Company Registration No. 03053799 (England and Wales)
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2019
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
COMPANY INFORMATION
Directors
Ms C Cavaliere De Moncayo
Ms K D Rahbary
Secretary
Ms N Crawley
Company number
03053799
Registered office
Ramillies House
1 - 2 Ramillies Street
London
England
W1F 7LN
Auditor
FLS Accounting Solutions Limited T/A SP Vinshaw
UCB House
3 George Street
Watford
Hertfordshire
England
WD18 0BX
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 6
Statement of income and retained earnings
7
Balance sheet
8
Statement of cash flows
9
Notes to the financial statements
10 - 21
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2019
- 1 -
The directors present the strategic report for the year ended 31 July 2019.
Principal activities
The principal activity of the company during the year was the provision of government funded classroom based learning and Apprenticeships to 16-18 year olds and adults. The principal courses provided are in Beauty Therapy, Hair & Media Make Up and Hairdressing Diploma and Health & Fitness programmes as well as Advanced Level 4 courses in Aesthetics. In regards to Apprenticeships, the company continues to deliver Apprenticeship frameworks and standards in Beauty Therapy, Retail, and Team Leading.
London College of Beauty Therapy (LCBT) was founded in 1995 by Chairman Eileen Cavalier as a specialist independent Beauty college through a collaborative partnership with a General Further Education College. In 2004 LCBT was awarded a direct Further Education funding contract by Learning Skills Council London. Its mission is to deliver high quality training, create employment opportunities and provide business support to the beauty and retail sectors. Located in central London, LCBT offers a wide range of courses across the beauty, hair & media make-up, hairdressing, retail, customer service, health & fitness and well-being sectors, and provides a variety of routes to enter employment through classroom based and apprenticeship training. LCBT has additionally been delivering a range of apprenticeship programmes over many years, working closely with employers to facilitate successful outcomes for both apprentices and employers alike. All LCBT training courses offer monthly enrolments and therefore enable individuals to enrol and commence training all year round, supporting the engagement of learners as the needs arise and a gradual stream of completions which maximises the opportunities to gain employment after training. LCBT offers ‘careers, not courses’ and provides a holistic approach to training including an extensive programme of support exceeding their accredited training including life skills, employability skills, industry experience through the in-house dedicated Job Shop specialist industry support founded in 2000.
Fair review of the business
In 2018/19 LCBT continued a focus on investment in quality education and training provision as well as continuing to make efficiency savings, continuing also with a narrow and focused subcontracting as part of a strategic review of the business. Our 16-18 year old funding allocation remained much the same as the previous academic year that had a reduction in funding per learner which was part of a national picture for providers in receipt of FE funding. Significant learning provision was delivered for a high number of adults from the ESFA funding allocations for AEB and Advanced Learner loans, though in real terms, funding in these areas has not increase with inflation since 2012/13. Since 2015/16 Directors have refocused the direction of LCBT away from wider service delivery in areas such as health and social care and catering among others to focus directly on our core specialist delivery in Beauty, Hair, Fitness and Media Make-up of which they are all continue as growth areas. LCBT also made a significant investment in our buildings and quality training in 2016/17 and in 2017/18 invested in the Provision of advanced level 4 courses in areas such as advanced aesthetics, advanced epilation and spa & salon management. Additionally, in 2018/19 LCBT successfully delivered the Adult Flexible Learning project, a successful ESFA bid, which allowed us to develop and enhance our e-Learning facilities for adult learners, to provide more flexibility for learning opportunities to shape around the lives of busy adults who want to develop and progress in their careers. All of which provide both essential & desirable training for advanced beauty therapists as well as provide strong emerging revenue streams for future years, keeping LCBT in the forefront of sector training.
LCBT remains in a good financial position and currently rated as satisfactory within the ESFA health categories.
Principal risks and uncertainties
The College and its business strategy are subject to key risks, which include changes to Government funding policy and stakeholder relationships. They significant risk is the devolution of the Adult Education Budget (AEB) to mayor combined authorities, which for the LCBT would be the Greater London Authority (GLA). The college considers itself to be in a strong position to weather this impact any future government funding policy changes, mainly due to both the college’s professionalism and adaptability to optimise opportunities within the sector.
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 2 -
Future Developments
LCBT has sought new partnerships for AEB subcontracted provision from a number of General Further Education (GFE) colleges and college groups to secure AEB funding for 2019/20.
The enhanced and developed e-Learning facility from the 2018/19 successful Adult Flexible Learning project will also be expanded to all learners in the college, including supporting the 16-19 study programme provision due to the ending of the grant’s restrictions in it use.
Strategic partnerships with leading beauty and fitness industries brands to both enhance the college’s learning and enrichment provision as well as provide resources for students and classrooms.
Adapting the Level 3 provision for adults for Beauty Therapy and Hair & Media Make-up to allow for direct entry to these qualifications’ levels through the use of the Advanced Learner Loan, providing the continued accessibility to these courses to adults since the loss of the AEB allocation. With this, the college is focusing to increase LCBT’s advanced learner loan allocation year on year to fulfil the demand from adult learners for these courses.
Level 4 advanced courses are a strong and growing area of the business
LCBT strategy is to increase the range of courses available as part of our core specialist areas including further development of advanced level qualifications and using LCBT’s strong branding and reputation in the industry to build on franchising and other partnership delivery opportunities both domestically and internationally.
Ms C Cavaliere De Moncayo
Director
17 February 2020
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2019
- 3 -
The directors present their annual report and financial statements for the year ended 31 July 2019.
Principal activities
The principal activity of the company continued to be that of provision of government funded classroom based learning and Apprenticeships to 16 - 18 year olds and adults, for Beauty Therapy, Hair & Media Make Up and Hairdressing Diploma programmes, Health & Fitness Diplomas and Certificates and Apprenticeships in Beauty, Retail, Management, Team leading, Customer Service, Business Administration and Hospitality industries.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Ms C Cavaliere De Moncayo
Ms K D Rahbary
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Auditor
FLS Accounting Solutions Limited T/A SP Vinshaw were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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.
On behalf of the board
Ms C Cavaliere De Moncayo
Ms K D Rahbary
Director
Director
17 February 2020
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2019
- 4 -
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.
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
- 5 -
Opinion
We have audited the financial statements of The London College Of Beauty Therapy Limited (the 'company') for the year ended 31 July 2019 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, 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 FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 July 2019 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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
- 6 -
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 and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
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.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
Sadikali Gulamabas Premji FCCA (Senior Statutory Auditor)
for and on behalf of FLS Accounting Solutions Limited T/A SP Vinshaw
17 February 2020
Chartered Certified Accountants
Statutory Auditor
UCB House
3 George Street
Watford
Hertfordshire
England
WD18 0BX
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 JULY 2019
- 7 -
2019
2018
Notes
£
£
Turnover
3
5,095,885
4,843,338
Cost of sales
(2,008,220)
(2,015,117)
Gross profit
3,087,665
2,828,221
Administrative expenses
(2,849,171)
(2,827,526)
Operating profit
4
238,494
695
Interest receivable and similar income
7
19,501
6,037
Profit before taxation
257,995
6,732
Tax on profit
8
(15,093)
1,772
Profit for the financial year
242,902
8,504
Retained earnings brought forward
4,511,266
4,502,762
Retained earnings carried forward
4,754,168
4,511,266
The profit and loss account has been prepared on the basis that all operations are continuing operations.
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
BALANCE SHEET
AS AT 31 JULY 2019
31 July 2019
- 8 -
2019
2018
Notes
£
£
£
£
Fixed assets
Tangible assets
9
123,349
186,918
Current assets
Stocks
11
2,864
15,140
Debtors
12
329,932
652,309
Cash at bank and in hand
5,278,461
4,895,224
5,611,257
5,562,673
Creditors: amounts falling due within one year
13
(555,338)
(813,225)
Net current assets
5,055,919
4,749,448
Total assets less current liabilities
5,179,268
4,936,366
Provisions for liabilities
14
(425,000)
(425,000)
Net assets
4,754,268
4,511,366
Capital and reserves
Called up share capital
17
100
100
Profit and loss reserves
4,754,168
4,511,266
Total equity
4,754,268
4,511,366
The financial statements were approved by the board of directors and authorised for issue on 17 February 2020 and are signed on its behalf by:
Ms C Cavaliere De Moncayo
Ms K D Rahbary
Director
Director
Company Registration No. 03053799
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2019
- 9 -
2019
2018
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
20
(21,470)
233,772
Income taxes refunded/(paid)
401,615
-
Net cash inflow from operating activities
380,145
233,772
Investing activities
Purchase of tangible fixed assets
(16,409)
(5,721)
Proceeds from other investments and loans
-
1,606,470
Interest received
19,501
6,037
Net cash generated from investing activities
3,092
1,606,786
Net increase in cash and cash equivalents
383,237
1,840,558
Cash and cash equivalents at beginning of year
4,895,224
3,054,666
Cash and cash equivalents at end of year
5,278,461
4,895,224
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2019
- 10 -
1
Accounting policies
Company information
The London College Of Beauty Therapy Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Ramillies House, 1 - 2 Ramillies Street, London, England, W1F 7LN.
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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. 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 is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that
it is probable will be
recover
ed
.
1.4
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.
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
1
Accounting policies
(Continued)
- 11 -
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 period of the lease
Plant and equipment
20% - 33% straight line
Fixtures and fittings
20% - 33% 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
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
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.
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
1
Accounting policies
(Continued)
- 12 -
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.
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.
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.
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
1
Accounting policies
(Continued)
- 13 -
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 though 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
1
Accounting policies
(Continued)
- 14 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Provisions
Provisions are recognised when the
company
has a legal or constructive present obligation as a result of a past event, it is probable that the
company
will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision i
s
measured at present value
,
the unwinding of the discount is recognised as a finance cost in profit or loss in the period
in which
it arises.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 15 -
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.
3
Turnover and other revenue
All the turnover rose within the United Kingdom.
2019
2018
£
£
Other significant revenue
Interest income
19,501
6,037
4
Operating profit
2019
2018
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
14,512
12,958
Depreciation of owned tangible fixed assets
79,978
90,557
Operating lease charges
655,011
696,881
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
Beauty Therapy & Retail
41
43
Administration
3
3
Admissions & Business Support
31
25
Total
75
71
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
5
Employees
(Continued)
- 16 -
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
1,998,731
2,115,549
Social security costs
193,173
208,564
Pension costs
33,913
19,982
2,225,817
2,344,095
6
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
94,693
154,717
Company pension contributions to defined contribution schemes
976
530
95,669
155,247
7
Interest receivable and similar income
2019
2018
£
£
Interest income
Interest on bank deposits
19,143
6,037
Other interest income
358
-
Total income
19,501
6,037
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
19,143
6,037
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 17 -
8
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
18,128
-
Adjustments in respect of prior periods
(3,829)
-
Total current tax
14,299
-
Deferred tax
Origination and reversal of timing differences
794
(1,772)
Total tax charge/(credit)
15,093
(1,772)
The actual charge/(credit) 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:
2019
2018
£
£
Profit before taxation
257,995
6,732
Expected tax charge based on the standard rate of corporation tax in the UK of 019% (2018: 19.00%)
49,019
1,279
Tax effect of expenses that are not deductible in determining taxable profit
337
1,464
Capital allowances
(5,635)
(4,156)
Depreciation
15,196
17,206
Under/(over) provided in prior years
(3,829)
-
Deferred tax adjustment
794
(1,772)
Utilisation of tax losses
(40,789)
(15,793)
Taxation charge/(credit) for the year
15,093
(1,772)
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 18 -
9
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 August 2018
819,908
283,909
577,455
1,681,272
Additions
-
1,157
15,252
16,409
At 31 July 2019
819,908
285,066
592,707
1,697,681
Depreciation and impairment
At 1 August 2018
659,494
274,117
560,743
1,494,354
Depreciation charged in the year
54,498
4,914
20,566
79,978
At 31 July 2019
713,992
279,031
581,309
1,574,332
Carrying amount
At 31 July 2019
105,916
6,035
11,398
123,349
At 31 July 2018
160,414
9,792
16,712
186,918
10
Financial instruments
2019
2018
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
77,195
80,693
Carrying amount of financial liabilities
Measured at amortised cost
480,977
749,252
11
Stocks
2019
2018
£
£
Finished goods and goods for resale
2,864
15,140
12
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
77,195
80,693
Corporation tax recoverable
-
397,786
Prepayments and accrued income
244,584
164,883
321,779
643,362
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
12
Debtors
(Continued)
- 19 -
2019
2018
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 15)
8,153
8,947
Total debtors
329,932
652,309
13
Creditors: amounts falling due within one year
2019
2018
£
£
Trade creditors
59,344
52,031
Corporation tax
18,128
-
Other taxation and social security
56,233
63,973
Other creditors
181
7,382
Accruals and deferred income
421,452
689,839
555,338
813,225
14
Provisions for liabilities
2019
2018
£
£
Provisions for liabilities
425,000
425,000
Movements on provisions:
Provisions for liabilities
£
At 1 August 2018 and 31 July 2019
425,000
The company has provided for liabilities in respect of property commitments. The amounts provided are the directors current best estimate of the likely consideration to be paid to discharge its obligations.
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 20 -
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2019
2018
Balances:
£
£
Accelerated capital allowances
8,153
8,947
2019
Movements in the year:
£
Asset at 1 August 2018
(8,947)
Charge to profit or loss
794
Asset at 31 July 2019
(8,153)
The deferred tax asset
set out above
is expected to reverse
in more than 12 months and relates to timing differences.
16
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
33,913
19,982
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.
17
Share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
100 Ordinary shares of £1 each
100
100
THE LONDON COLLEGE OF BEAUTY THERAPY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 21 -
18
Operating lease commitments
Lessee
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:
2019
2018
£
£
Within one year
655,000
683,535
Between two and five years
655,000
1,310,000
1,310,000
1,993,535
19
Ultimate controlling party
The company is controlled by the directors.
20
Cash (absorbed by)/generated from operations
2019
2018
£
£
Profit for the year after tax
242,902
8,504
Adjustments for:
Taxation charged/(credited)
15,093
(1,772)
Investment income
(19,501)
(6,037)
Depreciation and impairment of tangible fixed assets
79,978
90,557
Movements in working capital:
Decrease in stocks
12,276
10,025
(Increase)/decrease in debtors
(76,203)
70,943
(Decrease)/increase in creditors
(276,015)
61,552
Cash (absorbed by)/generated from operations
(21,470)
233,772
2019-07-31
2018-08-01
false
CCH Software
CCH Accounts Production 2020.100
Ms C Cavaliere De Moncayo
Ms K D Rahbary
Ms N Crawley
03053799
2018-08-01
2019-07-31
03053799
bus:Director1
2018-08-01
2019-07-31
03053799
bus:Director2
2018-08-01
2019-07-31
03053799
bus:CompanySecretary1
2018-08-01
2019-07-31
03053799
bus:RegisteredOffice
2018-08-01
2019-07-31
03053799
2019-07-31
03053799
2017-08-01
2018-07-31
03053799
core:RetainedEarningsAccumulatedLosses
2018-07-31
03053799
core:RetainedEarningsAccumulatedLosses
2017-07-31
03053799
core:RetainedEarningsAccumulatedLosses
2019-07-31
03053799
core:RetainedEarningsAccumulatedLosses
2018-07-31
03053799
core:ShareCapital
2019-07-31
03053799
core:ShareCapital
2018-07-31
03053799
2018-07-31
03053799
core:LeaseholdImprovements
2019-07-31
03053799
core:PlantMachinery
2019-07-31
03053799
core:FurnitureFittings
2019-07-31
03053799
core:LeaseholdImprovements
2018-07-31
03053799
core:PlantMachinery
2018-07-31
03053799
core:FurnitureFittings
2018-07-31
03053799
core:CurrentFinancialInstruments
core:WithinOneYear
2019-07-31
03053799
core:CurrentFinancialInstruments
core:WithinOneYear
2018-07-31
03053799
core:CurrentFinancialInstruments
2019-07-31
03053799
core:CurrentFinancialInstruments
2018-07-31
03053799
1
2017-08-01
2018-07-31
03053799
2018-07-31
03053799
2017-07-31
03053799
core:LeaseholdImprovements
2018-08-01
2019-07-31
03053799
core:PlantMachinery
2018-08-01
2019-07-31
03053799
core:FurnitureFittings
2018-08-01
2019-07-31
03053799
core:UKTax
2018-08-01
2019-07-31
03053799
core:UKTax
2017-08-01
2018-07-31
03053799
1
2018-08-01
2019-07-31
03053799
2
2018-08-01
2019-07-31
03053799
3
2018-08-01
2019-07-31
03053799
2
2017-08-01
2018-07-31
03053799
core:LeaseholdImprovements
2018-07-31
03053799
core:PlantMachinery
2018-07-31
03053799
core:FurnitureFittings
2018-07-31
03053799
core:Non-currentFinancialInstruments
2019-07-31
03053799
core:Non-currentFinancialInstruments
2018-07-31
03053799
core:WithinOneYear
2019-07-31
03053799
core:WithinOneYear
2018-07-31
03053799
core:BetweenTwoFiveYears
2019-07-31
03053799
core:BetweenTwoFiveYears
2018-07-31
03053799
bus:PrivateLimitedCompanyLtd
2018-08-01
2019-07-31
03053799
bus:FRS102
2018-08-01
2019-07-31
03053799
bus:Audited
2018-08-01
2019-07-31
03053799
bus:FullAccounts
2018-08-01
2019-07-31
xbrli:pure
xbrli:shares
iso4217:GBP