Company registration number 04249786 (England and Wales)
MOUNDSLEY HEALTHCARE GROUP LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
PAGES FOR FILING WITH REGISTRAR
MOUNDSLEY HEALTHCARE GROUP LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 11
MOUNDSLEY HEALTHCARE GROUP LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 1 -
2022
2021
Notes
£
£
£
£
Fixed assets
Investment property
5
10,862,176
10,690,000
Investments
6
1,000
1,000
10,863,176
10,691,000
Current assets
Debtors
8
360,677
476,561
Cash at bank and in hand
364
361,041
476,561
Creditors: amounts falling due within one year
9
(188,986)
(247,965)
Net current assets
172,055
228,596
Total assets less current liabilities
11,035,231
10,919,596
Creditors: amounts falling due after more than one year
10
(2,090,930)
(2,270,249)
Provisions for liabilities
(1,339,562)
(988,831)
Net assets
7,604,739
7,660,516
Capital and reserves
Called up share capital
13
1,000
1,000
Non-distributable profit and loss reserve
14
4,292,478
4,635,876
Distributable profit and loss reserves
3,311,261
3,023,640
Total equity
7,604,739
7,660,516
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 13 October 2023 and are signed on its behalf by:
Mr B M Gimson
Director
Company Registration No. 04249786
MOUNDSLEY HEALTHCARE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
1
Accounting policies
Company information
Moundsley Healthcare Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Moundsley Hall, Walkers Heath Road, Kings Norton, Birmingham, West Midlands, B38 0BL.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
The company has a number of borrowing facilities which contain covenants that require the group to maintain specific financial ratios. These covenants mainly depend on fellow subsidiary Moundsley Hall Nursing Home Limited's performance. Primarily, due to the on-going affect of Covid-19, which has had a material impact on the care sector, the group was unable to meet bank covenants during the year. However, there have been no defaults on repayment, every payment has been made on time and no penalties have been incurred during the year.
These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future.
The Directors have reached this opinion having considered the following specific matters which relates to fellow subsidiary Moundsley Hall Nursing Home Limited.
The ongoing recovery from the Covid – 19 pandemic with post year end occupancy rates on a continuing upward trend, and
Although Birmingham City Council has issued a Section 114 notice, effectively declaring itself unable to balance it’s budget, the appointment of Commissioners by the Government to monitor a compulsory order that the council deliver an Improvement Plan to enable and support the continuance of their statutory duty to deliver and fund frontline services, including Adult Social Care. Birmingham City Council continues to fund existing contracts in place with the company and have placed new contracts since the announcement at normal fee levels without interruption.
MOUNDSLEY HEALTHCARE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 3 -
1.3
Investment property
Investment property, which is property held to earn rentals and 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. The surplus or deficit on revaluation is recognised in the profit and loss account.
1.4
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.5
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.
1.6
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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.
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
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 company after deducting all of its liabilities.
MOUNDSLEY HEALTHCARE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 4 -
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.
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 company after deducting all of its liabilities.
1.7
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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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.
1.8
Leases
Rentals payable and receivable under operating leases are charged to the profit and loss account on a straight line basis over the period of the leases.
MOUNDSLEY HEALTHCARE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’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.
Valuation of investment property
Determining the value of investment property requires an estimation based on the market values of similar properties at the time. The directors undertake an impairment review every year to determine any need for impairment, which estimates the value of the property based on market values. Details of the investment property are set out in note 6.
Rental value
The investment properties explained above charges rent to a fellow subsidiary company. Directors have assessed the rental value on a comparable basis having regard to rents in the south Birmingham area with adjustments for location, accessibility and design.
Rent in respect of care homes, is based on the valuation approach as guided by the RICS Red Book is to assess the fair maintainable income and sustainable profit or EBITDAR (Earning Before Interest Tax Depreciation Amortisation and Rent).
3
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
6,000
5,700
4
Employees
There were no employees during the year except for the directors.
MOUNDSLEY HEALTHCARE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 6 -
5
Investment property
2022
£
Fair value
At 1 January 2022
10,690,000
Additions
172,176
At 31 December 2022
10,862,176
Investment properties are measured at fair value at each reporting date with changes in fair value recognised in profit or loss.
Directors have reviewed the market value as at 31 December 2022 on the same basis used by GVA Grimley Limited which was carried out on 18 June 2015.
The directors have used the multiplier approach to determine the properties value. The multiplier approach is a valuation method based on the idea that similar assets sell at similar prices.
The metric measures value by multiplying the group’s EBITDA (Earnings before interest, tax, depreciation, and amortisation) by the gross multiplier.
The choice of multiplier reflects the location and physical qualities of the asset together with the historic, current and forecast trade, and the CQC rating.
The multiplier in the industry ranges from 7-10%. Directors have used multiple of 8.5% in calculating the investment properties value, which they feel provides a conservative approach in their valuation methodology.
In order to determine the potential impairments the directors have used the group’s EBITDA from projected management accounts to 31 December 2023. In their view no impairment has occurred.
If investment properties were stated on an historical cost basis rather than a fair value basis, the amounts would have been included as follows:
2022
2021
£
£
Cost
5,138,872
4,966,696
Accumulated depreciation
-
-
Carrying amount
5,138,872
4,966,696
MOUNDSLEY HEALTHCARE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 7 -
6
Fixed asset investments
2022
2021
£
£
Shares in group undertakings and participating interests
1,000
1,000
Fixed asset investments not carried at market value
7
Subsidiaries
Details of the company's subsidiaries at 31 December 2022 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Moundsley Care Village Limited
England and Wales
Dormant
Ordinary
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Moundsley Care Village Limited
1,000
8
Debtors
2022
2021
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
351,250
461,302
Other debtors
9,427
15,259
360,677
476,561
9
Creditors: amounts falling due within one year
2022
2021
£
£
Bank loans and overdrafts
176,159
187,734
Amounts owed to group undertakings
1,000
1,000
Corporation tax
54,078
Other creditors
11,827
5,153
188,986
247,965
MOUNDSLEY HEALTHCARE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
10
Creditors: amounts falling due after more than one year
2022
2021
£
£
Bank loans and overdrafts
2,090,930
2,270,249
11
Loans and overdrafts
2022
2021
£
£
Bank loans
2,267,089
2,443,247
Bank overdrafts
14,736
2,267,089
2,457,983
Payable within one year
176,159
187,734
Payable after one year
2,090,930
2,270,249
On 8 July 2019, a guarantee was entered with National Westminster Bank PLC confirming Moundsley Hall Nursing Home Limited and Moundsley Healthcare Group Limited jointly will cover any liability owed by Moundsley Hall Limited to the bank up to the total guaranteed amount of £3,936,901.
On 8 June 2011, a debenture was entered with National Westminster Bank PLC. A fixed and floating charge over the undertaking and all property and assets of the company.
On 8 June 2011, a legal charge was entered on the land and buildings at Kensington House and administration buildings, Walkers Heath Road, Kings Norton, Birmingham.
On 8 June 2011, a legal charge was entered on the land and buildings at the Paddocks, Walkers Heath Road, Kings Norton, Birmingham.
An unlimited cross company guarantee dated 27 April 2011 between Moundsley Hall Limited, Moundsley Healthcare Group Limited and Moundsley Hall Nursing Home Limited, exists in respect of the loan secured upon the assets of Moundsley Hall Limited and Moundsley Healthcare Group Limited.
MOUNDSLEY HEALTHCARE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
12
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
(91,264)
(98,597)
Revaluations
1,430,826
1,087,428
1,339,562
988,831
2022
Movements in the year:
£
Liability at 1 January 2022
988,831
Charge to profit or loss
350,731
Liability at 31 December 2022
1,339,562
£6,638 of the deferred tax liability set out above is expected to reverse within 12 months.
13
Called up share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
14
Non-distributable profit and loss reserve
2022
2021
£
£
At the beginning of the year
4,635,876
4,635,876
Non distributable losses in the period
(343,398)
-
At the end of the year
4,292,478
4,635,876
Included within the profit and loss reserves are non-distributable reserves totalling £4,292,478. The non-distributable reserves comprise of £5,723,304 in relation to investment property revaluations less a deferred tax provision in relation to the revaluations of £1,430,826.
MOUNDSLEY HEALTHCARE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
15
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Mr Steven McLoughlin FCCA
Statutory Auditor:
Jerroms Business Solutions Limited
MOUNDSLEY HEALTHCARE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
16
Related party transactions
The company has taken advantage of the exemption available in accordance with FRS102 'Section 33 Paragraph 33.1A' not to disclose transactions entered into between two or more members of a group, as the company is a wholly owned subsidiary undertaking of the group to which it is party to the transactions.
17
Parent company
The company is a wholly owned subsidiary of Moundsley Hall Limited and these accounts have been incorporated into the consolidated accounts which are publically available. Copies of the consolidated financial statements may be obtained from Moundsley Hall Limited, Walkers Heath Road, Kings Norton, Birmingham, West Midlands, B38 0BL.
There is no ultimate controlling party.
18
Non-audit services provided by auditor
In common with many businesses of our size and nature we use our auditor to prepare and submit returns to the tax authorities and assist with the preparation of the financial statements.
19
Auditor's liability limitation agreement
The company has, by resolution, waived the need for approval of the auditors’ limitation liability, which has been set at £2,000,000 within the letter of engagement dated 4 August 2022. This approval has been confirmed in the letter of representation dated 6 October 2023.
2022-12-312022-01-01false13 October 2023CCH SoftwareCCH Accounts Production 2023.200No description of principal activityThis audit opinion is unqualifiedMr M R GimsonMrs C M GimsonMr B M Gimson2023-10-134042497862022-01-012022-12-31042497862022-12-31042497862021-12-3104249786core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3104249786core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3104249786core:Non-currentFinancialInstrumentscore:AfterOneYear2022-12-3104249786core:Non-currentFinancialInstrumentscore:AfterOneYear2021-12-3104249786core:CurrentFinancialInstruments2022-12-3104249786core:CurrentFinancialInstruments2021-12-3104249786core:ShareCapital2022-12-3104249786core:ShareCapital2021-12-3104249786core:FurtherSpecificReserve1ComponentTotalEquity2022-12-3104249786core:FurtherSpecificReserve1ComponentTotalEquity2021-12-3104249786core:RetainedEarningsAccumulatedLosses2022-12-3104249786core:RetainedEarningsAccumulatedLosses2021-12-3104249786bus:Director32022-01-012022-12-31042497862021-01-012021-12-31042497862021-12-310424978612022-01-012022-12-3104249786core:WithinOneYear2022-12-3104249786core:WithinOneYear2021-12-3104249786core:Non-currentFinancialInstruments2022-12-3104249786core:Non-currentFinancialInstruments2021-12-3104249786bus:PrivateLimitedCompanyLtd2022-01-012022-12-3104249786bus:SmallCompaniesRegimeForAccounts2022-01-012022-12-3104249786bus:FRS1022022-01-012022-12-3104249786bus:Audited2022-01-012022-12-3104249786bus:Director12022-01-012022-12-3104249786bus:Director22022-01-012022-12-3104249786bus:FullAccounts2022-01-012022-12-31xbrli:purexbrli:sharesiso4217:GBP