Achieve Education Limited - Limited company accounts 20.1

REGISTERED NUMBER: 09077274 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2020

FOR

ACHIEVE EDUCATION LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Income Statement

8

Consolidated Other Comprehensive Income

9

Consolidated Balance Sheet

10

Company Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Cash Flow Statement

14

Notes to the Consolidated Cash Flow Statement

15

Notes to the Consolidated Financial Statements

16

DIRECTORS:

Mr C Bao

Ms T Zhou

Mr M C Farmer

Mr B Farrell

REGISTERED OFFICE:

Chase Grammar School

Convent Close

Cannock

Staffordshire

WS11 0UR

REGISTERED NUMBER:

09077274 (England and Wales)

SENIOR STATUTORY AUDITOR:

Anna Richards

AUDITORS:

Wynniatt-Husey Ltd

Chartered Accountants

and Statutory Auditors

The Old Coach House

Horse fair

Rugeley

Staffordshire

WS15 2EL

REVIEW OF THE BUSINESS

Achieve Education Limited is a diverse organisation. The company comprises Abbotsholme School Limited, Chase Grammar School Limited and Chase Grammar School Partners Limited. The Company has a rich experience in operating schools and offers a personalised customer service. The schools share one ethos of delivering an outstanding education for boys and girls up to the age of 19. Our Schools are inclusive of pupils of a wide range of ability and talents and provide a broad selection of academic and extra-curricular opportunities. The international element within each school creates a platform for pupils to become global citizens and effective contributors within a competitive environment. Achieve Education Limited and each of its schools is individual and reflective of its own local community and our schools have an impressive reputation for outstanding academic results with pupils attending top universities. Academic study is central for every pupil and will always take priority, but the experiences of Abbotsholme School Ltd or Chase Grammar School Ltd pupils are never confined only to the classroom.

The global pandemic has taught us many things - the importance of family values, a healthy life style and an ability to adapt. It has also demonstrated the resilience and commitment of our talented staff, pupils and parents. Alongside the many challenges, the change of circumstances has resulted in many new initiatives and staff and pupils having to adapt to an online learning platform during prolonged periods of school closure. The shift to remote learning was seamless which demonstrated our pupils' resilience within an ever changing environment.

The educational sector has been impacted significantly though the Covid-19 pandemic, particularly in respect of the international market, where retention has been restrained by travel restrictions and parents lack of confidence in the countries ability to manage the virus. Despite this, the directors and the Advisory Board remain mindful that its strategic decisions have long term implications for the business, and these implications are carefully assessed. The most recent example of this is the directors decision with regards to a new scholarship and mentoring initiative and the establishment of partnerships with international schools through online learning platforms.

It has been a challenging year, both operationally and financially. The schools have had to adapt to changing situations and have faced unprecedented challenges. We are extremely grateful to our heads of the school, the school leadership teams and all staff for their commitment and tireless efforts throughout the pandemic to ensure the best possible experience for our pupils. Despite the impact of the Covid-19 pandemic, the company's financial results are reflective of the forecasted position. This has been achieved through careful management of the schools' finances and the benefit of the government furlough scheme during the period of school closure has contributed to the schools successfully mitigating the loss of revenue through the discounting of fees in the summer term and the loss of boarding revenue.

The directors are conscious of its various key stakeholders and seeks to understand the respective interests of all its stakeholders, parents, staff, pupils and alumnae so that they may be properly considered in the Advisory Board decisions. We do this through various methods, including direct engagement by the board members, the receiving of reports and updates from the members of the schools' management who engage with such groups, and coverage in the Advisory Board papers of relevant stakeholders interest with regard to proposed courses of action.

The business continues to position itself through its effective marketing campaigns, both locally and internationally, to be a competitive player within the independent sector and to benefit from pupil growth once the pandemic is over and confidence returns to the market. The strength of the schools is built on the hard work and commitment of all the staff. The Achieve schools provide a safe and stable working environment where teaching and support staff can be at their best. During the year, the Advisory Board considered a number of matters where it was important to consider the interest of the employees.

The schools' success and future recruitment opportunities are built on their reputation and our current parents and pupils are the reason that the schools exist. It is essential to our future that we consistently and continuously offer an attractive high quality package to our customers at an assessable price. In so doing we continue to build our reputation, both locally and internationally.

Achieve Education Ltd is also very conscious of its community responsibilities and regularly opens its facilities to local groups, including sports clubs and cultural organisations. Current groups who benefit from the Achieve schools facilities experience include youth football clubs, local hockey groups, equestrian individuals and performing arts groups.

KEY PERFORMANCE INDICATORS

The company's key performance indicators are to provide a top quality education program and continue to offer this to more and more people. Achieve Education Limited strives to enable its all pupils reach their academic potential and therefore achieve their ambitions. The company is committed to its educational vision and to expand its reach through the provision of scholarships to high achieving pupils and through bursary support to those who otherwise would not be able to benefit from an independent school education.

The company's bank balances (comprising cash at the bank) increased by £999,051 at the year end from a bank/cash figure of £1,020,550 in 2019 to a bank/cash in hand figure of £2,019,601. This increment is attributable to the receipt of CBIL's loan funding.

DEBTORS AND CREDITORS POLICY

The company endeavours to pay all supplies within 30 days. Borrowing facilities have been re-negotiated during the last year and the group has benefitted from the government CBIL's loan funding which has eased the pressure on cash flow.

The company continues to collect revenues timeously each term to improve and maximise cash flow requirements.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors and the Advisory Board of Achieve Education Limited manage the risks at the group and individual school level.

The recent impact of the Covid-19 pandemic has had a significant impact on the individual schools' recruitment

processes. The exposure to international pupils and the periods of school closure has impacted revenue streams and the schools' ability to market in the usual manner. The company has adopted a pro-active approach in establishing blended online learning platforms and virtual experiences to mitigate exposure.

The company aims to maintain a flexible borrowing structure and monitors future funding requirements over the medium term such that it can take action to supplement its future cash flows to service debt obligations, where appropriate. The group has been exposed to liquidity risk due to the Covid-19 pandemic but this has been managed through CBIL's loan funding. Other risks to the business are retaining high quality teachers and keeping class sizes to optimum level whilst delivering a broad and balance curriculum.

BUSINESS IN THE FUTURE

The company has continued its principal activities throughout the year and the directors expect it to do so for the foreseeable future. The recent impact of the Covid-19 pandemic has had significant impact of the schools' traditional recruitment streams and processes. International parents' confidence has been significantly impacted which has resulted in a lower than normal recruitment of international pupils which has affected the schools' revenue streams. Through adopting a proactive approach the schools' offered a blended online learning platform which contributed to mitigating their exposure as a result of pupils being unable to travel.

The marketing of the schools' and engagement with prospective parents has been a high priority and with Covid-19 restrictions and social distancing in place for much of the year a virtual schools' platform was developed to allow prospective pupils and parents to experience the schools offering. Being part of the Achieve group of schools has enabled pupils and colleagues to benefit from collaboration with leading global institutions. This includes educational partnerships with schools and university colleges in mainland China through the provision of joint partnerships.

ON BEHALF OF THE BOARD:

Mr C Bao - Director

29 July 2021

The directors present their report with the financial statements of the company and the group for the year ended 31 August 2020.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of school curriculum education.

The principal activity of the parent company continued to be that of holding company.

DIVIDENDS

No dividends will be distributed for the year ended 31 August 2020.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 September 2019 to the date of this report.

Mr C Bao

Ms T Zhou

Mr M C Farmer

Other changes in directors holding office are as follows:

Mr B Farrell - appointed 1 September 2019

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Wynniatt-Husey Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr C Bao - Director

29 July 2021

Opinion

We have audited the financial statements of Achieve Education Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 August 2020 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, 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:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 August 2020 and of the group's loss 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.

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 group 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.

Material uncertainty relating to going concern

We draw attention to note 20 in the financial statements, which indicates that the consolidated company incurred a deficit of £119,163 during the period ended 31 August 2020 and, as of that date, the company's total liabilities exceeded its total assets by £147,610. As stated in note 25, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

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.

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.

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.

Anna Richards (Senior Statutory Auditor)

for and on behalf of Wynniatt-Husey Ltd

Chartered Accountants

and Statutory Auditors

The Old Coach House

Horse fair

Rugeley

Staffordshire

WS15 2EL

29 July 2021

8,890,362

TURNOVER

12,198,304

(6,767,870

)

Cost of sales

(10,392,076

)

2,122,492

GROSS PROFIT

1,806,228

(2,277,920

)

Administrative expenses

(2,489,614

)

(155,428

)

(683,386

)

-

Other operating income

650,491

(155,428

)

OPERATING LOSS

4

(32,895

)

94

Interest receivable and similar income

40

(155,334

)

(32,855

)

(99,013

)

Interest payable and similar expenses

5

(157,836

)

(254,347

)

LOSS BEFORE TAXATION

(190,691

)

(33,524

)

Tax on loss

6

71,528

(287,871

)

LOSS FOR THE FINANCIAL YEAR

(119,163

)

Loss attributable to:

(287,871

)

Owners of the parent

(119,163

)

(287,871

)

LOSS FOR THE YEAR

(119,163

)

-

OTHER COMPREHENSIVE INCOME

-

(287,871

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(119,163

)

Total comprehensive income attributable to:

(287,871

)

Owners of the parent

(119,163

)

FIXED ASSETS

4,575,009

Intangible assets

8

4,320,842

8,439,654

Tangible assets

9

8,405,157

-

Investments

10

-

13,014,663

12,725,999

CURRENT ASSETS

59,690

Stocks

11

57,474

386,865

Debtors

12

414,587

1,020,550

Cash at bank and in hand

2,019,601

1,467,105

2,491,662

CREDITORS

12,567,972

Amounts falling due within one year

13

11,846,794

(11,100,867

)

NET CURRENT LIABILITIES

(9,355,132

)

1,913,796

TOTAL ASSETS LESS CURRENT LIABILITIES

3,370,867

CREDITORS

(1,861,855

)

Amounts falling due after more than one year

14

(3,509,617

)

(80,388

)

PROVISIONS FOR LIABILITIES

18

(8,860

)

(28,447

)

NET LIABILITIES

(147,610

)

CAPITAL AND RESERVES

100

Called up share capital

19

100

(28,547

)

Retained earnings

20

(147,710

)

(28,447

)

SHAREHOLDERS' FUNDS

(147,610

)

The financial statements were approved by the Board of Directors and authorised for issue on 29 July 2021 and were signed on its behalf by:

Mr C Bao - Director

Mr B Farrell - Director

Ms T Zhou - Director

FIXED ASSETS

-

Intangible assets

8

-

-

Tangible assets

9

-

7,776,200

Investments

10

7,776,200

7,776,200

7,776,200

CURRENT ASSETS

2,720,453

Debtors

12

1,996,553

3,390

Cash at bank

86,012

2,723,843

2,082,565

CREDITORS

10,609,267

Amounts falling due within one year

13

10,458,693

(7,885,424

)

NET CURRENT LIABILITIES

(8,376,128

)

(109,224

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(599,928

)

CREDITORS

75,000

Amounts falling due after more than one year

14

-

(184,224

)

NET LIABILITIES

(599,928

)

CAPITAL AND RESERVES

100

Called up share capital

19

100

(184,324

)

Retained earnings

20

(600,028

)

(184,224

)

SHAREHOLDERS' FUNDS

(599,928

)

(111,931

)

Company's loss for the financial year

(415,704

)

The financial statements were approved by the Board of Directors and authorised for issue on 29 July 2021 and were signed on its behalf by:

Ms T Zhou - Director

Mr B Farrell - Director

Mr C Bao - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 September 2018

100

259,324

259,424

Changes in equity

Total comprehensive income

-

(287,871

)

(287,871

)

Balance at 31 August 2019

100

(28,547

)

(28,447

)

Changes in equity

Total comprehensive income

-

(119,163

)

(119,163

)

Balance at 31 August 2020

100

(147,710

)

(147,610

)

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 September 2018

100

(72,393

)

(72,293

)

Changes in equity

Total comprehensive income

-

(111,931

)

(111,931

)

Balance at 31 August 2019

100

(184,324

)

(184,224

)

Changes in equity

Total comprehensive income

-

(415,704

)

(415,704

)

Balance at 31 August 2020

100

(600,028

)

(599,928

)

Cash flows from operating activities

(2,531,912

)

Cash generated from operations

1

1,097,769

(82,807

)

Interest paid

(149,124

)

(16,206

)

Interest element of finance lease payments paid

(8,712

)

(58,925

)

Tax paid

-

(2,689,850

)

Net cash from operating activities

939,933

Cash flows from investing activities

(191,882

)

Purchase of tangible fixed assets

(42,449

)

94

Interest received

40

(191,788

)

Net cash from investing activities

(42,409

)

Cash flows from financing activities

1,758,452

New loans in year

-

51,125

Capital repayments in year

(22,722

)

1,515,986

Amount introduced by directors

811,875

(573,890

)

Amount withdrawn by directors

(687,626

)

2,751,673

Net cash from financing activities

101,527

(129,965

)

Increase/(decrease) in cash and cash equivalents

999,051

1,150,515

Cash and cash equivalents at beginning of year

2

1,020,550

1,020,550

Cash and cash equivalents at end of year

2

2,019,601

1.	RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.8.20

31.8.19

£

£

Loss before taxation

(190,691

)

(254,347

)

Depreciation charges

331,114

325,341

Finance costs

157,836

99,013

Finance income

(40

)

(94

)

298,219

169,913

Decrease/(increase) in stocks

2,216

(4,690

)

Increase in trade and other debtors

(27,722

)

(303,326

)

Increase/(decrease) in trade and other creditors

825,056

(2,393,809

)

Cash generated from operations

1,097,769

(2,531,912

)

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 August 2020

31.8.20

1.9.19

£

£

Cash and cash equivalents

2,019,601

1,020,550

Year ended 31 August 2019

31.8.19

1.9.18

£

£

Cash and cash equivalents

1,020,550

1,150,515

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.9.19

Cash flow

At 31.8.20

£

£

£

Net cash

Cash at bank and in hand

1,020,550

999,051

2,019,601

1,020,550

999,051

2,019,601

Debt

Finance leases

(51,125

)

22,722

(28,403

)

Debts falling due within 1 year

(999,040

)

830,000

(169,040

)

Debts falling due after 1 year

(1,833,452

)

(1,667,980

)

(3,501,432

)

(2,883,617

)

(815,258

)

(3,698,875

)

Total

(1,863,067

)

183,793

(1,679,274

)

1.	STATUTORY INFORMATION

Achieve Education Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Basis of consolidation

All subsidiaries are consolidated under acquisition accounting principles. Results of subsidiary undertakings acquired or disposed of during the period are included from the date of acquisition or to the date of disposal to the extent of group ownership.

The separable net assets of subsidiary undertakings acquired and accounted for under acquisition accounting and joint ventures are included in the group financial statements at their fair value to the group at the date of acquisition including provisions and liabilities taken into consideration in assessing the fair value of the business acquired.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

As permitted by Section 408 of the Company Act 2006, no profit and loss account or statement of comprehensive income is presented in respect of the parent company. The profit/(loss) attributable to the company is disclosed in the footnote to the Company's balance sheet.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Significant judgements and estimates

The presentation of the financial statements requires judgements, estimations and assumptions to be made that affect the reported values of assets, liabilities, revenue and expenses. The nature of estimation and judgement means that actual outcomes could differ from those estimates. Significant areas of estimation and judgement for the company includes the measurement of the fair value of the company's freehold properties and land (Note 9). The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant.

Turnover

Turnover is measured at the fair value of the consideration received or receivable recognised by the company in respect of services supplied during the period.

In the past turnover was always net of pupils remissions, bursaries and scholarships. The company has changed this accounting policy to be in line with FRS 102 section 23 and therefore the income will be shown gross and cost of remissions will be included in cost of sales.

Goodwill

On the acquisition of the business fair values are attributable to the company's share of net assets. Where the cost of acquisition exceeds the fair values attributable to such net assets, the difference is treated as purchased goodwill and capitalised in the Balance sheet in the year of acquisition. The goodwill is amortised over its estimated useful life up to maximum of 20 years. The directors believe that the business worth far more than previously paid and therefore the directors regard 20 years as a reasonable maximum for the estimated useful life of goodwill. Goodwill has been amortised from 1 September 2017 over a period of 20 years.

Intangible assets

Patents and licences are shown in the accounts at cost and are not amortised as the amounts are not materially different from cost.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Portable classrooms

-

10% on reducing balance

Plant and machinery

-

15% on cost

Fixtures and fittings

-

15% on cost and 10% on reducing balance

Computer equipment

-

25% on cost and 10% on reducing balance

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses.

The freehold property and land are shown in the accounts at cost and are not depreciated.

Government grants

Government grants are credited to the profit and loss account as the related expenditure is incurred.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

All stock movement is expensed to the profit and loss account.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.