Company registration number 03546461 (England and Wales)
THE STEPPING STONE GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2022
THE STEPPING STONE GROUP LIMITED
COMPANY INFORMATION
Directors
Mrs A L Martin MBE
J Y Bailey
Secretary
J Y Bailey
Company number
03546461
Registered office
Lime Court
Pathfields Business Park
South Molton
Devon
United Kingdom
EX36 3LH
Auditor
Azets Audit Services
Epsilon House
Gloucester Business Park
Gloucester
United Kingdom
GL3 4AD
Business address
Sunindale
Hilliers Lane
Worth
Wells
Somerset
United Kingdom
BA5 1LP
THE STEPPING STONE GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditor's report
7 - 9
Profit and loss account
10
Group statement of comprehensive income
11
Group balance sheet
12 - 13
Company balance sheet
14
Group statement of changes in equity
15
Company statement of changes in equity
16
Group statement of cash flows
17
Notes to the financial statements
18 - 43
THE STEPPING STONE GROUP LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 JUNE 2022
- 1 -

The directors present the strategic report for the period ended 30 June 2022.

 

Fair review of the business

 

The results for the period for the group and the financial position of the group and the company are shown in the the annexed financial statements.

 

The companies in The Stepping Stone Group continued to keep residents safe and supported throughout the Covid pandemic which was still prevalent for most of 2021/22. In common with the rest of the residential Care sector the group suffered in the post Covid period (2022/23) from reduced occupancy at its Care Home.

 

Whilst the Group continued to pursue the planning applications for sites in Nynehead and Somerton, its sales and development of existing Close Care properties were adversely affected. This increased the development costs particularly for Close Care Homes in Somerton and increased the loss for the Courthouse Mews Development. The retail properties in Somerton had to be supported through this period but all units are now fully let. The directors are pleased that all the residential properties in Somerton are also fully occupied and a successful retirement community has been established.

 

Throughout the period the group has been supported by the strong trading performance of Nynehead Care Limited.

 

At the date of this report the group is in the process of agreeing terms from a new specialist development funder to replace its secured debt and assist with further Group funding arrangements. At the date of this report these arrangements were not complete but the directors expect the new funding to be in place within a few weeks. This longer term funding is essential for planned development by the Group of high quality Retirement Housing with Care facilities and in providing long-term certainty for the remaining trade of the group.

 

The key performance indicators of the group are summarised as follows:

 

          2022         2021

         £         £         

Turnover     2,875,396     3,669,984     

Gross profit          877,579     800,213    

Gross profit % 30.5%      21.8%

Profit before tax      66,694     18,604

Net profit %     2.3%     0.5%

Net assets         2,039,447     1,972,753

 

The significant areas on the review of the business in respect of the individual companies within the group were as follows:

 

The  Stepping  Stone  Group  Limited - Parent  company
The  key  performance  indicators  of  the  company  are  summarised  as  follows:
2022
2021
£
£
Operating loss
(700,892)
(95,670)
(Loss)/Profit  before  tax
(607,727)
(38,367)
With  no  turnover  for  the year,  the  gross  loss  was  £Nil (2021: £1,427).
Following a review of balances owed by group entities and the associated financial performance of these entities, an expense has been recognised in relation a provision for doubtful debts of £557,448 (2021: £33,691).
The  directors  have  reviewed  the  results  and  consider  them  to  be  satisfactory.
THE STEPPING STONE GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 2 -
Nynehead Care Limited
The care home has 38 rooms with 36 occupied at the end of the period. Following the financial period 2022 occupancy fell in the following financial year but has recovered to be consistently around 90% in 2024. This was a common trend experienced by most of the Residential Care Sector in the period following the Covid pandemic.
As in recent years, expenditure was controlled during the year. The main areas that have increased were wages and salary costs (up £64,067), power, light, and heat costs (up £6,805). Other additional costs were necessary to maintain the quality and reputation of the home as well as deal with the effects of the COVID-19 pandemic. Turnover was maintained and increased to £2,462,655 (2021: £2,351,602) and the company received coronavirus support of £69,892 from the government which helped to offset some of the increased operating costs caused by the pandemic.
During the period the company continued to carry out stringent infection control measures to protect residents and staff from Covid-19 infection. Although this resulted in additional staff and other operational costs Nynehead Court did not experience some of the more adverse effects suffered by large parts of the Care sector.The Directors are extremely grateful to the dedicated staff at Nynehead Court for their support during this very difficult period.
The group intends to build further assisted living Close Care units on the property to expand and extend the range of care services provided by the company. The plans for new units at Nynehead Court were delayed due to planning issues but the directors anticipate that the Court Farm development will start later in 2024 for 6 new Close Care homes. This development will be carried out in conjunction with Nynehead Court Farm Limited which is a wholly owned subsidiary of Nynehead Care Limited.
The amount owed by the group companies as at the balance sheet date was £1,505,790 (2021: £1,109,142). The company's bank and cash-in-hand balances were £33,204 (2021: £25,255) at the balance sheet date.
The key performance indicators of the company are summarised as follows:
2022
2021
£
£
Turnover
2,462,655
2,351,602
Gross profit
987,803
958,991
Profit before tax and exceptional items
617,231
623,828
The company had net assets at the end of the financial period of £3,127,989 (2021: £2,628,079) and long-term borrowings of £3,519,760 (2021: £3,772,262).
The directors have reviewed these results and consider them satisfactory.
THE STEPPING STONE GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 3 -
Close  Care  Homes  Limited,  Close  Care  Homes  (Somerton)  Limited,  Passfield  Park  Limited, Nynehead Court Farm Limited and Somerview Limited.
Close Care Homes (Somerton) Limited had £6,000 (2021: £Nil) trading income in this period as it is continuing to develop its site at Wessex House, Pesters Lane in Somerton, Somerset. As a result of overheads and finance costs incurred and the expected sales value of the development, a loss before tax has been recognised for the period of £314,885 (2021: £20,196).
Close Care Homes Limited continued the marketing and development of its site on West Street, Somerton, Somerset and sold one of its two remaining properties. The company turnover was £406,741 (2021: £1,112,712). As a result of the expected performance of the development, overheads and finance costs incurred, a loss before tax has been recognised of £79,139 (2021: £314,457).
Nynehead Court Farm Limited continued to develop the Court Farm Gardens site previously held within Nynehead Care Limited. As a result of overheads and finance costs incurred and the expected sales value of the development, a loss before tax has been recognised for the period of £29,802 (2021: £26,850).
Passfield Park Limited had no trading income in the period (2021: £Nil). As a result of overheads incurred, a loss before tax has been recognised of £22,827 (2021: £39,664).
Somerview Limited was incorporated on 6 October 2021 as a 100% subsidiary of Close Care Homes (Somerton) Limited to assist in developing the Somerton site. As a result of overheads incurred, a loss before tax has been recognised of £5,971 (2021: N/A).
The directors have reviewed these results and consider them to be satisfactory, particularly as many of the properties held are still in the process of being redeveloped and improved for selling in the future.
PRINCIPAL  RISKS  AND  UNCERTAINTIES
The  directors  have  assessed  the  risks  and  uncertainties  which  could  have  an  impact  on  the  group's  long   term performance.  The  group  has  a  risk  management  structure  in  place  which  is  designed  to  highlight  business  risks   at  an early  stage  so  that  they  may  be  managed  within  the  business  cycle.  The  principal  risks  facing  the  businesses  in  the  group are  reviewed  annually  by  the  board. The  broad  categories  of  risk  identified  are  as  follows:
Financial  Risks
A  price  risk  may  arise  if  the  individual  company  prices  its  fees  or  properties  too  high  or  if  fee  income  or  the  price  of  the property  is  not  sufficient  to  account  for  key  expenses  which  may  impact  on  the  going  concern  of  that  company  and  the group.
Credit  risk  is  the  risk  that  one  party  to  a  financial  instrument  will  cause  a  financial  loss  for  that  other  party  by  failing  to discharge  an  obligation.  The  individual  company  and  the  group  does  not  perform  credit  check  procedures  on  potential residents,   however  if  a  resident  falls  into  arrears  legal  assistance  is  sought  to  grant  a  charge  on  the  resident's  assets  (such  as property)  although  the  potential  credit  risk  is  uncertain.The  parent  company  does  not  perform  credit  check  procedures on  subsidiary  or  related  companies,  however,  if  a  subsidiary   or  related  company  falls  into  arrears  or  fails  to  pay  the  sum owed,  this  may  have  an  impact  on  the  going  concern  for  that  company  and  the  group.
Liquidity  risk  is  the  risk  that  an  entity  will  encounter  difficulty  in  meeting  obligations  associated  with   financial liabilities.  The  group  tries  to  mitigate  risks  by  ensuring  to  keep  its  revenue  levels  as  high  as  possible  throughout  the  year and  transferring  monies  between  companies  within  the  group.
Cash  flow  risk  is  the  risk  of  exposure  to  variability  in  cash  flows  that  is  attributable  to  a  particular  risk  associated  with  a recognised  asset   or  liability  such  as  future  interest  payments  on  a  variability  rate  debt.  Cash  flow  is  monitored  by  the parent  company  to  ensure  the  subsidiary  companies  and  the  parent  company  can  continue  to  manage  its   liabilities effectively.
THE STEPPING STONE GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 4 -
As part of managing liquidity and cash flow risk, the group is forward looking and in frequent contacts with finance providers, in addition to acquiring services from experienced brokers in assisting with the refinance of banking facilities.
Regulatory  Risks
Residential homes are governed by the Care Quality Commission 'CQC' who monitor, regulate and inspect services for quality and compliance with UK laws and regulations. Compliance imposes costs and failure to comply with these standards could materially affect a subsidiary company's ability to operate. In March 2020, the subsidiary company received a 'good' rating for its CQC review. This is an improvement to the rating that was given in the October 2018 CGC report and is reflective of the continued improvements achieved.
Property  development  companies  within  the  group  are  governed  by  the  local  planning authority  who  monitor,  regulate  and  inspect  property  development  for  quality  and  compliance  with  UK  laws   and regulations.  Compliance  imposes  costs  and  failure  to  comply  with  these  regulations  could  materially  affect  the  group's and  subsidiary  companies  ability  to  operate.
There  is  also  a  risk  that  the  group  could  fail  to  comply  with  fire  risks,  employment  law,  health  and  safety  regulations, building  regulations  and  other  regulations  which  could  also  affect  the  group  and  subsidiary  company's  ability  to  trade. The  systems  within  the  group  of  companies  are  regularly  reviewed  to  ensure  any  increased  risks  are  managed.
Commercial  and  Reputation  Risks
The  group  is  reliant  on  its  advertising  and  reputation  to  attract  new  service  users  to  the  care  home  and  buyers  for  its properties.  There  are  various  other  residential  homes  in  the  area  and  as  such  it  not  possible  to  guarantee  residential  fee income.There  are  also  a  number  of  properties  for  sale  and  as  such  it  is  not  always  possible  to  guarantee  that  a  property will  be  sold.
General  Risks
There  is  a  risk  of  losses  of  assets  from  fire,  flood  or  theft.
IT  Risk
There  is  a  risk  that  computer  systems  may  fail  and  cause  business  disruption  to  trading  and  the  effectiveness  of  records. This  risk  is  mitigated  as  third  party  assistance  is  provided  to  assist  with  the  production  of  management  information.

On behalf of the board

J Y Bailey
Director
28 February 2024
THE STEPPING STONE GROUP LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 JUNE 2022
- 5 -

The directors present their annual report and financial statements for the period ended 30 June 2022.

Principal activities

The principal activities of the group continued to be those of the operation of a residential care home, the development of property sites and the provision of residential care for the elderly.

Results and dividends

The results for the period are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the period and up to the date of signature of the financial statements were as follows:

 

Mrs A L Martin MBE
J Y Bailey
Future developments

The Stepping Stone Group

The company is continuing to manage and provide support to its subsidiary companies as required.

 

Nynehead Care Limited

Nynehead Care has continued to achieve a “Good Rating” from the Care Quality Commission and despite a drop in financial performance during 2023 has since seen further improvements in EBITDA following year end. The directors remain optimistic that following extensive planning and development consultations the company will be able to build additional Close Care homes at Nynehead Court which will provide further assisted living facilities to residents who can live more independently.

 

Nynehead Court Farm Limited

The directors remain optimistic that following extensive planning and development consultations that the company will be able to build additional Close Care homes at Nynehead Court which will provide further assisted living facilities to residents who are able to live more independently.

 

Close Care Homes Limited

The company is continuing to market its site which originally consisted of nine residential units and two garages for sale in Somerton as well as refurbishing five commercial units for rental, also in Somerton, with the majority of units now sold.

 

Close Care Homes (Somerton) Limited

The company is planning to continue developing its site in Somerton and is exploring additional sources of finance in order to commence the next stage of the development works.

THE STEPPING STONE GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 6 -
Directors' responsibilities statement

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

On behalf of the board
J Y Bailey
Director
28 February 2024
THE STEPPING STONE GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE STEPPING STONE GROUP LIMITED
- 7 -
Opinion

We have audited the financial statements of The Stepping Stone Group Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 30 June 2022 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including 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:

Basis for opinion

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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and 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.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's 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.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

THE STEPPING STONE GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE STEPPING STONE GROUP LIMITED
- 8 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their 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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 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 parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's 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.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

THE STEPPING STONE GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE STEPPING STONE GROUP LIMITED
- 9 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, 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.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

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 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 override of internal control.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Claire Clift (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
29 February 2024
Chartered Accountants
Statutory Auditor
Epsilon House
The Square
Gloucester Business Park
Gloucester
United Kingdom
GL3 4AD
THE STEPPING STONE GROUP LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 30 JUNE 2022
- 10 -
Period
Year
ended
ended
30 June
29 June
2022
2021
Notes
£
£
Turnover
3
2,875,396
3,669,984
Cost of sales
(1,997,817)
(2,869,771)
Gross profit
877,579
800,213
Administrative expenses
(676,140)
(565,570)
Other operating income
69,892
120,225
Operating profit
5
271,331
354,868
Interest receivable and similar income
7
15,862
9,172
Interest payable and similar expenses
8
(188,644)
(123,449)
Fair value gains and losses on investment properties
12
(5,937)
-
0
Profit before taxation
92,612
240,591
Tax on profit
9
(25,918)
(221,987)
Profit for the financial period
25
66,694
18,604
Profit for the financial period is attributable to:
- Owners of the parent company
79,436
71,411
- Non-controlling interests
(12,742)
(52,807)
66,694
18,604
THE STEPPING STONE GROUP LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2022
- 11 -
Period
Year
ended
ended
30 June
29 June
2022
2021
£
£
Profit for the period
66,694
18,604
Other comprehensive income
Tax relating to other comprehensive income
-
0
(226,747)
Total comprehensive income for the period
66,694
(208,143)
Total comprehensive income for the period is attributable to:
- Owners of the parent company
79,436
(155,336)
- Non-controlling interests
(12,742)
(52,807)
66,694
(208,143)
THE STEPPING STONE GROUP LIMITED
GROUP BALANCE SHEET
AS AT
30 JUNE 2022
30 June 2022
- 12 -
30 June 2022
29 June 2021
Notes
£
£
£
£
Fixed assets
Goodwill
10
511,424
580,058
Tangible assets
11
6,170,355
6,163,809
Investment property
12
587,000
592,937
Investments
13
25,000
25,000
7,293,779
7,361,804
Current assets
Stocks
15
2,901,162
3,038,959
Debtors
16
299,636
869,346
Cash at bank and in hand
55,314
46,163
3,256,112
3,954,468
Creditors: amounts falling due within one year
17
(4,033,087)
(3,612,275)
Net current (liabilities)/assets
(776,975)
342,193
Total assets less current liabilities
6,516,804
7,703,997
Creditors: amounts falling due after more than one year
18
(3,531,335)
(4,787,377)
Provisions for liabilities
Deferred tax liability
20
946,022
943,867
(946,022)
(943,867)
Net assets
2,039,447
1,972,753
Capital and reserves
Called up share capital
21
43
43
Share premium account
22
199,998
199,998
Revaluation reserve
23
314,329
314,329
Capital redemption reserve
24
29
29
Profit and loss reserves
25
1,784,742
1,705,306
Equity attributable to owners of the parent company
2,299,141
2,219,705
Non-controlling interests
(259,694)
(246,952)
2,039,447
1,972,753
THE STEPPING STONE GROUP LIMITED
GROUP BALANCE SHEET (CONTINUED)
AS AT
30 JUNE 2022
30 June 2022
- 13 -
The financial statements were approved by the board of directors and authorised for issue on 28 February 2024 and are signed on its behalf by:
28 February 2024
J Y Bailey
Director
Company registration number 03546461 (England and Wales)
THE STEPPING STONE GROUP LIMITED
COMPANY BALANCE SHEET
AS AT 30 JUNE 2022
30 June 2022
- 14 -
30 June 2022
29 June 2021
Notes
£
£
£
£
Fixed assets
Tangible assets
11
262
742
Investments
13
890,179
890,179
890,441
890,921
Current assets
Debtors
16
1,977,241
1,756,776
Cash at bank and in hand
8,061
16,759
1,985,302
1,773,535
Creditors: amounts falling due within one year
17
(3,021,946)
(2,212,099)
Net current liabilities
(1,036,644)
(438,564)
Total assets less current liabilities
(146,203)
452,357
Provisions for liabilities
Deferred tax liability
20
-
0
186
-
(186)
Net (liabilities)/assets
(146,203)
452,171
Capital and reserves
Called up share capital
21
43
43
Share premium account
22
199,998
199,998
Capital redemption reserve
24
29
29
Profit and loss reserves
25
(346,273)
252,101
Total equity
(146,203)
452,171

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £598,374 (2021 - £77,624 loss).

The financial statements were approved by the board of directors and authorised for issue on 28 February 2024 and are signed on its behalf by:
28 February 2024
J Y Bailey
Director
Company registration number 03546461 (England and Wales)
THE STEPPING STONE GROUP LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2022
- 15 -
Share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
£
£
£
£
£
£
£
£
Balance at 30 June 2020
43
199,998
347,857
29
1,827,114
2,375,041
(194,145)
2,180,896
Year ended 29 June 2021:
Profit for the year
-
-
-
-
71,411
71,411
(52,807)
18,604
Other comprehensive income:
Tax relating to other comprehensive income
-
-
(226,747)
-
-
0
(226,747)
-
(226,747)
Total comprehensive income for the year
-
-
(226,747)
-
71,411
(155,336)
(52,807)
(208,143)
Other movements
-
-
193,219
-
(193,219)
-
-
-
Balance at 29 June 2021
43
199,998
314,329
29
1,705,306
2,219,705
(246,952)
1,972,753
Period ended 30 June 2022:
Profit and total comprehensive income for the period
-
-
-
-
79,436
79,436
(12,742)
66,694
Balance at 30 June 2022
43
199,998
314,329
29
1,784,742
2,299,141
(259,694)
2,039,447
THE STEPPING STONE GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2022
- 16 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 30 June 2020
43
199,998
29
329,725
529,795
Year ended 29 June 2021:
Loss and total comprehensive income for the year
-
-
-
(77,624)
(77,624)
Balance at 29 June 2021
43
199,998
29
252,101
452,171
Period ended 30 June 2022:
Loss and total comprehensive income for the period
-
-
-
(598,374)
(598,374)
Balance at 30 June 2022
43
199,998
29
(346,273)
(146,203)
THE STEPPING STONE GROUP LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 JUNE 2022
- 17 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
32
604,130
1,476,806
Interest paid
(213,082)
(123,449)
Income taxes refunded/(paid)
724
(15,230)
Net cash inflow from operating activities
391,772
1,338,127
Investing activities
Purchase of tangible fixed assets
(20,688)
(14,181)
Proceeds on disposal of tangible fixed assets
-
20,293
Proceeds on disposal of fixed asset investments
-
8,873
Interest received
15,862
9,172
Net cash (used in)/generated from investing activities
(4,826)
24,157
Financing activities
Proceeds from borrowings
90,345
270,000
Repayment of borrowings
(136,481)
(98,489)
Proceeds of new bank loans
115,000
-
Repayment of bank loans
(446,841)
(1,379,677)
Amounts withdrawn by directors
(154,368)
(250,490)
Amounts repaid by directors
154,550
48,923
Net cash used in financing activities
(377,795)
(1,409,733)
Net increase/(decrease) in cash and cash equivalents
9,151
(47,449)
Cash and cash equivalents at beginning of period
46,163
93,612
Cash and cash equivalents at end of period
55,314
46,163
THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2022
- 18 -
1
Accounting policies
Company information

The Stepping Stone Group Limited is a private limited company limited by shares incorporated in England and Wales. The registered office of the group is Lime Court, Pathfields Business Park, South Molton, Devon, EX36 3LH.

 

The group consists of The Stepping Stone Group Limited and its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

1.2
Basis of consolidation

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
- 19 -

The consolidated financial statements incorporate those of The Stepping Stone Group Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

 

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Minority interest is that part of the net results of operations and of net assets of a subsidiary attributable to interests which are not owned directly or indirectly by the group. It is measured at the minorities' share of the fair value of the subsidiaries' identifiable assets and liabilities at the date of acquisition by the group and the minorities' share of changes in equity since the date of acquisition, except when the losses applicable to the minority in a subsidiary exceed the minority interest in the equity of that subsidiary. In such cases, the excess and further losses applicable to the minority are attributed to the equity holders of the company, unless the minority has a binding obligation to, and is able to, make good the losses. When that subsidiary subsequently reports profits, the profits attributable to the minority are attributed to the equity holders of the company until the minority's share of losses previously absorbed by the equity holders of the company has been recovered.

1.3
Going concern

At the balance sheet date the group had net current liabilities of £776,975 (2021: £342,193 net current assets). In accordance with their responsibilities as directors, the directors have considered the appropriateness of the going concern basis for the preparation of the financial statements. The financial statements have been prepared on the basis that the company and group is a going concern, and that it will be in a position to continue to trade and to meet its obligations for a period of at least twelve months from the date of the directors approval of these financial statements.

 

The directors have reviewed the results of the company and group during the period since the balance sheet date and consider that there have been no additional material post balance sheet events that would have affected the results and financial position at the balance sheet date.

 

The directors, being suitably knowledgeable and experienced, consider that the company and group will be able to continue in its operations for a period of at least twelve months from the date of the approval of these financial statements. In arriving at this opinion, the directors have considered the current economic climate, specific conditions affecting the industry, the availability of future loan and bank funding facilities and level of required support to group entities.

 

Bank loans of £3,604,086 in place at the balance sheet date have since been extended to July 2024. Bank loans of £841,347 in place at the balance sheet date have since been extended to April 2024. Bank loans of £440,444 in place at the balance sheet date have since been refinanced and extended to May 2023.

 

The current bank loan facilities are due to be repaid imminently as part of a consolidation of group finance facilities, with all facilities due to be retained up to the date oif this refinance and as such the directors do not consider this to impair the company's ability to continue as a going concern. An experienced broker has been used as part of this refinance, with a strong expectation that the refinance shall shortly complete. However, alternative options are also available if the refinance does not proceed as expected.

 

With the support of the directors, all companies in the group, bankers and other finance providers, the directors consider that the going concern basis is appropriate for the preparation of the financial statements. The directors have no reason to believe that this support will not continue and have a reasonable expectation that the group has adequate resources to continue in operational existence for a period of at least twelve months from the date of approval of these financial statements.

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
- 20 -
1.4
Reporting period

The financial statements are presented for the period from 30 June 2021 to 30 June 2022.

1.5
Turnover

Turnover represents net invoiced sales of contracts & other services, fees in respect of the provision of residential care and the sale of developed property sites, excluding value added tax, and are all derived from the principal activities of the group.

 

Rendering of fees and services

Revenue is recognised in respect of the weekly provision of residential care and the receipt of service charges from developed close care units in the grounds of the residential care home. Income is adjusted for accrued/deferred income as appropriate.

 

Sale of property

Revenue from the sale pf property is recognised when the significant risks and rewards of ownership of the property have passed to the buyer, usually on legal exchange, and the amount of revenue can be measured reliably, it is probable that economic benefits associated with the transaction will flow to the group and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 

Other revenue and Interest income

Revenue is recognised as interest accrues using the effective interest rate method and other income as it is due or received.

 

Rental income

Revenue from rental income is recognised in respect of the rental income accrued.

1.6
Intangible fixed assets - goodwill

Goodwill represents the amount paid in connection with the acquisition of businesses in 2004 and 2011. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 20 years. The directors have reviewed the policy of amortising goodwill and believe that the life span accurately reflects the enduring value of the goodwill.

 

The directors will continue to review the position and assess any permanent diminution in the value of goodwill upon an assessment of a number of factors relating to the value of the businesses and any reduction in the realisable value of goodwill will be provided in the annual financial statements. The directors consider this appraisal provides a true and fair view of the enduring value of the goodwill asset of the group.

1.7
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
2% on cost (land: nil)
Leasehold land and buildings
equal instalments over 3 to 5 years
Plant and equipment
20% or 25% on cost
Fixtures and fittings
20% on cost
Computers
33% on cost
Motor vehicles
25% reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
- 21 -

Properties whose fair value can be measured reliably are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.

 

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation loss previously recognised in a profit or loss or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and losses are recognised in profit or loss.

 

An amount equal to the excess of the annual depreciation charge on revalued assets over the notional historical cost depreciation charge on those assets is transferred annually from the revaluation reserve to retained earnings where appropriate.

1.8
Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

 

The fair values of the assets are regularly reviewed by the directors and further adjustments to carrying values are made where considered appropriate.

 

Properties are valued using RICS open market valuation and are supported by independent valuations, where appropriate.

1.9
Fixed asset investments

The fixed asset investments in this company's balance sheet are stated at cost.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Other investments are initially measured at cost. At each reporting period, an assessment is made of the fair value of all investment balances, with the corresponding movement recognised within profit or loss.

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
- 22 -
1.10
Borrowing costs related to fixed assets

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

1.11
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.12
Stocks

Work in progress is stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the work in progress to their present location and condition.

 

At each reporting date, an assessment is made for impairment, Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognise as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

 

1.13
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
- 23 -
1.14
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
- 24 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.15
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.16
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
- 25 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.17
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.18
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.19
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

 

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.20
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.21

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 26 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The judgements, estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Valuation of freehold property

Freehold property is carried at fair value, with changes in fair value being recognised in the revaluation reserve. The group engaged independent valuation specialists to determine the property valuation, and this has been reflected fully in the accounts as at 30 June 2022. The valuer used a valuation technique based on an existing use value model. The determined fair value of freehold property is sensitive to the estimated yield as well as the group's EBITDA. Further independent valuations have been obtained since the Balance Sheet date each on a similar basis to prior valuations, with these supporting the value recognised. .

 

The directors have reviewed the valuation assumptions and variables as at 30 June 2022, consequently, a pre-tax gain of £Nil (2021: £Nil) was recognised in other comprehensive income. No impairment has been noted as a result of Covid-19.

Depreciation

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful lives and residual values of the assets held. The useful lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.


Rates of depreciation are considered on a line by line basis and disclosed with the accounting policy for tangible fixed assets.

 

See the tangible fixed asset note for the carrying amount of each class of asset.

Valuation of investment property

Investment properties are reviewed annually for their fair value, where this valuation materially differs to carrying value, adjustments are made to revalue these assets. This movement is recognised in profit or loss.

 

Independent valuations are obtained from suitably qualified professionals. These are conducted on a periodic basis in order to prevent material misstatement.

 

The fair value of investment properties was reassessed at 30 June 2022 to be £587,000 (2021: £592,937). Consequently, a loss of £5,937 (2021: £Nil) has been recognised in other comprehensive income.

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
2
Judgements and key sources of estimation uncertainty
(Continued)
- 27 -
Work in progress value
An apportionment of work in progress is made to cost of sales so that the costs are recognised in line with the respective sales value and total expected sales value for the development.
The carrying value of work in progress is reviewed annually by the directors against the expected selling price less costs to complete and sell. Where any impairment is noted, this is recognised within costs of sales.
Goodwill

The group establishes a reliable estimate of the useful life of goodwill arising on business combinations. This estimate is based on a variety of factors such as the expected use of the acquired business, the expected useful life of the cash generating units to which goodwill is attributed, any legal, regulatory or contractual provisions that can limit useful life and assumptions that market participants would consider in respect of the business.

Bad debts

The group recognises bad debts as soon as it is known the sum in debtors will not be recovered. Any amounts provided for are recognised in the profit and loss account.

 

3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Residents fees
2,330,541
2,197,022
Sale of property
326,754
1,265,419
Close care properties
41,692
51,550
Close care services
90,421
103,030
Rental income
40,442
25,431
Other
45,545
27,531
2,875,395
3,669,983
2022
2021
£
£
Other significant revenue
Interest income
15,862
9,172
Grants received
69,892
100,925
Rents received
-
19,300

Grants received in the year related to the Infection Control Fund of £35,192 (2021: £87,654), Social Care retention grants of £34,700 (2021: Nil), and Job Retention Scheme of £Nil (2021: £8,715).

 

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 28 -
4
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
7,021
5,303
Audit of the financial statements of the company's subsidiaries
35,995
25,296
43,016
30,599
5
Operating profit
2022
2021
£
£
Operating profit for the period is stated after charging/(crediting):
Government grants
(69,892)
(100,925)
Depreciation of owned tangible fixed assets
14,142
29,380
Profit on disposal of tangible fixed assets
-
(3,073)
Amortisation of intangible assets
68,634
69,007
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the period was:

Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
Management and administration
5
5
4
3
Carers
49
49
-
-
Domestic and catering
24
23
-
-
Gardeners and maintenance
6
5
-
-
Total
84
82
4
3

Their aggregate remuneration comprised:

Group
Company
2022
2021
2022
2021
£
£
£
£
Wages and salaries
1,274,568
1,190,623
39,520
19,393
Social security costs
81,762
76,464
-
-
Pension costs
25,881
19,019
1,855
888
1,382,211
1,286,106
41,375
20,281
THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 29 -
7
Interest receivable and similar income
2022
2021
£
£
Interest income
Other interest income
15,862
9,172
8
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
179,796
108,281
Other interest on financial liabilities
5,178
11,247
Other interest
3,670
3,921
Total finance costs
188,644
123,449
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
23,763
32,410
Deferred tax
Origination and reversal of timing differences
2,155
189,573
Total tax charge
25,918
221,987

The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:

2022
2021
£
£
Profit before taxation
92,612
240,591
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
17,596
45,712
Tax effect of expenses that are not deductible in determining taxable profit
3,965
7,757
Change in unrecognised deferred tax assets
515
-
0
Adjustments in respect of prior years
-
0
(10,528)
Effect of change in corporation tax rate
600
-
Permanent capital allowances in excess of depreciation
(937)
-
0
Timings in recognition of group relief
-
0
189,957
Change in rate of deferred tax
-
(219)
Other
4,179
(10,692)
Taxation charge
25,918
221,987
THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
9
Taxation
(Continued)
- 30 -

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2022
2021
£
£
Deferred tax arising on:
Revaluation of property
-
226,747
10
Intangible fixed assets
Group
Goodwill
£
Cost
At 30 June 2021 and 30 June 2022
1,609,867
Amortisation and impairment
At 30 June 2021
1,029,809
Amortisation charged for the period
68,634
At 30 June 2022
1,098,443
Carrying amount
At 30 June 2022
511,424
At 29 June 2021
580,058
The total carrying amount of intangible fixed assets held by the group are pledged as security for the bank borrowings of certain group companies under fixed and floating charges.
The company had no intangible fixed assets at 30 June 2022 or 29 June 2021.
THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 31 -
11
Tangible fixed assets
Group
Freehold land and buildings
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
£
Cost or valuation
At 30 June 2021
6,090,425
15,461
241,736
14,073
20,509
6,800
6,389,004
Additions
-
0
-
0
7,557
8,280
668
4,183
20,688
At 30 June 2022
6,090,425
15,461
249,293
22,353
21,177
10,983
6,409,692
Depreciation and impairment
At 30 June 2021
-
0
15,461
182,867
3,653
17,265
5,949
225,195
Depreciation charged in the period
-
0
-
0
9,999
2,236
1,171
736
14,142
At 30 June 2022
-
0
15,461
192,866
5,889
18,436
6,685
239,337
Carrying amount
At 30 June 2022
6,090,425
-
0
56,427
16,464
2,741
4,298
6,170,355
At 29 June 2021
6,090,425
-
0
58,869
10,420
3,244
851
6,163,809
THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 32 -
Company
Leasehold land and buildings
Plant and equipment
Computers
Total
£
£
£
£
Cost or valuation
At 30 June 2021 and 30 June 2022
15,461
3,210
10,102
28,773
Depreciation and impairment
At 30 June 2021
15,461
2,468
10,102
28,031
Depreciation charged in the period
-
0
480
-
0
480
At 30 June 2022
15,461
2,948
10,102
28,511
Carrying amount
At 30 June 2022
-
0
262
-
0
262
At 29 June 2021
-
0
742
-
0
742

Group

The total carrying amount of tangible fixed assets held by the group are pledged as security for the bank borrowings of certain group companies under fixed and floating charges.

 

Land and buildings were revalued in a prior year by Knight Frank LLP, independent valuers not connected with the group on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties. The directors do not consider there to be any evidence with regards to the diminution in value of this amount, at the balance sheet date. The value recognised is consistent with subsequent valuations obtained since the Balance Sheet date and known wider conditions in the market.

 

If revalued assets were stated on a historical cost basis rather than fair value basis, the total amounts included would have been £1,984,334 (2021: £1,984,334). If depreciation was calculated on historical cost basis, depreciation would have been £422,506 (2021: £398,200) for the year at 2%.

 

Included in cost of freehold land and buildings is freehold land of £769,000, no depreciation is charged on freehold land.

 

Company

The total carrying amount of tangible fixed assets are pledged as security for the bank borrowings of the company under fixed and floating charges.

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 33 -
12
Investment property
Group
Company
2022
2022
£
£
Fair value
At 30 June 2021 and 30 June 2022
592,937
-
Net gains or losses through fair value adjustments
(5,937)
-
At 30 June 2022
587,000
-

The fair value of the investment property has been based on the assumptions of the directors of the fair value of investment property based on their rental values at the balance sheet date. The property valuation has been based on an independent valuation carried out by Savills and observable market information. The directors do not consider the fair value of the investment property to be materially misstated.

 

The total carrying amount of investment properties are pledged as security for the bank borrowings of a group company under fixed and floating charges.

13
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
865,179
865,179
Unlisted investments
25,000
25,000
25,000
25,000
25,000
25,000
890,179
890,179
Movements in fixed asset investments
Group
Investments
£
Cost or valuation
At 30 June 2021 and 30 June 2022
25,000
Carrying amount
At 30 June 2022
25,000
At 29 June 2021
25,000
THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
13
Fixed asset investments
(Continued)
- 34 -
Movements in fixed asset investments
Company
Shares in subsidiaries
Other investments
Total
£
£
£
Cost or valuation
At 30 June 2021 and 30 June 2022
865,179
25,000
890,179
Carrying amount
At 30 June 2022
865,179
25,000
890,179
At 29 June 2021
865,179
25,000
890,179

The group and company

Investments with a carrying amount of £25,000 are pledged as security for the bank borrowings of the parent company under fixed and floating charges

 

The company

The total carrying amount of investments are pledged as security for the bank borrowings of the company under fixed and floating charges

14
Subsidiaries

Details of the company's subsidiaries at 30 June 2022 are as follows:

Name of undertaking
Class of
% Held
shares held
Direct
Indirect
Nynehead Care Limited
Ordinary £1
100
-
Close Care Homes (Somerton) Limited
Ordinary £1
100
-
Close Care Homes Limited
Ordinary £1
80
-
Passfield Park Limited
Oridnary £1
100
-
Nynehead Court Farm Limited
Ordinary £1
100
-
Somerview Limited
Ordinary £1
0
100
The registered office for all subsidiary companies is Lime Court, Pathfields Business Park, South Molton, Devon, EX36 3LH.
THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 35 -
15
Stocks
Group
Company
2022
2021
2022
2021
£
£
£
£
Work in progress
2,901,162
3,038,959
-
-

Group

The total carrying amount of stocks for the group are pledged as security for the bank borrowings of certain group companies under fixed and floating charges

The carrying value of stock for the group includes capitalised borrowing costs of £1,053,267 (2021: £974,268).

 

The carrying value of stock for the group includes an impairment of £440,557 (2021: £343,952).

 

16
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Trade debtors
18,701
17,769
-
0
-
0
Corporation tax recoverable
1,026
1,026
-
0
-
0
Amounts owed by group undertakings
-
-
1,722,029
919,657
Other debtors
271,793
846,789
255,212
836,455
Prepayments and accrued income
8,116
3,762
-
0
664
299,636
869,346
1,977,241
1,756,776

Group

Debtors with a carrying value of £299,373 (2021: £863,204) are pledged as security for the bank borrowings of certain group companies under fixed and floating charges.

 

Company

Amounts due from group undertakings are repayable on demand and interest is charged at 4% over base per annum in accordance with inter-group loan arrangements. Amounts are recognised net of impairments of £2,146,409 (2021: £1,588,951).

 

The total carrying amount of debtors for the company are pledged as security for the bank borrowings of the company under fixed and floating charges.

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 36 -
17
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans
19
1,566,958
1,671,363
-
0
-
0
Other borrowings
19
266,813
284,343
200,000
250,000
Payments received on account
118,218
8,458
-
0
-
0
Trade creditors
203,022
120,954
95,161
53,777
Amounts owed to group undertakings
-
0
-
0
1,505,790
1,109,142
Corporation tax payable
242,291
217,804
177,521
177,521
Other taxation and social security
34,579
38,124
11,681
7,816
Other creditors
448,031
34,575
432,133
12,271
Accruals and deferred income
1,153,175
1,236,654
599,660
601,572
4,033,087
3,612,275
3,021,946
2,212,099

Company

Amounts due to group undertakings are repayable on demand and interest is charged at 4% over base per annum in accordance with inter-group loan arrangements.

18
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans and overdrafts
19
3,374,284
3,601,720
-
0
-
0
Other borrowings
19
157,051
1,185,657
-
0
-
0
3,531,335
4,787,377
-
-
19
Loans and overdrafts
Group
Company
2022
2021
2022
2021
£
£
£
£
Bank loans
4,941,242
5,273,083
-
0
-
0
Other loans
423,864
1,470,000
200,000
250,000
5,365,106
6,743,083
200,000
250,000
Payable within one year
1,833,771
1,955,706
200,000
250,000
Payable after one year
3,531,335
4,787,377
-
0
-
0
THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
19
Loans and overdrafts
(Continued)
- 37 -

Group

Bank loans of £3,604,086 (2021: £3,784,185) are secured by a debenture over all the company assets, a first legal charge over the freehold properties, and an unlimited inter-company guarantee granted by the company and The Stepping Stone Group Limited. The loan is subject to monthly repayments of £24,442 inclusive of interest, with the remaining balance all due by July 2023. The loan has since been extended to July 2024.

 

Bank loans includes an amount of £39,691 (2021: £49,167) in relation to a Business Bounce Back Loan, with

monthly repayments due until April 2026 and interest charged at 2.5%. Bank loans includes the company bank loan that is repayable by monthly instalments, with the remaining balance due by May 2026, interest is charged at 2.28% over the Bank of England Base rate of interest.

 

Bank loans of £841,347 are secured by fixed and floating charges over all the assets of the company and by a legal mortgage over certain properties in work in progress. The bank loan is repayable by the sales of certain properties held in work in progress, with the loan facility available till 30 November 2023. The facility has since been extended to 30 April 2024.

 

Bank loans of £440,444 are secured by a legal mortgage over a property held in work in progress, with interest payable at 9% per annum. The loan was refinanced in September 2022.Additional security has been provided for this loan balance in relation to a personal guarantee by a director.

 

Bank loans of £15,674 relates to a Business Bounce Back Loan, with monthly repayments due until May 2026.

 

Other loans of £185,657 (2021: £210,000) are unsecured and payable by monthly repayments all due by

June 2027, with interest charged rate rates of 10.2%.

 

Other loans of £38,207 (2021: £10,000) are unsecured and payable by monthly repayments of at least 10%,

with interest charged at rates ranging from Bank of England base rate plus 2.16% to Bank of England base rate plus 2.82%.

 

Company and group

Other loans includes an amount of £200,000 due within one year that is unsecured. Interest is charged at 5% and final repayment is due July 2022. This loan has since been extended to 31 March 2025.

 

20
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2022
2021
Group
£
£
Accelerated capital allowances
(18,586)
(22,662)
Revaluations
965,045
966,529
Retirement benefit obligations
(437)
-
946,022
943,867
THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
20
Deferred taxation
(Continued)
- 38 -
Liabilities
Liabilities
2022
2021
Company
£
£
Accelerated capital allowances
-
186
Group
Company
2022
2022
Movements in the period:
£
£
Liability at 30 June 2021
943,867
186
Charge/(credit) to profit or loss
2,155
(186)
Liability at 30 June 2022
946,022
-

A rate of 25% (2021: 25%) was used for purposes of considering the effects of deferred taxation in the current period, as the increase in the main rate of UK Corporation Tax intended to take effect from 1 April 2023 had been enacted at the Balance Sheet date.

21
Share capital
Group and company
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of 1p each
3,100
3,100
31
31
A Ordinary of 1p each
1,163
1,163
12
12
4,263
4,263
43
43

Called up share capital represents the nominal value of shares that have been issued.

 

Ordinary shares carry the right of the holder to one vote per share.

 

A Ordinary shares do not carry any right of the holder to participate in votes. A Ordinary shares do not entitle the holders to receive any dividend or distribution declared.

22
Share premium account
Group
Company
2022
2021
2022
2021
£
£
£
£
At the beginning and end of the period
199,998
199,998
199,998
199,998

This is the difference between the nominal share price and the actual price paid for the shares

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 39 -
23
Revaluation reserve
Group
Company
2022
2021
2022
2021
£
£
£
£
At the beginning of the period
314,329
347,857
-
0
-
0
Deferred tax on revaluation of tangible assets
-
(226,747)
-
-
Transfers
-
193,219
-
-
At the end of the period
314,329
314,329
-
0
-

Revaluation reserve includes all current and prior period revaluations of fixed assets, less amounts capitalised as part of a bonus share issue in 2015. Transfers are in relation to amounts transferred to retained earnings in the year due to deferred tax movements in relation to revaluation gains capitalised as part of the 2015 bonus share issue.

 

24
Capital redemption reserve
Group
Company
2022
2021
2022
2021
£
£
£
£
At the beginning and end of the period
29
29
29
29

This is the reserve for the amounts transferred when a group companies own shares were purchased or redeemed out of distributable profits

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 40 -
25
Profit and loss reserves
Group
Company
2022
2021
2022
2021
£
£
£
£
At the beginning of the period
1,705,306
1,827,114
252,101
329,725
Profit/(loss) for the period
79,436
71,411
(598,374)
(77,624)
Transfers
-
(193,219)
-
-
At the end of the period
1,784,742
1,705,306
(346,273)
252,101

Profit and loss reserves includes all current and prior period retained profits and losses. Transfers are in relation to amounts transferred from the revaluation reserve.

 

Movements in non-distributable retained earnings below are in relation to movements in the valuation of investment property via profit or loss, or associated movements in relation to taxation.

Group
Company
2022
2021
2022
2021
£
£
£
£
Non-distributable profits included above
At the beginning of the period
72,209
72,209
-
-
Non distributable profits in the period
(5,937)
-
-
-
At the end of the period
66,272
72,209
-
-
Distributable profits
1,718,470
1,633,097
(346,273)
252,101
26
Non-Controlling interest

One of the group's subsidiaries, Close Care Homes Limited, has a minority interest shareholder of 20% of the issued share capital in that company.

 

27
Financial commitments, guarantees and contingent liabilities

Group

As at 30 June 2022, there were commitments with regards to operating leases of £67,739 (2021: £38,166). The operating lease commitment note provides further detail.

 

As at 30 June 2022, the group had contingent liabilities of £450,000 (2021: £450,000) with regards to a share buyback agreement, for which conditions are yet to be met.

 

Company

As at 30 June 2022, the company had total guarantees and commitments of £4,445,433 (2021: £4,983,554) in respect of group companies.

 

As at 30 June 2022, the company had contingent liabilities of £450,000 (2021: £450,000) with regards to a share buyback agreement, for which conditions are yet to be met.

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 41 -
28
Operating lease commitments

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2022
2021
2022
2021
£
£
£
£
Within one year
23,423
17,140
-
-
Between two and five years
44,316
20,760
-
-
In over five years
-
266
-
-
67,739
38,166
-
-
29
Related party transactions

Company

At the balance sheet date, the company was owed £1,360,790 (2021: £1,385,068) by a non-100% owned subsidiary company. This debt has subsequently had a bad debt provision recognised of £1,298,469 (2021: £1,234,759). Interest has been charged on this balance at 4% above the Bank of England base rate, with a subsequent charge of £58,868 (2021: £56,949) receivable for the year.

 

During the year, the company has performed management service charges for a non-100% owned subsidiary company of £17,152 (2021: £16,514).

 

Company and group

At the balance sheet date, £432,134 (2021: £12,271) was owed to directors of the company.

 

At the balance sheet date, the company was owed £Nil (2021: £580,320) by a director of the company. Interest has been charged on this balance at 2.5% for the year, with a subsequent charge of £15,862 (2021: £9,123) receivable for the year. As at 30 June 2022, an amount of £17,991 (2021: £2,129) is recognised within other debtors in relation to unpaid interest.

 

During the year, management service charges have been received from the spouse of a director of £36,025 (2021; £36,000).

 

At the balance sheet date, accruals of £503,600 (2021: £503,600) have been recognised with a shareholder. These amounts include £500,000 in relation to a provision for a redemption of shares. Further amounts have been recognised with a shareholder within other debtors of £33,543 (2021: £33,543) and other creditors of £Nil (2021: £50,000), all due in less than one year.

 

During the year, £Nil (2021: £10,500) of rental income was received from a charity, for which a director of the company is a trustee. During the year, £9,000 (2021: £3,250) was donated to this charity.

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
29
Related party transactions
(Continued)
- 42 -

Group

During the year, rent of £Nil (2021: £7,200) has been received from a director.

 

At the balance sheet date, the group owed £Nil (2021: £1,000,000) to a shareholder of the group. Interest has been charged on this balance at 12%, with a subsequent charge of £60,000 (2021: £120,000) payable for the year. An amount of £452,548 (2021: £392,548) is held in accruals in relation to unpaid interest. During the year, the amount previously owed to a shareholder of £1,000,000 was settled by a director and thus re-assigned to the director.

 

At the balance sheet date, the group was owed an amount of £Nil (2021 £7,337) from a family member of a director, with this balance recognised within trade debtors.

 

During the year, the company received rent from a relative of a director of the company amounting to £4,321 (2021 £3,820).

 

During the year, management service charges have been received from a director of £4,500 (2021; £Nil).

 

30
Directors' transactions

The following advances and credits subsisted during the year ended 30 June 2022 for the group.

 

These amounts are unsecured and repayable on demand.

 

Interest is charged at 2.5%. During the year, interest has been charged of £15,862 (2021: £9,172).

During the period a loan balance of £1,000,000 was settled by a director of the company. Accordingly the debt has been re-assigned to the director and has been included within transfers below.

Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Transfers
Closing balance
£
£
£
£
£
Director (2022)
2.50
580,320
144,368
(154,551)
(1,000,000)
(429,863)
Director (2021)
2.50
378,753
250,490
(48,923)
-
580,320
31
Analysis of changes in net debt - group
30 June 2021
Cash flows
Other non-cash changes
30 June 2022
£
£
£
£
Cash at bank and in hand
46,163
9,151
-
55,314
Borrowings excluding overdrafts
(6,743,083)
377,977
1,000,000
(5,365,106)
(6,696,920)
387,128
1,000,000
(5,309,792)

During the period a loan balance of £1,000,000 was settled by a director of the company. Accordingly the debt has been re-assigned to the director.

THE STEPPING STONE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
- 43 -
32
Cash generated from group operations
2022
2021
£
£
Profit for the period after tax
66,694
18,604
Adjustments for:
Taxation charged
25,918
221,987
Finance costs
188,644
123,449
Investment income
(15,862)
(9,172)
Gain on disposal of tangible fixed assets
-
(3,073)
Fair value loss on investment properties
5,937
-
0
Amortisation and impairment of intangible assets
68,634
69,007
Depreciation and impairment of tangible fixed assets
14,142
29,380
Movements in working capital:
Decrease in stocks
137,797
1,090,569
Increase in debtors
(10,610)
(20,322)
Increase/(decrease) in creditors
122,836
(43,623)
Cash generated from operations
604,130
1,476,806
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