FUTUREPATH_CHILDCARE_LTD - Accounts

The directors present the strategic report for the Period ended 31 December 2020.

The company traded in line with expectations, with a turnover of £1.192m (2019 - £1,191m) and a loss before tax of £280K (2019 - profit £187K).

The business faces regulatory risk from Ofsted inspections that take place at each site every few years. A poor inspection result can temporarily compromise fee income and profitability at a single site, resulting in a negative impact on the business’ overall performance. Other risks facing the business include competition from new entrants and difficulty recruiting experienced staff in some areas.

The pandemic outbreak of COVID-19 in 2020 has had a significant impact on childcare provision with only children of key-workers being initially provided with childcare services.

The overall impact of COVID-19 is currently very difficult to predict. The effect of the pandemic was to close all nurseries for 2 months and following re-opening slow the return of children to the nurseries, resulting in lower occupancy levels. However the company has utilised the Government Job Retention Scheme and the directors believe that the company has successfully managed its way through this challenging period with sensible cost control measures. The company is now seeing child occupancy levels returning towards pre-Coronavirus levels.

We have made significant progress throughout the year in relation to key elements of our strategy. The Board monitors the progress of the group rather than individual companies, the performance indicators for this can be seen in the consolidated accounts of Grandir UK Ltd.

On behalf of the board

The directors present their annual report and financial statements for the Period ended 31 December 2020.

The principal activity of the company continued to be that of children's day nurseries.

The results for the Period are set out on page 8.

Ordinary dividends were paid amounting to £99,750. The directors do not recommend payment of a further dividend.

The directors who held office during the Period and up to the date of signature of the financial statements were as follows:

The ongoing outbreak of the COVID-19 pandemic continues to lead to travel and trade restrictions including social distancing measures. The directors have considered the risk to the company's activities and it's income streams and made further disclosures concerning the impact of the pandemic in note 17 to the financial statements.

Further information concerning the risks and uncertainties facing the company following the pandemic can be found in the Strategic Report.

On 1 April 2021 the Group headed up by Grandir UK Limited undertook a reorganisation of its activities, as a result the trade and assets of the company were hived across to The Childcare Corporation Limited, a fellow group undertaking. After this date the company ceased trading and it is the intention of the directors to strike the company off within 12 months from the date of approval of these financial statements. As such, these financial statements have been prepared on a basis other than going concern as disclosed within the accounting policies.

Azets Audit Services were appointed as auditor to the company during the period and is deemed to be reappointed under section 487(2) of the Companies Act 2006.

As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

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.

The directors are responsible for preparing the annual 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 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 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 and then apply them consistently;

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

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

•     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 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.

We have audited the financial statements of Futurepath Childcare Ltd (the 'company') for the Period ended 31 December 2020 which comprise the profit and loss account, 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 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 FRS 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 31 December 2020 and of its loss for the Period 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 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.

Emphasis of matter - basis of preparation / financial statements prepared on a basis other than going concern

We draw attention to note 1, Accounting Policies, which describes the basis of preparation of these financial statements and highlights that these financial statements are prepared on a basis other than going concern. The basis of preparation has not impacted upon the carrying value or disclosure of amounts included within the financial statements. Our opinion is not modified in respect of this matter.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. 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 our audit:

• the information given in the strategic report and the directors' report for the financial Period 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 and the directors' report.

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, 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 directors' remuneration specified by law are not made; or

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

As explained more fully in the directors' responsibilities statement, 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 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Other matters which we are required to address

In the previous accounting period the directors took advantage of audit exemption under s477 of the Companies Act. Therefore the prior period financial statements were not subject to audit.

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 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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

Futurepath Childcare Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Tuscany House, White Hart Lane, Basingstoke, Hampshire, United Kingdom, RG21 4AF.

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. The principal accounting policies adopted are set out below.

On 1 April 2021 the Group headed up by Grandir UK Limited undertook a reorganisation of its activities, as a result the trade and assets of the company were hived across to The Childcare Corporation Limited, a fellow group undertaking. After this date the company ceased trading and it is the intention of the directors to strike the company off within 12 months from the date of approval of these financial statements. As such, these financial statements have been prepared on a basis other than going concern as disclosed within the accounting policies.true

The entity’s reporting period was lengthened to 14 months in order that the period end was coterminous with the period end of it's parent undertaking, i.e. 31 December 2020. Consequently the comparative amounts presented in the financial statements (including the related notes) are not entirely comparable.

Turnover is recognised at the fair value of the consideration received or receivable for childcare services provided in the normal course of business.

Tangible fixed assets are initially measured at cost and subsequently measured at cost, 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:

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.

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.

Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.

The company only has financial instruments that are classified as basic 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, which include debtors , amounts due from group undertaking and cash and bank balances, are initially measured at transaction price and are subsequently carried at amortised less impairment.

Financial assets are assessed for indicators of impairment at each reporting end date. The impairment loss is recognised in profit or loss.

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.

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.

Basic financial liabilities, including creditors, and loans from fellow group companies are initially recognised at transaction price and 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. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

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.

The tax expense represents the sum of the tax currently payable and deferred 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.

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.

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.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Government grants receivable under the Job Retention Scheme are recognised in the period to which the payroll contribution relates.

In the application of the company’s accounting policies, the directors are 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.

The average monthly number of persons (including directors) employed by the company during the Period was:

Their aggregate remuneration comprised:

The actual charge for the Period can be reconciled to the expected (credit)/charge for the Period based on the profit or loss and the standard rate of tax as follows:

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

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.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

During the period and since the period end, the spread of COVID-19 has severely impacted many local economies around the globe. In many countries, businesses are being forced to cease or limit operations for long or indefinite periods of time. The Company has been able to continue to operate throughout this period of disruption within certain parameters, notwithstanding measures taken based upon Government advice to contain the spread of the virus, including travel bans, quarantines, and social  distancing.

The UK Government has responded with monetary and fiscal interventions to stabilise economic conditions and the Company has utilised the furlough measures introduced by the Government for a number of employees.

On 1 April 2021 the Group headed up by Grandir UK Limited undertook a reorganisation of its activities, as a result the trade and assets of the company were hived across to The Childcare Corporation Limited, a fellow group undertaking. After this date the company ceased trading and it is the intention of the directors to strike the company off within 12 months from the date of approval of these financial statements. As such, these financial statements have been prepared on a basis other than going concern as disclosed within the accounting policies.

The immediate parent undertaking is Grandir UK Limited ad the ultimate parent undertaking is Grandir SAS, a company registered in France. The ultimate controlling party is Jean Emmanuel Rodocanachi by reference to his majority shareholding in Grandir SAS.

The smallest group in which the company is consolidated is Grandir UK Limited, the largest group is Grandir SAS.

The registered office of Grandir UK Limited is Tuscany House, White Hart Lane, Basingstoke, Hampshire, RG21 4AF and the registered office of Grandir SAS is 6 Allee Jean Prouve, 92110, Clichy, France.

The consolidated financial statements of Grandir UK Limited are available from Companies House.