Company registration number 04060333 (England and Wales)
EASYGROUP LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
EASYGROUP LTD
COMPANY INFORMATION
Director
Sir Stelios Haji-Ioannou
Company number
04060333
Registered office
168 Fulham Road
London
SW10 9PR
Auditor
Kirk Rice LLP
The Courtyard
High Street
Ascot
Berkshire
SL5 7HP
EASYGROUP LTD
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 25
EASYGROUP LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 1 -
The director presents the strategic report for the year ended 30 September 2023.
Review of the business
The principal activity of the company is the creation, ownership, protection, exploitation and licensing out for royalty income of the easy family of brands as seen on the easy portal www.easy.com and on www.easyHistory.info . The company owns about one thousand one hundred and fifty registered trademarks with the prefix "easy" and is active in many business sectors via its licensee companies. The aim of the company remains to extend the brand further into other suitable business activities by selecting appropriate business partners (some of which are substantial companies like easyJet PLC or easyHotel Ltd and others are entrepreneurial start ups) and licensing the particular sub brand to them with requisite controls, checks and balances. Moreover the company will continue to act as a prudent brand owner in protecting the brand from infringement and any unauthorised use. The overall aim is to maximise returns on a risk adjusted basis.
Principal risks and uncertainties
The principal risks are potential damage to the brand by internal and external threats and failure by licensees to pay the royalties due to the company or a reduction in the licensee's revenues which will reduce the royalties due to easyGroup. The way the companies manages these risks is by diversifying the royalty income streams and to manage the associated risks of default.
Development and performance
The balance sheet at 30 September 2023 shows shareholders' funds of £33.7m. This is excluding the intangible assets like the easy family of brands which are not valued on the balance sheet. The company made a substantial charitable donation out of its profits to the Stelios Philanthropic Foundation which is set up by the Director of the company for his legacy which reduced the reported profits of the company.
Key performance indicators
The main Key Performance Indicator (KPI) for the financial performance of the company is to maximise its operating profit margin.
Sir Stelios Haji-Ioannou
Director
24 November 2023
EASYGROUP LTD
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 2 -
The director presents his annual report and financial statements for the year ended 30 September 2023.
Principal activities
The principal activity of the company is the creation, ownership, protection, exploitation and licensing out in return for royalty income of the easy family of brands as seen on the easy portal www.easy.com and www.easyhistory.info.
Results and dividends
The results for the year are set out on page 8.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Sir Stelios Haji-Ioannou
Going concern assumption
The company made a profit for the year amounting to £3,224,104 (2022: £436,134) and at year end had net current liabilities of £426,031 (2022: £1,656,606) and net assets of £33,651,531 (2022: £30,427,427). The company has produced a cash flow forecast to December 2024 and it shows that it can settle its liabilities as they fall due for a period of at least 12 months from the date of approval of the financial statements.
The director has prepared these financial statements on a going concern basis on the basis that his expectation is that the company will continue as a going concern for the foreseeable future.
Auditor
Kirk Rice LLP 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 director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
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:
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 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 them 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.
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.
EASYGROUP LTD
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 3 -
On behalf of the board
Sir Stelios Haji-Ioannou
Director
24 November 2023
EASYGROUP LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EASYGROUP LTD
- 4 -
Opinion
We have audited the financial statements of Easygroup Ltd (the 'company') for the year ended 30 September 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 September 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
EASYGROUP LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EASYGROUP LTD
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the director's report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the director was not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the director's report.
Responsibilities of director
As explained more fully in the director's responsibilities statement, 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 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 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.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company and the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to the acts by the company which were contrary to applicable laws and regulations including fraud, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to inflated revenue and profit.
Audit procedures performed included: review of financial statement disclosures to underlying supporting documentation, substantive testing of revenue, making enquiries of management, testing of journals, and evaluating whether the judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
EASYGROUP LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EASYGROUP LTD
- 6 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Graham Jennings
Senior Statutory Auditor
For and on behalf of Kirk Rice LLP
27 November 2023
Statutory Auditor
The Courtyard
High Street
Ascot
Berkshire
SL5 7HP
EASYGROUP LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
23,819,925
18,371,412
Cost of sales
(3,016,190)
(3,826,889)
Gross profit
20,803,735
14,544,523
Administrative expenses
(4,828,895)
(3,458,867)
Other operating income
3,391,675
244,399
Charitable donations
(15,440,306)
(10,496,725)
Operating profit
4
3,926,209
833,330
Interest receivable and similar income
7
106,417
142,798
Amounts written off investments
8
(118,162)
(417,226)
Profit before taxation
3,914,464
558,902
Tax on profit
9
(690,360)
(122,768)
Profit for the financial year
3,224,104
436,134
The profit and loss account has been prepared on the basis that all operations are continuing operations.
EASYGROUP LTD
BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
19,453,257
30,104,550
Investment property
12
13,136,029
Investments
13
1,960,629
1,979,483
34,549,915
32,084,033
Current assets
Debtors
16
6,924,215
12,732,019
Investments
17
1,082,128
966,715
Cash at bank and in hand
2,221,858
7,479,197
10,228,201
21,177,931
Creditors: amounts falling due within one year
18
(10,654,232)
(22,834,537)
Net current liabilities
(426,031)
(1,656,606)
Total assets less current liabilities
34,123,884
30,427,427
Provisions for liabilities
Deferred tax liability
20
472,353
(472,353)
-
Net assets
33,651,531
30,427,427
Capital and reserves
Called up share capital
23
3,650,002
3,650,002
Profit and loss reserves
24
30,001,529
26,777,425
Total equity
33,651,531
30,427,427
The financial statements were approved and signed by the director and authorised for issue on 24 November 2023
Sir Stelios Haji-Ioannou
Director
Company registration number 04060333 (England and Wales)
EASYGROUP LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 9 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 October 2021
3,650,002
26,341,291
29,991,293
Year ended 30 September 2022:
Profit and total comprehensive income
-
436,134
436,134
Balance at 30 September 2022
3,650,002
26,777,425
30,427,427
Year ended 30 September 2023:
Profit and total comprehensive income
-
3,224,104
3,224,104
Balance at 30 September 2023
3,650,002
30,001,529
33,651,531
EASYGROUP LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
27
7,795,926
(16,109,834)
Income taxes (paid)/refunded
(62,880)
50,474
Net cash inflow/(outflow) from operating activities
7,733,046
(16,059,360)
Investing activities
Purchase of tangible fixed assets
(44,714)
(20,237)
Proceeds from disposal of tangible fixed assets
10,000
250,000
Purchase of investments
(214,721)
(146,049)
Proceeds from disposal of investments
5,835,392
Interest received
48,449
30,492
Dividends received
57,968
112,306
Net cash (used in)/generated from investing activities
(143,018)
6,061,904
Financing activities
Repayment of borrowings
(12,847,367)
9,411,469
Net cash (used in)/generated from financing activities
(12,847,367)
9,411,469
Net decrease in cash and cash equivalents
(5,257,339)
(585,987)
Cash and cash equivalents at beginning of year
7,479,197
8,065,184
Cash and cash equivalents at end of year
2,221,858
7,479,197
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 11 -
1
Accounting policies
Company information
Easygroup Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 168 Fulham Road, London, SW10 9PR.
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 amounts 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
The financial statements have been prepared on a going concern basis. This assessment has been made based on the projected cash flow forecasts for a period of 12 months from the date of these financial statements. Accordingly, the director continues to adopt the going concern basis.true
1.3
Turnover
Revenue represents royalty income and cost recharges, net of VAT. Revenue is recognised based on the conditions specified in brand protection licenses and recharge agreements with licensees.
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.
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:
Freehold land and buildings
2% straight line
Leasehold land and buildings
2% straight line
Fixtures and fittings
20% - 33% straight line
Motor vehicles
3 years
Freehold land is not depreciated.
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
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss within other operating income.
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.6
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.7
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.
1.8
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.
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.9
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.
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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 subsequently 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 through 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.
1.10
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.
1.11
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.
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.
1.12
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
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.16
Current assets investments in listed entities are stated at the quoted market price in an active market.
2
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.
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.
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
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.
Depreciation, useful lives and residual values of property, plant & equipment
The director estimates the useful lives and residual values of property, plant & equipment in order to calculate the depreciation charges. Changes in these estimates could result in changes being required to the annual depreciation charges in the statement of comprehensive income and the carrying value of the property, plant & equipment in the balance sheet.
Unlisted investments
Unlisted investments are tested for impairment when circumstances indicate that the carrying value may be impaired.
Impairment is determined for unlisted investments by assessing the recoverable amount of each investment as the higher of the value in use and its fair value less costs to sell. Where the recoverable amount is less than the carrying amount, an impairment loss is recognised. The director makes an impairment review once per year and, based on the available information from the investee companies, has made certain provisions in these accounts.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Recharge income
1,362,413
2,093,933
Royalty income
22,457,512
16,277,479
23,819,925
18,371,412
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
23,662,597
18,256,739
Rest of the world
157,328
114,673
23,819,925
18,371,412
2023
2022
£
£
Other revenue
Interest income
48,449
30,492
Dividends received
57,968
112,306
Rental income
502,521
244,399
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 17 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
101,257
169,138
Fair value gains on investment property
2,889,154
-
Depreciation of owned tangible fixed assets
430,132
442,765
(Profit)/loss on disposal of tangible fixed assets
(9,000)
(124,101)
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
18,500
27,000
For other services
All other non-audit services
6,500
6,900
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration staff
13
13
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
784,823
685,529
Social security costs
92,174
82,179
Pension costs
13,961
11,361
890,958
779,069
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 18 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
48,449
30,492
Other income from investments
Dividends received
57,968
112,306
Total income
106,417
142,798
2023
2022
Investment income includes the following:
£
£
Interest received
35,144
29,565
Dividends received
57,968
112,306
8
Amounts written off investments
2023
2022
£
£
Fair value gains/(losses) on financial instruments
Gain on financial assets held at fair value through profit or loss
115,413
565,956
Other gains/(losses)
Gain/(loss) on disposal of financial assets held at fair value through profit or loss
(14,039)
Other gains and (losses)
(233,575)
(969,143)
(118,162)
(417,226)
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
277,895
122,768
Adjustments in respect of prior periods
(59,888)
Total current tax
218,007
122,768
Deferred tax
Origination and reversal of timing differences
472,353
Total tax charge
690,360
122,768
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
9
Taxation
(Continued)
- 19 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
3,914,464
558,902
Expected tax charge based on the standard rate of corporation tax in the UK of 22.00% (2022: 19.00%)
861,182
106,191
Tax effect of expenses that are not deductible in determining taxable profit
30,169
1,900
Tax effect of income not taxable in determining taxable profit
(25,391)
(104,864)
Gain on disposal not deductible
(1,980)
Change in unrecognised deferred tax assets
62,179
(62,609)
Adjustments in respect of prior years
(59,888)
Effect of change in corporation tax rate
56,683
Dividend income
(12,753)
(21,338)
Impairment of assets
203,488
Taxable profit being less than accounting profit on revaluation of investment properties
(219,841)
Taxation charge for the year
690,360
122,768
10
Impairments
The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.
Reversals of previous impairment losses have been recognised in profit or loss as follows:
2023
2022
Notes
£
£
In respect of:
Fixed asset investments
13
(233,575)
(969,143)
Recognised in:
Amounts written off investments
(233,575)
(969,143)
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 20 -
11
Tangible fixed assets
Freehold land and buildings
Leasehold land and buildings
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 October 2022
30,889,320
621,347
1,414,858
61,992
32,987,517
Additions
14,714
30,000
44,714
Disposals
(18,000)
(23,659)
(41,659)
Transfers to investment property
(10,585,801)
(621,347)
(360,744)
(11,567,892)
At 30 September 2023
20,303,519
1,050,828
68,333
21,422,680
Depreciation and impairment
At 1 October 2022
1,570,734
197,009
1,054,232
60,992
2,882,967
Depreciation charged in the year
231,469
12,427
180,403
5,833
430,132
Eliminated in respect of disposals
(22,659)
(22,659)
Transfers to investment property
(835,017)
(209,436)
(276,564)
(1,321,017)
At 30 September 2023
967,186
958,071
44,166
1,969,423
Carrying amount
At 30 September 2023
19,336,333
92,757
24,167
19,453,257
At 30 September 2022
29,318,586
424,338
360,626
1,000
30,104,550
The carrying value of land and buildings comprises:
2023
2022
£
£
Freehold
19,336,333
29,318,586
Long leasehold
424,338
19,336,333
29,742,924
12
Investment property
2023
£
Fair value
At 1 October 2022
Transfers from owner-occupied property
10,246,875
Net gains or losses through fair value adjustments
2,889,154
At 30 September 2023
13,136,029
The fair value of the investment properties has been arrived at 30 September 2023 by the director. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 21 -
13
Fixed asset investments
2023
2022
£
£
Unlisted investments
1,960,629
1,979,483
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 October 2022
3,008,781
Additions
214,721
At 30 September 2023
3,223,502
Impairment
At 1 October 2022
1,029,298
Impairment losses
233,575
At 30 September 2023
1,262,873
Carrying amount
At 30 September 2023
1,960,629
At 30 September 2022
1,979,483
14
Subsidiaries
Details of the company's subsidiaries at 30 September 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
easyGroup IP Ireland Limited
Ireland
Ordinary
100.00
easyGroup Europe Ltd
Cyprus
Ordinary
100.00
15
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
6,717,781
12,403,316
Equity instruments measured at cost less impairment
1,960,629
1,979,483
Instruments measured at fair value through profit or loss
1,082,128
966,715
Carrying amount of financial liabilities
Measured at amortised cost
9,596,453
22,295,200
The above disclosure excludes cash balances held of £2,221,858 (2022: £7,479,197).
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 22 -
16
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
405,035
512,648
Other debtors
98,434
Prepayments and accrued income
6,519,180
12,120,937
6,924,215
12,732,019
17
Current asset investments
2023
2022
£
£
Listed investments
1,082,128
966,715
18
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Other borrowings
19
8,064,102
20,911,469
Trade creditors
894,624
1,019,276
Corporation tax
277,895
122,768
Other taxation and social security
461,761
32,968
Deferred income
21
318,123
383,601
Other creditors
104,761
70,012
Accruals and deferred income
532,966
294,443
10,654,232
22,834,537
19
Loans and overdrafts
2023
2022
£
£
Loans received from parent company
8,064,102
20,911,469
Payable within one year
8,064,102
20,911,469
The above amount due to the parent undertaking is interest free and will not be recalled before 1 December 2023. The loan was repaid by the company to the parent company on 17 October 2023.
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 23 -
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Revaluations
472,353
-
2023
Movements in the year:
£
Liability at 1 October 2022
-
Charge to profit or loss
472,353
Liability at 30 September 2023
472,353
The deferred tax liability set out above has arisen on the fair value gains on investment property.
21
Deferred income
2023
2022
£
£
Other deferred income
318,123
383,601
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
13,961
11,361
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.
23
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
3,650,002
3,650,002
3,650,002
3,650,002
Share capital represents the nominal value of shares that have been issued. There is a single class of ordinary shares, which have attached to them full voting, dividend and capital distribution (including winding up) rights. They do not confer any rights of redemption.
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 24 -
24
Profit and loss reserves
The retained earnings reserve represents cumulative profits and losses.
25
Related party transactions
The company received royalties of £201,476 (2022: £176,269), management fees of £24,000 (2022: £24,000), recharged costs of £5,750 (2022: £2,475) and brand protection costs of £50,000 (2022: £100,000) from easyCar Online Ltd. easyCar Online Ltd is a company under common control. These amounts, including the comparatives, are shown exclusive of VAT.
During the year the company was charged £600,000 (2022: £600,000) in management charges by easyGroup Holdings Limited, a company registered in the Cayman Islands whose ultimate controlling party is the Sir Stelios Haji-Ioannou Trust. At the year end, an outstanding balance of £8,064,102 (2021: £20,911,469) was due to easyGroup Holdings Limited.
During the year the company made donations of £15,440,306 (2022: £10,496,725) to the Stelios Philanthropic Foundation, a UK registered charity. The Foundation is controlled by its seven Trustees, of which Sir Stelios Haji-Ioannou is one of them.
26
Ultimate controlling party
The company's immediate and ultimate parent undertaking is easyGroup Holdings Limited, a company registered in the Cayman Islands whose ultimate controlling party is the Sir Stelios Haji-Ioannou Trust, a Cayman Islands trust set up for the benefit of Sir Stelios Haji-Ioannou and others in which he participates in the management. The financial statements of easyGroup Holdings Limited are not available to the public.
27
Cash generated from/(absorbed by) operations
2023
2022
£
£
Profit for the year after tax
3,224,104
436,134
Adjustments for:
Taxation charged
690,360
122,768
Investment income
(106,417)
(142,798)
Gain on disposal of tangible fixed assets
(9,000)
(124,101)
Write off of fixed assets not received
18,000
-
Fair value gain on investment properties
(2,889,154)
Depreciation and impairment of tangible fixed assets
430,132
442,765
Other (gains) and losses
118,162
417,226
Movements in working capital:
Decrease/(increase) in debtors
5,807,804
(11,638,405)
Increase/(decrease) in creditors
577,413
(4,556,058)
Decrease in deferred income
(65,478)
(1,067,365)
Cash generated from/(absorbed by) operations
7,795,926
(16,109,834)
EASYGROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 25 -
28
Analysis of changes in net debt
1 October 2022
Cash flows
30 September 2023
£
£
£
Cash at bank and in hand
7,479,197
(5,257,339)
2,221,858
Borrowings excluding overdrafts
(20,911,469)
12,847,367
(8,064,102)
(13,432,272)
7,590,028
(5,842,244)
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