ACCOUNTS - Final Accounts preparation
ACCOUNTS - Final Accounts preparation
|
Registered number:
FOR THE YEAR ENDED 31 JULY 2020
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
COMPANY INFORMATION
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
CONTENTS
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2020
The Company is an intermediate holding company which indirectly owns 100% of Babington Business Limited its subsidiaries, which include Babington Business College Limited and its subsidiary company Acorn Training Consultants Limited which are the two main trading companies. Subsequent to the year end, Acorn Training Consultants limited was sold to a third party.
This year has been a year of transition and further development to ensure we continue to meet the needs of our customers as we continue transitioning from frameworks to standards. It is also a year impacted by Covid 19. A detailed business review is included within the financial statements of Project Sinatra Topco Limited. The Group has continued to invest to make our programmes innovative and has undergone a reshaping of the business over the last 12 months to ensure it is aligned for the opportunities in the marketplace. The Group continues to receive the support of funders to enable us to deliver quality career pathways for our learners and employers. The Group is under the ownership of RJD Partners, who are dedicated in supporting and investing in Babington’s growth.
The Group, to which this Company belongs, is heavily invested in the delivery of various Government funded skills and job outcome programmes. As such this Group has to be aware of changes in Government policies, priorities and funding availability and be prepared to adapt our approaches to skills and employability accordingly. The impact and implications of Covid 19 are included within the financial statements of Project Sinatra Topco Limited.
We consider that our key financial performance indicators are those that communicate the financial performance and strength of the Group as a whole, these being turnover, EBITDA and cash flow and not of this Company, which is an intermediate holding company.
This report was approved by the board on 29 March 2021 and signed on its behalf.
Page 1
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2020
The directors present their report and the financial statements for the year ended 31 July 2020.
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £2,744,633 (2019 - loss £2,398,248).
The directors do not recommend the payment of a dividend (2019: £Nil).
The directors who served during the year were:
There are no significant future developments which the directors believe require disclosure than those already disclosed under post balance sheet events.
Page 2
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2020
The Group's operations expose it to a variety of financial risks that include the effects of changes in debt market prices, credit risk and liquidity risk. The Group has a risk management programme that seeks to limit the adverse effects on the financial performance of the Group by monitoring levels of debt finance and finance costs. The Group has implemented policies that require appropriate credit checks before a sale is made. The Group maintains loan facilities to ensure the Group has sufficient funds for its operations and investment activities, including hire purchase contracts, loan notes and bank loans.
The Company's employment policies have been designed to meet the needs of its business, and follow best practice whilst complying with both current and anticipated legislation. Applied consistently throughout the Company they provide a fair framework within which employees work.
The Company is firmly committed to ensuring that the manner in which it employs staff is fair and equitable. Its equal opportunities policy is designed to ensure that no person or group of individuals will be treated less favourably because of their race, colour, ethnic origin, gender or sexual orientation, age or disability. The Company maintains a policy of regular consultation and discussion with its employees on a wide range of issues that are likely to affect their interests and ensure that all employees are aware of the financial and economic performance of their business units and of the Group as a whole. employment by transfer to alternative duties, if required and by provision of such retraining as appropriate.
Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
There have been no significant events affecting the Company since the year end. The on going impact of Covid 19 is considered within Project Sinatra Topco Limited financial statements. The post year end sale of Acorn Training Consultants is further disclosed within the financial statements of Project Sinatra Topco Limited, as is the acquisition of trade and assets relating to apprenticeship training from another business.
Under section 487(2) of the Companies Act 2006, Smith Cooper Audit Limited will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
Page 3
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2020
This report was approved by the board on
Page 4
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROJECT SINATRA MIDCO LIMITED
We have audited the financial statements of Project Sinatra Midco Limited (the 'Company') for the year ended 31 July 2020, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, 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:
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
Page 5
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROJECT SINATRA MIDCO LIMITED (CONTINUED)
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' 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:
As explained more fully in the Directors' responsibilities statement on page 2, 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.
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 Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
Page 6
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROJECT SINATRA MIDCO LIMITED (CONTINUED)
This report is made solely to the Company's members 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 Auditors' 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 for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
St Helen's House
King Street
DE1 3EE
Page 7
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2020
Page 8
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
REGISTERED NUMBER: 10055080
BALANCE SHEET
AS AT 31 JULY 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 11 to 18 form part of these financial statements.
Page 9
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2020
Page 10
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2020
The Company is a limited company and is incorporated in England and Wales and details of its registered office are set out in the company information page. The Company's principal activity is set out in the Directors's report.
2.Accounting policies
The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The Company's functional and presentational currency is GBP. The financial statements have been prepared to the nearest £.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d).
This information is included in the consolidated financial statements of Project Sinatra Topco Limited as at 31 July 2020 and these financial statements may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.
The Company is a parent Company that is also a subsidiary included in the consolidated financial statements of its immediate parent undertaking established under the law of an EEA state and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006.
Page 11
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2020
2.Accounting policies (continued)
At 31 July 2020, the Company had net liabilities of £9,167,985 (2019: £6,423,352) and is reliant on the support of the parent undertaking to provide adequate resources to enable the company to continue trading and to meet its liabilities as they fall due.
The Company has given an unlimited guarantee to secure the bank borrowings of other companies within the Group. At 31 July 2020, group borrowings amounted to £5,200,000 (2019: £5,350,000). As noted in the accounts of the ultimate parent undertaking, the Group had net liabilities of £18,150,294 and net current assets of £1,061,570 (2019: £12,735,814 and £1,063,382). Group forecasts through to 14 April 2022 show all covenants being met. The Group's principal banker (“The Bank”), has considered the forecasts and indicated their satisfaction with them. In January 2021, an advance repayment of bank debt was made by the Group of £1,436,361 from the proceeds of the sale of Acorn Training Consultants Limited, the Company's subsidiary entity. The holders of all of the loan notes have confirmed that they will continue to provide support to the Group by not seeking payment of any interest falling due on all loan notes until the earlier of: ii) the bank or any other secured creditor taking enforcement action against the Group; ii) such time that all other liabilities of the Group can be repaid in full as they fall due; and iii) 14 April 2022. The directors drew up an operational improvement plan during the previous year which was implemented in the year to enhance the underlying strength of the business and to improve the overall trading performance of the Group. The forecast prepared shows a significant improvement in the Group’s EBITDA going forward, following the implementation of the operational improvement plan. Subsequent to the year end, the Company has acquired the trade of another business to strengthen their apprenticeship offering and to further improve their performance going forward. The Group has taken a number of measures to monitor and mitigate the effects of COVID-19, such as safety and health measures for employees (such as social distancing and working from home) and delivering training services which are essential to the business and learner experience, by remote and blended learning. The directors do not believe that the impact on the results has been significant as adequate alternative methods of delivering training services have been successfully implemented. On the basis of the improved performance indicated by the forecasts and actions undertaken as reported above, the directors consider that they have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and to meet its current liabilities as they fall due. The Group and Company therefore continue to adopt the going concern basis in preparing its financial statements.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Page 12
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2020
2.Accounting policies (continued)
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
Investments in subsidiaries are measured at cost less accumulated impairment.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. There are no significant areas of estimates and judgments.
Page 13
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2020
Page 14
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2020
8.Taxation (continued)
The Company has approximately £3.2 million of taxable losses available to offset taxable profits.The deferred tax asset in respect of these losses has not been recognised, as it remains a contingent asset, until all the factors required for its recognition have been met.
Page 15
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2020
Page 16
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2020
Profit and loss account
Page 17
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROJECT SINATRA MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2020
The Company has given an unlimited guarantee to secure the bank borrowings of other companies within the Group. At 31 July 2020, group borrowings amounted to £5,200,000 (2019: £5,350,000).
The directors consider that there is no one ultimate controlling party by virtue of there being no majority shareholder within the ultimate parent entity.
Page 18
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||