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STRATEGIC REPORT, REPORT OF THE DIRECTOR AND |
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FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 31 JANUARY 2019 |
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FOR |
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EDUCATIONCITY LIMITED |
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REGISTERED NUMBER:
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STRATEGIC REPORT, REPORT OF THE DIRECTOR AND |
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FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 31 JANUARY 2019 |
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FOR |
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EDUCATIONCITY LIMITED |
EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
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CONTENTS OF THE FINANCIAL STATEMENTS |
for the year ended 31 January 2019 |
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Company Information | 1 |
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Strategic Report | 2 |
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Report of the Director | 3 |
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Report of the Independent Auditors | 4 |
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Income Statement | 6 |
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Other Comprehensive Income | 7 |
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Balance Sheet | 8 |
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Statement of Changes in Equity | 9 |
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Notes to the Financial Statements | 10 |
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EDUCATIONCITY LIMITED |
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COMPANY INFORMATION |
for the year ended 31 January 2019 |
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DIRECTOR: |
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SECRETARY: |
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REGISTERED OFFICE: |
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REGISTERED NUMBER: |
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AUDITORS: |
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Unit 2 |
Charnwood Edge Business Park |
Syston Road |
Leicester |
LE7 4UZ |
EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
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STRATEGIC REPORT |
for the year ended 31 January 2019 |
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The director presents his strategic report for the year ended 31 January 2019. |
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REVIEW OF BUSINESS |
Our key financial indicators are Invoiced Sales, Revenue, and EBITDA. The business has a slight seasonal pattern, with |
Q1 and Q3 being strong, linked to the budget year for the majority of UK schools and the start of the new academic year |
respectively, and the remaining quarters being of broadly similar size. Our product is sold on a subscription basis, with |
some multi-year subscriptions. We rely significantly on our ability to achieve renewals of subscriptions, as well as sales |
to new customers. |
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In the year, we had a 15% decline in overall revenue in the business. UK revenue fell compared to prior year, albeit this |
was partially offset by an increase in International revenue. Administrative expenses were held broadly level with the |
prior year. We continue to invest in product development, adding content to provide greater UK and US curriculum |
coverage for our current subject offering, developing new features for the product platform, as well as looking to ensure |
our products remain compatible with the widening range of devices used by schools and individual users. |
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Other operating income grew 41%, and mainly comprises royalties receivable from sales in the USA by Edmentum of |
our own product and products to which we have contributed content. We continue to develop a significant amount of |
content for a new product released by Edmentum in early 2017, and sales of this product have produced the royalty |
growth. |
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As a result of the movements mentioned above, Operating profit decreased by 68%. |
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Interest receivable and Other interest receivable and similar income mainly comprises unrealised foreign exchange |
losses on USD denominated loans and trading balances with Edmentum, reflecting the weakening of sterling during the |
year. |
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An agreement entered into on 9 June 2015 by our directors restricts repayments of loans by US group companies. An |
impairment provision against the book value of intercompany loans receivable from US entities within the group has |
been updated accordingly in the current year. |
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We continue to finance our business primarily through cash flow from operations, supported where required by financing |
from Edmentum. |
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Looking ahead, in addition to the opportunities for growth that exist for our product in international markets, we |
anticipate growth opportunities arising from the sales of other Edmentum products in international markets, and we have |
started actively pursuing these opportunities in the current year, albeit these will take time to realise. We also anticipate |
continuing growth in royalties receivable on sales made in the USA by Edmentum of relevant products. |
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PRINCIPAL RISKS AND UNCERTAINTIES |
The current economic outlook remains very challenging, although the low cost nature of our product and its very |
comprehensive and engaging content should enable us to continue to grow the overall business. We continue to target |
significant growth opportunities in International markets, whilst looking to maintain our market leading position in the UK |
market. Our products continue to benefit from the wide range of new features and additional content added in the twice |
a year major product releases. |
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We continue to monitor our potential exposure to risks arising from Brexit. Whilst we have limited exposure to the EU |
directly, there could be some level of impact via tariff changes on our non EU International business. This will be |
dependent upon the exact nature of the UK withdrawal from the EU. |
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ON BEHALF OF THE BOARD: |
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EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
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REPORT OF THE DIRECTOR |
for the year ended 31 January 2019 |
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The director presents his report with the financial statements of the company for the year ended 31 January 2019. |
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PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of providing educational content and online |
educational software targeted at children aged 3 - 12 years. The product covers English, Maths, Science, Modern |
Foreign Languages and Computing. |
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DIVIDENDS |
No dividends will be distributed for the year ended 31 January 2019. |
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DIRECTORS |
The directors who have held office during the period from 1 February 2018 to the date of this report are as follows: |
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STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in |
accordance with applicable law and regulations. |
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Company law requires the director to prepare financial statements for each financial year. Under that law the director |
has 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 director must not approve |
the financial statements unless he is 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 director is required |
to: |
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- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company
will continue in business. |
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The director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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. |
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STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act |
2006) of which the company's auditors are unaware, and he has taken all the steps that he ought to have taken as a |
director in order to make himself aware of any relevant audit information and to establish that the company's auditors |
are aware of that information. |
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AUDITORS |
The auditors, Magma Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
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ON BEHALF OF THE BOARD: |
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REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
EDUCATIONCITY LIMITED |
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Opinion |
We have audited the financial statements of Educationcity Limited (the 'company') for the year ended 31 January 2019 |
which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity |
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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of |
Ireland' (United Kingdom Generally Accepted Accounting Practice). |
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In our opinion the financial statements: |
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give a true and fair view of the state of the company's affairs as at 31 January 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. |
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Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. |
Our responsibilities under those standards are further described in the Auditors' 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. |
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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: |
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the director's use of the going concern basis of accounting in the preparation of the financial statements is not
appropriate; or |
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the director has 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. |
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Other information |
The director is responsible for the other information. The other information comprises the information in the Strategic |
Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors |
thereon. |
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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. |
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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. |
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Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
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the information given in the Strategic Report and the Report of the Director for the financial year for which the
financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal
requirements. |
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Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, |
we have not identified material misstatements in the Strategic Report or the Report of the Director. |
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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: |
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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 director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
EDUCATIONCITY LIMITED |
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Responsibilities of director |
As explained more fully in the Statement of Director's Responsibilities set out on page three, the director is 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 director determines necessary to enable the preparation of financial statements that are free from |
material misstatement, whether due to fraud or error. |
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In preparing the financial statements, the director is 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 director either intends to liquidate the company or to cease operations, or has no realistic |
alternative but to do so. |
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Auditors' 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 a Report of the Auditors 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. |
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A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting |
Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
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Use of our report |
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 a Report of the Auditors 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. |
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for and on behalf of
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Unit 2 |
Charnwood Edge Business Park |
Syston Road |
Leicester |
LE7 4UZ |
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EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
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INCOME STATEMENT |
for the year ended 31 January 2019 |
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2019 | 2018 |
Notes | £ | £ |
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TURNOVER | 3 |
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Administrative expenses | ( |
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(740,930 | ) | (15,079 | ) |
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Other operating income | 4 |
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OPERATING PROFIT | 6 |
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Interest receivable and similar income | 7 |
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1,073,921 | (12,715 | ) |
Amounts written off investments | 8 | (213,161 | ) | (92,061 | ) |
PROFIT/(LOSS) BEFORE TAXATION |
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Tax on profit/(loss) | 9 | ( |
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PROFIT/(LOSS) FOR THE FINANCIAL YEAR |
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( |
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EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
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OTHER COMPREHENSIVE INCOME |
for the year ended 31 January 2019 |
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2019 | 2018 |
Notes | £ | £ |
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PROFIT/(LOSS) FOR THE YEAR |
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( |
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OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR |
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( |
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EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
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BALANCE SHEET |
31 January 2019 |
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2019 | 2018 |
Notes | £ | £ |
FIXED ASSETS |
Tangible assets | 11 |
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CURRENT ASSETS |
Debtors | 12 |
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Cash at bank and in hand |
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CREDITORS |
Amounts falling due within one year | 13 | ( |
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NET CURRENT ASSETS |
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TOTAL ASSETS LESS CURRENT
LIABILITIES |
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CREDITORS |
Amounts falling due after more than one
year |
14 |
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( |
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PROVISIONS FOR LIABILITIES | 16 | ( |
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NET ASSETS |
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CAPITAL AND RESERVES |
Called up share capital | 17 |
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Retained earnings |
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SHAREHOLDERS' FUNDS |
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The financial statements were approved by the director on
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EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
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STATEMENT OF CHANGES IN EQUITY |
for the year ended 31 January 2019 |
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Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
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Balance at 1 February 2017 |
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Changes in equity |
Total comprehensive income | - | ( |
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Balance at 31 January 2018 |
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Changes in equity |
Total comprehensive income | - |
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Balance at 31 January 2019 |
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EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
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NOTES TO THE FINANCIAL STATEMENTS |
for the year ended 31 January 2019 |
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1. | STATUTORY INFORMATION |
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Educationcity Limited is a limited company, registered in England and Wales. Its registered office address and |
its registered number can be found on the company information page. |
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2. | ACCOUNTING POLICIES |
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Basis of preparing the financial statements |
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. |
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The financial statements are prepared in sterling, which is the functional currency of the company. Monetary |
amounts in these financial statements are rounded to the nearest £. |
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The financial statements have been prepared under the historical cost convention, modified to include certain |
financial instruments at fair value. The principal accounting policies adopted are set out below. |
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The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of |
that group prepares publicly available consolidated financial statements, including this company, which are |
intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group.The |
company has therefore taken advantage of exemptions from the following disclosure requirements: |
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- | Section 4 ‘Statement of Financial Position’ - Reconciliation of the opening and closing number of shares; |
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Section 7 ‘Statement of Cash Flows’ - Presentation of a statement of cash flow and related notes and
disclosures; |
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Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues' - Carrying
amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income; |
- | Section 33 ‘Related Party Disclosures’ - Compensation for key management personnel. |
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The financial statements of the company are consolidated in the financial statements of Archipelago Learning |
Holdings UK Ltd. These consolidated financial statements are available from its registered office, Unit 8 |
Saddlers Court, Barleythorpe, Oakham, LE15 7GH. |
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Critical accounting judgements and key sources of estimation uncertainty |
In the application of the company’s accounting policies, the director is 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. |
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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. |
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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. |
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Useful economic lives of tangible assets |
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic |
lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. |
They are amended when necessary to reflect current estimates, based on technological advancement, future |
investments, economic utilisation and the physical condition of the assets. For the carrying amount of the |
property plant and equipment, and the tangible assets see accounting policy for the useful economic lives for |
each class of assets. |
EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 January 2019 |
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2. | ACCOUNTING POLICIES - continued |
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Turnover |
Turnover in the financial statements is recognised on the accruals basis and represents amounts receivable for |
goods and services net of VAT and discounts. The company's income comprises the sales of licenses for a |
period of 12 months and in some cases longer, invoiced at inception of the agreement. Income relating to the |
future periods is deferred based on the length of the license and released into the period to which it relates, |
usually on a monthly basis. Other operating income relates to royalties received, or receivable, from fellow group |
companies selling the company's software. Deferred income is disclosed separately in creditors in the financial |
statements. |
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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. |
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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: |
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Land and buildings Leasehold | Over the term of the lease |
Fixtures, fittings & equipment | 25% & 33% straight line |
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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. |
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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. |
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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. |
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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. |
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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. |
EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 January 2019 |
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2. | ACCOUNTING POLICIES - continued |
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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. |
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Financial instruments are recognised in the company's balance sheet when the company becomes party to the |
contractual provisions of the instrument. |
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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. |
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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. |
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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. |
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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. |
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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. |
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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. |
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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. |
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Basic financial liabilities |
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference |
shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes |
a financing transaction, where the debt instrument is measured at the present value of the future payments |
discounted at a market rate of interest. Financial liabilities classified as payable within one year are not |
amortised. |
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Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of |
business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or |
less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction |
price and subsequently measured at amortised cost using the effective interest method. |
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Derecognition of financial liabilities |
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or |
cancelled. |
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EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 January 2019 |
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2. | ACCOUNTING POLICIES - continued |
Taxation |
The tax expense represents the sum of the tax currently payable and deferred tax. |
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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. |
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Deferred tax |
Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of |
certain items for taxation and accounting purposes. The deferred tax balance has not been discounted. |
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Research and development |
Expenditure on research and development is written off to the profit and loss account in the year in which it is |
incurred. |
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Foreign currencies |
Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at |
the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange |
ruling at the date of transaction. All differences are taken to the profit and loss account. |
|
Operating leases |
Rentals payable under operating leases, including any lease incentives received, are charged to income 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 asset are consumed. |
|
Pension costs and other post-retirement benefits |
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. |
|
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. |
|
Going concern |
At the time of approving the financial statements, the director has a reasonable expectation that the company |
has adequate resources to continue in operational existence for the foreseeable future. Thus the director |
continues to adopt the going concern basis of accounting in preparing the financial statements. |
|
Cash and cash equivalents |
Cash at bank and in hand 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. |
|
3. | TURNOVER |
|
The turnover and profit (2018 - loss) before taxation are attributable to the one principal activity of the company. |
|
An analysis of turnover by class of business is given below: |
|
2019 | 2018 |
£ | £ |
|
|
|
|
|
EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 January 2019 |
|
|
3. | TURNOVER - continued |
|
An analysis of turnover by geographical market is given below: |
|
2019 | 2018 |
£ | £ |
United Kingdom |
|
|
Europe |
|
|
Rest of the World | 754,822 | 595,995 |
|
|
|
4. | OTHER OPERATING INCOME |
2019 | 2018 |
£ | £ |
Royalties Receivable |
|
|
|
5. | EMPLOYEES AND DIRECTORS |
2019 | 2018 |
£ | £ |
Wages and salaries |
|
|
Social security costs |
|
|
Other pension costs |
|
|
|
|
|
The average number of employees during the year was as follows: |
2019 | 2018 |
|
Directors | 1 | 1 |
Sales | 41 | 45 |
Content | 48 | 47 |
Other | 6 | 7 |
|
|
|
2019 | 2018 |
£ | £ |
Directors' remuneration |
|
|
|
6. | OPERATING PROFIT |
|
The operating profit is stated after charging/(crediting): |
|
2019 | 2018 |
£ | £ |
Hire of plant and machinery |
|
|
Other operating leases |
|
|
Depreciation - owned assets |
|
|
Loss on disposal of fixed assets |
|
|
Audit fees |
|
|
Foreign exchange differences | ( |
) |
|
|
Exchange differences recognised in profit or loss during the year amounted to (£971,710) (2017 - £975,337). |
EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 January 2019 |
|
|
7. | INTEREST RECEIVABLE AND SIMILAR INCOME |
2019 | 2018 |
£ | £ |
Bank interest received |
|
|
Exchange differences |
|
( |
) |
Interest receivable from group |
companies |
|
|
|
( |
) |
|
8. | AMOUNTS WRITTEN OFF INVESTMENTS |
2019 | 2018 |
£ | £ |
Amounts written off investments | 213,161 | 92,061 |
|
9. | TAXATION |
|
Analysis of the tax charge/(credit) |
The tax charge/(credit) on the profit for the year was as follows: |
2019 | 2018 |
£ | £ |
Current tax: |
UK corporation tax |
|
|
Adjustment to prior years | - | 1,761 |
Total current tax |
|
|
|
Deferred tax | ( |
) | ( |
) |
Tax on profit/(loss) |
|
( |
) |
|
Reconciliation of total tax charge/(credit) included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is |
explained below: |
|
2019 | 2018 |
£ | £ |
Profit/(loss) before tax |
|
( |
) |
Profit/(loss) multiplied by the standard rate of corporation tax in the UK of
|
|
( |
) |
|
Effects of: |
Expenses not deductible for tax purposes |
|
|
Depreciation in excess of capital allowances |
|
|
Adjustments to tax charge in respect of previous periods | ( |
) |
|
Group relief | (121,259 | ) | (5,807 | ) |
Other tax adjustments | (43,129 | ) | (2,661 | ) |
Deferred tax charge | (10,800 | ) | (11,000 | ) |
Total tax charge/(credit) | 40,583 | (9,239 | ) |
|
10. | RETIREMENT BENEFIT SCHEMES |
|
Defined contribution schemes |
2019 | 2018 |
£ | £ |
Charge to profit or loss in respect of defined contribution schemes | 98,875 | 105,147 |
EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 January 2019 |
|
|
11. | TANGIBLE FIXED ASSETS |
Land & | Fixtures, |
buildings | fittings |
leasehold | & equipment | Totals |
£ | £ | £ |
COST |
At 1 February 2018 |
|
|
|
Additions |
|
|
|
Disposals |
|
( |
) | ( |
) |
At 31 January 2019 |
|
|
|
DEPRECIATION |
At 1 February 2018 |
|
|
|
Charge for year |
|
|
|
Eliminated on disposal |
|
( |
) | ( |
) |
At 31 January 2019 |
|
|
|
NET BOOK VALUE |
At 31 January 2019 |
|
|
|
At 31 January 2018 |
|
|
|
|
12. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2019 | 2018 |
£ | £ |
Trade debtors |
|
|
Amounts owed by group undertakings |
|
|
Tax |
|
|
Prepayments |
|
|
|
|
|
13. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2019 | 2018 |
£ | £ |
Trade creditors |
|
|
Tax |
|
|
Social security and other taxes |
|
|
VAT | 88,813 | 108,052 |
Deferred income |
|
|
Accrued expenses |
|
|
|
|
|
14. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2019 | 2018 |
£ | £ |
Deferred income |
|
|
EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 January 2019 |
|
|
15. | LEASING AGREEMENTS |
Operating lease payments represent values payable by the company for certain of it properties, and vehicles. |
Leases are negotiated for various period between 2-3 years. |
|
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 | 25,590 | 138,179 |
Between one and five years | - | 25,590 |
25,590 | 163,769 |
|
16. | PROVISIONS FOR LIABILITIES |
2019 | 2018 |
£ | £ |
Deferred tax | 3,200 | 14,000 |
|
Deferred |
tax |
£ |
Balance at 1 February 2018 |
|
Credit to Income Statement during year | ( |
) |
Balance at 31 January 2019 |
|
|
The movement in deferred tax for the following period, based on current rates and information, is estimated to be |
a £3,200 credit to the profit and loss account. This (primarily) relates to the reversal of timing differences on |
capital allowances. |
|
17. | CALLED UP SHARE CAPITAL |
|
|
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2019 | 2018 |
value: | £ | £ |
|
Ordinary | £1 | 100 | 100 |
|
The Ordinary shares have full rights in the company with respect to voting, dividends and distributions. |
EDUCATIONCITY LIMITED (REGISTERED NUMBER: 03343749) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 January 2019 |
|
|
18. | RELATED PARTY DISCLOSURES |
|
|
Transactions during the
year |
Amounts due from/(to) at
year end |
current year | prior year | current year | prior year |
|
Educationcity Inc. |
Amounts due from them included in group
debtors |
|
134,698 |
124,674 |
|
Archipelago Learning Inc. |
Interest received | 83,030 | 46,679 |
Impairment of loan receivable balance | 83,562 | 36,088 |
Amounts due from them included in group
debtors |
|
4,299,380 |
4,321,013 |
|
Edmentum Inc. |
Recharged costs from them | 291,904 | 337,795 |
Royalties received | 974,815 | 664,494 |
Royalties paid | 21,885 | 5,875 |
Interest received | 128,776 | 72,397 |
Impairment of loan receivable balance | 129,601 | 55,973 |
|
19. | ULTIMATE CONTROLLING PARTY |
|
The immediate parent undertaking is Archipelago Learning Holdings UK Limited, a company incorporated in the |
United Kingdom. Consolidated accounts are available from Educationcity Limited's registered office. |
|
The ultimate parent undertaking at 31 January 2019 was Edmentum Ultimate Holdings LLC, a company |
incorporated in the United States of America. |