ECCTIS Limited - Period Ending 2021-06-30

ECCTIS Limited

Contents

ECCTIS Limited

Company Information

ECCTIS Limited

Strategic Report for the Year Ended 30 June 2021

The directors present their strategic report for the year ended 30 June 2021.

Principal activity

The principal activity of the company is the recognition and accreditation of international qualifications.

Fair review of the business

The Company's results matched budgeted expectations, with turnover for the 12 month period of £11.5m, an increase when compared, on a pro-rated basis, against the year ended June 2020, of 29%.

The unprecedented and on-going global pandemic has continued to impact operational performance. The Company has continued to invest significantly in people, technology and in diversifying the business' critical support portfolios in order to manage restrictions in working practices and falling demand for face-to-face services. The ability of the Company to adapt in the face of these sizeable challenges has been critical to its success.

In financial terms, the traditional, core business model recovered after a difficult first few months of the pandemic. However, largely as a result of a strategy to broaden business streams, in particular internationally, the Company has prospered. Income generated by the Company for the year grew both in the UK (28%) and overseas (32%), as set out on page 15 of these financial statements.

The Company continued, during the period under review, to provide a high quality and comprehensive information service on international qualifications in order to meet the Government’s obligations and support public policy.

Key performance indicators used by the Management and the Board remain unchanged, including: the quality of the information provided to member organisations; the number and standards of services delivered to the public; customer experience and customer satisfaction rates; and the effective promotion of UK Qualifications internationally. Metrics in these areas continue to be met and illustrate the positive impact of the services that the Company provides.

The reporting period encompasses the transition of ownership of the Company's parent to an Employee Ownership Trust. Significant time and resource have been taken during the period under review in the planning of a restructure and its subsequent deployment. This has coincided with the need to have the right team in place as a result of the UK leaving the EU and other major changes caused by a number of external factors. This restructure more accurately reflects future objectives and will create the right environment for the Company, the wider Group and its employees to prosper. The ongoing organisational changes will involve the new management team taking strategic control.

The overarching vision of the new structure will be to become the world’s leading provider of cross-border qualification and skill conversion services, a recognised supplier of information services to a global membership network and the Company will capitalise on 25 years of professional experience to achieve this.

To achieve this, strategic objectives and implementation plans are being developed which focus on:

1. Effective management of government contracts, including change management to reflect new contractual remits and responsibilities
2. Promotion of global migration management solutions and services
3. Expansion of international benchmarking and training activities
4. Quality Benchmarking and accreditation globally
5. Evaluation and verification solutions for global migrants and professionals
6. Enhancing and expanding the global professional network of organisations handling international qualifications and skills

ECCTIS Limited

Strategic Report for the Year Ended 30 June 2021

A key focus of the new structure will be to develop a cohesive, international business development framework. This will place an emphasis on strong opportunities with repeat business, establishing and embedding trusted in-country partners, developing consistent international messages and a distinct brand for a global community.

The Board recognises the critical importance of investing continuously both in the quality of the information on qualifications and in the high quality of services to users. In particular, the ongoing investment in technology will help to transform the Company's operations and services, meaning it remains well-placed to meet the new challenges of a post-pandemic era.

In a similar fashion, with the newly established Employee Ownership Trust, investment in people is a key focus of the Board’s attention. The ability to adapt to the new operating environment has been achieved by our team of skilled and experienced professionals, and the continuing success of the Company will be underpinned by the new People Strategy. This aims to increase both employee development and engagement, whilst augmenting the management team with new skills as the breadth of work continues to expand.

Principal risks and uncertainties

The management of the business and the execution of the company's strategy are subject to a number of risks and the principal risks are considered to relate to the changes in the national and international political climate, particularly in relation to the educational sector, regulatory frameworks and global migration positions.

The company is required to maintain a specific level of reserves in order to be able to deal effectively with any changes which may have immediate and significant impact on its operations.

The company is compelled to implement an imposed pricing structure for its core business for a fixed term of operation. Significant changes to that pricing structure can have a major impact on the ability to continue to provide those services at the current high quality level. Careful management and control of its costs and level of reserves remain critical to mitigate any changes imposed on the business.

Going concern

After reviewing the company's forecasts and projections, that include the continued impact of COVID-19 and availability and use of government support should it be necessary, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Approved by the Board on 18 March 2022 and signed on its behalf by:

C Bai-Yun
Director

ECCTIS Limited

Directors' Report for the Year Ended 30 June 2021

The directors present their report and the financial statements for the year ended 30 June 2021.

Directors of the company

The directors who held office during the year were as follows:

C Bai-Yun

M J Cartwright

N T Everett (appointed 1 March 2021)

C Mathews (appointed 1 March 2021)

P W W Norris

P M Wood (appointed 1 March 2021)

Financial instruments

The company's financial instruments comprise cash and liquid resources, and various other items such as trade debtors, trade creditors etc. that arise directly from its operations. The main purpose of these financial instruments are to finance the operations of the company.

The main risk arising from the company's financial instruments are set out below:

Price risk, credit risk, liquidity risk and cash flow risk

Credit risk:
The company's principal financial assets are bank balances and cash and trade and other receivables. The company’s credit risk is primarily attributable to its trade receivables. The company's policies are aimed at minimising losses through monitoring appropriate payment history and satisfy credit worthiness procedures. The amounts presented in the balance sheet are, where appropriate, net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. The credit risk on liquid funds is limited because the counter parties are banks with high credit-ratings assigned by international credit-rating agencies.

Liquidity risk:
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The company mitigates liquidity risk by managing cash generation from its operations, applying cash collection targets and constantly monitors the company's trading results to ensure that the company can meet its future obligations as they fall due.

Cash flow risk:
Cash flow risk is the risk of exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability such as future interest payments on a variable rate loans. The company is able to manage its cash flow through the generation of cash resources of its operational activities without the need for external debt and therefore this risk is mitigated.

Disclosure of information to the auditors

Approved by the Board on 18 March 2022 and signed on its behalf by:

C Bai-Yun
Director

ECCTIS Limited

Statement of Directors' Responsibilities

ECCTIS Limited

Independent Auditor's Report to the Members of ECCTIS Limited

Opinion

We have audited the financial statements of ECCTIS Limited (the 'company') for the year ended 30 June 2021, which comprise the Profit and Loss Account, 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).

In our opinion the financial statements:

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 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 original financial statements were authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

We have nothing to report in this regard.

ECCTIS Limited

Independent Auditor's Report to the Members of ECCTIS Limited

Opinion on other matter prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of our 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 Directors' Report.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page 5, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

ECCTIS Limited

Independent Auditor's Report to the Members of ECCTIS Limited

Use of this 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 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.

Ryan Hancock (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor

Staverton Court
Staverton
Cheltenham
GL51 0UX

24 March 2022

ECCTIS Limited

Profit and Loss Account for the Year Ended 30 June 2021

The above results were derived from continuing operations.

The company has no other comprehensive income for the year.

ECCTIS Limited

(Registration number: 02405026)
Balance Sheet as at 30 June 2021

Approved and authorised by the Board on 18 March 2022 and signed on its behalf by:
 

C Bai-Yun
Director

ECCTIS Limited

Statement of Changes in Equity for the Year Ended 30 June 2021

ECCTIS Limited

Notes to the Financial Statements for the Year Ended 30 June 2021

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Suffolk House
Suffolk Road
Cheltenham
GL50 2ED

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

Basis of preparation

Summary of disclosure exemptions

As a qualifying entity, the Company has taken advantage of the following disclosure exemptions from FRS 102:
- the requirements to prepare a cash flow statement; and
- the requirements in relation to financial instruments of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26 (in relation to those cross-referenced paragraphs from which a disclosure exemption is available), 12.27, 12.29(a), 12.29(b), and 12.29A, where equivalent disclosure is given in consolidated financial statements..

Name of parent of group

These financial statements are consolidated in the financial statements of GRS (Holdings) Limited.

The financial statements of GRS (Holdings) Limited may be obtained from the company's registered office.

Going concern

After reviewing the company's forecasts and projections, that include the continued impact of COVID-19 and availability and use of government support should it be necessary, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
 

ECCTIS Limited

Notes to the Financial Statements for the Year Ended 30 June 2021

Judgements

Key sources of estimation uncertainty

No key sources of estimation uncertainty have been identified by management in preparing these financial statements other than those detailed in these accounting policies.

Revenue recognition

Government grants

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

Tangible assets

Depreciation

ECCTIS Limited

Notes to the Financial Statements for the Year Ended 30 June 2021

Cash and cash equivalents

Trade debtors

Trade creditors

Leases

Share capital

Dividends

Defined contribution pension obligation

Financial Instruments

Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.
 

ECCTIS Limited

Notes to the Financial Statements for the Year Ended 30 June 2021

Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets and liabilities are only offset in the balance sheet when, and only when, there exists a legally enforceable right to set off the recognised amounts and the company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
 

Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

Non-financial assets:
An asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

Financial assets:
For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

The analysis of the company's revenue for the year from continuing operations is as follows:

The analysis of the company's turnover for the year by market is as follows:

ECCTIS Limited

Notes to the Financial Statements for the Year Ended 30 June 2021

The analysis of the company's other operating income for the year is as follows:

Arrived at after charging/(crediting):

The aggregate payroll costs (including directors' remuneration) were as follows:

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

ECCTIS Limited

Notes to the Financial Statements for the Year Ended 30 June 2021

The directors' remuneration for the year was as follows:

Tax charged/(credited) in the profit and loss account

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2020 - higher than the standard rate of corporation tax in the UK) of 19% (2020 - 19%).

The differences are reconciled below:

ECCTIS Limited

Notes to the Financial Statements for the Year Ended 30 June 2021

Deferred tax

Deferred tax assets and liabilities

ECCTIS Limited

Notes to the Financial Statements for the Year Ended 30 June 2021

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £266,277 (2020 - £235,318).

Allotted, called up and fully paid shares

Operating leases

The total of future minimum lease payments is as follows:

The amount of non-cancellable operating lease payments recognised as an expense during the year was £85,499 (2020 - £128,250).

ECCTIS Limited

Notes to the Financial Statements for the Year Ended 30 June 2021

The company has taken advantage of the exemption from disclosing transactions with other members of the group.

The company's immediate parent is GRS (Holdings) Limited, incorporated in England and Wales.