Registered number:
03307429
STEPPES TRAVEL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
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STEPPES TRAVEL LIMITED
COMPANY INFORMATION
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White Hart Associates (London) Limited
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Chartered Accountants and Statutory Auditors
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STEPPES TRAVEL LIMITED
CONTENTS
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Independent Auditors' Report
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Statement of Comprehensive Income
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Statement of Changes in Equity
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Notes to the Financial Statements
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STEPPES TRAVEL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2020
The directors present their annual report of Steppes Travel Limited (“The Company”) for the year ended 31 August 2020.
Introduction
The Company is required by the Companies Act 2006, to set out in this report a fair review of the business of the Company during the financial year ended 31 August 2020, the position of the Company at the year end, and a description of the principal risks and uncertainties facing the Company. The review is prepared solely to provide additional information to shareholders to assess the Company's strategies and the potential for the strategies to succeed, and the business review should not be relied upon by any other party or for any other purpose.
Section 172 (1) Statement
The information provided below is intended to explain how the directors considered the interests of the Company’s key stakeholders and the broader matters set out in section 172 (1) (a) to (f) of the Companies Act 2006 when performing their duty to promote the success of the Company under section 172 of the Companies Act 2006.
The results for the year and the financial position of the Company are shown in the financial statements on pages 11 to 39. The Company has been adversely affected by the Covid-19 outbreak which was declared a pandemic on 11 March 2020. Since then events moved rapidly and are still constantly changing. Management has set up arrangements within the organisation to monitor, plan and respond pro-actively to the continuously changing situation. However, the safety of our staff and customers is the highest priority. The current crisis is expected to ease in the Summer of 2021 once the impact of improved testing and the population vaccination programme has been implemented. Management has taken all necessary action on discretionary expenditure and to minimise overhead.
Management is of the opinion that the Company’s cost structure is low and uniquely scalable for both downsize and upsize requirements.
Key performance indicators
The Company continues monitoring a number of KPIs in respect of sales, gross profit and operating cash (refer to pages 11,17 and 18).
Covid-19 Response
The Covid-19 pandemic has been an unprecedented challenge for all travel market participants, including the Company, its staff, clients and other business partners. The Company’s top priority has been and continues to be the protection of the health and safety of its staff, customers and business partners. In line with the best practice guidelines the Company has put precautions and measures in place including travel restrictions and self-quarantine requirements. The directors monitor government and industry advice in relation to all operations and will respond to and implement the improved testing regimes available.
Management is of the opinion that the Company’s cost structure is low and scalable for both downsize and upsize requirements.
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STEPPES TRAVEL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2020
The Company has availed itself of the Coronavirus Business Interruption Loan Support Scheme and has sourced a £400,000 loan from the Company’s bankers to facilitate improved and surplus liquidity going forward. These funds were drawn down in November 2020. Additionally, shareholders have injected a further £300,000 into the Company, in the form of share capital of £100,000 and a shareholder subordinated loan of £200,000. The Company is also in the process of selling the investment property it owns to raise an additional £245,000 of liquidity.
Travel regulatory bodies
The Company holds an ATOL granted by the CAA which falls due for renewal in September 2021.
Principal risks and uncertainties
The risk factors described below are those which the directors believe are potentially significant but should not be regarded as a complete and comprehensive statement of all potential risks and uncertainties facing the Company.
Covid-19:
Due to the Covid-19 global pandemic travel in the UK and to the rest of the world are currently restricted and have strict distancing and quarantine rules in place. However the positive news is that the UK has already started a successful vaccination programme and the demographic of The Company’s customer is such that they will be the first to receive the vaccine.
Regulatory risk:
The Company is exposed to various regulators, including the Civil Aviation Authority ("CAA"), which issues an Air Travel Organisers Licence ("ATOL"), which is required in order for the company to operate. This licence is renewed in March each year and is subject to assessments of fitness and financial criteria, the framework of which is available on the CAA website (www.caa.co.uk).
Geo-political events and natural disasters:
The nature of the business operation exposes the Company to a wide range of Geo-political and natural disasters. To counter this the Company operates a flexible business model with the ability to shift capacity amongst a variety of destinations where necessary.
Commercial relationships:
The Company has well established and close relationships with customers and suppliers and the risk is spread by not placing over-reliance on any one supplier in any particular area. However, if a relationship were lost or damaged with a major supplier this could have a detrimental effect on the business. The management team meets regularly with suppliers to maintain good working relationships and to understand the suppliers financial position.
Information technology:
The Company is heavily reliant upon information technology. Investment is being made to ensure the Company has advanced and efficient systems in place, but there is a risk there were a major failure - particularly if it were to affect selling systems. Procedures are in place to minimise the time a selling system is unavailable in the event of such failure.
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STEPPES TRAVEL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2020
This report was approved by the board on 23 June 2021
and signed on its behalf.
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J C Wateridge
Director
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STEPPES TRAVEL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2020
The directors present their report and the financial statements for the year ended 31 August 2020.
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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:
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select suitable accounting policies for the Company's financial statements and then apply them consistently;
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make judgments and accounting estimates that are reasonable and prudent;
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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 to 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.
The Company's principal activity during the year continued to be the provision of tailored travel holidays and fixed departure groups.
The loss for the year, after taxation, amounted to £
1,513,552
(2019 -
profit
£
111,993
)
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No dividends have been paid or proposed for the year ending 31 August 2020.
The directors who served during the year were:
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STEPPES TRAVEL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2020
Disclosure of information to auditors
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Each of the persons who are
directors at the time when this Directors' Report is approved has confirmed that:
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so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and
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the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
Post balance sheet events
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Subsequent to the balance sheet date shareholders have subscribed to additional share capital in the sum of £100,000. One of the shareholders has also made a loan of £200,000 to the Company. The loan is subject to a subordinated undertaking in favour of the CAA and cannot be repaid without their prior written consent. These additional injection of funds were conditions precedent to the renewal of the Company's Air Travel Organisers Licencing ("ATOL") until September 2021. The Company has also implemented a CAA Approved Trust Account to protect all future ATOL bookings. The Company is also in the final stages of selling its investment property (Note 16) for £245,000.
Under section 487(2) of the Companies Act 2006, White Hart Associates (London) Limited will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board on
23 June 2021
and signed on its behalf.
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J C Wateridge
Director
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STEPPES TRAVEL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF STEPPES TRAVEL LIMITED
We have audited the financial statements of Steppes Travel Limited (the 'Company') for the year ended 31 August 2020, which comprise the Profit and Loss Account, the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity
and the related notes, 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:
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give a true and fair view of the state of the Company's affairs as at 31 August 2020 and of its loss for the year then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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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 United Kingdom, including the Financial Reporting Council'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.
The impact of uncertainties due to the Covid-19 pandemic
Uncertainties related to the effects of the Covid-19 pandemic are relevant to understanding our of the financial statements. All audits assess and challenge the reasonableness of estimates made by the such as recoverability of investments, intangible assets and related disclosures and the of the going concern basis of preparation of the financial statements. All of these depend on assessments of the future economic environment and Company's future prospects and performance.
The Covid-19 pandemic has had an unprecedented impact upon the worldwide economy and in particular upon the travel industry, with many consumers cancelling or delaying travel plans as a result. At the date of this report, the full range of possible effects upon travel companies cannot be estimated or assessed due to the current levels of uncertainty around government and consumer responses to what might happen.
We applied a standardised firm-wide approach in response to that uncertainty when assessing the Company's future prospects and performance. However, no audit should be expected to predict the unknowable factors or all possible future implications for a company or group and this is particularly the case in relation to the Covid-19 pandemic.
Material uncertainty related to going concern
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In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 2.2 to the financial statements concerning the Company's ability to continue as a going concern.
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STEPPES TRAVEL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF STEPPES TRAVEL LIMITED (CONTINUED)
As explained in note 2.2, the current Covid-19 pandemic has had an unprecedented impact upon the global economy and especially upon the travel industry. This has led many consumers to hold off on booking new holidays or cancel existing holidays until the global situation stabilises, resulting in greatly reduced cash flows for travel companies. These problematic trading conditions, have negatively impacted the Company's trading performance in this year and since the year-end.
The Company is also in the process of renewing its ATOL licence, which is due in September 2021 and is necessary for continued trading.
In the event that the Covid-19 pandemic worsens for a prolonged period of time, this would put pressure on the Company's finances and its ability to continue as a going concern. We draw attention to note 2.2 of the financial statements as to the review and actions undertaken by the Board of Directors to ensure that the Company has adequate resources to continue trading for at least 12 months. The financial statements are therefore prepared on a going concern
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' Report 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 there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
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the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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STEPPES TRAVEL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF STEPPES TRAVEL LIMITED (CONTINUED)
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
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the financial statements are not in agreement with the accounting records and returns; or
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certain disclosures of directors
' remuneration specified by law are not made; or
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we have not received all the information and explanations we require for our audit.
Responsibilities of directors
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As explained more fully in the Directors' Responsibilities Statement on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
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STEPPES TRAVEL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF STEPPES TRAVEL LIMITED (CONTINUED)
Auditors' responsibilities for the audit of the financial statements
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Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
- We exercise professional judgement and maintain professional scepticism throughout the audit;
- We identify and assess the risks of material misstatement of the financial statements, whether due to fraud orerror, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the deliberate override of internal control;
- We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control;
- We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made;
- We assess the risk of management override of controls, including testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business;
- We review the scope of the Company's compliance with its regulator, the Civil Aviation Authority ("CAA") and sample test relevant documentation to assess this and the effectiveness of its control environment;
- We review the Company's relationships with related parties and other group companies, identifying and disclosing transactions during the year and balances at year-end with such parties;
- We conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern. if we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the entity to cease to continue as a going concern.
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 Auditors' Report.
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STEPPES TRAVEL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF STEPPES TRAVEL LIMITED (CONTINUED)
This report is made solely to the Company's members
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 Auditors' 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 for our audit work, for this report, or for the opinions we have formed.
Ms N A Spoor ACA FCCA
(Senior Statutory Auditor)
for and on behalf of
White Hart Associates (London) Limited
Chartered Accountants and Statutory Auditors
2nd Floor, Nucleus House
2 Lower Mortlake Road
Richmond
TW9 2JA
23 June 2021
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STEPPES TRAVEL LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 AUGUST 2020
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Gains on revaluation of investment property
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Interest receivable and similar income
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Interest payable and similar expenses
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(Loss)/profit for the financial year
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The notes on pages 20 to 39 form part of these financial statements.
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STEPPES TRAVEL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2020
(Loss)/profit for the financial year
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Other comprehensive income
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Other comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 20 to 39 form part of these financial statements.
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STEPPES TRAVEL LIMITED
REGISTERED NUMBER:
03307429
BALANCE SHEET
AS AT
31 AUGUST 2020
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Net current (liabilities)/assets
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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STEPPES TRAVEL LIMITED
REGISTERED NUMBER:
03307429
BALANCE SHEET
(CONTINUED)
AS AT
31 AUGUST 2020
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Capital redemption reserve
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on
23 June 2021
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................................................
J C Wateridge
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The notes on pages 20 to 39 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 AUGUST 2020
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Capital redemption reserve
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Comprehensive income for the year
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Other comprehensive income for the year
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Total comprehensive income for the year
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Total transactions with owners
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The notes on pages 20 to 39 form part of these financial statements.
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Non-distributable reserves
- Of the total balance shown above of (£824,843) for the "profit and loss account" at 31 August 2020, an amount of £142,874 is undistributable at this date as it represents the net unrealised gain on investment property. This leaves a balance of (£967,717) which is distributable at 31 August 2020
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 AUGUST 2019
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Capital redemption reserve
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Comprehensive income for the year
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Other comprehensive income for the year
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Total comprehensive income for the year
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Shares redeemed during the year
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Total transactions with owners
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The notes on pages 20 to 39 form part of these financial statements.
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STEPPES TRAVEL LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2020
Cash flows from operating activities
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(Loss)/profit for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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Coronavirus (Covid-19) business support grants
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(Increase)/decrease in stocks
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(Increase)/decrease in debtors
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Net fair value (gains)/losses recognised in P&L
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of intangible fixed assets
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Purchase of tangible fixed assets
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Coronavirus (Covid-19) business support grants
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Net cash from investing activities
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STEPPES TRAVEL LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2020
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Cash flows from financing activities
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Purchase of ordinary shares
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Net cash used in financing activities
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Net (decrease)/increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 20 to 39 form part of these financial statements.
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STEPPES TRAVEL LIMITED
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 AUGUST 2020
The notes on pages 20 to 39 form part of these financial statements.
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
Steppes Travel Limited is a private company limited by shares and incorporated in England. Its registered office is 51 Castle Street, Cirencester, Gloucestershire, GL7 1QD
2.
Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
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The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company had a net current liability position of £787,192 albeit with cash at bank of £1.46m as at 31 August 2020. Due to the Covid-19 pandemic, which has had an unprecedented impact upon the global economy and in particular the travel, leisure and hospitality industry, business was interrupted in the Spring of 2020 and led to the Company posting substantial losses for the first time.
Most of the Company’s customers elected to move their 2020 cancelled bookings to a like for like holiday in 2021 or 2022 or accepted a consumer protected refund credit note to be used against a future holiday. This has enabled the Company to maintain high levels of cash at bank.
The Company’s cost structure is scalable for both downsize and upsize requirements.
The directors have prepared cash flow forecasts for the period to 31 August 2022 which reflect operational liquidity throughout with the ongoing support of the Company’s finances through the Coronavirus Business Interruption Loan provided by the Company’s bankers drawn in November 2020. There are no interest or capital repayments due before November 2021.
Post balance sheet, shareholders subscribed to an additional £100,000 of shares in the Company. One shareholder also loaned the sum of £200,000 to the Company which was subject to a subordinated loan agreement in favour of the Civil Aviation Authority ("CAA") and cannot be repaid without their prior written consent.
Notwithstanding it is extremely difficult to predict the overall outcome and impact of Covid-19 pandemic at the date of this report. Under the downside scenario there is potentially a liquidity risk to the Company should restrictions continue beyond the Summer of 2021 and further financing, government or shareholder support is not obtained.
Consequently, the directors are confident that the Company will have sufficient funds and cash reserves to continue to meet liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
2.
Accounting policies (continued)
Turnover is the amount derived from ordinary activities and represents the aggregate revenue receivable from tours departed during the year, together with the total non refundable sales for departures in September and October 2020 in line with the company's cancellation policy.
|
|
Operating leases: the Company as lessee
|
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
The Company has taken advantage of the optional exemption available on transition to FRS 102 which allows lease incentives on leases entered into before the date of transition to the standard 01 September 2018 to continue to be charged over the period to the first market rent review rather than the term of the lease.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Profit and Loss Account in the same period as the related expenditure.
Interest income is recognised in profit or loss using the effective interest method.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
2.
Accounting policies (continued)
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
|
|
Current and deferred taxation
|
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:
∙
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
2.
Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
|
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Short-term leasehold property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investment property is carried at fair value determined annually by external valuers and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Profit and Loss Account for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
Investments in listed company shares are remeasured to market value at each Balance Sheet date. Gains and losses on remeasurement are recognised in profit or loss for the period.
|
|
Associates and joint ventures
|
Associates and Joint Ventures are held at cost less impairment.
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
2.
Accounting policies (continued)
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first outbasis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
|
|
Cash and cash equivalents
|
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
|
|
Provisions for liabilities
|
Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
2.
Accounting policies (continued)
|
|
Financial instruments (continued)
|
are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.
The Company uses foreign currency forward contracts to manage its exposure to cash flow risk on its recognised and highly probable liabilities. These derivatives are measured at fair value at each balance sheet date.
To the extent the cash flow hedge is effective, movements in fair value are recognised in other comprehensive income and presented in a separate cash flow hedge reserve. Any ineffective portions of those movements are recognised in profit or loss for the year.
Gains and losses on the hedging instruments and the hedged items are recognised in profit or loss for the year. When a hedged item is an unrecognised firm commitment, the cumulative hedging gain or loss on the hedged item is recognised as an asset or liability with a corresponding gain or loss recognised in profit or loss.
|
Judgments in applying accounting policies and key sources of estimation uncertainty
|
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
a) Critical judgments in applying the Company's accounting policies
The directors believe that there are no critical judgments involved in applying the Company's accounting policies that warrant disclosure.
b) Key accounting estimates and assumptions
The directors believe that there are no key accounting estimates and assumptions involved in applying the
Company's accounting policies that warrant disclosure.
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
|
|
|
An analysis of turnover by class of business is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All turnover arose within the United Kingdom.
|
|
|
|
|
|
Coronavirus (Covid-19) business support grants
|
|
|
|
Foreign exchange gains/(losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The operating (loss)/profit is stated after charging:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of tangible fixed assets
|
|
|
|
|
|
|
|
|
|
|
|
Other operating lease rentals
|
|
|
|
Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements
|
|
|
|
Defined contribution pension cost
|
|
|
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
|
Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements
|
|
|
|
|
|
Staff costs, including directors' remuneration, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of defined contribution scheme
|
|
|
|
|
|
|
|
|
|
|
|
The average monthly number of employees, including the directors, during the year was as follows:
|
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
|
|
|
|
|
Company contributions to defined contribution pension schemes
|
|
|
|
|
|
|
|
|
|
|
|
During the year retirement benefits were accruing to
1
director
(2019 -
1
)
in respect of defined contribution pension schemes.
|
|
The highest paid director received remuneration of £
127,288
(2019 - £137,762
)
.
|
|
The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £
6,364
(2019 - £
6,888
)
.
|
|
Other interest receivable
|
|
|
|
|
|
|
|
Interest payable and similar expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loan interest payable
|
|
|
|
|
|
|
|
|
|
|
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
|
|
|
|
|
Current tax on profits for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Origination and reversal of timing differences
|
|
|
|
|
|
|
|
Deferred tax on revaluation surplus
|
|
|
|
|
|
|
|
|
|
|
|
Taxation on (loss)/profit on ordinary activities
|
|
|
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
12.
Taxation (continued)
|
Factors affecting tax charge for the year
|
|
The tax assessed for the year is higher than
(2019 - lower than)
the standard rate of corporation tax in the UK of
19
%
(2019 -
19
%)
. The differences are explained below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit on ordinary activities before tax
|
|
|
|
(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2019 - 19%)
|
|
|
|
|
|
|
|
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
|
|
|
|
Capital allowances for year in excess of depreciation
|
|
|
|
Adjustments to tax charge in respect of prior periods
|
|
|
|
Increase or decrease in pension fund prepayment leading to an increase (decrease) in tax
|
|
|
|
|
|
|
|
|
|
|
|
Unrelieved tax losses carried forward
|
|
|
|
Total tax charge for the year
|
|
|
|
Factors that may affect future tax charges
|
Changes to the UK corporation tax rates were announced in March 2021.These include increase to the main rate to 25% from April 2023.
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge for the year on owned assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
|
|
Short-term leasehold property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge for the year on owned assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The net book value of land and buildings may be further analysed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
|
|
Investments in subsidiary/associate companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiary/ Associate undertakings
|
|
The following were subsidiary/associate undertakings of the Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discovery Initiatives Limited
|
|
|
|
Steppes Travel (TCI) Limited
|
|
|
|
Travel Russia (Europe) Limited
|
|
|
|
The aggregate of the share capital and reserves as at 31 August 2020 and the profit or loss for the year ended on that date for the subsidiary/associate undertakings were as follows:
|
|
|
Aggregate of share capital and reserves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discovery Initiatives Limited
|
|
|
|
Steppes Travel (TCI) Limited
|
|
|
|
Travel Russia (Europe) Limited
|
|
|
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
|
|
Freehold investment property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The 2019 valuations were made by Central Surveying Limited on 23 January 2019, on an open market value for existing use basis.
The investment property is held at 95 Drift Way, Cirencester, Gloucestershire, GL7 1WN.
|
|
|
|
|
|
|
|
|
|
|
|
|
Called up share capital not paid
|
|
|
|
Prepayments and accrued income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
18.
Debtors (continued)
|
Included in prepayments and accrued income is the sum of £1,497,916 (2019 - £991,523) of supplier payments made in advance for departures post 31 October 2020.
During the year the Company changed their method of reporting trade debtors by recognising only trade debtors for clients departing to 31 October. Previously all debtors were recognised irrespective of their departure dates. Comparatives have been restated accordingly.
|
|
Creditors: Amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxation and social insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in deferred income is the sum of £3,899,572 (2019 - £3,029,301) of customer monies received in advance for departures post 31 October 2020.
During the year the Company changed their method of reporting deferred income by recognising only cash received for clients departing post 31 October. Previously all sales were recognised as deferred income irrespective of their departure dates. Comparatives have been restated accordingly.
|
|
Creditors: Amounts falling due after more than one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The subordinated loan is unsecured and is subject to an undertaking to the Civil Aviation Authority (CAA) and cannot be repaid without their prior written consent.
|
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
|
|
|
|
|
Amounts falling due 1-2 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets measured at fair value through profit or loss
|
|
|
|
Financial assets measured at fair value through profit or loss comprise of bank and cash balances
|
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charged to profit or loss
|
|
|
|
|
|
|
|
The provision for deferred taxation is made up as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated capital allowances
|
|
|
|
Surplus on revaluation of investment property
|
|
|
|
|
|
|
|
|
Allotted, called up and fully paid
|
|
|
|
|
|
|
|
|
|
377,111
(2019 -
377,111
)
Ordinary
shares of £
1.00
each
|
|
|
|
|
19,807
(2019 -
19,807
)
Full dividends and voting rights "A" Ordinary
shares of £
0.01
each
|
|
|
|
|
40,000
(2019 -
40,000
)
A Ordinary
shares of £
0.01
each
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
Share premium account
Share premium is the amount by which the amount received by the Company for a share issue exceeds its nominal value.
Foreign exchange reserve
Foreign exchange reserve consists of cashflow hedge reserve relating to the amount of gain or loss recognised on forward contracts and derivatives that are cashflow hedges for committed foreign exchange transactions occuring in the 12 months post year end.
Profit and loss account
The profit and loss account represents the net distributable reserves of the Company at the date of the statement of financial position minus the net unrealised gain on investment property.
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension charge represents contributions payable by the Company to the fund and amounted to £66,455 (2019: £68,976)
|
Commitments under operating leases
|
|
At 31 August 2020 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Later than 1 year and not later than 5 years
|
|
|
|
|
|
|
|
STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
|
Related party transactions
|
|
|
|
|
|
|
|
Travel Russia (Europe) Limited
|
|
|
Company in which Steppes Travel Limited is a shareholder and the director N A G Laing is also a director and shareholder.
|
|
|
Re-charge of sales deposits received and expenses paid on behalf of Travel Russia (Europe) Limited
|
|
|
Amount received on behalf of related party
|
|
|
Amount paid on behalf of related party
|
|
|
Post balance sheet events
|
Subsequent to the balance sheet date shareholders have subscribed to additional share capital in the sum of £100,000. One of the shareholders has also made a loan of £200,000 to the Company. The loan is subject to a subordinated undertaking in favour of the CAA and cannot be repaid without their prior written consent. These additional injection of funds were conditions precedent to the renewal of the Company's Air Travel Organisers Licencing ("ATOL") until September 2021. The Company has also implemented a CAA Approved Trust Account to protect all future ATOL bookings. The Company is also in the final stages of selling its investment property (Note 16) for £245,000.
In the opinion of the directors there is no one controlling party.
|