Registered number: 11108344
CC GROUP SERVICES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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CC GROUP SERVICES LIMITED
COMPANY INFORMATION
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106 Lower Addiscombe Road
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CC GROUP SERVICES LIMITED
CONTENTS
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Directors' Responsibilities Statement
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Independent Auditors' Report
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Consolidated Statement of Comprehensive Income
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Consolidated Statement of Financial Position
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Company Statement of Financial Position
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Consolidated Analysis of Net Debt
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Notes to the Financial Statements
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CC GROUP SERVICES LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2022
The principal activity of the Group in the year under review was that of an online retailer specialising in the sale of health, beauty, cosmetic and personal care products.
Development and Performance
The fiscal year 2021-22 witnessed substantial growth in a multitude of areas including revenue, skilled manpower, inventory, and product offerings. This expansion was fueled by a concerted effort to capture a greater market share within the UK and European markets.
Strategic Initiatives
A considerable investment was allocated to marketing and brand development activities aimed at enhancing visibility. While these strategic moves effectively elevated revenue streams, it's important to note that the unavoidable increased expenditure and full impact of Brexit and leaving the EU exerted downward pressure on net profitability.
Lessons Learned
The increased demand for the Group’s products has since resulted in further investment of time and working capital to support the Group in the next stage of growth.
Principal risks and uncertainties
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Brexit Impact
Established as a Pan-European Group, the UK's exit from the EU single market had generated significant challenges across multiple facets of the business namely distribution of products and the availability of skilled labour in the UK. .
Logistical Hurdles
Customs clearance inconsistencies between the UK and EU had created uncertainty in our supply chain. Each shipment crossing the border faced unpredictable clearance protocols, leading to operational inefficiency.
Fulfilment Complexity
Post-Brexit regulations prohibited direct shipments to EU customers from the UK, necessitating the utilisation of 3rd party providers (3PLs) for storage of stock and daily order fulfilment.
Supplier Challenges
The complexities of shipping from the UK to the EU had forced the Group to secure local suppliers thereby affecting product availability at key times throughout the year.
Manpower
The Group’s headquarters are located in the UK. Post Brexit regulations made it increasingly difficult to employ EU staff. This resulted in delayed deployment of staff and a reliance upon external contractors.
Regulatory Fluctuations
The nutraceutical industry is prone to frequent regulatory shifts. These types of changes are often poorly communicated and result in compliance challenges. While risks are actively monitored and discussed during board meetings to develop mitigating strategies, they nonetheless represent a constant battle.
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CC GROUP SERVICES LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
Financial key performance indicators
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Revenue Expansion
2022 saw a substantial 45% increase in revenue compared to the previous fiscal year, marking a pivotal growth trajectory for the Group.
Q4 Shift to Profit-Centric Strategy
The Group had focused the final quarter of the financial year towards increasing profitability. This was achieved and provided a solid foundation for the start of the following year.
Other key performance indicators
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Enhanced Product Portfolio
The Group met its goal to increase the product portfolio. This resulted in increased basket values.
Year of Strategic Investment
Designating FY 2022 as a year for focused investment, the company significantly increased investments in marketing, labour, and infrastructural improvements, including the addition of a new warehouse facility in Sevenoaks, Kent with significant capacity for growth.
Gains in Market Share
The Group enjoyed a significant increase in market share as a result of deploying additional marketing resources.
Elevated Brand Recognition
Consumer behaviour reflected a heightened awareness and preference for own label branded products, testifying to the efficacy of our marketing and quality of the products.
Customer Acquisitions
The accumulation of increased positive reviews from the existing customer base played a critical role in attracting new customers, further amplifying market reach.
Improved Delivery Performance
Despite an increased impact on gross margins, the integration of third-party logistics (3PLs) in the EU allowed for delivery times being cut from five to two days for EU customers. This activity notably elevated customer satisfaction and increased repeat order ratios.
Summary
The Group experienced notable growth in a wide number of areas during the financial year 2021-22. Despite facing micro organisational and macro challenges like Brexit, it achieved a 45% increase in gross revenue.
The ongoing risks of doing business are ever changing. However, the Group is well positioned from a structural perspective to meet these challenges. Increased regulatory compliance requirements further create barriers to entry. The Group is well positioned to take advantage of these dynamics in a more robust manner having invested significantly into adding to and creating internal departments with specialist knowledge and expertise.
While the Group successfully navigated complex logistical and regulatory problems through the first three quarters, this resulted in increased net profitability for the final quarter. These actions generated positive momentum going into the first quarter of the new year.
The Group continues to operate in a sector that is undeniably growing at great pace. Comfort Click uses its vast experience and specialist knowledge to create product offerings that are well researched and well received. It is able to access the market via a multitude of complementary channels and deliver products via an established network of logistical arrangements. The Group heads into 2022-23 better equipped than ever before and on a trajectory to further increase market share and profitability.
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CC GROUP SERVICES LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
This report was approved by the board on 4 October 2023 and signed on its behalf.
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CC GROUP SERVICES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2022
The directors present their report and the financial statements for the year ended 30 June 2022.
The profit for the year, after taxation, amounted to £1,474,581 (2021 - £1,549,215).
Dividends of £750,000 were declared during the year (2021: £NIL) and paid to the shareholders post year end.
The directors who served during the year were:
The Group has seen significant growth in 2023 and plans to drive this growth in the coming years. While the Group has had success in the UK and European markets, there are plans to investigate other potential markets to take advantage of the marketing and product expertise gained in recent years.
In addition to new markets, the Group is also looking to increase its product portfolio. The products will continue to fall within the scope of health and wellness where the Group has developed its expertise.
The Group is also planning to improve its efficiency in terms of its management and structure in order to be in a position to fully and efficiently take advantage of the planned growth in new markets and increased products.
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:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙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 and the Group's auditors are aware of that information.
Post balance sheet events
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There have been no significant events affecting the Group since the year end.
The auditors, Haysmacintyre LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
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CC GROUP SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
This report was approved by the board and signed on its behalf.
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CC GROUP SERVICES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2022
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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CC GROUP SERVICES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CC GROUP SERVICES LIMITED
We have audited the financial statements of CC Group Services Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 30 June 2022, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statements of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated and Company 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, except for the possible effects of the matters described in the basis for qualified opinion section of our report, the financial statements:
∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 30 June 2022 and of the Group's 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.
Basis for qualified opinion
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We were not appointed as auditor of the company until after 30 June 2022 and thus did not observe the counting of physical inventories at the end of the year. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at 30 June 2022, which are included in the Consolidated Statement of Financial Position at £3,016,202, by using other audit procedures. Consequently, we were unable to determine whether any adjustment to this amount was necessary. In addition, were any adjustment to the inventory balance to be required, the strategic report would also need to be amended.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 qualified opinion.
We would like to draw attention to Note 20 to the financial statements which describes the prior period adjustment. Our opinion is not modified in respect of this matter.
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CC GROUP SERVICES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CC GROUP SERVICES LIMITED (CONTINUED)
Conclusions relating to going concern
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In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. 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. 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 course of 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.
As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the inventory quantities of £3,016,202 held at 30 June 2022. We have concluded that where the other information refers to the inventory balance or related balances such as cost of sales, it may be materially misstated for the same reason.
Opinion on other matters prescribed by the Companies Act 2006
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Except for the possible effects of the matter described in the basis for qualified opinion section of our report. in our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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CC GROUP SERVICES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CC GROUP SERVICES LIMITED (CONTINUED)
Matters on which we are required to report by exception
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Except for the matter described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
Arising solely from the limitation on the scope of our work relating to inventory, referred to above:
∙we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and
∙we were unable to determine whether adequate accounting records have been kept.
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:
∙returns adequate for our audit have not been received from branches not visited by us; or
∙the parent Company financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made.
Responsibilities of directors
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As explained more fully in the Directors' Responsibilities Statement set out on page 6, 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 Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
Auditors' responsibilities for the audit of the financial statements
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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 Group 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:
Explanation as to what extent the audit was considered capable of detecting irregularities, including
fraud.
Based on our understanding of the Company and industry, we identified that the principal risks of noncompliance with laws and regulations related to trade regulations, overseas selling, employment law, UK and overseas tax laws and regulation and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation
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CC GROUP SERVICES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CC GROUP SERVICES LIMITED (CONTINUED)
of the financial statements such as the Companies Act 2006, UK tax laws and regulations, including sales tax and corporation tax.
We evaluated management's incentives and opportunities |or fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries to revenue and management bias in accounting estimates. Audit procedures performed by the engagement team included:
∙reviewing correspondence and filings with tax authorities;
∙discussions with management including consideration of known or suspected instances of non-compliance
with laws and regulation and fraud;
∙evaluating management's controls designed to prevent and detect irregularities;
∙identifying and testing journals, in particular journal entries posted with key shared risk characteristics; and
∙challenging assumptions and judgements made by management in their critical accounting estimates,including their stock provision.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
Other matters
In the previous accounting period, the directors of the company took advantage of the audit exemption under s477 of the Companies Act. Therefore, the prior period financial statements were not subject to audit.
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 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, as a body, for our audit work, for this report, or for the opinions we have formed.
Christopher Cork (Senior Statutory Auditor)
for and on behalf of
Haysmacintyre LLP
Statutory Auditors
10 Queen Street Place
London
EC4R 1AG
4 October 2023
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CC GROUP SERVICES LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
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Unaudited
(Restated)
2021
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Interest payable and similar expenses
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Profit for the financial year
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Other comprehensive income for the 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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Profit for the year attributable to:
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Owners of the parent company
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There were no recognised gains and losses for 2022 or 2021 other than those included in the consolidated statement of comprehensive income.
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The notes on pages 18 to 33 form part of these financial statements.
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CC GROUP SERVICES LIMITED
REGISTERED NUMBER: 11108344
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
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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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Equity attributable to owners of the parent Company
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Non-controlling interests
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 4 October 2023.
The notes on pages 18 to 33 form part of these financial statements.
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CC GROUP SERVICES LIMITED
REGISTERED NUMBER: 11108344
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
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Debtors: amounts falling due within one year
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Total assets less current liabilities
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Profit and loss account carried forward
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 4 October 2023.
The notes on pages 18 to 33 form part of these financial statements.
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CC GROUP SERVICES LIMITED
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
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Non-controlling interests
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Comprehensive income for the year
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Profit for the year (restated)
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At 1 July 2021 (as previously stated)
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Prior year adjustment - correction of error (see note 20)
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At 1 July 2021 (as restated)
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Dividends: Equity capital
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The notes on pages 18 to 33 form part of these financial statements.
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CC GROUP SERVICES LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
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Comprehensive income for the year
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The notes on pages 18 to 33 form part of these financial statements.
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CC GROUP SERVICES LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
Cash flows from operating activities
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Profit for the financial year
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Depreciation of tangible assets
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Profit on disposal of tangible assets
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(Increase)/decrease in debtors
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Increase/(decrease) in creditors
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Net cash generated from operating activities
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Cash flows from investing activities
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Proceeds from sale of tangible fixed assets
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Net cash from investing activities
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Cash flows from financing activities
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Repayment of finance leases
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Net cash used in financing activities
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Net 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 18 to 33 form part of these financial statements.
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CC GROUP SERVICES LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 JUNE 2022
The notes on pages 18 to 33 form part of these financial statements.
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
CC Group Services Limited is a private limited company, limited by shares, registered in England and Wales, registration number 11108344. The registered office and trading address is Rapeed House, 106 Lower Addiscombe Road, Croydon, Surrey, United Kingdom, CR0 6AD.
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.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The Group has prepared consolidated financial statements for the first time for the year ended 30 June 2022. Prior to the comparative period presented, the extant group structure arose by way of common control transactions which did not impact the relative rights of ultimate shareholder interest in the Group’s principal subsidiary, Comfort Click Limited. As a result, the consolidated financial statements have been prepared using the principles of merger accounting, with merger relief also being applied in respect of the shares issued as the consideration for the acquisition of Comfort Click Limited. As a result, the consideration paid for this acquisition is recorded at the nominal value of shares issued and gives rise to a merger reserve. The Group has not entered into any transactions that would give rise to acquisition accounting.
During the year the Group made a profit of £1,474,581 and had a net asset position at year end of £3,855,227. The directors have reviewed the cash flow forecasts for a period of 12 months from the date of the signing of these financial statements and expect the Group to have sufficient cash and working capital to meet its liabilities as and when they fall due. On this basis, the directors therefore consider it appropriate to adopt the going concern basis of preparation for these financial statements.
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Group has transferred the significant risks and rewards of ownership to the buyer;
∙the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
2.Accounting policies (continued)
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.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 Group in independently administered funds.
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 and the Group operate and generate income.
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:
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.
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
2.Accounting policies (continued)
Investments in subsidiaries are measured at cost less accumulated impairment.
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 out basis. 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.
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 Consolidated 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 Group'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.
The Group 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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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
2.Accounting policies (continued)
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Financial instruments (continued)
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Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the reporting date.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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Judgments in applying accounting policies and key sources of estimation uncertainty
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Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances. Although these estimates are based on management's best knowledge of the amount, events or actions, actual results ultimately may differ from those estimates. The following are the critical judgements that the Directors have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.
Stock Provision
At each reporting date, stock is assessed for impairment. Management have exercised and applied judgement when determining the level of provision required for stock at year end. This process involves management reviewing the expiration date of stock and assessing it for obsolescence. Where stock is impaired, the carrying amount is reduced to its selling price less costs to sell and the impairment loss is recognised immediately in the profit and loss account. Management have concluded that no provision was required at year end on the basis of the review performed.
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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An analysis of turnover by class of business is as follows:
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Revenue from sales of goods
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Analysis of turnover by country of destination:
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The operating profit is stated after charging:
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Depreciation of tangible fixed assets
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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No directors received remuneration during either period presented.
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Interest payable and similar expenses
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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Current tax on profits for the year
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Factors affecting tax charge for the year
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The tax assessed for the year is the same as (2021 - the same as) the standard rate of corporation tax in the UK of 19% (2021 - 19%) as set out below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
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Expenses not deductible for tax purposes
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Total tax charge for the year
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Factors that may affect future tax charges
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In the March 2021 Budget, a change to the future UK corporation tax rate was announced, indicating that
the rate will increase to 25% from April 2023. There is no deferred tax at the reporting date. Future deferred tax balances will be measured at 25%.
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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Dividends to shareholders
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On 30 June 2022 the directors proposed a dividend of £750,000.
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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Investments in subsidiary companies
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The following were subsidiary undertakings of the Company:
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106 Lower Addiscombe Road, Croydon, Surrey, CR0 6AD
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No 7 Dr Croke Place, Clonmel, Tipperary, Ireland
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Finished goods and goods for resale
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The difference between purchase price or production cost of stocks and their replacement cost is not material.
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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Prepayments and accrued income
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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The Group took out a Cononavirus Business Interruption Loan of £250,000 previous year. The loan is repayable within 6 year from the date of drawdown, however repayments commenced one year after
drawdown and the interest rate is 3.99% per annum over the Bank of England Base Rate.
There are fixed and floating charges over all the assets both present and future.
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Financial assets measured at amortised cost
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Financial liabilities measured at amortised cost
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Financial assets measured at amortised cost comprise trade and other debtors & cash and cash equivalents.
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Financial liabilities measured at amortised cost comprise corporation tax, other taxation and social security, trade creditors and other creditors.
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Allotted, called up and fully paid
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104 (2021 - 104) Ordinary shares of £1.00 each
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Foreign exchange reserve
Comprises cumulative foreign exchange differences arising as a result of subsidiaries held in foreign currencies.
Merger Reserve
Relates to a group restructuring in 2018 and represents the difference between the consideration and the book value of the net assets of the subdiary transferred.
Profit and loss account
Includes all current and prior period retained profit and losses.
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
The Group has become aware of unrecognised revenue and fees associated with sales of goods which were not previously recognised. Consequently, the revenue and fees previously reported were understated and the trade debtors were overstated. The Group has recognised the tax impact of the restatement to revenue and fees, resulting in a decrease to the corporation tax charge and liability.
The Group has reconciled and rectified the issues and the impact on the Company financial statements is detailed below.
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
20.Prior year adjustment (continued)
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £2,452 (2021: £1,498). Contributions totalling £488 (2021: £271) were payable to the fund at the reporting date.
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CC GROUP SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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Commitments under operating leases
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At 30 June 2022 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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At 30 June 2022, the Group owed Wisby Limited, a company under common control, £216,915 (2021: £61,646) relating to consultancy services provided during the year. The total consultancy fees recognised as an expense in the consolidated statement of comprehensive income was £952,898 (2021: £1,046,935).
At 30 June 2022, the Group owed Click Leaf Limited, a company under common control, £7,582 (2021: £8,157) relating to marketing services provided during the year. The total marketing expenses recognised as an expense in the consolidated statement of comprehensive income was £1,250 (2021: £3,825). The Group also made sales of £NIL (2021: £13,471) to Click Leaf Limited during the year.
At 30 June 2022, the Group owed Hexpress Healthcare Limited, a company under common control, £NIL (2021: £425,000) relating to a loan agreement and the provision of consultancy services. The total consultancy services recognised as an expense in the consolidated statement of comprehensive income was £12,657 (2021: £NIL). The Group also received income of £27,226 (2021: £NIL) from Hexpress Healthcare Ltd related to services provided during the year.
At 30 June 2022, the Group owed Le Luna Limited, a company under common control, £10,621 (2021: £NIL) relating to marketing services provided during the year. The total marketing expenses recognised as an expense in the consolidated statement of comprehensive income was £18,989 (2021: £61,711). The Group also made sales of £NIL (2021: £18,573) to Le Luna Limited during the year.
At 30 June 2022, a director of Comfort Click Limited owed the Company £14,022 (2021: £104,022).
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Post balance sheet events
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On 23 March 2023, the Group repaid its Coronavirus Business Interruption Loan in full. This repayment was in advance of the loan termination date.
The directors do not consider there to be one ultimate controlling party.
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