Other revenue
Dividends received
-
1,542,767
LEARNDIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2022
- 17 -
4
Operating profit
2022
2021
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
15,572
35,088
Depreciation of owned tangible fixed assets
6,699
1,877
Amortisation of intangible assets
118,251
347
5
Employees
The average monthly number of persons employed by the company during the year was:
2022
2021
Number
Number
Operational
64
40
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
1,874,627
3,226,971
Social security costs
168,622
174,498
Pension costs
27,458
22,045
2,070,707
3,423,514
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
315,395
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
n/a
315,395
As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.
LEARNDIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2022
- 18 -
7
Interest receivable and similar income
2022
2021
£
£
Income from fixed asset investments
Income from shares in group undertakings
1,542,767
8
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
2,156
9
Amounts written off investments
2022
2021
£
£
Amounts written back to/(written off) current loans
-
(283,890)
Other gains and losses
-
(325,000)
(608,890)
LEARNDIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2022
- 19 -
10
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
266,563
284,761
Adjustments in respect of prior periods
(23,108)
Total current tax
243,455
284,761
Deferred tax
Origination and reversal of timing differences
113,000
Total tax charge
356,455
284,761
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
3,304,538
5,290,113
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
627,862
1,005,121
Tax effect of expenses that are not deductible in determining taxable profit
121,401
Adjustments in respect of prior years
(23,108)
Group relief
(249,822)
(545,147)
Dividend income
(293,126)
Deferred tax not recognised
3,134
(3,488)
Remeasurement of deferred tax for changes in tax rates
27,187
Fixed asset differences
(28,798)
Taxation charge for the year
356,455
284,761
11
Dividends
2022
2021
£
£
Final paid
5,000,000
LEARNDIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2022
- 20 -
12
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2022
2021
Notes
£
£
In respect of:
Fixed asset investments
15
-
325,000
Recognised in:
Amounts written off investments
-
325,000
The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.
13
Intangible fixed assets
Goodwill
Software
Course development costs
Intellectual property rights
Total
£
£
£
£
£
Cost
At 1 May 2021
3,940,000
31,909
6,939
3,978,848
Additions
591,607
204,383
795,990
At 30 April 2022
3,940,000
623,516
204,383
6,939
4,774,838
Amortisation and impairment
At 1 May 2021
3,940,000
347
3,940,347
Amortisation charged for the year
82,451
35,106
694
118,251
At 30 April 2022
3,940,000
82,451
35,106
1,041
4,058,598
Carrying amount
At 30 April 2022
541,065
169,277
5,898
716,240
At 30 April 2021
31,909
6,592
38,501
LEARNDIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2022
- 21 -
14
Tangible fixed assets
Fixtures and fittings
Office equipment
Total
£
£
£
Cost
At 1 May 2021
24,798
24,798
Additions
10,822
14,197
25,019
At 30 April 2022
10,822
38,995
49,817
Depreciation and impairment
At 1 May 2021
3,067
3,067
Depreciation charged in the year
1,374
5,325
6,699
At 30 April 2022
1,374
8,392
9,766
Carrying amount
At 30 April 2022
9,448
30,603
40,051
At 30 April 2021
21,731
21,731
15
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
16
6,521,503
6,521,503
16
Subsidiaries
Details of the company's subsidiaries at 30 April 2022 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Stonebridge Associated Colleges Limited
1st Floor Wilson House, Lorne Park Road, Bournemouth, England, BH1 1JN
Ordinary shares
100.00
Pearltech UK Limited
As above
Ordinary shares
100.00
Central College for Education Limited
As above
Ordinary shares
100.00
Online Academies Limited
As above
Ordinary shares
100.00
Digital Monkey Media Limited
As above
Ordinary shares
100.00
LEARNDIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2022
- 22 -
17
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
10,320,988
7,536,182
Amounts owed by group undertakings
10,328,450
9,616,653
Other debtors
13,832
13,896
Prepayments and accrued income
151,518
50,081
20,814,788
17,216,812
18
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
1,331,406
557,965
Amounts owed to group undertakings
15,093,559
9,778,254
Corporation tax
595,326
415,151
Other taxation and social security
2,263,369
1,996,593
Other creditors
6,543
21,634
Accruals and deferred income
928,544
1,791,631
20,218,747
14,561,228
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
113,000
-
2022
Movements in the year:
£
Liability at 1 May 2021
-
Charge to profit or loss
113,000
Liability at 30 April 2022
113,000
LEARNDIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2022
- 23 -
20
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
27,458
22,045
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
21
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
250
250
250
250
22
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2022
2021
£
£
Within one year
168,231
114,710
23
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel (including Directors' remuneration) is as follows.
2022
2021
£
£
Aggregate compensation
449,075
Other information
The company has taken advantaged of the exemption in section 33.1A of FRS 102 from disclosing transactions entered into between two or more members of the group as all subsidiaries are wholly owned.
At 30 April 2022, £12,682 was owed to Learndirect Limited relating to members of the group which are not wholly owned.
At 30 April 2022 £410,963 was owed by Learndirect Limited relating to members of the group which are not wholly owned.
24
Ultimate controlling party
The immediate parent company of Learndirect Limited is Learndirect Digital Group Limited and the ultimate UK parent company is Learndirect Digital Holdings Limited. The ultimate controlling party is Queens Park Equity Partners I LP (Guernsey).
LEARNDIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2022
- 24 -
25
Cash generated from operations
2022
2021
£
£
Profit for the year after tax
2,948,083
5,005,352
Adjustments for:
Taxation charged
356,455
284,761
Finance costs
2,156
Investment income
(1,542,767)
Amortisation and impairment of intangible assets
118,251
347
Depreciation and impairment of tangible fixed assets
6,699
1,877
Other gains and losses
-
608,890
Movements in working capital:
Increase in debtors
(3,597,976)
(13,022,935)
Increase in creditors
5,477,344
10,073,723
Cash generated from operations
5,308,856
1,411,404
26
Analysis of changes in net funds
1 May 2021
Cash flows
30 April 2022
£
£
£
Cash at bank and in hand
3,176,924
(575,433)
2,601,491
2022-04-30
2021-05-01
false
CCH Software
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