Company Registration No. 12167302 (England and Wales)
FARRINGTON GROUP HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
FARRINGTON GROUP HOLDINGS LIMITED
COMPANY INFORMATION
Directors
P.C. Nathwani
K.C. Nathwani
Secretary
P.C. Nathwani
Company number
12167302
Registered office
Sai Villa
1 Farrington Place
Northwood
Middlesex
HA6 3SW
Auditor
HW Fisher LLP
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
Business address
PO Box 100
Harrow
HA3 8WE
Bankers
National Westminster Bank Plc (Wembley)
520 High Road
Wembley
Middlesex
HA9 7BZ
FARRINGTON GROUP HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Profit and loss account
7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Notes to the financial statements
14 - 28
FARRINGTON GROUP HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 1 -

The directors present the strategic report for the year ended 30 September 2022.

Fair review of the business

The principal activity of the group continues to be the provision of nursing and residential care.

 

The group made a pre-tax profit of £4,509,221 (2021: £4,293,243) for the year, on turnover of £9,956,379 (2021: £10,168,122).

 

At 30 September 2022 the group had net assets of £8,867,121 (2021: £6,665,035).

 

The group operated 11 care homes during the year to 30 September 2022. There are no plans in place to acquire additional care homes but the directors are open to opportunities that arise.

 

Wellfield House Care Home was closed on 27 December 2021.

 

The Fairways Care Home was sold on 17 January 2022.

Principal risks and uncertainties

The principal risks and uncertainties facing the group relate to adverse findings by the Care Quality Commission (CQC). The group have engaged third party consultants to carry out mock CQC inspections and Fire Risk Assessments at all of their care homes on a periodic basis, in order to ensure compliance with laws and regulations.

 

Other risks facing the group include the use of agency staff to meet employment demands. The group aims to minimise the reliance placed on agency staff by ensuring the care homes have sufficient staff available.

 

The directors continually review risks and uncertainties throughout the period and believe that they have the management and systems in place to deal with changing situations.

Key performance indicators

In the opinion of the directors the Key Performance Indicators of the group include gross profit margin and occupancy levels of care homes, which are closely monitored by the directors. The gross profit margin of the group for the year was 95% (2020: 93%) and the occupancy levels are in line with the directors' expectations.

 

These ratios are regularly reviewed by management.

On behalf of the board

P.C. Nathwani
Director
29 September 2023
FARRINGTON GROUP HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 2 -

The directors present their annual report and financial statements for the year ended 30 September 2022.

Results and dividends

The results for the year are set out on page 7.

Ordinary dividends were paid amounting to £1,680,000. The directors do not recommend payment of a further dividend.

Directors

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

P.C. Nathwani
K.C. Nathwani
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

Within the bounds of commercial confidentiality, information is disseminated to all members of staff about matters that affect the progress of the company and are of interest and concern to them as employees.

Post reporting date events

On 4 October 2022, the group made an early repayment of all of its outstanding bank loans, totalling £669,087 at 30 September 2022.

 

Listed investments with a year-end market of value of £2,092,485 were sold post year-end for an amount in excess of the year-end value.

Auditor

The auditor, HW Fisher LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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
P.C. Nathwani
Director
29 September 2023
FARRINGTON GROUP HOLDINGS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 3 -

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.

FARRINGTON GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FARRINGTON GROUP HOLDINGS LIMITED
- 4 -

Qualified opinion on financial statements

We have audited the financial statements of Farrington Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 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 FRS 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 effects of the matters described in the Basis for Qualified Opinion section of our report, the financial statements:

Basis for qualified opinion

Stocks comprising of land are held at cost. At the year-end date we were unable to obtain sufficient and appropriate evidence regarding the net realisable value of the land and consequently we were unable to determine whether any impairment adjustment to stock was necessary.

 

We were also unable to obtain sufficient audit evidence to verify the existence of listed investments of £2,092,485. Consequently we were unable to determine whether any adjustment to investments was necessary.

 

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 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 qualified 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.

FARRINGTON GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FARRINGTON GROUP HOLDINGS LIMITED
- 5 -

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matters described in the Basis for Qualified Opinion section of our report, in our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In respect solely of the limitation on our work relating to stock and existence of listed investments, described above:

 

Except for the matters 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 strategic report and the directors' report.

 

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

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 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.

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.

As part of our planning process:

 

FARRINGTON GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FARRINGTON GROUP HOLDINGS LIMITED
- 6 -

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

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.

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.

Darshna Choudhury (Senior Statutory Auditor)
For and on behalf of HW Fisher LLP
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
29 September 2023
FARRINGTON GROUP HOLDINGS LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 7 -
2022
2021
Notes
£
£
Turnover
3
9,956,379
10,168,122
Cost of sales
(526,076)
(554,132)
Gross profit
9,430,303
9,613,990
Administrative expenses
(5,765,605)
(7,162,850)
Other operating income
387,158
871,911
Operating profit
4
4,051,856
3,323,051
Interest receivable and similar income
7
28,484
-
Interest payable and similar expenses
8
(78,377)
(80,959)
Amounts written off investments
9
507,258
1,051,151
Profit before taxation
4,509,221
4,293,243
Tax on profit
10
(627,135)
(486,394)
Profit for the financial year
3,882,086
3,806,849
Profit for the financial year is all attributable to the owners of the parent company.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

FARRINGTON GROUP HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 8 -
2022
2021
£
£
Profit for the year
3,882,086
3,806,849
Other comprehensive income
-
-
Total comprehensive income for the year
3,882,086
3,806,849
Total comprehensive income for the year is all attributable to the owners of the parent company.
FARRINGTON GROUP HOLDINGS LIMITED
GROUP BALANCE SHEET
AS AT
30 SEPTEMBER 2022
30 September 2022
- 9 -
2022
2021
Notes
£
£
£
£
Fixed assets
Goodwill
14
352,871
465,336
Tangible assets
15
6,565,968
6,617,707
Investments
16
2,092,485
1,585,227
9,011,324
8,668,270
Current assets
Stocks
18
1,423,823
1,423,823
Debtors
19
241,247
260,534
Cash at bank and in hand
1,096,610
1,603,002
2,761,680
3,287,359
Creditors: amounts falling due within one year
20
(2,246,376)
(2,401,034)
Net current assets
515,304
886,325
Total assets less current liabilities
9,526,628
9,554,595
Creditors: amounts falling due after more than one year
21
(457,325)
(2,726,149)
Provisions for liabilities
Deferred tax liability
23
202,182
163,411
(202,182)
(163,411)
Net assets
8,867,121
6,665,035
Capital and reserves
Called up share capital
25
500,002
500,002
Profit and loss reserves
8,367,119
6,165,033
Total equity
8,867,121
6,665,035
The financial statements were approved by the board of directors and authorised for issue on
29 September 2023
29 September 2023
and are signed on its behalf by:
P.C. Nathwani
Director
FARRINGTON GROUP HOLDINGS LIMITED
COMPANY BALANCE SHEET
AS AT
30 SEPTEMBER 2022
30 September 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Investments
16
500,100
500,100
Current assets
Debtors
19
2
2
Creditors: amounts falling due within one year
20
(100)
(100)
Net current liabilities
(98)
(98)
Total assets less current liabilities
500,002
500,002
Capital and reserves
Called up share capital
25
500,002
500,002

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,680,000 (2021 - £1,800,000 profit).

The financial statements were approved by the board of directors and authorised for issue on
29 September 2023
29 September 2023
and are signed on its behalf by:
P.C. Nathwani
Director
Company Registration No. 12167302
FARRINGTON GROUP HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2020
500,002
4,158,184
4,658,186
Year ended 30 September 2021:
Profit and total comprehensive income for the year
-
3,806,849
3,806,849
Dividends
11
-
(1,800,000)
(1,800,000)
Balance at 30 September 2021
500,002
6,165,033
6,665,035
Year ended 30 September 2022:
Profit and total comprehensive income for the year
-
3,882,086
3,882,086
Dividends
11
-
(1,680,000)
(1,680,000)
Balance at 30 September 2022
500,002
8,367,119
8,867,121
FARRINGTON GROUP HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2020
500,002
-
500,002
Year ended 30 September 2021:
Profit and total comprehensive income for the year
-
1,800,000
1,800,000
Dividends
11
-
(1,800,000)
(1,800,000)
Balance at 30 September 2021
500,002
-
500,002
Year ended 30 September 2022:
Profit and total comprehensive income for the year
-
1,680,000
1,680,000
Dividends
11
-
(1,680,000)
(1,680,000)
Balance at 30 September 2022
500,002
-
500,002
FARRINGTON GROUP HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 13 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
30
3,692,876
2,961,325
Interest paid
(78,377)
(80,959)
Income taxes paid
(588,689)
(571,565)
Net cash inflow from operating activities
3,025,810
2,308,801
Investing activities
Purchase of tangible fixed assets
(739,249)
(714,056)
Proceeds on disposal of tangible fixed assets
1,700,000
825,000
Interest received
28,484
-
Net cash generated from investing activities
989,235
110,944
Financing activities
Repayment of bank loans
(2,841,437)
(1,906,409)
Dividends paid to equity shareholders
(1,680,000)
(1,800,000)
Net cash used in financing activities
(4,521,437)
(3,706,409)
Net decrease in cash and cash equivalents
(506,392)
(1,286,664)
Cash and cash equivalents at beginning of year
1,603,002
2,889,666
Cash and cash equivalents at end of year
1,096,610
1,603,002
FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 14 -
1
Accounting policies
Company information

Farrington Group Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Sai Villa, 1 Farrington Place, Northwood, Middlesex, HA6 3SW.

 

The group consists of Farrington Group Holdings Limited and all of 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 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

The consolidated group financial statements consist of the financial statements of the parent company Farrington Group Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 30 September 2022. 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.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

1.3
Going concern

The directors have considered the effect of the on-going Covid-19 pandemic, which continued to cause some disruption to the group’s business. During the year, the group received further infection control grants and other grants from local councils to support funding the additional costs of the pandemic which included additional staffing and costs of purchasing personal protective equipment (PPE). With tighter operational controls and government support the directors believe that the group has been able to mitigate the impact of the pandemic on the business. Accordingly, the directors have a reasonable expectation that the group has adequate resources to continue in operation for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 15 -
1.4
Turnover

Turnover represents the amounts receivable during the year in respect of care services invoiced.

 

Turnover is recognised when the company's contractual obligation is fulfilled, that is typically when the resident has received the care services from the company, which is usually provided on a weekly basis.

1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 20 years

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.6
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% straight line
Fixtures and fittings
15% reducing balance
Motor vehicles
25% reducing balance

Freehold land is not depreciated.

1.7
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

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.

Listed investments are initially measured at transaction price and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in profit or loss.

FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 16 -
1.8
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 company 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.

1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to sell.

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 recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.10
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings and current liabilities.

1.11
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.

FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 17 -
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.

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.

Derecognition of financial liabilities

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

1.12
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.

1.13
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.

FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 18 -
Deferred tax

Deferred tax is provided in full on timing differences which result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the accounts. Deferred tax is not provided on timing differences arising from the revaluation of fixed assets where there is no commitment to sell the assets. Deferred tax assets are recognised to the extent that is is regarded as more like;y than not that they will be recovered. Deferred tax assets and liabilities are not discounted.

1.14
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

 

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

 

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

1.15
Retirement benefits

The group contributes to the the directors' and employees private defined contribution pension scheme. Contributions payable are charged to the profit and loss account in the year they are payable.

1.16
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.

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.

Key sources of estimation uncertainty

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

Depreciation on freehold buildings

The group recognises depreciation at 2% straight line on freehold buildings. The land value attributed to the group's land and buildings has been estimated at 30%, therefore depreciation is only charged on the remaining 70% which is the estimated cost of the building.

Useful life of goodwill

The group amortises goodwill over an estimated useful life of 20 years.

FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 19 -
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Fee income
9,956,379
10,168,122
2022
2021
£
£
Other significant revenue
Interest income
28,484
-
Grants received
362,918
828,615
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
9,956,379
10,168,122
4
Operating profit
2022
2021
£
£
Operating profit for the year is stated after charging/(crediting):
Government grants
(362,918)
(828,615)
Depreciation of owned tangible fixed assets
214,155
270,155
Profit on disposal of tangible fixed assets
(1,123,167)
(229,777)
Amortisation of intangible assets
101,215
144,885
Impairment of intangible assets
11,250
78,662
5
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, company and its subsidiaries
42,796
32,965
FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 20 -
6
Employees

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

Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
Care homes
182
209
-
-
Administration
7
11
-
-
Directors
2
2
-
-
Total
191
222
-
-

Their aggregate remuneration comprised:

Group
Company
2022
2021
2022
2021
£
£
£
£
Wages and salaries
3,385,595
4,035,527
-
-
Social security costs
284,006
316,814
-
-
Pension costs
56,072
65,941
-
-
3,725,673
4,418,282
-
-
7
Interest receivable and similar income
2022
2021
£
£
Interest income
Other interest income
28,484
-
8
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
78,377
80,959
9
Amounts written off investments
2022
2021
£
£
Fair value gains/(losses) on financial instruments
Change in value of financial assets held at fair value through profit or loss
507,258
1,051,151
FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 21 -
10
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
588,364
616,630
Adjustments in respect of prior periods
-
(185,486)
Total current tax
588,364
431,144
Deferred tax
Origination and reversal of timing differences
38,771
55,250
Total tax charge
627,135
486,394

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

2022
2021
£
£
Profit before taxation
4,509,221
4,293,243
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
856,752
815,716
Tax effect of expenses that are not deductible in determining taxable profit
5,780
22,919
Tax effect of income not taxable in determining taxable profit
(96,379)
(199,719)
Gains not taxable
(112,988)
(660)
Adjustments in respect of prior years
-
(185,486)
Permanent capital allowances in excess of depreciation
-
(3,391)
Deferred tax adjustments
(26,030)
37,015
Taxation charge
627,135
486,394
11
Dividends
2022
2021
Recognised as distributions to equity holders:
£
£
Interim paid
1,680,000
1,800,000
FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 22 -
12
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2022
2021
Notes
£
£
In respect of:
Goodwill
14
11,250
78,662
Recognised in:
Administrative expenses
11,250
78,662

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

13
Dividends

Interim dividends paid by the group were £1,800,000 (2020: £5,671,000).

14
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 October 2021
3,227,698
Disposals
(599,500)
At 30 September 2022
2,628,198
Amortisation and impairment
At 1 October 2021
2,762,362
Amortisation charged for the year
101,215
Impairment losses
11,250
Disposals
(599,500)
At 30 September 2022
2,275,327
Carrying amount
At 30 September 2022
352,871
At 30 September 2021
465,336
The company had no intangible fixed assets at 30 September 2022 or 30 September 2021.

More information on impairment movements in the year is given in note 12.

FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 23 -
15
Tangible fixed assets
Group
Freehold land and buildings
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 October 2021
7,908,221
904,464
18,898
8,831,583
Additions
-
703,849
35,400
739,249
Disposals
(753,302)
(75,754)
-
(829,056)
At 30 September 2022
7,154,919
1,532,559
54,298
8,741,776
Depreciation and impairment
At 1 October 2021
1,616,341
582,123
15,412
2,213,876
Depreciation charged in the year
104,796
99,637
9,722
214,155
Eliminated in respect of disposals
(198,227)
(53,996)
-
(252,223)
At 30 September 2022
1,522,910
627,764
25,134
2,175,808
Carrying amount
At 30 September 2022
5,632,009
904,795
29,164
6,565,968
At 30 September 2021
6,291,880
322,341
3,486
6,617,707
The company had no tangible fixed assets at 30 September 2022 or 30 September 2021.
16
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
17
-
-
500,100
500,100
Listed investments
2,092,485
1,585,227
-
-
2,092,485
1,585,227
500,100
500,100
Listed investments carrying amount
2,092,485
1,585,227
-
-

In the opinion of the directors, the aggregate value of the company's investment in subsidiary undertaking is not less than the amount included in the balance sheet.

 

Listed investments are held at market value at the balance sheet date. The comparable historical cost of listed investments is £2,881,483 (2021: £2,881,483).

FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
16
Fixed asset investments
(Continued)
- 24 -
Movements in fixed asset investments
Group
Investments other than loans
£
Cost or valuation
At 1 October 2021
1,585,227
Valuation changes
507,258
At 30 September 2022
2,092,485
Carrying amount
At 30 September 2022
2,092,485
At 30 September 2021
1,585,227
Movements in fixed asset investments
Company
Shares in group undertakings
£
Cost or valuation
At 1 October 2021 and 30 September 2022
500,100
Carrying amount
At 30 September 2022
500,100
At 30 September 2021
500,100
17
Subsidiaries

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

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Farrington Care Homes Limited
Sai Villa, 1 Farrington Place, Northwood, Middlesex, England, HA6 3SW
Care Homes
Ordinary
100.00
Farrington Investments Limited
Sai Villa, 1 Farrington Place, Northwood, Middlesex, England, HA6 3SW
Property Development
Ordinary
100.00
18
Stocks
Group
Company
2022
2021
2022
2021
£
£
£
£
Stock of properties
1,412,827
1,412,827
-
-
Food stocks and consumables
10,996
10,996
-
-
1,423,823
1,423,823
-
-
FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 25 -
19
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Trade debtors
172,003
179,334
-
-
Other debtors
453
453
2
2
Prepayments and accrued income
68,791
80,747
-
-
241,247
260,534
2
2
20
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans
22
211,762
784,375
-
-
Trade creditors
605,613
276,755
-
-
Amounts owed to group undertakings
-
-
100
100
Corporation tax payable
15,150
15,475
-
-
Other taxation and social security
52,321
45,520
-
-
Other creditors
1,205,016
1,123,221
-
-
Accruals and deferred income
156,514
155,688
-
-
2,246,376
2,401,034
100
100
21
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans and overdrafts
22
457,325
2,726,149
-
-
22
Loans and overdrafts
Group
Company
2022
2021
2022
2021
£
£
£
£
Bank loans
669,087
3,510,524
-
-
Payable within one year
211,762
784,375
-
-
Payable after one year
457,325
2,726,149
-
-

The bank loans are repayable by monthly instalments comprising of both capital and interest. The remaining repayment terms on the bank loans are between 1 and 5 years. The applicable rate of interest is between 0.75% and 3% above Base Rate. The bank loans are secured by legal charges over the group's freehold properties and a debenture over all assets of the group.

FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 26 -
23
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
202,182
164,018
Retirement benefit obligations
-
(607)
202,182
163,411
The company has no deferred tax assets or liabilities.
Group
Company
2022
2022
Movements in the year:
£
£
Liability at 1 October 2021
163,411
-
Charge to profit or loss
38,771
-
Liability at 30 September 2022
202,182
-

Deferred tax has been calculated based on the future expected rate of corporation tax in the UK of 25% (2021: 25%).

24
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
56,072
65,941

The group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the group. During the year the company made contributions of £56,072 (2021: £65,941).

25
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
500,002
500,002
500,002
500,002
FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 27 -
26
Events after the reporting date

On 4 October 2022, the group made an early repayment of all of its outstanding bank loans, totalling £669,087 at 30 September 2022.

 

Listed investments with a year-end market of value of £2,092,485 were sold post year-end for an amount in excess of the year-end value.

27
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2022
2021
£
£
Aggregate compensation
166,945
127,247
28
Directors' transactions

At 30 September 2022, an amount of £810 (2021: £12,484) was due from the group to K.C. Nathwani, a director of the company.

 

At 30 September 2022, an amount of £810 (2021: £12,484) was due from the group to P.C. Nathwani, a director of the company.

 

Amounts due to the directors at the year end are interest free and repayable on demand.

 

Transactions with directors during the year include loans to directors of £1,666,202 (2021: £1,729,780), and expenses paid on behalf of the directors of £8,663 (2021: £69,975). The loans to the directors (who are also the shareholders) have been settled via dividends paid from the parent company, Farrington Group Holdings Limited, of £1,680,000 (2021: £1,800,000).

29
Controlling party

The ultimate controlling parties are the directors of the company, K.C. and P.C. Nathwani.

FARRINGTON GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 28 -
30
Cash generated from group operations
2022
2021
£
£
Profit for the year after tax
3,882,086
3,806,849
Adjustments for:
Taxation charged
627,135
486,394
Finance costs
78,377
80,959
Investment income
(28,484)
-
Gain on disposal of tangible fixed assets
(1,123,167)
(229,777)
Amortisation and impairment of intangible assets
112,465
223,547
Depreciation and impairment of tangible fixed assets
214,155
270,155
Amounts written off investments
(507,258)
(1,051,151)
Decrease in provisions
-
(300,000)
Movements in working capital:
Decrease in debtors
19,287
4,638
Increase/(decrease) in creditors
418,280
(330,289)
Cash generated from operations
3,692,876
2,961,325
31
Analysis of changes in net funds/(debt) - group
1 October 2021
Cash flows
30 September 2022
£
£
£
Cash at bank and in hand
1,603,002
(506,392)
1,096,610
Borrowings excluding overdrafts
(3,510,524)
2,841,437
(669,087)
(1,907,522)
2,335,045
427,523
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