Company registration number 02418535 (England and Wales)
CHILDBASE PARTNERSHIP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
CHILDBASE PARTNERSHIP LIMITED
COMPANY INFORMATION
Directors
M A N Thompson CBE
E P Rooney
S L Hill
J S Clubb
L J Wigley
(Appointed 18 November 2021)
Secretary
M A N Thompson CBE
Company number
02418535
Registered office
Kingston House
Northampton Road
Newport Pagnell
Buckinghamshire
MK16 8NJ
Auditor
Ad Valorem Audit Services Limited
2 Manor Farm Court
Old Wolverton Road
Old Wolverton
Milton Keynes
Buckinghamshire
MK12 5NN
Bankers
HSBC Bank Plc
321 Avebury Boulevard
Milton Keynes
MK9 2NW
CHILDBASE PARTNERSHIP LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 6
Directors' responsibilities statement
7
Independent auditor's report
8 - 10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 30
CHILDBASE PARTNERSHIP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2022
- 1 -
The directors present the strategic report for the year ended 31 October 2022.
Fair review of the business
It seems as you reach the end of one major challenge, Covid, another one strikes. It is clear however, that the work force challenges are not ours alone. To our colleagues, thank you. Your support is what has made the difference consistently for over 30 years.
The numbers tell the story. Our commitment to everyone, through our employee owned status, remains our focus. The Partnership Dividend implemented at the end of the financial year is provided to help the team, on an equal basis, through the costs of living increases. For the first time this is being paid in equal instalments across a six month period. From December 1st to May 1st 2023 tax free payments will be made to all.
That initiative is only made possible through all their contributions during the financial year under review. The support of our bank should not go unrecognised. Their belief in our ownership model, investment in colleagues and sharing the success is, at times, extraordinary.
Whilst all the shareholders in the business, are employed in the business, our focus simply links to cash, not returns to investors. Whilst we are trying to protect our clients from the ever-inflating costs, particularly over the last three years, the forecasts ahead mean that fees will rise in April 2023.
Revenue for the year increased to £67m, in line with our forecasts. Whilst some of this uplift was attributable to new openings increasing their capacity, occupancy across the whole company was strong. Wages costs were up by over 16%. Reflected by increased staffing numbers at new settings and above cost of living increases for all colleagues.
Utility costs rose by 34%, with costs overall up by 18%. As our debt position has been well managed there was a small, not significant increase in our bank interest payments. Clearly, that position will change in the year ahead. At the same time our Corporation Tax liability, with a significant reduction in our year on year profits, was £1m lower. The overall EBITDA was returned at just under £3.5m.
Capital expenditure for the year in the maintenance of the estate remained at record levels. The cost of delivering those constant updates to buildings seems to have increased from all contractors during the period under review.
Our Academy goes from strength to strength. The number of learners seeking qualifications with Childbase has increased fourfold. The investments at Head Office, and the new training facilities, has made that growth, and delivery of learning outcomes possible. Our thanks again to Emma Rooney, our Chief Executive, for having that vision. The recruitment challenge would be even tougher were it not for this focus on our own.
The wage increases implemented, against the real living wage, impacted upon the outturn. We remain, as always, in front of those directives on earnings.
The new nurseries, recently opened in Milton Keynes, Redbourn and Hertford have all increased occupancy significantly in the year under review. Berryfields in Aylesbury, opening January 2023 has already advanced bookings which demonstrate the new approach to advertising, and the location, on a huge new residential development, pays dividends.
We have a number of other new sites secured for development 2024/25. The focus in this financial year 2023/24, remains on the existing portfolio. A commitment from the Executive Team to fully refurbish 6 nurseries in each of the next two years. As we build new, and designs move forward, resources need refreshing, then the core needs to be a priority.
To our colleagues on the Council, thank you for your support, commitment, and wisdom. Whilst we remain focussed on our direction of travel it is always beneficial to seek guidance from those on the front line. It is helpful not to agree on everything.
CHILDBASE PARTNERSHIP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 2 -
Fair review of the business (continued)
The Green Priority in the business saw us further reduce our carbon footprint in the year. It was a real achievement to win the Eco Schools Early Provider of the Year Award. Our partnership with Furthr entered its fifth year. The carbon neutral status, through offsetting, does not reduce our focus on the continuing reduction on our own footprint. The increase in electric cars for colleagues, completing the change to LED lighting throughout the business, no waste and Planet Mark accreditation across the whole business. It is a welcome addition, in this annual report, that we now include the measures taken to improve energy efficiency and our progress to meet our targets.
To all our colleagues, thank you. The challenges never seem to ease. However, your collective ability to cope with each one, is what sets us apart. The Executive Team are proud to have made a record tax free payment to everyone this year on an equal basis, through the Partnership Dividend. Thank you to them, and you, for making that outcome possible.
Description of Principal Risks and Uncertainties
The principal risks facing the company can broadly be grouped as competitive, legislative and financial.
Competitive
The main competitive risk relates to the ability of the company’s nurseries to continue to meet and exceed the needs of parents and therefore continue to attract customers in their area and gain an advantage over their competitors. To this end, all Childbase nurseries are committed to a child-centred approach, which treats each child as an individual and follows a set of principles linked to the Early Years Foundation Stage to provide innovative learning through play programmes.
Legislative
The quality of service provided in the education sector continues to be under public scrutiny. The company has an excellent reputation within the marketplace however and continues to meet the requirements of the Office for Standards in Education, Children's Services and Skills (Ofsted). All of the company's nurseries have an Ofsted rating of “Outstanding” or “Good”.
Financial
The company's main financial instruments comprised of cash, bank loans and overdrafts, and trade creditors. The main purpose of these instruments is to provide funding for the company's operations. There are limited risks arising to the company as a result of these instruments and the directors agree policies for the management of these instruments which are detailed below:
a) Credit risk - the company’s contract terms to customers stipulate that fees must be paid in advance and therefore any credit risk is considered to be minimal. Where fees are not paid as per the contract, the company has procedures in place to ensure any issues are addressed in a timely manner.
b) Liquidity risk - the company seeks to manage and minimise financial risk by ensuring that sufficient liquidity is available at all times to meet foreseeable needs and by investing cash assets safely and profitably.
c) Interest rate risk - the company raised a £25m loan to finance the Employee Ownership Trust share purchase. The loan is on a variable interest rate arrangement linked to SONIA. Management have reviewed the potential financial impact due to a rate increase and then considered the company’s ability to then increase its fee rates to mitigate this risk and decided that no interest rate hedging is needed.
CHILDBASE PARTNERSHIP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 3 -
S172 Statement
The company continues to work towards achieving its corporate plan targets, which forms the basis for the strategic direction of travel. The Directors continue to set and review targets on a regular basis to ensure that they remain a challenge but not unachievable. The targets are fed through to business operational plans for delivery in the settings.
To ensure we maintain the company’s high standards of business conduct, the Executive Directors meet with key stakeholders in the business on a quarterly basis to review business operations and ensure clear actions are set and monitored to ensure high standards are maintained. This work is complemented by ensuring regular feedback is obtained from all colleagues in the business to monitor whether policies and procedures for example are working effectively in practice and ensure where necessary changes are made to reflect this.
Excellent relationships and solid diligence on costs, quality and delivery of products and services with external stakeholders is embedded within practice.
Business Continuity Plans and a comprehensive Risk Register remain an active part of the business, updated periodically and communicated to all stakeholders within the company.
Finally, as Directors we recognise the importance of ensuring an active role in the company, which sets the behaviours and culture expected of all stake holders, both internally and externally.
M A N Thompson CBE
E P Rooney
Chairman
Chief Executive Officer
25 May 2023
CHILDBASE PARTNERSHIP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2022
- 4 -
The directors present their annual report and financial statements for the year ended 31 October 2022.
Principal activities
The company's principal activity is the provision of nursery care. The company had 45 nurseries in operation during the year, 2 of which were sold in the year.
Results and dividends
The results for the year are set out on page 11.
During the year dividends of £nil (2021: £nil) were paid. In addition dividends of £129,101 (2021: £6,697) have been paid on the Ordinary 'B' shares. The Employee Ownership Trust has agreed to forgo dividends on the shares they hold.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
M A N Thompson CBE
E P Rooney
S L Hill
J S Clubb
M Hinchliffe
(Resigned 26 May 2022)
L J Wigley
(Appointed 18 November 2021)
Market value of land and buildings
The directors consider that the market value of the freehold land and buildings is in excess of the amount shown in the financial statements but, as these assets are used in the company's business, the excess is not quantified.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The directors do recognise that the success of the company continues as a result of the huge efforts its managers and staff put into running the nurseries. The directors are always grateful for their continued commitment and dedication to the company.
The directors are committed to keeping employees fully informed about current issues within the company and of future developments. This is achieved through regular staff meetings, a quarterly newsletter and the annual 'Roadshow' where the directors present to all employees.
Future developments
The directors do not anticipate that there will be any fundamental change in the development of the company's business during the coming year.
Auditor
During the year Ad Valorem Audit Services Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
CHILDBASE PARTNERSHIP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 5 -
Energy and carbon report
During the year the company was responsible for the emission of the following tonnes of CO2e during the course of its business activities,
2022
2021
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
4,204,179
4,919,061
2022
2021
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
421.40
484.10
- Fuel consumed for owned transport
67.80
31.50
489.20
515.60
Scope 2 - indirect emissions
- Electricity purchased
355.20
375.30
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
51.90
39.30
Total gross emissions
896.30
930.20
Intensity ratio
Tonnes CO2e per employee
0.6
0.43
Quantification and reporting methodology
We follow the GHG Protocol for Corporate Emission Reporting and The National TOMs Framework for Social Value Reporting. Refer to Planet Mark Code of Practice for detailed information on the methodology and standards used in the preparation of this report.
Intensity measurement
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per employee, the recommended ratio for the sector.
Measures taken to improve energy efficiency
The company has successfully certified its carbon emissions via PlanetMark for the period 1 November 2021 to 31 October 2022 which is our fifth year of certification. PlanetMark is a sustainability certification that recognises continuous improvements, encourages action, and builds an empowered community of like-minded individuals.
The company also makes a commitment upon certification of the PlanetMark, to achieve a minimum 2.5% reduction in our measured carbon footprint year on year. Through the PlanetMark, the company has taken action to protect one acre of rainforest with the charity Cool Earth – as with the certification this is our fifth year of this support.
March 2021 represents the first-year anniversary of the formalising of the businesses net zero strategy – dubbed Zeroby30 – and the subsequent full incorporation of sustainability as a core business purpose through the addition of the ‘Environment Pillar’ to the Corporate Strategy alongside existing pillars covering People, Quality, Sustainability and Communications.
Total energy usage, comprising electricity, gas, and burning oil, was 4,204,179 kwh across the financial year compared to 4,919,061 kwh in 2020/21 showing a 714,802 kwh reduction – this despite an increase in electricity usage. This is representative of a pivoting from gas to more efficient electrically powered heating and catering methods in-keeping with the broader Net Zero strategy.
CHILDBASE PARTNERSHIP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 6 -
Childbase remains committed to leading delivery of environmental education and works closely with Eco-Schools as a trusted partner. Energy is one of many topics covered through the scheme and this has a two-pronged benefit through reduced usages, improved stakeholder engagement within the team and cascades the message through the children to their parents and wider families. Childbase currently has 100% of sites holding an Eco-Schools Green Flag with 53% of those with Distinction, 33% of those with Merit and the remaining 14% holding the standard Green Flag.
The utility market shock linked to the conflict in the Ukraine exacerbated existing increases with wholesale gas in the previous financial year. This has now seen a substantial focus on electricity supplies with the renewal offer representing a dramatic increase in costs only partly met by the Governments support schemes. Regardless of this we have retained our longstanding partnership with GreenenergyUK and their EKOEnergy tariff ensuring our electricity supply remains guaranteed from only renewable sources.
The Meter Monitoring Project launched, providing half-hourly granular usage information, in the previous financial year and is providing progressively deeper and more useful insights as time progresses. Initial focus has been on gas usages as that data has matured quicker than electricity metering whilst providing faster improvements through thermostats and timer adjustments. With our maintenance provider and the support of the businesses Head of Facilities we have manually amended heating controls across the sites to ensure we are not heating the properties out of hours and over the weekends. This has substantially flattened the usage across those periods by focusing usage to core opening hours which, in turn, reduces carbon emissions associated with gas.
We now have three 22kw car chargers installed at three sites with a further five locations planned for investment in the coming financial year with the scoping works completed within this financial year. The existing chargers will provide “hubs” for company fleet drivers who have moved to fully electric vehicles alongside the subsequent points in the coming financial year which will be targeted at perimeter locations.
Childbase currently has seven fully electric battery vehicles amongst the fleet with the end users being financially supported with home charging to the value of £900 per person.
For the second year we have elected to bring the carbon offsetting forward from the end of the net zero strategy in 2030 with our partnership with Furthr. We have elected to offset 5,900tCO2e which is the businesses benchmark carbon footprint encompassing all three emissions scopes. This figure has been maintained in year one and year two despite emissions reducing between the two points representing offsets that therefore go above and beyond our emissions. The vision is to maintain this investment in offsets throughout the remainder of the net zero strategy whilst maintaining investment in carbon reductions.
During the financial year Childbase attended the inaugural Nursery World Sustainability in the Early Years Conference as a speaker and has been integral in delivering a case study and working party support to the Department for Education (DfE) who launched their Sustainability and Climate Change Strategy. As part of this strategy our long-serving Eco-Champions were rebranded Sustainability Leads with a broad remit to drive sustainability from their settings through behaviour improvements be that energy efficiency, waste, or products and services. Sustainability Leads had a half-day training with PlanetMark’s Engagement Team to provide a base level of knowledge alongside a recap of the businesses work thus far.
Statement of disclosure to auditor
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.
On behalf of the board
M A N Thompson CBE
Chairman
25 May 2023
CHILDBASE PARTNERSHIP LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2022
- 7 -
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.
CHILDBASE PARTNERSHIP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CHILDBASE PARTNERSHIP LIMITED
- 8 -
Opinion
We have audited the financial statements of Childbase Partnership Limited (the 'company') for the year ended 31 October 2022 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity 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 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 company's affairs as at 31 October 2022 and of its profit 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 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.
The directors are responsible for the other information. The other information comprises the information in 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 our audit:
give the information given in the 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 Strategic Report and Report of the Directors has been prepared in accordance with applicable legal requirements.
CHILDBASE PARTNERSHIP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CHILDBASE PARTNERSHIP LIMITED
- 9 -
Matters on which we are required to report by exception
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 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:
give
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.
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page eight, 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 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.
Auditor's 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:
In our process of identifying fraud risks we assessed events or conditions that indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud ("fraud risk factors") to determine how fraud risks are relevant to our audit. Based on the auditing standards we addressed two fraud risks that were relevant to our audit, in relation to revenue recognition and management override of controls. Based upon our analysis of fraud risk factors, we have not identified any additional fraud risks.
Our audit procedures included an evaluation of the design, implementation as well as the operating effectiveness of internal controls relevant to mitigate these risks. We also performed substantive audit procedures, including detailed testing of high risk journal entries and procedures to satisfy ourselves that revenue has been properly recognised in the financial statements in accordance with financial reporting standards and the Company's accounting policies. Through these procedures, we did not identify any material actual or suspected incidences of fraud.
We have evaluated facts and circumstances in order to assess laws and regulations relevant to the Company. We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general and sector experience, through discussion with the Directors and other management (as required by auditing standards) and discussed with the Directors and other management the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.
CHILDBASE PARTNERSHIP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CHILDBASE PARTNERSHIP LIMITED
- 10 -
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Company is subject to laws and regulations that directly affect the financial statements including taxation and financial reporting (including related company legislation) and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect:
- Employment legislation, reflecting the Company's workforce
- Health and safety regulation, reflecting the Company's operating processes
- Data privacy, reflecting the Company's management of personal and corporate data
Auditing standards limit the required audit procedures to identify non-compliance with these regulations to enquiry of the Directors and other management and inspection of regulatory and legal correspondence, if any. Through these procedures we did not identify any material actual or suspected non-compliance in any of the above areas.
We note that our audit is not primarily designed to detect non-compliance with laws and regulations and the Directors and other management are responsible for such internal control as the Directors and other management of the Company determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to errors or fraud, including compliance with laws and regulations. Additionally, owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
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.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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.
Darren Kerins FCCA (Senior Statutory Auditor)
For and on behalf of Ad Valorem Audit Services Limited
Chartered Accountants
Statutory Auditor
2 Manor Farm Court
Old Wolverton Road
Old Wolverton
Milton Keynes
Buckinghamshire
MK12 5NN
25 May 2023
CHILDBASE PARTNERSHIP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2022
- 11 -
2022
2021
Notes
£
£
Turnover
3
67,210,523
60,859,798
Cost of sales
(47,422,148)
(40,434,746)
Gross profit
19,788,375
20,425,052
Administrative expenses
(19,866,519)
(16,604,185)
Other operating income
1,000,000
2,698,342
Exceptional items
4
(1,037,139)
Operating profit
5
921,856
5,482,070
Interest receivable and similar income
9
716,612
Interest payable and similar expenses
10
(735,304)
(586,832)
Amounts written off investments
14
(100)
(701,839)
Profit before taxation
186,452
4,910,011
Tax on profit
11
8,632
(1,348,586)
Profit for the financial year
195,084
3,561,425
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CHILDBASE PARTNERSHIP LIMITED
BALANCE SHEET
AS AT
31 OCTOBER 2022
31 October 2022
- 12 -
2022
2021
Notes
£
£
£
£
Fixed assets
Goodwill
12
4,047,950
4,405,293
Tangible assets
13
28,591,743
26,914,402
Investments
14
100
32,639,693
31,319,795
Current assets
Debtors
16
2,889,340
2,004,436
Cash at bank and in hand
67,346
4,698,353
2,956,686
6,702,789
Creditors: amounts falling due within one year
17
(17,103,424)
(17,338,888)
Net current liabilities
(14,146,738)
(10,636,099)
Total assets less current liabilities
18,492,955
20,683,696
Creditors: amounts falling due after more than one year
18
(12,441,722)
(15,066,722)
Provisions for liabilities
Deferred tax liability
20
239,175
(239,175)
-
Net assets
5,812,058
5,616,974
Capital and reserves
Called up share capital
22
327,996
327,996
Revaluation reserve
23
1,180,242
1,195,748
Capital redemption reserve
23
50,985
50,985
Profit and loss reserves
23
4,252,835
4,042,245
Total equity
5,812,058
5,616,974
The financial statements were approved by the board of directors and authorised for issue on 25 May 2023 and are signed on its behalf by:
M A N Thompson CBE
J S Clubb
Director
Director
Company Registration No. 02418535
CHILDBASE PARTNERSHIP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2022
- 13 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 November 2020
327,996
1,211,254
50,985
465,314
2,055,549
Year ended 31 October 2021:
Profit and total comprehensive income for the year
-
-
-
3,561,425
3,561,425
Transfers
-
(15,506)
-
15,506
-
Balance at 31 October 2021
327,996
1,195,748
50,985
4,042,245
5,616,974
Year ended 31 October 2022:
Profit and total comprehensive income for the year
-
-
-
195,084
195,084
Transfers
-
(15,506)
-
15,506
-
Balance at 31 October 2022
327,996
1,180,242
50,985
4,252,835
5,812,058
CHILDBASE PARTNERSHIP LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2022
- 14 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
3,700,292
4,640,517
Interest paid
(735,304)
(586,832)
Income taxes paid
(1,364,195)
(681,368)
Net cash inflow from operating activities
1,600,793
3,372,317
Investing activities
Purchase of intangible assets
(742,500)
Purchase of tangible fixed assets
(4,158,313)
(4,519,649)
Proceeds from disposal of tangible fixed assets
980,084
Dividends received
716,612
Net cash used in investing activities
(3,178,229)
(4,545,537)
Financing activities
Repayment of bank loans
(3,053,571)
(2,571,429)
Net cash used in financing activities
(3,053,571)
(2,571,429)
Net decrease in cash and cash equivalents
(4,631,007)
(3,744,649)
Cash and cash equivalents at beginning of year
4,698,353
8,443,002
Cash and cash equivalents at end of year
67,346
4,698,353
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
- 15 -
1
Accounting policies
Company information
Childbase Partnership Limited is a private company limited by shares incorporated in England and Wales. The registered office is Kingston House, Northampton Road, Newport Pagnell, Buckinghamshire, MK16 8NJ.
1.1
Accounting convention
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.
The financial statements present information about the company as an individual entity and not about its group. The company is exempt from the requirement to prepare consolidated financial statements on the basis that all the subsidiaries are dormant and immaterial to the company.
1.2
Going concern
The financial statements have been prepared on a going concern basis. trueIn making this assessment, the directors have prepared detailed trading and cash flow forecasts to 31 October 2024. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence over this period and have therefore adopted the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Revenue is recognised to the extent that the company obtains the right to consideration in exchange for its performance. Revenue is measured at the fair value of the consideration received, excluding value added tax.
Revenue in respect of the provision of nursery care is recognised as the services are provided.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which varies between 14 and 35 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
1
Accounting policies
(Continued)
- 16 -
1.5
Tangible fixed assets
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:
Freehold land and buildings
1% on cost
Leasehold land and buildings
Over the term of the lease
Fixtures, fittings and equipment
10% - 33% on cost
Motor vehicles
25% reducing balance
No depreciation is charged on freehold land.
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.
1.6
Fixed asset investments
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.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
1
Accounting policies
(Continued)
- 17 -
1.8
Cash at bank and in hand
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.
1.9
Financial instruments
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
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.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
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, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
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.
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
1
Accounting policies
(Continued)
- 18 -
Basic financial liabilities
Basic financial liabilities, including creditors and bank loans, 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
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.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current 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
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.
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
1
Accounting policies
(Continued)
- 19 -
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
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.
1.13
Retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to this scheme are charged to the profit and loss account in the period to which they relate. These contributions are invested separately from the company's assets. The assets of the scheme are held in an independently administered fund.
1.14
Leases
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.
1.15
Government grants
Government and local authority grants are matched in the profit and loss accounts against the expenditure to which they relate.
1.16
Development interest and other related charges
The historic cost of freehold land and buildings includes the interest cost on the financing and other related costs incurred up to the time the individual developments are completed. A nursery development is treated as completed when the nursery opens for business.
2
Judgements and key sources of estimation uncertainty
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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Carrying value of goodwill
The directors review the carrying value of goodwill together with the associated impairment provision that may be required annually using discounted future cash flows.
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 20 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
Provision of nursery care
67,210,523
60,859,798
2022
2021
£
£
Other significant revenue
Dividends received
-
716,612
Grants received
1,000,000
698,342
Insurance income
-
2,000,000
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
67,210,523
60,859,798
4
Exceptional item
2022
2021
£
£
Expenditure
Costs associated with the Employee Ownership Trust
-
1,037,139
During the prior year a contribution of £1,037,139 was made to the Employee Share Ownership Trust to enable it to purchase further Ordinary B shares.
5
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
2,043,088
1,881,357
(Profit)/loss on disposal of tangible fixed assets
(542,200)
30,593
Amortisation of intangible assets
357,343
303,692
Operating lease charges
3,406,010
3,324,934
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 21 -
6
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
25,000
24,000
For other services
All other non-audit services
17,250
7
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Administration
78
66
Nursery
2,093
2,050
Total
2,171
2,116
Their aggregate remuneration, excluding the partnership dividend, comprised:
2022
2021
£
£
Wages and salaries
40,689,275
34,865,291
Social security costs
3,025,376
2,367,974
Pension costs
1,020,365
920,390
44,735,016
38,153,655
8
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
1,573,237
1,451,602
Company pension contributions to defined contribution schemes
60,738
29,432
1,633,975
1,481,034
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2021 - 3).
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
8
Directors' remuneration
(Continued)
- 22 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
387,697
424,358
9
Interest receivable and similar income
2022
2021
£
£
Income from fixed asset investments
Income from shares in group undertakings
716,612
10
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
606,203
580,135
Dividends on redeemable preference shares not classified as equity
129,101
6,697
735,304
586,832
11
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
(138,080)
1,286,362
Adjustments in respect of prior periods
(167,914)
60,025
Total current tax
(305,994)
1,346,387
Deferred tax
Origination and reversal of timing differences
297,362
2,199
Total tax (credit)/charge
(8,632)
1,348,586
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
11
Taxation
(Continued)
- 23 -
The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
186,452
4,910,011
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
35,426
932,902
Tax effect of expenses that are not deductible in determining taxable profit
61,380
380,626
Adjustments in respect of prior years
(167,914)
60,025
Effect of change in corporation tax rate
46,909
(82,843)
Depreciation on assets not qualifying for tax allowances
55,288
194,032
Other permanent differences
(39,721)
Dividend income
(136,156)
Taxation (credit)/charge for the year
(8,632)
1,348,586
12
Intangible fixed assets
Goodwill
£
Cost
At 1 November 2021 and 31 October 2022
7,022,273
Amortisation and impairment
At 1 November 2021
2,616,980
Amortisation charged for the year
357,343
At 31 October 2022
2,974,323
Carrying amount
At 31 October 2022
4,047,950
At 31 October 2021
4,405,293
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 24 -
13
Tangible fixed assets
Freehold land and buildings
Leasehold land and buildings
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 November 2021
10,584,225
27,307,893
4,017,147
41,670
41,950,935
Additions
167,847
3,149,941
840,525
4,158,313
Disposals
(1,176,883)
(73,153)
(1,250,036)
Transfers
1,270,631
(1,323,591)
52,960
At 31 October 2022
12,022,703
27,957,360
4,837,479
41,670
44,859,212
Depreciation and impairment
At 1 November 2021
1,442,051
11,404,160
2,159,546
30,776
15,036,533
Depreciation charged in the year
85,761
1,308,799
645,900
2,628
2,043,088
Eliminated in respect of disposals
(755,387)
(56,765)
(812,152)
At 31 October 2022
1,527,812
11,957,572
2,748,681
33,404
16,267,469
Carrying amount
At 31 October 2022
10,494,891
15,999,788
2,088,798
8,266
28,591,743
At 31 October 2021
9,142,174
15,903,733
1,857,601
10,894
26,914,402
Included in the amounts for land and buildings above are capitalised interest costs of £250,831 (2021: £250,831). No interest has been capitalised during the year.
On 1 November 2014 the company adopted the transitional provisions of FRS102, with the previous valuations becoming deemed cost.
The directors perform annual impairment reviews in accordance with the requirements of FRS102 to ensure that the carrying value is not lower than the recoverable amount.
14
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
15
100
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
14
Fixed asset investments
(Continued)
- 25 -
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 November 2021
716,621
Disposals
(716,621)
At 31 October 2022
-
Impairment
At 1 November 2021
716,521
Disposals
(716,521)
At 31 October 2022
-
Carrying amount
At 31 October 2022
-
At 31 October 2021
100
15
Subsidiaries
Details of the company's subsidiaries at 31 October 2022 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Childbase Partnership International Limited
England
Ordinary
40.00
Child Base Limited, Nature Trails Limited and Toy Barn Limited were dissolved on 30 August 2022.
16
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
267,876
176,181
Corporation tax recoverable
797,828
122,528
Other debtors
110,287
227,461
Prepayments and accrued income
1,713,349
1,420,079
2,889,340
1,946,249
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
16
Debtors
(Continued)
- 26 -
2022
2021
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 20)
58,187
Total debtors
2,889,340
2,004,436
17
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans
19
1,500,000
1,928,571
Trade creditors
1,863,627
1,901,123
Amounts owed to group undertakings
100
Corporation tax
994,889
Other taxation and social security
674,154
579,625
Other creditors
3,249,193
3,435,608
Accruals and deferred income
9,816,450
8,498,972
17,103,424
17,338,888
18
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
19
12,375,000
15,000,000
Ordinary 'B' shares of 2.5p each
19
66,722
66,722
12,441,722
15,066,722
19
Loans and overdrafts
2022
2021
£
£
Bank loans
13,875,000
16,928,571
Ordinary 'B' shares of 2.5p each
66,722
66,722
13,941,722
16,995,293
Payable within one year
1,500,000
1,928,571
Payable after one year
12,441,722
15,066,722
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
19
Loans and overdrafts
(Continued)
- 27 -
The bank loans and overdraft are secured by a debenture including a fixed and floating charge over all the assets and undertakings of the company, a fixed charge over the goodwill and intellectual property of the company and a first legal charge over eight of the company's freehold properties and four of its leasehold properties.
Details of the loan is as follows:
Bank loan is repayable in quarterly instalments of £375,000 which commenced in April 2022. Interest is charged at SONIA rate plus 2.9%.
20
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
Assets
Assets
2022
2021
2022
2021
Balances:
£
£
£
£
Accelerated capital allowances
241,590
-
-
22,393
Other timing differences
(2,415)
-
-
35,794
239,175
-
-
58,187
2022
Movements in the year:
£
Asset at 1 November 2021
(58,187)
Charge to profit or loss
297,362
Liability at 31 October 2022
239,175
The deferred tax liability set out above is expected to reverse within the foreseeable future and relates to accelerated capital allowances that are expected to mature within the same period.
21
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
1,020,365
920,390
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 year end contributions of £192,698 (2021 - £201,384) were unpaid.
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 28 -
22
Share capital
2022
2021
£
£
Shares classified as equity
Issued and fully paid
11,969,831 Ordinary shares of 2.5p each
299,246
299,246
1,150,000 Reviewed incentive shares of 2.5p each
28,750
28,750
327,996
327,996
Shares classified as non-equity
Issued and fully paid
2,668,885 Ordinary 'B' share of 2.5p each
66,722
66,722
The Ordinary 'B' shares carry no voting rights but are entitled to a fixed cumulative dividend based on the Bank of England's base rate.
23
Reserves
Share premium
This reserve records the amount above the nominal value received for shares sold, less transaction costs.
Revaluation reserve
This reserve represents the increase in the carrying value of freehold land and buildings to the revalued amount.
Capital redemption reserve
This reserve records the nominal value of shares repurchased by the company.
24
Operating lease commitments
Lessee
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:
2022
2021
£
£
Within one year
3,152,113
3,167,416
Between two and five years
10,886,176
11,785,188
In over five years
20,617,898
22,005,019
34,656,187
36,957,623
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 29 -
25
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2022
2021
£
£
Aggregate compensation
2,440,121
2,000,211
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Purchases
2022
2021
£
£
Other related parties
892,040
925,648
26
Ultimate controlling party
Following the establishment of the Employee Ownership Trust the company is now controlled by the Trust.
27
Cash generated from operations
2022
2021
£
£
Profit for the year after tax
195,084
3,561,425
Adjustments for:
Taxation (credited)/charged
(8,632)
1,348,586
Finance costs
735,304
586,832
Investment income
(716,612)
(Gain)/loss on disposal of tangible fixed assets
(542,200)
30,593
Amortisation and impairment of intangible assets
357,343
303,692
Depreciation and impairment of tangible fixed assets
2,043,088
1,881,357
Other gains and losses
100
701,839
Decrease in provisions
(6,469)
Movements in working capital:
Increase in debtors
(267,791)
(160,972)
Increase/(decrease) in creditors
1,187,996
(2,889,754)
Cash generated from operations
3,700,292
4,640,517
CHILDBASE PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 30 -
28
Analysis of changes in net debt
1 November 2021
Cash flows
31 October 2022
£
£
£
Cash at bank and in hand
4,698,353
(4,631,007)
67,346
Borrowings excluding overdrafts
(16,995,293)
3,053,571
(13,941,722)
(12,296,940)
(1,577,436)
(13,874,376)
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