Registered number:
03307429
STEPPES TRAVEL LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 AUGUST 2021
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STEPPES TRAVEL LIMITED
REGISTERED NUMBER:
03307429
STATEMENT OF FINANCIAL POSITION
AS AT
31 AUGUST 2021
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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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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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Capital redemption reserve
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STEPPES TRAVEL LIMITED
REGISTERED NUMBER:
03307429
STATEMENT OF FINANCIAL POSITION
(CONTINUED)
AS AT
31 AUGUST 2021
The Company's
financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the income statement in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
3 February 2022
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................................................
J C Wateridge
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The notes on pages 7 to 21 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 AUGUST 2021
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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 issued during the year
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Total transactions with owners
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The notes on pages 7 to 21 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 7 to 21 form part of these financial statements.
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STEPPES TRAVEL LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2021
Cash flows from operating activities
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Loss 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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Decrease/(increase) in stocks
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Decrease/(increase) in debtors
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(Decrease)/increase in creditors
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Net fair value losses/(gains) recognised in P&L
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Corporation tax received/(paid)
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Loss on sale of investment property
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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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Sale of investment property
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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 2021
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Cash flows from financing activities
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Coronavirus business interruption loans
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Net cash used in financing activities
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Net increase/(decrease) 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 7 to 21 form part of these financial statements.
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
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.
The following principal accounting policies have been applied:
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
2.
Accounting policies (continued)
The Company had a net current liability position of £544,522 albeit with unrestricted cash at bank of £1,487,451 as at 31 August 2021. 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 in 2020 and also in the current year.
Most of the Company’s customers elected to move their 2020 and 2021 cancelled bookings to a like for like holiday in 2022 or 2023 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 profit and loss account projections and cash flow forecasts for the period to March 2023 which reflect operational liquidity throughout with the ongoing support of the Company’s finances through the Coronavirus Business Interruption Loans and Recovery loans provided by the Company’s bankers drawn during the year. The cashflow forecasts reflect ongoing complaince with the liquidity covenant agreed with the Civil Aviation Authority in connection with the ongoing maintenance of the Company's ATOL. This covenant requires the Company to maintain an unrestricted cash flow "Floor" at a minimum of £300,000 at the end of each month throughout the Company's licence year to March each year.
In addition, shareholders subscribed to an additional £100,104 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 the impact of pandemic continue beyond the Summer of 2022 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.
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 2021 in line with the company's cancellation policy.
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
2.
Accounting policies (continued)
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Operating leases: the Company as lessee
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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 2019 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 Income Statement 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.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
2.
Accounting policies (continued)
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 Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
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Current and deferred taxation
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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 reporting 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 Statement of Financial Position date, except that:
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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
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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 reporting 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.
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.
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
2.
Accounting policies (continued)
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Tangible fixed assets (continued)
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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
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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 Income Statement 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 Statement of Financial Position date. Gains and losses on remeasurement are recognised in profit or loss for the period.
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 reporting 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.
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
2.
Accounting policies (continued)
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.
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Cash and cash equivalents
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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.
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Provisions for liabilities
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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 Statement of Financial Position 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 Statement of Financial Position.
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 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.
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
2.
Accounting policies (continued)
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Financial instruments (continued)
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Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position 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.
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The average monthly number of employees, including the directors, during the year was as follows:
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
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Charge for the year on owned assets
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
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Short-term leasehold property
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Charge for the year on owned assets
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The net book value of land and buildings may be further analysed as follows:
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
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Investments in subsidiary/associate companies
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Subsidiary/ Associate undertakings
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The following were subsidiary/associate undertakings of the Company:
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Discovery Initiatives Limited
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Steppes Travel (TCI) Limited
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Travel Russia (Europe) Limited
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The aggregate of the share capital and reserves as at 31 August 2021 and the profit or loss for the year ended on that date for the subsidiary/associate undertakings were as follows:
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Aggregate of share capital and reserves
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Discovery Initiatives Limited
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Steppes Travel (TCI) Limited
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Travel Russia (Europe) Limited
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The auditors' report on the financial statements for the year ended 31 August 2021 was unqualified.
The audit report was signed on
3 February 2022
by
Ms N A Spoor ACA FCCA
(Senior Statutory Auditor) on behalf of
White Hart Associates (London) Limited
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
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Freehold investment property
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The investment property was 95 Drift Way, Cirencester, Gloucestershire, GL7 1WN. The property was sold on 1 July 2021 for £245,000.
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Called up share capital not paid
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Prepayments and accrued income
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Included in prepayments and accrued income is the sum of £1,385,055 (2020 - £1,497,916) of supplier payments made in advance for departures post 31 October 2021.
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
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Creditors: Amounts falling due within one year
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Taxation and social insurance
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Included in deferred income is the sum of £3,463,986 (2020 - £3,899,572) of customer monies received in advance for departures post 31 October 2021.
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Creditors: Amounts falling due after more than one year
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Bank loans consist of £217,000 of Coronavirus business interruption loan and £150,000 under the Recovery Loan Scheme ("RLS").
The Coronavirus business interruption loan is funded by Barclays Bank Plc and is supported by the Coronavirus Business Interruption Loan Scheme. The loan is for a period of 72 month term with no capital repayments or interest payments in the first 12 months. Interest is payable at 2.78% per annum over the bank base rate therafter.
The Recovery loan is a working capital loan funded by Barclays Bank Plc and is supported by the Recovery Loan Scheme. The loan is for a term of 48 months with no capital repayments or interest payments in the first 6 months. Interest is payable at 5.61% per annum over the bank base rate thereafter.
Other loans consist of £200,000 of shareholder's loans and £67,000 of other third party loans. These loans are subject to a subordinated undertaking in favour of the Civil Aviation Authority ("CAA") and cannot be repaid without CAA's written consent.
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Shareholder and other loans
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Amounts falling due 2-5 years
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Amounts falling due after more than 5 years
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Financial assets measured at fair value through profit or loss
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Financial assets measured at fair value through profit or loss comprise of bank and cash balances.
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Release of deferred tax on investment property
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Surplus on revaluation of investment property
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377,111
(2020 -
377,111
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Ordinary
shares of £
1.00
each
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308,215
(2020 -
19,807
)
Full dividends and voting rights "A" Ordinary
shares of £
0.01
each
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40,000
(2020 -
40,000
)
A Ordinary
shares of £
0.01
each
|
|
|
|
|
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During the year 288,408 full dividends and voting rights "A" Ordinary shares of £0.01 each were issued by the Company. Of these 10,630 shares were issued at par and 277,778 shares were issued at a premium of £0.35 per share. All shares were fully paid.
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 £48,750 (2020: £66,455)
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STEPPES TRAVEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
During the year shareholders have subscribed to additional share capital in the sum of £100,104. 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 Civil Aviation Authority ("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"). The Company has also implemented a CAA Escrow Trust Account on 6 July 2021 to protect all future ATOL bookings. The terms of the trust deed are that 70% of all customer monies received for ATOL protected bookings remain within the independently administered CAA Escrow Trust Account until the customer returns from their holiday.
Additionally, the CAA requires the Company to maintain a minimum of cash flow "Floor" of £300,000 at the end of each month. Company's cashflows to 31 March 2023 reflect ongoing complaince with this.
The Company also sold its investment property (Note 11) for £245,000 during the year.
Included in the cash at bank as at 31 August 2021 was £20,119 held in the CAA Escrow Trust Account and are consumer protected restricted funds. The company's cash at bank as at 31 August 2021 was:
Unrestricted Cash - £1,487,451
Restricted Cash - £20,119
Total Cash - £1,507,570
In accordance with the maintenace of the company's ATOL, the company is required to maintain at all times a minimum unrestricted cash balance of £300,000.
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