Northcoders_Limited - Accounts

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

For the financial year ended 31 December 2020 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

Northcoders Limited is a private company limited by shares incorporated in England and Wales. The registered office is Manchester Technology Centre, Oxford Road, Manchester, Lancashire, M1 7ED.

These financial statements have been prepared in accordance with “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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 £1.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.

The directors have considered all factors, including in the wider economy, as part of their assessment of going concern. Although the current economic climate creates both cash flow and profitability risks for the company, the directors believe, on balance, that they have sufficient resources to enable trading to continue for a period of at least one year from the date of approval of the financial statements; this is based on the information currently available to them as at the point of approving these financial statements. Accordingly, these financial statements have been prepared on the going concern basis.true

Revenue represents training services provided, net of VAT and discounts. The revenue is recognised on a per-unit delivery basis across the period of training provided.

In the prior year revenue was recognised on the date of receipt, and as such this policy is a change of accounting policy in the current year. As such a prior year adjustment has been recognised, which is shown in note 15.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

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.

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

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, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

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 are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

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 year was:

Included within other loans is an outstanding loan of £130,403 (2019 - £46,267), with an unrelated third party, which is secured by a fixed and floating charge over the company's current and future assets. Bank loans are secured by a fixed and floating charge over the company's assets.

Included within other loans is an outstanding loan of £331,796 (2019 - £nil), with an unrelated third party, which is secured by a fixed and floating charge over the company's current and future assets. Bank loans are secured by a fixed and floating charge over the company's assets.

The impact of Covid-19 and its associated lockdown has caused the business model to change in the year, as a result of which the company's main office is no longer used primarily for the delivery of training. This has resulted in excess space being rented which cannot be used or sublet, and as such an onerous provision has been included in the financial statements. The directors estimate that 67.65% of the space cannot be used, with the remainder being utilised for head office functions.

Of the total provision made, £139,149 is expected to unwind within one year, with £350,295 due to unwind in more than one year but less than five years.

The prior year adjustment relates to an ordinary resolution passed on 20 February 2019 to issue the R1 and R2 shares.

Subsequent to the year end the shares were sub-dividend, as explained in note 12.

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

The operating lease is subject to an onerous provision, which is described in note 9. The future commitments described above include amounts provided for within this provision.

On 5 February 2021 the company subdivided all of its share classes such that each 10p share was split into 1,000 equivalent shares with nominal value 0.01p. The total value of issued share capital and all other equity reserves did not change as a result of this transaction, however the company has 7,830,000 shares in issue immediately following this.

On 15 February 2021 the company granted share options to a number of its key employees. This gave rights over 720,000 C Ordinary shares, which were to be newly issued in the event of an exercise of these options. The vesting period for 182,500 of these options was 2 years from grant, and for 537,500 options is 3 years from grant, or a qualifying exit event should this be earlier. The 2 year scheme has a fair value of £8,344 and the 3 year scheme has a fair value of £27,823, with these values being determined using a Black-Scholes valuation. In June 2021 these options were surrendered in full.

On 19 May 2021 the company exercised an option to purchase the 76 remaining ordinary shares of Taylor Made Training (NW) Ltd, and took full ownership of the company from this date. On the same date the company was renamed Northcoders TechEd Limited. The option has been been provided for as a liability in these financial statements, with a corresponding amount included in the cost of investment, as explained in note 14.

On 26 May 2021, the company undertook a reduction of share capital by way of the solvency statement procedure under the Companies Act 2006. The reduction of share capital reduced the amount standing to the credit of the share capital of the company by cancelling each of the R shares and the share premium account of the company.

On 24 June 2021, the entire issued share capital of the company was transferred to Northcoders Group Limited in exchange for the issue of shares to the then shareholders of the company in the same proportions as held by those shareholders.

Advances or credits have been granted by the company to its directors as follows:

* The opening balance on this loan has been adjusted to reflect a cancellation of dividends in 2018, and a reallocation of entries made, as shown in note 15.

** The opening balance on this loan has been adjusted for the reallocation of entries made, as shown in note 15.

Details of the company's associates (which have been accounted for as subsidiaries) at 31 December 2020 are as follows:

* The company was called Taylor Made Training (NW) Limited at the year end, and was renamed to this on 19 May 2021.

The registered office of Northcoders TechEd Limited is Manchester Technology Centre, Oxford Road, Manchester, M1 7ED.

The company has an option to purchase the remaining share capital Taylor Made Training (NW) Ltd and therefore converting to a wholly-owned subsidiary. At the year end it was expected that this option would be exercised, and accordingly the cost of exercising the option has been recognised within the cost of investment. The option was exercised on 19 May 2021.

The prior period adjustment relates to:

1. The issue of R1 and R2 shares passed by ordinary resolution dated 20 February 2019, which has increased loans to directors (within other debtors) by £283.

2. Corrections to the allocation of funds to directors' loan accounts against a historic provision against an exiting director's loan account, which has reduced loans to directors by £1,500, and decreased retained profits by £1,500.

3. Cancellation of dividends not declared lawfully in 2018, totalling £34,700, and associated increase in loans to directors.

4. Correction of the value of deferred revenues, increasing these by £208,001 as at 31 December 2019, and associated tax impact.