EDNS Group Limited - Limited company accounts 23.2

REGISTERED NUMBER: 10698364 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2023

FOR

EDNS GROUP LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

DIRECTORS:

E M Drut

G J A Jessiman

REGISTERED OFFICE:

Corner Of Meadowsweet Close

Grand Drive

Raynes Park

London

SW20 9NA

REGISTERED NUMBER:

10698364 (England and Wales)

AUDITORS:

Butters Gates & Company

part of Pulp Fraction Limited

(Statutory Auditor)

107 Bell Street

London

NW1 6TL

The directors present their strategic report of the company and the group for the year ended 31 March 2023.

REVIEW OF BUSINESS

The results for the year and financial position of the Group are as shown in the annexed financial statements.

The year ended 31st March 2023 .The Group continues to remain profitable. The key financial indicators that the directors use to monitor the performance of the business are turnover, gross profit and operating profit, details of which are set out in 'analysis of development and performance' below.

The directors are satisfied with the performance during the year and continue to work on providing the highest standards of care at all the nurseries and school. They are investing in growth within raising the occupancy through expansion of all their existing sites which will continue into the next few years in feasibility studies and planning applications. There were 2 main increases in fees in the past year. Normally the company has one increase in September, however they had not put an increase in the previous year due to covid restrictions. inflation was a contributing factor. Finally, the directors continue to see turnover increase and maintain a 50 % ratio of wages to turnover.

PRINCIPAL RISKS AND UNCERTAINTIES

The Group faces a number of risks and uncertainties due to competition, maintaining the reputation and quality of service together with satisfying the laws and regulations.

The business' principal financial instruments comprise bank balances and bank loans to the business. The main purpose of these instruments is to finance the business' operations.

In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility. All of the business' cash balances are held in such a way that achieves a competitive rate of interest.

Loans comprise loans from financial institutions. The interest rate and monthly repayments on the loans are fixed to the bank's base rate. The business manages the liquidity risk by ensuring there are sufficient funds to meet the payments.

ANALYSIS OF DEVELOPMENT AND PERFORMANCE

31.03.23

31.03.22

Turnover

£8.72m

£8.37m

Gross profit margin

38.15%

38.14%

Operating profit/ (loss)

£425k

£863k

Profit before tax/ (loss) after loan write off £267k

£33k

£779k

GOING CONCERN

The financial statements have been prepared on a going concern basis which the directors consider to be appropriate, for the following reasons.

The directors reviewed the cash flow forecasts for the Group extending until November 2024. Management have modelled various cash flow scenarios, including a severe yet plausible downside scenario which indicates that the company will have sufficient funds, through its facility and operating cash flows, to meet its liabilities as they fall due for that period.

Consequently, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.

ON BEHALF OF THE BOARD:

G J A Jessiman - Director

20 December 2023

The directors present their report with the financial statements of the company and the group for the year ended 31 March 2023.

PRINCIPAL ACTIVITIES

The principal activities of the group in the year under review were those of School Nursery and hotelier with Restaurant.

DIVIDENDS

The total distribution of dividends for the year end 31 March 2023 was £400,000.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2022 to the date of this report.

E M Drut

G J A Jessiman

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, Butters Gates & Company, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

G J A Jessiman - Director

20 December 2023

Opinion

We have audited the financial statements of EDNS Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2023 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 March 2023 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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The directors are responsible for the other information. The other information comprises the information 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 this gives rise to a material misstatement in the financial statements themselves. 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the school and hotel sector; we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, and health and safety legislation; we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries to identify unusual transactions;

- assessed whether judgements and assumptions made in determining the accounting estimates were reasonable

- were indicative of potential bias; and

- investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: agreeing financial statement disclosures to underlying supporting documentation; reading the minutes of meetings of those charged with governance; enquiring of management as to actual and potential litigation and claims; and reviewing correspondence with HMRC, relevant regulators and the company's legal advisors.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

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.

Jonathan R Butters (Senior Statutory Auditor)

for and on behalf of Butters Gates & Company

part of Pulp Fraction Limited

(Statutory Auditor)

107 Bell Street

London

NW1 6TL

21 December 2023

TURNOVER

8,724,320

8,371,925

Cost of sales

5,396,185

5,178,498

GROSS PROFIT

3,328,135

3,193,427

Administrative expenses

2,892,971

2,370,715

435,164

822,712

Other operating income

-

39,994

OPERATING PROFIT

4

435,164

862,706

Profit/loss on sale of

investment

5

-

3

435,164

862,703

Interest receivable and similar income

4,334

191

439,498

862,894

Amounts written off investments

6

266,557

-

172,941

862,894

Interest payable and similar expenses

7

139,606

83,542

PROFIT BEFORE TAXATION

33,335

779,352

Tax on profit

8

101,572

195,874

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(68,237

)

583,478

(Loss)/profit attributable to:

Owners of the parent

(68,237

)

583,478

(LOSS)/PROFIT FOR THE YEAR

(68,237

)

583,478

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(68,237

)

583,478

Total comprehensive income attributable to:

Owners of the parent

(68,237

)

583,478

FIXED ASSETS

Tangible assets

11

7,014,133

7,266,149

Investments

12

-

-

7,014,133

7,266,149

CURRENT ASSETS

Stocks

13

-

2,600

Debtors

14

284,432

743,464

Cash at bank and in hand

2,016,982

2,244,294

2,301,414

2,990,358

CREDITORS

Amounts falling due within one year

15

1,664,654

1,928,244

NET CURRENT ASSETS

636,760

1,062,114

TOTAL ASSETS LESS CURRENT LIABILITIES

7,650,893

8,328,263

CREDITORS

Amounts falling due after more than one year

16

(2,737,189

)

(2,946,322

)

PROVISIONS FOR LIABILITIES

19

(18,463

)

(18,463

)

NET ASSETS

4,895,241

5,363,478

CAPITAL AND RESERVES

Called up share capital

20

1,000

1,000

Retained earnings

21

4,894,241

5,362,478

SHAREHOLDERS' FUNDS

4,895,241

5,363,478

The financial statements were approved by the Board of Directors and authorised for issue on 20 December 2023 and were signed on its behalf by:

G J A Jessiman - Director

FIXED ASSETS

Tangible assets

11

14,165,594

14,371,459

Investments

12

200

200

14,165,794

14,371,659

CURRENT ASSETS

Debtors

14

-

250,931

Cash at bank

35,396

11,277

35,396

262,208

CREDITORS

Amounts falling due within one year

15

412,287

442,863

NET CURRENT LIABILITIES

(376,891

)

(180,655

)

TOTAL ASSETS LESS CURRENT LIABILITIES

13,788,903

14,191,004

CREDITORS

Amounts falling due after more than one year

16

2,737,189

2,946,322

NET ASSETS

11,051,714

11,244,682

CAPITAL AND RESERVES

Called up share capital

20

1,000

1,000

Retained earnings

21

11,050,714

11,243,682

SHAREHOLDERS' FUNDS

11,051,714

11,244,682

Company's profit for the financial year

207,032

270,778

The financial statements were approved by the Board of Directors and authorised for issue on 20 December 2023 and were signed on its behalf by:

G J A Jessiman - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2021

1,000

5,079,000

5,080,000

Changes in equity

Dividends

-

(300,000

)

(300,000

)

Total comprehensive income

-

583,478

583,478

Balance at 31 March 2022

1,000

5,362,478

5,363,478

Changes in equity

Dividends

-

(400,000

)

(400,000

)

Total comprehensive income

-

(68,237

)

(68,237

)

Balance at 31 March 2023

1,000

4,894,241

4,895,241

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2021

1,000

11,272,904

11,273,904

Changes in equity

Dividends

-

(300,000

)

(300,000

)

Total comprehensive income

-

270,778

270,778

Balance at 31 March 2022

1,000

11,243,682

11,244,682

Changes in equity

Dividends

-

(400,000

)

(400,000

)

Total comprehensive income

-

207,032

207,032

Balance at 31 March 2023

1,000

11,050,714

11,051,714

Cash flows from operating activities

Cash generated from operations

1

824,493

1,436,645

Interest paid

(139,606

)

(83,542

)

Government Grants

-

23,896

Tax paid

(182,707

)

8,979

Net cash from operating activities

502,180

1,385,978

Cash flows from investing activities

Purchase of tangible fixed assets

(36,701

)

(19,872

)

Sale of fixed asset investments

-

3

Interest received

4,334

191

Net cash from investing activities

(32,367

)

(19,678

)

Cash flows from financing activities

Loan repayments in year

(304,224

)

(176,938

)

Amount introduced by directors

546,000

600,000

Amount withdrawn by directors

(538,901

)

(588,179

)

Equity dividends paid

(400,000

)

(300,000

)

Net cash from financing activities

(697,125

)

(465,117

)

(Decrease)/increase in cash and cash equivalents

(227,312

)

901,183

Cash and cash equivalents at beginning of year

2

2,244,294

1,343,111

Cash and cash equivalents at end of year

2

2,016,982

2,244,294

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

31.3.23

31.3.22

£

£

Profit before taxation

33,335

779,352

Depreciation charges

288,717

283,242

Government grants

-

(23,896

)

Finance costs

139,606

83,542

Finance income

(4,334

)

(191

)

457,324

1,122,049

Decrease in stocks

2,600

-

Decrease in trade and other debtors

445,864

114,686

(Decrease)/increase in trade and other creditors

(81,295

)

199,910

Cash generated from operations

824,493

1,436,645

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 March 2023

31.3.23

1.4.22

£

£

Cash and cash equivalents

2,016,982

2,244,294

Year ended 31 March 2022

31.3.22

1.4.21

£

£

Cash and cash equivalents

2,244,294

1,343,111

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.4.22

Cash flow

At 31.3.23

£

£

£

Net cash

Cash at bank and in hand

2,244,294

(227,312

)

2,016,982

2,244,294

(227,312

)

2,016,982

Debt

Debts falling due within 1 year

(315,153

)

95,091

(220,062

)

Debts falling due after 1 year

(2,946,322

)

209,133

(2,737,189

)

(3,261,475

)

304,224

(2,957,251

)

Total

(1,017,181

)

76,912

(940,269

)

1.	STATUTORY INFORMATION

EDNS Group 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.

Financial Reporting Standard 102 - reduced disclosure exemptions

The group has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirements of paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A;

•

the requirements of paragraphs 26.18(b), 26.19 to 26.21 and 26.23;

•

the requirement of paragraph 33.7;

•

the requirements of paragraph 24(b) of IFRS 6.

Basis of consolidation

The group financial statements include the financial statements of the company and all its subsidiary undertakings. The consolidated financial statements are based on financial statements that are coterminous with those of the parent company and using the same accounting policies.

A subsidiary is an entity that is controlled by the group. Control is the power to govern the financial and operating policies of an entity in order to gain the benefits from its activities and typically arises from owning in excess of 50% of the voting shares in an entity.

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

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Goodwill

Goodwill, being the amount paid in connection with acquisitions prior to merger is now fully amortised in the period.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property

-

2% on cost

Fire safety equipment

-

20% on reducing balance and 20% on cost

Fixtures and fittings

-

Straight line over 10 years

Motor vehicles

-

20% on reducing balance

Office equipment

-

20% on reducing balance

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

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

Financial instruments

All of the company's financial assets and liabilities qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.

Cash and cash equivalents include cash in hand and held with banks.

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

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

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Financial instruments

All of the company's financial assets and liabilities qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.

Cash and cash equivalents include cash in hand and held with banks.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was as follows:

31.03.23

31.03.22

Admin Staff

12

12

Management

7

16

Teachers and hotel staff

223

222

242

250