Final Results

RNS Number : 4232J

Starcrest Education The Belt & Road

09 April 2020

 

9 April 2020

Starcrest Education The Belt & Road Limited

("Starcrest" or the "Company" or the "Group")

Final Results

Starcrest Education The Belt & Road Limited (LSE: OBOR), the international developer and operator of education services in Europe, is pleased to announce its audited final results for the period ended 31 December 2019.

Highlights

· Cash balance of £2,787,046 as at 31 December 2019

· Loss before tax of £1,216,746 for the period ended 31 December 2019

· In September 2019, the Company signed a non-legally binding heads of terms to acquire sixty per cent. of the issued share capital of The London School of Science and Technology Limited (the "Proposed Transaction")

· Annual General Meeting held in May 2019

· First Board meeting held in Guizhou, China in March 2019

· Raised equity of approximately £4.1 million (net proceeds of approximately £3.6 million) via a Subscription and successful admission to trading on the London Stock Exchange's Main Market on 31 January 2019.

John McLean OBE, Non-Executive Chairman, commented:

"I am delighted to announce Starcrest's final results for the period ended 31 December 2019 .

"Starcest has made significant steps since its listing in January 2019; most notably, in September 2019, we announced our first acquisition target, The London School of Science and Technology Limited, which is in line with the Group's strategy. If successful, we believe that, given its vast network of contacts and experience across the education sector and in capital markets, the Group is well placed to add value to the acquired business and subsequently to the Company's shareholders. We look forward to updating the market in due course.

"The Board believes that there remains significant potential for long-term growth within the international education sector, particularly for institutions in Europe offering the International Baccalaureate programme. As such, we intend to continue searching for other acquisition targets that meet the Board's criteria.

"Throughout the period, we have continued to sponsor the UK-China Charity Initiative, launched by The Lord Mayor's Appeal and China Chamber of Commerce in the UK to raise funds for the LMA's charities in the UK and CCCUK poverty alleviation projects in China. In February 2020, we also supported the "China-UK United We Stand" event, hosted by the CCCUK and the City of London, for the mutual collaboration and support against the COVID-19 outbreak. 

"2020 is set to be a transitional year for the Group, and we look forward to updating shareholders on our progress."

- Ends -

Enquiries:

Starcrest Education The Belt & Road Limited John McLean OBE, Non-Executive Chairman	[phone]
Allenby Capital Limited (Financial Adviser and Broker) John Depasquale / Nicholas Chambers	[phone]
Yellow Jersey PR (Financial PR) Sarah Hollins Henry Wilkinson	[phone] [phone]

Notes to editors:

Starcrest is an international developer and operator of education services in Europe. The newly formed entity has been established to seek acquisition opportunities in the international education sector. 

The Company intends to capture opportunities arising from the 'One Belt, One Road' ("OBOR") initiative, a foreign policy and economic strategy of the Chinese Government.   The term derives from the Silk Road, the ancient trade route, and encompasses the overland 'Silk Road Economic Belt' and the '21st-Century Maritime Silk Road,' concepts introduced by Chinese President Mr Xi Jinping in 2013. These are the two major axes along which China proposes to economically link Europe to China through countries across Eurasia and the Indian Ocean. The OBOR initiative also links to Africa and Oceania.

Starcrest listed on the Main Market of the London Stock Exchange on 31 January 2019 under the ticker symbol (LSE: OBOR). Further information can be found on the Company's website at  https://www.starcresteducation.com

Chairman's Statement

Introduction

I am pleased to report the final results for the year ended 31 December 2019; the full year results since Starcrest Education The Belt & Road Limited (the Company) was successfully admitted to trading on the London Stock Exchange's Main Market on 31 January 2019. The Company, together with its subsidiaries form the Group or "Starcrest".

As announced upon admission to trading, Starcrest's strategic objective has been to provide innovative solutions that add value to students, employees and the wider society in One Belt One Road (OBOR) countries.

As per the Group's strategy, we have been proactively seeking relevant acquisition opportunities that fit with the Group's search criteria and that offer attractive growth potential. As a result, on 18 September 2019, Starcrest was pleased to announce the signing of the non-legally binding Heads of Terms to acquire sixty per cent. of the issued share capital of London School of Science and Technology Limited (LSST). We believe that LSST provides a valuable opportunity for Starcrest and its shareholders.

The Company is unable to provide further information at this stage about the terms of the Proposed Transaction. We are in the process of our Due Diligence, as soon as we are able to provide an update, we will do so.

As announced in the Company's interim results, released in September 2019, we can confirm that, during the period, Starcrest successfully became a member of the Quoted Companies Alliance (QCA), the independent membership organisation that champions the interests of small to mid-size quoted companies.

Prior to and since the Company's admission, Starcrest has continued in its support of UK-China relations. Throughout the period, we continued to sponsor the UK-China Charity Initiative, launched by The Lord Mayor's Appeal and China Chamber of Commerce in the UK to raise funds for the LMA's charities in the UK and CCCUK poverty alleviation projects in China. Post period, in February 2020, we also supported the "China-UK United We Stand" event, hosted by the CCCUK and the City of London, for the mutual collaboration and support against the COVID-19 outbreak.

Results and Trading

As of 31 December 2019, the Group had cash balances of £2,787,046. Loss before tax for the period ended 31 December 2019 was £1,216,746. 

The majority of the losses reported in this period, representing approximately £0.8m are attributed to professional fees and associated costs relating to the listing on 31 January 2019 and funds invested in legal and financial due diligence relating to the Proposed Transaction.

Since the year-end, the Group can confirm that trading has remained in line with the Board's expectations.

Working Capital

Since the year-end, the Group has opened a bank account in the UK and has transferred a significant proportion of the funds held in its Singapore bank account to the UK bank. As at 31 March 2020, funds held at our banks was £2,588,046.

The Board has reviewed its cash flows for the next 12 months on a stand-alone basis, having taken into account current overheads and projected costs associated with the due diligence on the Proposed Transaction. The Board is satisfied that the Group has sufficient funds for the next 12 months.

Strategy and COVID-19

The Group continues to seek acquisition targets across Europe, which will add value and support this strategy. The Directors look forward to updating the market with our overall progress.

In light of developments regarding COVID-19, which the World Health Organisation (WHO) announced as a pandemic, the wellbeing of our staff remains our ultimate priority. Following Government advice, in order to ensure the health and safety of all employees, all of the Company's personnel are now working from home as the Company's range of corporate activities, notably progressing the Proposed Transaction, continues. This will remain the case until we are confident that all employees can safely return to working as we were prior to the COVID-19 outbreak.

As a direct result of the virus, we have already seen a monumental shift in the education sector towards online, remote learning. The Board believes this trend will continue even after the virus has been properly dealt with, and believes that its strategy and search criteria for acquisition targets is in-line with this growing trend.

Summary and Outlook

The Board remains of the belief that Starcrest is well placed and has adopted the right strategy to capitalise on the enormous potential of the Chinese education sector and the opportunities arising from China's OBOR initiative.

Starcrest still intends to hold our Annual General Meeting in May 2020, however, we will consider alternative methods of hosting the event to remain in accordance with Government advice regarding social distancing. We will update shareholders as developments materialise. 

The Board will continue to prioritise the safeguarding of all employees during this difficult time, and we look forward to updating existing and prospective investors with our progress regarding the Proposed Transaction and other corporate news in due course.

John McLean OBE

Non-Executive Chairman

8 April 2020

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2019

		Note	Year Ended 31 December 2019 £		Period Ended 31 December 2018 £
Administrative expenses			(1,214,374)		(189,698)
Operating loss		10	(1,214,374)		(189,698)
Finance expense			(2,372)		-
Loss before taxation			(1,2 16 , 746 )		(189,698)
Taxation		13	-		-
Loss for the year/period			(1,2 16 , 746 )		(189,698)
Other comprehensive loss
Exchange loss arising on translation to presentation currency			(113,428)		-
Total comprehensive loss for the period			(1,3 30 , 174 )		(189,698)
Loss per share - basic and diluted (pence per share)		14	( 6 )		(319)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

			As at 31 December 2019			As at 31 December 2018
	Note		£			£
Assets
Non-current assets
Right-of-use assets	15		70,197			-
Total non-current assets			70,197			-
Current assets
Cash and cash equivalents	17		2,787,046			4,020,320
Trade and other receivables			14,600			-
Total current assets			2,801,646			4,020,320
Total assets			2,871,843			4,020,320
Equity and liabilities Capital and reserves attributable to owners of the company
Share capital	19		215,600			8,000
Share premium	20		3,454,364			-
Other reserve	21		-			3,773,141
Retained earnings			(1,406,444)			(189,698)
Foreign exchange reserves			(113,428)			-
Total equity			2,150,092			3,591,443
Liabilities Current liabilities Trade and other payables	18		658,822			428,877
Lease liability	15		62,929			-
Total current liabilities			721,751			428,877
Total equity and liabilities			2,871,843			4,020,320

These financial statements were approved by the Board of Directors for issue on 8 April 2020 and signed on behalf by:

John McLean OBE

Non-Executive Chairman

CONSOLIDATED   STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2019

			Share capital	Share premium		Other Reserve		Retained earnings		Foreign exchange reserves	Total equity
		Note	£	£		£		£		£	£
Balance at 01 January 2019			8,000	-		3,773,141		(189,698)		-   3,591,443
Shares issued		19	207,600	-		(207,600)		-		-	-
Transferred from other reserves to share premium		20	-	3,565,541		(3,565,541)		-		-	-
Transactions costs deducted from equity		20	-	(111,177)		-		-		-	(111,177)
Loss for the year			-	-		-	(1,216,746)			-   (1,216,746)
Other comprehensive loss for the year			-	-		-		-		( 113,428)	( 113,428)
Balance at 31 December 2019			215,600	3,454,364		-	(1,406,444)			(113,428)   2,150,092

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

  FOR THE YEAR ENDED 31 DECEMBER 2018

			Share capital	Other Reserve		Retained earnings	Total equity
		Note	£	£		£	£
Issue of shares on incorporation on 23 May 2018		19	7,519	-		-	7,519
Repurchase and cancellation of the issued ordinary share capital		19	( 7,519)	-		-	( 7,519)
Proceeds from shares issued		19	8,000	-		-	8,000
Consideration for shares to be issued		21	-	4,064,363	-		4,064,363
Transaction costs deducted from equity		20	-	(291,222)		-	(291,222)
Total comprehensive loss for the financial period			-	-		(189,698)	(189,698)
Balance at 31 December 2018			8,000	3,773,141	(189,698)		3,591,443

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2019

	Year Ended 31 December 2019			Period Ended 31 December 2018
	£			£
Cash flows from operating activities
Loss for the year/period Depreciation	(1,216,746) 88,531			(189,698)  -
Finance cost	2,372			-
Increase in payables	281,377			185,757
Net cash used in operating activities	(844,466)			(3,941)
Cash flows from financing activities Proceeds from issue of ordinary shares Proceeds from ordinary shares to be issued Expenses paid on share issue	- - (174,837)			8,000 4,064,363 (48,102)
Principal paid on lease liabilities Interest paid on lease liabilities	(98,171) (2,372)			- -
Net cash (used)/generated from financing activities	(275,380)			4,024,261
Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the financial period	(1,119,846) 4,020,320			4,020,320 -
Exchange losses on cash and cash equivalents	(113,428)			-
Cash and cash equivalents at end of financial period	2,787,046			4,020,320

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

1.  GENERAL INFORMATION

Starcrest Education The Belt & Road Limited ("the Company") was incorporated and registered in the Cayman Islands as a private company limited by shares on 23 May 2018under the Companies Law (as revised) of The Cayman Islands, with the name Starcrest Education The Belt & Road Limited, and registered number 337619.

The Company's registered office is located at Cricket Square, Hutchins Drive PO Box 2681, Grand Cayman KY1-1111, Cayman Islands.

These financial statements are presented for the 12 month period from 1 January 2019 to 31 December 2019 so are not directly comparable to the comparative period of 7 months from 23 May 2018 to 31 December 2018.

2.  PRINCIPAL ACTIVITIES

The principal activity of the Group is to seek education related acquisition opportunities in Europe.

3.  RECENT ACCOUNTING PRONOUNCEMENTS 

(a)  New interpretations and revised standards effective for the year ended 31 December 2019

The Group has applied the same accounting policies and methods of computation as used in its 2018 accounts, except for those that relate to new standards and interpretations effective for the first time for periods beginning on (or after) 1 January 2019, and have been adopted in the 2019 annual financial statements. New standards impacting the Group that have been adopted in the annual financial statements for the year ended 31 December 2019, and which have given rise to changes in the Group's accounting policies are:

i.  IFRS 16 Leases

Effective 1 January 2019, IFRS 16 has replaced IAS 17 Leases and IFRIC 4 Determining whether an Arrangement Contains a Lease.

IFRS 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, together with options to exclude leases where the lease term is 12 months or less, or where the underlying asset is of low value. On 1 January 2019 the Group had no leases (2018: none) so there was no impact on transition to IFRS 16. See Note 5.6 for lease accounting policies.  

The lease liabilities were measured at the present value of the remaining lease payments, discounted using the incremental borrowing rate.

(b)  Standards and interpretations in issue but not yet effective

There are a number of standards and interpretations which have been issued by the International Accounting Standards Board that are effective in future accounting periods that the Group has decided not to adopt early. The most significant of these are as follows, which are all effective for the period beginning 1 January 2020:

· IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors(Amendment - Definition of Material)

· IFRS 3 Business Combinations(Amendment - Definition of Material)

· Revised Conceptual Framework for Financial Reporting

The Directors do not believe these standards and interpretations will have a material impact on the financial statements once adopted.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

4.  BASIS OF PREPARATION

The consolidated financial information has been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and prepared under the historic cost convention.

The consolidated financial statements include the audited financial statements for the Company for the year ended 31 December 2019 and its subsidiary companies (See Note 16).

The Group's functional currency is USD. The Company listed its shares on the Main market of the London Stock Exchange on 31 January 2019 (See Note 19). The directors have decided to present the financial information in Pounds Sterling (£), which is the Company's presentation currency, as the Company is listed in the UK.

These financial statements have been prepared on a going concern basis. The Directors consider that, having reviewed current cash flow forecasts on a stand-alone basis (i.e. excluding the Proposed Transaction), having taken into account current overheads and projected costs associated with the due diligence on the Proposed Transaction and including specific consideration of the potential risks associated with COVID-19, they have a reasonable expectation the Group has adequate resources to continue its operations for the foreseeable future.

5.  SIGNIFICANT ACCOUNTING POLICIES

5.1  Foreign currency translation

Transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Results at 31 December 2019 are translated into the presentation currency. Assets and liabilities are translated at the closing rate while income and expenses are translated at exchange rates at the dates of the transactions. Differences arising are recognised in Other Comprehensive Income in the period in which they arise.

5.2  Financial instruments

A financial asset or a financial liability is recognised only when the Group becomes a party to the contractual provisions of the instrument.

Financial instruments are initially recognised at the transaction price as this represents fair value, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest.

Financial assets

Financial assets are initially recognised at fair value, less transaction costs. Subsequent to initial recognition, they are recorded at amortised cost.

Financial liabilities

Financial liabilities are initially recognised at fair value less transaction costs. Subsequent to initial recognition, they are recorded at amortised cost.

5.3  Share Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares or options in relation to ordinary shares are shown in equity as a deduction, net of taxation, from the proceeds. 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

5.  SIGNIFICANT ACCOUNTING POLICIES (Continued)

5.4  Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held on call with banks and other short term highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

5.5  Earnings per share

Basic earnings per share is computed using the weighted average number of shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of shares during the period plus the dilutive effect of dilutive potential ordinary shares outstanding during the year.

5.6  Leases

During the year the Group has recognised a right-of-use asset measured at an amount equal to the lease liability, in relation to leased office space. The lease liability is measured at the present value of the remaining lease payments, discounted using the Group's incremental borrowing rate at date of lease commencement. Lease modifications are accounted for at the effective date of the lease modification.

6.  ACCOUNTING ESTIMATES AND JUDGEMENTS

Preparation of financial information in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources.

The Directors have applied judgement in determining the appropriate split of professional costs incurred in connection with the listing between profit or loss and equity. The Directors have made this assessment based on the proportion of shares in issue before and after the listing.

The Directors have applied judgement in determining the incremental borrowing rate, which is the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions. The rate is used to measure lease liabilities by discounting the present value of future lease payments (See Note 15).

7.  FINANCIAL RISK MANAGEMENT

The Group has exposure to liquidity risk, foreign currency risk and capital risks from its use of financial instruments. Credit, interest rate and market risks are not considered to be material to the Group. The Group is not subject to any external imposed capital requirements.

The Group's financial instruments consist mainly of cash and accounts payable.

a) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The Group's financial liabilities comprise amounts due to the parent company, lease liabilities and accruals. The Group's financial assets comprise cash and cash equivalents.

The Group has sufficient cash to meet their liabilities as they fall due.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

7.  FINANCIAL RISK MANAGEMENT (Continued)

b) Foreign currency risk (Continued)

The Group's operations expose it primarily to the financial risks of variations in foreign currency exchange rates. The Group undertakes transactions denominated in currencies which are different to its presentation currency. Consequently, the Group's financial performance is affected by exchange rate fluctuations.

The impact of exchange rate fluctuations that are recognised through other comprehensive income are those that arise on translation from functional to presentation currency. The carrying amounts of the balances and transactions denominated in a currency other than the Group's presentation currency are as follows:

2019			United States Dollar		RMB
Cash at bank			2,787,046		-
Amounts due to the parent company			-		(162,115)
Total			2,787,046		(162,115)

2018			United States Dollar		RMB
Cash at bank			4,020,320		-
Amounts due to the parent company			(26,636)		(170,637)
Total			3,993,684		(170,637)

A ten percent strengthening of GBP (£) against the following currencies at 31 December would have (decreased)/increased reported equity and other comprehensive income by the following amounts:

	2019 Other comprehensive income	Equity
United States Dollar	(253,368)	(253,368)
RMB	14,738	14,738
	2018 Other comprehensive income	Equity
United States Dollar	(363,062)	(363,062)
RMB	15,512	15,512

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

7.  FINANCIAL RISK MANAGEMENT (Continued)

b) Foreign currency risk (Continued)

A ten percent weakening of GBP (£) against the following currencies at 31 December would have (decreased)/increased reported equity and other comprehensive income by the following amounts:

		2019
		Other comprehensive income		Equity
United States Dollar		309,672		309,672
RMB		(18,013)		(18,013)
	2018
	Other comprehensive income		Equity
United States Dollar	443,743		443,743
RMB	(18,960)		(18,960)

The impact of the exchange rate fluctuations that are recognised through profit or loss are those that arise on translation to functional currency. The carrying amounts of the balances and transactions denominated in a currency other than the entity's functional currency (United States Dollar) are as follows:

2019			GBP		RMB
Amounts due to the parent company			(55,208)		(214,380)
Lease liabilities			(83,365)
Accruals			(602,805)
Trade and other receivables			19,341
Total			(722,036)		(214,380)

2018			GBP		RMB
Amounts due to the parent company			(66,581)		(217,735)
Accruals			(228,953)
Total			(295,534)		(217,735)

A ten percent strengthening of USD ($) against the following currencies at 31 December would have (decreased)/increased reported equity and profit or loss by the following amounts:

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

7.  FINANCIAL RISK MANAGEMENT (Continued)

b) Foreign currency risk (Continued)

	2019 Profit or loss	Equity
GBP	65,640	65,640
RMB	19,489	19,489
	2018 Profit or loss	Equity
GBP	26,867	26,867
RMB	19,794	19,794

A ten percent weakening of USD ($) against the following currencies at 31 December would have (decreased)/increased reported equity and profit or loss by the following amounts:

	2019 Profit or loss	Equity
GBP	(80,226)	(80,226)
RMB	(23,820)	(23,820)
	2018 Profit or loss	Equity
GBP	(32,837)	(32,837)
RMB	(24,193)	(24,193)

c)  Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. Credit allowances are made for estimated losses that have been incurred by the reporting date.

The Group's cash balances were all held with Oversea-Chinese Banking Corporation Limited (OCBC). Per Standard & Poor's, the Short Term Foreign / Local Currency Deposit Rating is A-1+.

8.  CAPITAL MANAGEMENT

The Group actively manages the capital available to fund the Group, comprising equity and reserves. The Group's objectives when maintaining capital is to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

9.  SEGMENT REPORTING

IFRS 8 defines operating segments as those activities of an entity about which separate financial information is available and which are evaluated by the Board of Directors to assess performance and determine the allocation of resources. The Board of Directors are of the opinion that under IFRS 8 the Group has only one operating segment. The Board of Directors assess the performance of the operating

segment using financial information which is measured and presented in a manner consistent with that in the Financial Statements. Segmental reporting will be reviewed and considered in light of the development of the Group's business over the next reporting period.

10.  OPERATING LOSS

	The operating loss is stated after charging:
		Year ended 31 December 2019		Period ended 31 December 2018
			£	£
	Foreign exchange losses		-		272

11.  STAFF COSTS AND KEY MANAGEMENT EMOLUMENTS

	Year ended 31 December 2019		Period ended 31 December 2018
		£	£
Key management emoluments
Remuneration		142,083	-
		£	£
Executive Directors
Xingchen Zhu Xiaojun Zhang		27,500 27,500	- -
Non-executive Directors
John McLean OBE		32,083	-
Norman Cumming		27,500	-
Nicholas Petford DSc		27,500	-
		142,083	-

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

12.  AUDITORS' REMUNERATION

	The following remuneration was received by the Company's auditors:
			Year ended 31 December 2019		Period ended 31 December 2018
				£	£
	Remuneration for the audit of the Company's financial statements			25,000		17,500
	Corporate finance services			175,000		50,000

13.  TAXATION

The Company is incorporated in the Cayman Islands, and its activities are subject to taxation at a rate of 0%. All subsidiaries have not started trading during the year.

14.  EARNINGS PER SHARE

The Company presents basic and diluted earnings per share information for its ordinary shares. Basic earnings per share is calculated by dividing the loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares in issue during the reporting period.

There is no difference between the basic and diluted loss per share.

	Year ended 31 December 2019		Period ended 31 December 2018
Loss attributable to ordinary shareholders (£)	(1,216,746)		(189,698)
Weighted average number of shares	19,796,822		59,375
Loss per share (expressed as pence per share)	(6)		(319)

The loss per share for the period has been calculated using the weighted average number of shares in issue during the year. The Company issued new Ordinary shares in January 2019 (See note 19).

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

15.  LEASES

Leases: right-of-use assets

			Land and Buildings
			£
At 1 January 2019			-
Additions Amortisation			104,595 (88,531)
Effect of modification to lease terms			54,133
At 31 December 2019			70,197

Lease liabilities

			Land and Buildings
			£
At 1 January 2019			-
Additions Interest expenses			104,595 2,372
Effect of modification to lease terms			54,133
Lease payments			(98,171)
At 31 December 2019			62,929

During the year the lease was extended from February 2020 to August 2020. This extension is a lease modification as it is a change in the scope of the lease by extension of contractual lease term, and is applied from the effective date of the modification, which was when the extension agreement was signed, prior to year-end.

16.  SUBSIDIARIES

All subsidiaries which have been included in these consolidated financial statements, are as follows:

Name	Country of incorporation and principal place of business	Proportion of ownership interest at 31 December 2019
Starcrest Education Plc	United Kingdom	100%
Starcrest Education Management (UK) Limited	United Kingdom	100%

Both companies above were incorporated in November 2019 and had not started trading in the period to 31 December 2019.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

17.  CASH AND CASH EQUIVALENTS

		Year ended 31 December 2019		Period ended 31 December 2018
		£		£
Cash at bank		2,787,046		4,020,320
Cash at bank earns interest at floating rates based on daily bank deposit rates.

18.  TRADE AND OTHER PAYABLES

			Year ended   31 December   2019	Period ended 31 December   2018
			£
Amounts due to the parent company Accruals			203,788    455,034	249,451   179,426
			658,822	428,877

The amounts above includes £179,160 (2018: £243,120) in relation to share issue costs.

All payables are financial liabilities measured at amortised cost.

Amounts due to the parent company are unsecured, interest free and repayable on demand.

19.  SHARE CAPITAL

	Number of shares	Nominal value  £
Authorised
Ordinary shares of £0.01 each	1,000,000,000	10,000,000
Issued and fully paid
Issue of ordinary shares of £0.01 each	21,560,000	215,600

On incorporation, the Company had an authorised share capital of US$50,000 divided into 50,000 ordinary shares of a par value of US$1.00 each.

On 18 December 2018 the Company repurchased and cancelled the issued ordinary share capital of 10,000 of US$1 each. Separately, the Company's authorised share capital became 1,000,000,000 ordinary shares of £0.01 each. On the same date the Company issued 800,000 ordinary shares at nominal value.

On 18 December 2018 20,760,000 were subscribed to and recognised as shares to be issued in other reserves. These were subsequently issued as part of the share issue on 31 January 2019.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

19.  SHARE CAPITAL (Continued)

On 31 January 2019, a total of 20,760,000 ordinary shares of nominal value £0.01 each were issued by way of placing at a price of £0.20 per share on the London Stock Exchange.

20.  SHARE PREMIUM

Transaction costs of £111,177 for the year ended 31 December 2019 and £291,222 for the period from 23 May 2018 to 31 December 2018 have been deducted from equity. These costs are incremental and directly attributable to the issue of shares.

The opening balance of Other Reserves of £3,773,141 has been recognised as share capital and share premium after the issue of the new shares on 31 January 2019.

21.  RESERVES

The following describes the nature and purpose of each reserve within equity:

Reserve	Description and purpose
Share premium	Amount subscribed for share capital in excess of nominal value.
Other reserve	Consideration received for shares which are not yet issued .
Retained earnings	All other net gains and losses and transactions not recognised elsewhere.
Foreign exchange reserve	Gains/losses arising on retranslation of net assets from functional to presentation currency.

22.  RELATED PARTY TRANSACTIONS

As at 31 December 2019, an amount of £203,788 (31 December 2018: £249,451) was owed to Starcrest Education Management Company Ltd. This amount mainly arose from business expenses paid on behalf of the Company by the parent company.

The remuneration of the Directors, the key management personnel of the Company, is set out in note 11.

23.  ULTIMATE CONTROLLING PARTY

The immediate parent company is Starcrest Education Management Company Ltd. The ultimate parent company is Shenzhen Xing Chen Investment Holdings Limited.  The ultimate controlling party is Mr Xingchen Zhu, who is also a director of the Company.

 

END

 

 

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