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REGISTERED NUMBER: 09826810 (England and Wales)















GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2023

FOR

TRISTONE HEALTHCARE LIMITED

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023










Page

Company Information 1

Group Strategic Report 2

Report of the Directors 13

Report of the Independent Auditors 15

Consolidated Income Statement 19

Consolidated Other Comprehensive Income 20

Consolidated Balance Sheet 21

Company Balance Sheet 22

Consolidated Statement of Changes in Equity 23

Company Statement of Changes in Equity 24

Consolidated Cash Flow Statement 25

Notes to the Consolidated Cash Flow Statement 26

Notes to the Consolidated Financial Statements 27


TRISTONE HEALTHCARE LIMITED

COMPANY INFORMATION
FOR THE YEAR ENDED 31 MARCH 2023







DIRECTORS: Y A Loucopoulos
C Elliott
R Finney
P N Ledgard
A Hibbard





REGISTERED OFFICE: 5 Brooklands Place
Brooklands Road
Sale
Cheshire
M33 3SD





REGISTERED NUMBER: 09826810 (England and Wales)





AUDITORS: Harold Sharp Limited
Statutory Auditors and Chartered Accountants
5 Brooklands Place
Brooklands Road
Sale
Cheshire
M33 3SD

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023


The directors present their strategic report of the company and the group for the year ended 31 March 2023.


TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023

REVIEW OF BUSINESS
Operational highlights

as at 31 March 2023 as at 31 March 2022
Capacity (places)
Adult residential service 75 24
Children's residential service 77 66
Community care 15 15
Total 167 105

Occupancy (places)
Adult residential service 73 21
Children's residential service 62 62
Community care 12 15
Total 147 98

Occupancy %
Adult residential service 97% 88%
Children's residential service 81% 94%
Community care 80% 100%
Total 88% 93%

Number of properties 60 46
Number of employees 482 287

Financial highlights


Year to 31 March 2023
(£m

)
Year to 31 March 2022
(£m

)

% increase2023 v 2022
Revenue 19.0 13.4 41.9%
EBITDA 2.9 1.8 67.4%
Operating profit 1.8 1.2 53.2%


OUR PURPOSE
To provide safe, essential care and support and to improve and enrich the lives of vulnerable children, young people and adults whilst balancing profit, people and planet in all we do.

WHO WE ARE
Tristone Healthcare is a group of businesses that provide the highest quality care and support, throughout the UK, for vulnerable children and adults below retirement age. We are acquiring and growing social care businesses that:

- Provide the highest levels of care and support
- Have demonstrated consistent profitability
- Have demonstrated consistent and strong operational cash flows
- Have quality management teams in place
- Have good relationships with Local Authorities
- Present clear opportunity for growth

Our businesses are constantly striving to be the best providers of care and support within each of their social care categories.

Our Adults Services support people with learning disabilities, those who are recovering from mental illness, people with autistic spectrum disorder, individuals who have one or more physical impairments and provide care and rehabilitation for acquired brain injury. We deliver services in residential, day care and a wide choice of supported living settings.

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023


Our Children's Services provide residential care, specialist education and supported accommodation for young people. We specialise in supporting children and young people with complex needs including those who have been identified with Communication and Interaction needs or Social, Emotional and Mental Health (SEMH) needs for example, as well as victims of criminal exploitation and abuse. Many of the children and young people for whom care and support is provided have significant attachment disorders and present with profound levels of trauma.

OUR GROUP OF BUSINESSES

As at 31 March 2023

Sportfit Support Services Limited
Based in Southampton, Sportfit Support Services Limited offers support and education to young people aged 16 to 19 suffering from developmental delays, abuse and family relationship breakdowns and has recently opened its first Residential Childrens Home.

Premier Care Management Limited
Premier Care Management Limited provides community and outreach services for vulnerable young people in the South-West.

Procare (Wales) Limited & Bangor Centre for Developmental Disabilities Limited
Procare Wales Limited and Bangor Centre for Developmental Disabilities Limited support children and adults with their work in Applied Behaviour Analysis. They also provide 24-hour community living schemes based in the Conwy and Denbighshire area.

Seaside Care Homes Limited
Based in Clacton-on-Sea, Seaside Care Homes provide both long and short- term residential care to young people with a wide variety of complex health care needs.

Beyond Limits (Plymouth) Limited
Plymouth based CQC registered Beyond Limits was founded in 2011 and specialises in supporting people with learning disabilities, mental health issues and other needs. The business operates across Devon, Cornwall, Somerset, and Dumfries and Galloway

K Bond Healthcare Limited
K Bond Healthcare (trading as Next Steps), based in the North-West, was founded in 2015, specialises in providing individuals with chronic and treatment-resistant mental illnesses with a therapeutic home environment to receive the highest quality of residential and nursing care.

Acquisitions since 31 March 2023

South West Intervention Services Limited (since 23 June 2023)
SWIS offer 1:1 and 2:1 personalised programs of support to children and young people with varying degrees of need. Services include: short breaks, family support, emergency support, hospital support and alternative education provision. SWIS ensure time is given in the approach to the different packages of support available to ensure there is the right balance of social and emotional support, intervention, and education, for each young person.

In addition, Tristone Healthcare provides consultancy and support services, for which we charge a monthly fee, to Juventas Services Limited and Dimensions Care Limited.

CEO STATEMENT

Welcome to the Tristone Healthcare annual report for 2023. The year has been characterised by a range of macro-economic challenges which we are pleased to say have been, and continue to be, carefully navigated. Our existing businesses continued to deliver best-in-class care, support and education and continued to perform profitably whilst delivering 59% capacity growth.


TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023

I feel as confident as ever that we have the right strategy and the right people to execute it. There is no doubt that the environment in which we have been operating the last few years has had its challenges but this is not unique to us and it is testament to our colleagues and the leadership teams within each business that we have been able to deliver further growth through this period.

We were delighted to acquire 2 further businesses - Beyond Limits and K Bond Healthcare with a third acquisition occurring after year end. Each of these businesses met our strict criteria for investment and offer the highest standards of care, support and education. We have been delighted to welcome them into our community and work with their highly skilled leadership teams.

Of fundamental importance, care quality was maintained and in many cases improved in each of our businesses. This is something we are all very proud of.

Revenue increased from £13.4m to £19.0m and EBITDA increased by 67% to £2.9m. Of this increase, organic growth contributed 33% of EBITDA growth.

Given inflationary pressures and labour challenges, the board is pleased with this result. What is quite clear is that the business is well positioned as we head into FY24 to realise substantial organic growth and I look forward to reporting on this in the next annual report.

Sportfit Support Services successfully implemented its succession plan with founder and MD Ashley Vickers stepping into a non-executive directorship role and Danielle Piller, the former Finance Director, being appointed as Managing Director. We, and Sportfit, are immensely grateful for Ashley's entrepreneurial drive and his guiding hand in the development of Sportfit and look forward to working with him in his new role. Similarly, we are delighted that Danielle will continue to lead the company in its next phase of growth and wish her all the best in her new role. Over the course of the year, the capacity of Sportfit to look after young people supported increased from 46 at March 2022 to 55 at March 2023.

Procare Wales, as ever, delivered some wonderful care for its residents whilst maintaining strong financial performance and we are all excited to see growth, additional capacity created and services delivered to more people in the coming years.

Premier Care Management saw significant growth through the course of 2023 with placement capacity increasing from 20 to 22, and annualised revenue increasing from £1.5m to £1.9m.

Seaside Care Homes has integrated well within the community and continues to deliver consistently good results. The focus through 2023 was ensuring that the infrastructure was in place to support the next phase of growth and I anticipate reporting on the successful opening of new homes in the next annual report.

We were delighted to acquire a majority stake in Beyond Limits at the start of this financial year and have thoroughly enjoyed working with Doreen Kelly (managing Director) and her leadership team. Integration within the Tristone community and onboarding was a key theme for Beyond Limits in 2023 but in addition we saw capacity growth from 28 to 29 with the local team continuing to work with other people who benefit from their expert care in the future.

K Bond Healthcare (trading as Next Steps) was our final acquisition of FY23. Founded in 2015, Kirsten Bond and her team quickly created an exceptional care provider and we are working closely with Kirsten and her leadership team to deliver more provision.

Looking Inward

Last year saw the launch and development of the Tristone Growth Enablement Platform and the addition of a number of key components including social impact assessment technology and the adoption of key operational technologies across the businesses. These developments have driven functional improvement across key departments, improved governance and risk management and provide a foundation that can facilitate growth through the years ahead.






TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023

Looking Forward

With a portfolio of 7 business much of our focus through 2024 is on delivering widely needed additional capacity. We are very proud of the care, support and education delivered by each of our businesses and strive to support local authorities, the NHS and ultimately individuals with more access to these services.

Last year I openly stated that our existing businesses will target 10% organic growth (broadly defined as placement capacity) each year. We nearly achieved this in FY23 (underlying sustainable organic growth of 7%) but expect to be back up to >10% in FY24. We view this steady organic growth strategy as a sensible, and sustainable approach to building competitive strength, shareholder value and outstanding services.

Our focus on organic growth is not to say that we won't continue with our highly acquisitive strategy - indeed we believe that there is significant opportunity in the coming years to acquire great businesses at quite reasonable valuations (the current cost of borrowing starting to depress valuations), whilst providing owners with the opportunity to exit to a respected, care-centric and fair investor.


COO STATEMENT

The last 12 months have been a period of growth for Tristone, through organic growth, acquisition, and in operational maturity and effectiveness. Many of the systems that we have been working hard to develop over the last year have come to fruition. These are designed to help us with recruitment, measuring social value, capturing the voice of our colleagues and ensuring best health and safety compliance. These initiatives, amongst others, have given new tools to our business leaders to ensure that they can deliver great quality care and support by creating more efficient solutions to the ongoing issues that social care leaders face.

We have had an emphasis on organic growth over the last year and the fruits of that labour will positively affect EBITDA throughout 2023 and 2024, with a number of new properties and services coming online. The Managing Directors and senior teams have become more focused on organic growth and the positive impact this has on the business and can achieve this without compromising the ongoing quality of care and support. This growth also helps us to meet what continues to be a huge demand for our services. This aligns with our Tristone Community value of Collaboration and Growth. Our services are needed by society, and we will continue to work hard to meet that demand, whilst excelling and maintaining a robust safeguarding culture.

The Independent Safeguarding Board continues to effectively monitor policy and procedure and safeguarding incidents. We have welcomed new board members, giving us more breadth and depth of expertise. This has given us more strategic input around probation, offender management, creating safer cultures, and adult care. It is very positive that board members have been visiting community businesses to conduct safeguarding audits. This has given us an opportunity to test our safeguarding practice with trusted 'critical friends'.

In 2024 Ofsted complete the process of registering 16 to 18 supported accommodation. This is very welcome, and we have applied for registration for all relevant services. We have still not seen the inspection framework from Ofsted, but the regulations are broadly what we expected them to be. Whilst we have worked hard to prepare for this, as we ran those services in line with regulatory standards anyway (as opposed to so many of our competitors) this has been a reasonably simple transition. We are keen to see what opportunity this brings over the coming months as we hear of many of our competitors are not choosing to register as they cannot meet the quality demands of regulation. Whilst this may present a clear opportunity for us, it will have a negative societal impact in worsening the sufficiency crisis in children's placements if that proves to be the case.

As the sector continues to recover post Covid, we are seeing green shoots in recruitment. We have grown from 287 colleagues to 482 over the year. As we grow, we continue to create more opportunities and growth for colleagues new and existing.

The next 12 months will see us complete on a number of growth projects, with a firm emphasis on good quality, sustainable organic growth.




TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023

OUR EMPLOYEES

We very purposefully describe our group of businesses as a community. That is at the very heart of Tristone life and highlights the critical significance of all our colleagues working together to provide the best possible care and support to all those in our care. Year in, year out, colleagues go above and beyond to support each other to make sure standards are never compromised. Often this means making great personal sacrifice. Tristone Healthcare benefits from wonderful, caring people who work in our sector, and we consistently seek to ensure that the Community's purpose and passion will prevail and more people will come to work in social care and experience what a rewarding vocation it can be.

Engaging with our employees is therefore of prime strategic importance (alongside safeguarding all stakeholders of the community) underlying the actions of the Directors of all community businesses, to create a stable, healthy and happy community of colleagues. The Directors strive to create a culture of engagement and inclusion, where every employee's contribution is valued and diversity of the team is celebrated.

In addition to each of our community businesses communicating with their employees through team meetings, producing local, business specific newsletters, and conducting information sessions such as 'director's days', we also produce a Tristone online newsletter called 'Tristone Today.' This initiative is helping to foster community cohesion. We celebrate the achievements of our colleagues throughout the community and the individuals they care for, whilst helping them to understand our sustainable working practices, with the aim that they see the Tristone community as an employer of choice that strives to create growth and opportunity.

Listening to our colleagues is essential and we utilise an employee feedback and engagement platform to send anonymised surveys and questionnaires, encouraging employee engagement and feedback. The platform equips employees with tools through which they can engage, feedback and provide colleague recognition as well as providing management with actionable insights and employee driven analytics. The anonymised surveys ensure we foster a culture of psychological safety and allow for deeper engagement with HR and management through anonymised chats. Recommended actions empower HR leaders to drive positive organizational change.

As any new business enters the community (via acquisition) our COO is always available to give a presentation introducing the Tristone community to new colleagues. to allay any fears about what new investment can bring. It is an opportunity to explain our values in terms of social care, allay any fears naturally arising from a change of ownership, and outline how our community model does not fundamentally change the business by withdrawing anything in place, but instead seeks to supplement great practices with growth enabling improvements. This has always been a positive process and all colleagues have the contact details of the COO should they need further assistance or reassurance.

The community of businesses is committed to offering equal opportunities to all; no colleague or potential colleague receives more or less favourable treatment due to their gender, age, race, national or ethnic origin, disability, sexual orientation, or marital status. It is our policy to give fair consideration to all applications for employment acknowledging the particular abilities and aptitudes of each applicant and taking into account the requirements of the vacancies available. We are committed to the training and development of all colleagues and to providing a productive, safe and positive working environment.

In the event of an employee becoming incapacitated or disabled or their circumstances adversely changing, every effort is made to ensure that their employment within the community of businesses continues and that appropriate help is given to assist the member of staff. It is the policy and commitment of the community to ensure that the training, career development and promotion of a disabled person should, as far as possible, be identical to that of a person who does not have any disability.

The care sector is not generally renowned for high levels of employee engagement in the financial aspects of running businesses. However, we view the financial awareness of our colleagues as extremely important to support the long-term success and growth of the community. This starts with ensuring all management teams participate in monthly trading reviews which include monthly financial results being compared to past achievements and future targets. Training opportunities exist, and are being further developed, to widen general financial awareness and management capability for all those in management roles. In addition, we are developing share option schemes on a business-by-business basis, depending on the suitability of individual community business circumstances, and to date three community businesses have their own share option schemes, with a further two planned for the next financial year. Colleagues are invited to participate depending on their personal ability to directly impact the financial success of their business with reward levels being linked to both financial and non-financial outcomes over time.

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023


SOCIAL IMPACT

The Tristone community takes its social impact extremely seriously. Charitable initiatives appropriate to the current size of the group, are undertaken by community businesses and we are developing our actions in response to climate change and how we can build such actions into our day-to-day operations. These are at an early stage but are a strategic objective for the Directors over the coming years. We are developing our systems to capture and measure our social impact and will seek to disclose our results in due course.

PRINCIPLE RISKS AND MITIGATION STRATEGIES

The Board of Directors carefully monitor and regularly review a range of risks relevant to the whole group. The principal risks and mitigation strategies at the date of this report (not listed in any particular order) are:

1) Safeguarding breaches. Given the nature of the services that the group provides, an ever-present risk is that a safeguarding breach leads to the harm of either an individual accessing support and/or care or of an employee working in our services.

Risk response: Safeguarding our service users and employees is at the very core and forefront of everything we do. This leads our culture, our strategic thinking, and all decision-making. It is the first thing on all formal meeting agendas and we monitor incidents very closely however benign they may first appear. It is the primary responsibility of all operational employees and we employ significant resources in its real life practice. We do not compromise on safeguarding leading the way in all our actions. Legislation is unequivocal in the expectation that the welfare of vulnerable people is paramount, and we take this responsibility extremely seriously. To augment our commitment to safeguarding, we have created an Independent Safeguarding Board (ISB) to analyse safeguarding practice, conduct regular reviews of our businesses, and provide lessons learned from any incident. The ISB sits separately and independently from our Board of Directors and comprises sector leading, highly experienced individuals to provide best in class oversight of our practices.

2) Serious accident of a service user or an employee. Closely linked to safeguarding breaches our service users and employees live and work in our freehold and leasehold properties. There is therefore a heightened need to ensure that health and safety policies and procedures are of the highest priority to prevent accidents and injuries. In addition to the impact on the individual, serious events of this type can lead to significant financial, legal, and reputational impact.

Risk response: Health and safety practices are fundamentally and intrinsically embedded into our safeguarding practices and are not separable. We utilise a highly effective health and safety on-line system to monitor compliance and ensure comprehensive property inspections take place on a routine basis. We monitor and investigate all accidents and incidents to ensure lessons are always learned.

3) Coronavirus (Covid 19). The now on-going nature of Covid 19 in our wider society means that its presence in our services is largely unavoidable. However, there remains a risk of a severe reaction to the virus in service-users and high levels of sickness in our employee community.

Risk response: All businesses follow appropriate local advice to reduce transmission. High quality agency staff are made available to cover sickness levels where required.

4) Regulation breaches. Many of our services are already covered by Ofsted, CQC or CIW bodies and regulation is forthcoming for the provision of support accommodation for young people aged 16-18. Aside from the all-important human impact of providing a substandard service to the people in our care (covered by risks 1 and 2 above) a breach of those regulations resulting in a downgrade of regulatory outcomes could give rise to reputational concerns impacting contract renewal or growth.

Risk response: All services (regulated or otherwise) are designed and run to target the highest level of regulated outcomes. Our safeguarding culture is set to expect those standards. Leadership teams are highly experienced and targeted to meet those standards. We target significant resources at strong corporate governance throughout the community and at present this includes monitoring and planning for the forthcoming regulation of supported accommodation services for young people aged 16-18.


TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023

5) Breach of funding facility covenants. The group's existing debt facilities have a series of covenants requiring compliance. They are typical to long-term debt facilities of this nature although are less onerous that those of more traditional bank facilities. A breach of any one covenant would technically give Duke Royalty the opportunity to accelerate the repayment of the Duke facility.

Risk response: The group budgets and re-forecasts its financial performance on a regular basis to ensure that all plans continue to keep the group within its covenant obligations. Clear delegated authorities to community businesses mean that all material decision making is held by Directors of Tristone Healthcare to facilitate that monitoring of covenant limitations to ensure compliance.

6) Data security breach / information systems compromise. Common for most modern-day businesses, data management and analysis are central to the successful operation of the Tristone community of businesses. It is again linked closely to safeguarding principles for our service users. A breach of our data security systems could give rise to financial and reputational losses as well as representing a serious safeguarding breach.

Risk response: The group employs a range of data security measures utilising the assistance of an external expert IT security business. Regular penetration tests are carried out to identify and then respond to security weaknesses. And regular IT security training exercises for our employees are used to enhance human decision making and reduce that greatest threat to our systems.

7) Failure to successfully integrate acquired businesses into the community. Central to the success of the Tristone community is that acquired businesses are 'on-boarded' successfully into the community. A failure to do so represents not only financial risk (lower return on investment) but also a risk of disengagement across the leadership teams in the community, and a failure to leverage the cross-networking potential of those leadership teams in the successful operation and growth of all our businesses.

Risk response: Utilise targeted project management methodologies and tools to manage a 3-month detailed on-boarding project for each acquisition. This is followed by monthly trading reviews for all community business with wide-ranging agendas to monitor the long-term success of each business. Systems are under-development for employee feedback and surveys to be commenced in 2023 enabling us to monitor and respond to key employee engagement trends.

8) High inflationary environment. The higher-than-normal inflationary environment of the United Kingdom markets we operate in presents an unusually high financial risk of cost inflation significant exceeding price increases.

Risk response: On-going commercially sensible cost control across the businesses together with balanced price management policies working closely with the fee-paying authorities relevant to our service-users.

9) Employee workforce recruitment, retention, and development. Fundamentally at the core of everything we do are stable, high quality and motivated employee teams across our businesses. A failure to retain and develop existing members of our teams presents significant operational and financial risk, and a failure to safely recruit more people into our teams prevents stability and growth.

Risk response: Clear workforce planning strategies in place across the businesses in addition to a leadership academy programme comprising internally delivered training and external 'mini-MBA' programmes for our leaders of the future. A sector-leading employee benefits programme is utilised to promote retention including competitive pay rates set out above living wage minimum levels, and enhanced recruitment systems continue to be developed for implementation in 2023/24.


GROUP FINANCIAL REVIEW

Year to 31 March 2023 Year to 31 March 2022
Revenue £19.0m £13.4m
Operating profit £1.8m £1.2m
Add back:
Depreciation £0.2m £0.1m
Goodwill amortisation £0.9m £0.5m
EBITDA £2.9m £1.8m
EBITDA % of revenue 15.4% 13.0%

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023


Operating profit £1.8m £1.2m
Finance costs (£2.4m) (£1.1m)
Profit before tax (£0.6m) £0.1m
Taxation (£0.6m) (£0.1m)
Profit after tax (£0.7m) £0.0m

Impact of acquisitions:
Revenue from existing operations £14.1m £13.4m
Revenue from acquisitions in 2023 £4.9m

EBITDA from existing operations £2.4m £1.8m
EBITDA from acquisitions in 2023 £0.5m


As at 31 March 2023 As at 31 March 2022
Annualised revenue £20.8m £14.4m
Annualised EBITDA £3.4m £2.1m
Annualised EBITDA % of Revenue 16.2% 14.2%

Net group liabilities (£2.5m) (£1.8m)

Gross debt (£18.5m) (£12.1m)
Cash at bank £1.2m £0.8m
Net debt (excluding deferred
consideration)

(£17.2m)

(£11.3m)
Deferred consideration (£2.7m) (£2.8m)
Net debt (£19.9m) (£14.1m)

Property portfolio valuation £7.5m £7.5m

Net debt after property valuation (£12.4m) (£6.6m)
EBITDA leverage (Net debt after
property valuation/annualised EBITDA

3.7x

3.2x


Revenue in the year to 31 March 2023 was £19.0m (31 March 2022: £13.4m) which represents a 41.9% increase year on year. Of this, 37% was driven by the in-year acquisitions and 7.7% was the full year effect and organic growth from the businesses acquired before 31 March 2022. Year on year annualised organic growth in the year to 31 March 2023 for operations acquired prior to 31 March 2022 (excluding one off revenues relating to a historic VAT exercise) was 7%.

Annualised revenue as at 31 March 2023 (annualised by grossing up to 12 months the in-year results of Premier Care Management and Seaside Care Homes to 31 March 2022 and Beyond Limits (Plymouth) Limited in April 2022 and K Bond Healthcare Limited to 31 March 2023) shows an increase of 44% from £14.4m to £20.8m. Following the subsequent acquisition of South West Intervention Services Limited ('SWIS') in June 2023, pro forma annualised revenue (excluding further organic growth from the existing businesses from 1 April 2022) has now reached £22.7m.

EBITDA (operating profit with the charges of depreciation and goodwill amortisation added back) is the principal profit metric used by the Tristone Healthcare group. The result for the year to 31 March 2023 is £2.9m (2022: £1.8m). To support the growth from acquisition and organic growth, the group invests in its central infrastructure and therefore it is not possible to accurately provide a split between EBITDA growth driven by acquisition and organic growth.


TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023

Annualised EBITDA had reached £3.4m by 31 March 2023 (31 March 2022: £2.1m). Following the acquisition of SWIS since 31 March 2023, pro forma annualised EBITDA (excluding further organic growth from the existing businesses from 1 April 2023) has now reached £3.7m.

The activities of the group have been funded by a variety of funding sources in the years to 31 March 2023 and 2022. In the period from 1 April 2021 through to 16 December 2021, funding was provided by loans provided by Tristone Healthcare Bond DAC (using the proceeds of Tristone Healthcare 8.5% Bonds 2027) and by acquisition banking loans provided by Santander Bank (for Sportfit Support Services and Premier Care Management) and by Shawbrook Bank (for Procare Wales). The finance costs for the same periods therefore represent the interest costs of these facilities.

On 16 December 2021, Tristone Healthcare Limited entered into a new strategic funding partnership with Duke Royalty (the 'Duke facility'). This provided the group with a £20.0m overall funding facility which has subsequently been increased to a facility of £21.0m in June 2023. The Duke facility is long-term financing, available for 30 years if not repaid earlier.

Of this £10.5m was immediately drawn in December 2021 enabling the group to refinance all its existing debt facilities. In the period to 31 March 2022 a further £1.6m was drawn for acquisition activity and in the year to 31 March 2023 a further £5.5m was drawn for subsequent acquisition activity. Therefore, as at 31 March 2023 a total of £17.6m had been drawn from the Duke facility. Since 31 March 2023 a further £1.8m has been drawn for acquisition related activity (£19.4m overall), and this therefore provides the group with an additional £1.4m of remaining headroom in the facilities (£21.0m total) available for a variety of uses including organic and acquisition growth and meeting some of the group's deferred consideration commitments.

In the year to 31 March 2023 loan notes were issued as part of the acquisitions of Beyond Limits (Plymouth) Limited and K Bond Healthcare Limited. These total £850,000 and are not due for repayment until 2027. They are therefore shown in long-term debt. In the year to March 2023 the related finance cost was £35,000.

The Duke facility cost £1.3m to raise in December 2021. Of this, £0.4m was the cash cost of raising the £20.0m facility and £0.9m was the fair value of the equity issued to Duke Royalty as part of the strategic partnership. The accounting treatment for each element differs. The costs of raising the debt were calculated as £1.2m and are being amortised over 60 months with £0.2m amortised this year (note 6) (£0.1m in the year to 31 March 2022) leaving a remaining £0.9m of unamortised finance costs shown netting off the long-term loans outstanding (note 15). The remaining £0.1m of the facility costs are treated as the cost of issuing equity and were taken to the share premium account and net off against the share premium value resulting in a £0.8m share premium reserve as at 31 March 2023 & 2022.

An element of the equity issued to Duke Royalty attracts a preference share dividend and in the year to 31 March 2023 this was £68,000.

The finance costs of the group since 16 December 2021 therefore represent the costs of the Duke facility, the amortisation of the transaction costs of the debt raise, loan notes interest and preference share dividends (see note 6).

Overall, finance costs have risen from £1.1m in the year to 31 March 2022 to £2.4m in the year to 31 March 2023 principally driven by a full year of the Duke facility and the increasing use of that same facility.

A loss before tax is therefore recorded of £0.6m in the year to 31 March 2023 (2022 profit before tax: £0.1m).

Taxation on those results is £0.1m in the year to March 2023 (2022: £0.1m). Tristone Healthcare Limited considers that it is important to pay our fair share of corporation tax in the UK and therefore will never use aggressive taxation schemes to minimise our tax expense.

There was therefore a loss after tax of £0.7m in the year to 31 March 2023 (2022: profit of £19,500). From this, a profit of £0.3m was attributable to non-controlling interests in 2023 (2022: £0.3m). They are the minority interest shareholders of the holding companies of Sportfit Support Services, Procare Wales, Premier Care Management, Beyond Limits (Plymouth) and K Bond Healthcare.


TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023

The effect of the continuing growth and acquisition activity during the year is significant on the balance sheet. The group net liabilities position moved from from £1.8m as at 31 March 2022 to £2.5m as at 31 March 2023. The present net liabilities position is the result of cumulative losses recognised during the time spent setting up the group, before any acquisitions were made, and does not indicate any short-term liquidity issues. The success of that early investment is now evident in the more recent group results both in terms of EBITDA and cashflow and these results better reflect the current and on-going financial strength of the group.

Properties used in the provision of services are a mixture of leasehold and freehold. A balanced mix of the two is considered an appropriate objective by the Directors. Freehold properties are regularly valued by independent surveyors and remain valued as at the 31 March 2022 valuation of £7.5m.

Combining net debt (see below) with the property portfolio valuations gives a view on the debt exposure linked to annualised EBITDA coverage. This "EBITDA leverage" value provides a good indicator of the real leverage of the operating activities of the group. As at 31 March 2023 this multiple was 3.7, increased a little from the multiple of 3.2 the year earlier, but remaining at a sustainable and healthy level.

The high level of activity in the year is also apparent in the consolidated cash flow statement. Cash generated from operations before interest, tax and capital expenditure (see note 1 to the accounts) is £3.7m (2022: £1.2m) and this represents 128% of EBITDA (2022: 70% of EBITDA). As the group continues to grow we expect that cash flow conversion % to settle towards 90%.

The cash flow statement also sets out the sources and uses of the acquisition activity for the year. Total investment activity (including acquisitions) in the year to 31 March 2023 was £6.1m and this was met from £5.5m raised from the Duke facility and £0.6m from the net cash from operating activities (after finance costs and tax were met). Withing this, investment into the acquired businesses (mainly propery and IT systems) to support growth was £0.3m. Total cash on the balance sheet therefore increased by £0.4m in the year to 31 March 2023.

After the cash flow activity in the year, net debt stood at £20.4m (2022: £14.1m). This comprises cash at bank of £1.2m (2022: £0.8m) partially off-setting gross debt from the Duke facility £17.6m (2022: £12.1m) and the loan notes of £0.85m. Net debt at 31 March 2023 also includes deferred consideration of £2.7m relating to the acquisition of subsidiaries (2022: £2.8m). The Duke facility debt has a potential 30-year life through to December 2051. The deferred consideration balances of the acquisitions that had completed by 31 March 2023 fall due in instalments through to December 2027 and will be met either through cash generated from operations or from the remaining headroom in the Duke facility.

ON BEHALF OF THE BOARD:





P N Ledgard - Director


31 October 2023

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023


The directors present their report with the financial statements of the company and the group for the year ended 31 March 2023.

PRINCIPAL ACTIVITY
The principal activity of the group in the year under review was that of the provision of residential care and care in the community.

DIVIDENDS
The directors do not recommend dividend payments for the year (2021: £nil).

EVENTS SINCE THE END OF THE YEAR
Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 April 2022 to the date of this report.

Y A Loucopoulos
C Elliott
R Finney
P N Ledgard
A Hibbard

DISCLOSURE IN THE STRATEGIC REPORT
The directors have chosen to disclose certain information in the strategic report, including post balance sheet events, future developments, and engagement with employees.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023


AUDITORS
The auditors, Harold Sharp Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





P N Ledgard - Director


31 October 2023

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
TRISTONE HEALTHCARE LIMITED


Opinion
We have audited the financial statements of Tristone Healthcare Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the group's and of the parent company affairs as at 31 March 2023 and of the group's loss for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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 the audit:
- the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
TRISTONE HEALTHCARE LIMITED


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 its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

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:
- adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
- the parent company financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page thirteen, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
TRISTONE HEALTHCARE LIMITED


Auditors' 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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

As part of our planning process:
- We enquired of management the systems and controls the company has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud.
- We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102, Companies Act 2006, health and safety, and employment law.
- We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.
- Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
- Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
- Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
- Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular in relation to amortisation, depreciation, bad debt provision, accrued costs, and deferred consideration.
- Assessing the extent of compliance, or lack of, with the relevant laws and regulations in particular those that are central to the entities ability to continue in operation.
- Testing key revenue lines, in particular cut-off, for evidence of management bias.
- Performing a verification of key assets.
- Obtaining third-party confirmation of material bank balances.
- Documenting and verifying all significant related party and consolidated balances and transactions.
- Reviewing documentation such as the company board minutes, correspondence with solicitors, for discussions of irregularities including fraud.
- Testing all material consolidation adjustments.

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 and management.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
TRISTONE HEALTHCARE LIMITED


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 a Report of the Auditors 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.




Karen Dent (Senior Statutory Auditor)
for and on behalf of Harold Sharp Limited
Statutory Auditors and Chartered Accountants
5 Brooklands Place
Brooklands Road
Sale
Cheshire
M33 3SD

31 October 2023

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023

2023 2022
Notes £    £   

TURNOVER 19,046,707 13,425,234

Cost of sales 11,715,031 8,495,623
GROSS PROFIT 7,331,676 4,929,611

Administrative expenses 5,520,118 3,905,019
1,811,558 1,024,592

Other operating income 33,913 180,273
OPERATING PROFIT 4 1,845,471 1,204,865

Interest receivable and similar income 11,921 16,627
1,857,392 1,221,492

Interest payable and similar expenses 6 2,420,627 1,075,782
(LOSS)/PROFIT BEFORE TAXATION (563,235 ) 145,710

Tax on (loss)/profit 7 119,008 126,210
(LOSS)/PROFIT FOR THE FINANCIAL
YEAR

(682,243

)

19,500
(Loss)/profit attributable to:
Owners of the parent (982,174 ) (285,800 )
Non-controlling interests 299,931 305,300
(682,243 ) 19,500

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

CONSOLIDATED OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023

2023 2022
Notes £    £   

(LOSS)/PROFIT FOR THE YEAR (682,243 ) 19,500


OTHER COMPREHENSIVE INCOME
- 114,746
Income tax relating to other comprehensive
income

-

(28,685

)
OTHER COMPREHENSIVE INCOME FOR
THE YEAR, NET OF INCOME TAX

-

86,061
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR

(682,243

)

105,561

Total comprehensive income attributable to:
Owners of the parent (982,174 ) (199,739 )
Non-controlling interests 299,931 305,300
(682,243 ) 105,561

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

CONSOLIDATED BALANCE SHEET
31 MARCH 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 9 10,906,424 5,436,930
Tangible assets 10 6,180,892 5,715,010
Investments 11 - -
17,087,316 11,151,940

CURRENT ASSETS
Debtors 12 2,280,523 8,742,205
Cash at bank and in hand 1,215,349 788,268
3,495,872 9,530,473
CREDITORS
Amounts falling due within one year 13 3,600,941 9,131,910
NET CURRENT (LIABILITIES)/ASSETS (105,069 ) 398,563
TOTAL ASSETS LESS CURRENT
LIABILITIES

16,982,247

11,550,503

CREDITORS
Amounts falling due after more than one year 14 (18,857,369 ) (12,828,721 )

PROVISIONS FOR LIABILITIES 19 (614,195 ) (528,856 )
NET LIABILITIES (2,489,317 ) (1,807,074 )

CAPITAL AND RESERVES
Called up share capital 20 78,125 78,125
Share premium 21 748,189 748,189
Revaluation reserve 21 47,543 86,061
Retained earnings 21 (3,977,251 ) (3,033,595 )
SHAREHOLDERS' FUNDS (3,103,394 ) (2,121,220 )

NON-CONTROLLING INTERESTS 614,077 314,146
TOTAL EQUITY (2,489,317 ) (1,807,074 )

The financial statements were approved by the Board of Directors and authorised for issue on 31 October 2023 and were signed on its behalf by:




P N Ledgard - Director


TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

COMPANY BALANCE SHEET
31 MARCH 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 9 80,104 -
Tangible assets 10 2,963 1,016
Investments 11 221 221
83,288 1,237

CURRENT ASSETS
Debtors 12 14,676,715 8,962,849
Cash at bank 101,752 42,770
14,778,467 9,005,619
CREDITORS
Amounts falling due within one year 13 1,352,697 538,133
NET CURRENT ASSETS 13,425,770 8,467,486
TOTAL ASSETS LESS CURRENT
LIABILITIES

13,509,058

8,468,723

CREDITORS
Amounts falling due after more than one year 14 (16,728,065 ) (10,994,292 )

PROVISIONS FOR LIABILITIES 19 (731 ) (193 )
NET LIABILITIES (3,219,738 ) (2,525,762 )

CAPITAL AND RESERVES
Called up share capital 20 78,125 78,125
Share premium 21 748,189 748,189
Retained earnings 21 (4,046,052 ) (3,352,076 )
SHAREHOLDERS' FUNDS (3,219,738 ) (2,525,762 )

Company's loss for the financial year (693,976 ) (836,589 )

The financial statements were approved by the Board of Directors and authorised for issue on 31 October 2023 and were signed on its behalf by:





P N Ledgard - Director


TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023

Called up
share Retained Share
capital earnings premium
£    £    £   

Balance at 1 April 2021 62,500 (2,747,795 ) -

Changes in equity
Issue of share capital 15,625 - 748,189
Total comprehensive income - (285,800 ) -
Balance at 31 March 2022 78,125 (3,033,595 ) 748,189

Changes in equity
Total comprehensive income - (943,656 ) -
Balance at 31 March 2023 78,125 (3,977,251 ) 748,189
Revaluation Non-controlling Total
reserve Total interests equity
£    £    £    £   

Balance at 1 April 2021 - (2,685,295 ) 8,846 (2,676,449 )

Changes in equity
Issue of share capital - 763,814 - 763,814
Total comprehensive income 86,061 (199,739 ) 305,300 105,561
Balance at 31 March 2022 86,061 (2,121,220 ) 314,146 (1,807,074 )

Changes in equity
Total comprehensive income (38,518 ) (982,174 ) 299,931 (682,243 )
Balance at 31 March 2023 47,543 (3,103,394 ) 614,077 (2,489,317 )

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023

Called up
share Retained Share Total
capital earnings premium equity
£    £    £    £   

Balance at 1 April 2021 62,500 (2,515,487 ) - (2,452,987 )

Changes in equity
Issue of share capital 15,625 - 748,189 763,814
Total comprehensive income - (836,589 ) - (836,589 )
Balance at 31 March 2022 78,125 (3,352,076 ) 748,189 (2,525,762 )

Changes in equity
Total comprehensive income - (693,976 ) - (693,976 )
Balance at 31 March 2023 78,125 (4,046,052 ) 748,189 (3,219,738 )

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023

2023 2022
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 3,740,377 1,219,835
Interest paid (2,118,675 ) (1,102,628 )
Finance costs paid (68,179 ) -
Tax paid (504,393 ) (228,657 )
Net cash from operating activities 1,049,130 (111,450 )

Cash flows from investing activities
Purchase of intangible fixed assets (82,840 ) -
Purchase of tangible fixed assets (196,561 ) (36,134 )
Sale of tangible fixed assets 9,196 -
Purchase of subsidiaries (5,863,232 ) (2,462,806 )
Interest received 11,921 16,627
Net cash from investing activities (6,121,516 ) (2,482,313 )

Cash flows from financing activities
New loans in year 5,500,000 12,350,000
Loan repayments in year - (9,240,000 )
Amount withdrawn by directors (533 ) (523 )
Costs of raising finance - (404,429 )
Net cash from financing activities 5,499,467 2,705,048

Increase in cash and cash equivalents 427,081 111,285
Cash and cash equivalents at beginning of
year

2

788,268

676,983

Cash and cash equivalents at end of year 2 1,215,349 788,268

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023


1. RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM
OPERATIONS
2023 2022
£    £   
(Loss)/profit before taxation (563,235 ) 145,710
Depreciation charges 1,093,648 543,904
(Profit)/loss on disposal of fixed assets (8,893 ) 1,418
Finance costs 2,420,627 1,075,782
Finance income (11,921 ) (16,627 )
2,930,226 1,750,187
Decrease/(increase) in trade and other debtors 7,328,224 (7,154,318 )
(Decrease)/increase in trade and other creditors (6,518,073 ) 6,623,966
Cash generated from operations 3,740,377 1,219,835

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 March 2023
31/3/23 1/4/22
£    £   
Cash and cash equivalents 1,215,349 788,268
Year ended 31 March 2022
31/3/22 1/4/21
£    £   
Cash and cash equivalents 788,268 676,983


3. ANALYSIS OF CHANGES IN NET DEBT

At 1/4/22 Cash flow At 31/3/23
£    £    £   
Net cash
Cash at bank and in hand 788,268 427,081 1,215,349
788,268 427,081 1,215,349
Debt
Debts falling due after 1 year (10,995,292 ) (6,583,773 ) (17,579,065 )
(10,995,292 ) (6,583,773 ) (17,579,065 )
Total (10,207,024 ) (6,156,692 ) (16,363,716 )

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023


1. STATUTORY INFORMATION

Tristone Healthcare Limited is a private company, limited by shares, registered in England and Wales. The company's registered number is 09826810 and its registered office is 5 Brooklands Place, Brooklands Road, Sale, Cheshire M33 3SD.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

The presentation and functional currency is £ sterling.

Basis of consolidation
The consolidated financial statements include the audited accounts of the company and its subsidiaries made up to 31 March. The financial information of the subsidiaries is prepared as of the same reporting date and consolidated using consistent accounting policies. Group inter-company balances and transactions, including any unrealised profits arising from Group inter-company transactions are eliminated in full.

Results of subsidiary undertakings acquired or disposed of during the current and prior financial year were included in the financial statements from the effective date of control or up to the date of cessation of control. The separable net assets of the acquired subsidiary undertakings were incorporated into the financial statements on the basis of fair value as at the effective date of the Group acquiring control.

Critical accounting 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.

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.

Provisions
A provision is recognised in the balance sheet when the entity has a present legal or constructive obligation as a result of a past event, that can be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the amount required to settle the obligation at the reporting date.

Depreciation
Depreciation is provided over the estimated useful life of the asset. The directors make estimates as to the length of those useful lives.

Investments in subsidiaries
Investments in subsidiaries are initially measured at cost and subsequently measured at amortised cost, being the transaction price less any amounts settled and any impairment losses. The directors make estimates as to the carrying value of these assets and provide for them accordingly.

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


2. ACCOUNTING POLICIES - continued

Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree.

Goodwill is being amortised evenly over its estimated useful life of 10 years from date of acquisition.

Intangible assets
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Computer software is being amortised evenly over its estimated useful life of five years.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Property - 2% on cost and in accordance with the property
Improvements to property - 25% on reducing balance, 25% on cost and 10% on cost
Plant and machinery - 25% on reducing balance and 15% on reducing balance
Fixtures and fittings - 25% on reducing balance, 25% on cost and 20% on reducing balance
Motor vehicles - 25% on reducing balance and 25% on cost
Computer equipment - 33% on reducing balance, 25% on cost, 25% on reducing balance and 25% to 50% straight line

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses.

At each balance sheet date the group reviews the carrying amount of its tangible fixed assets to determine whether there is any indication that any items have suffered an impairment loss. If any such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of the impairment loss, if any.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment loss is recognised as an expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately.

Property, which consists of freehold and leasehold buildings, is initially recognised at cost and subsequently carried at the revalued amount less accumulated impairment losses.

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


2. ACCOUNTING POLICIES - continued

Financial instruments
The group has elected to apply the provisions of Section 11 'Basic Financial Instruments' of FRS 102 to all of its financial instruments.

Financial instruments are recognised when the group 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, which include trade debtors, other debtors, amounts owed by group undertakings, amounts owed by related parties, current asset investments 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. Financial assets classified as receivable within one year are not amortised.

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.

Basic financial liabilities, including trade creditors, other creditors, debentures, bank loans, other loans, deferred consideration, amounts owed to group undertakings, and amounts owed to related parties, 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 are derecognised when, and only when, the group's contractual obligations are discharged, cancelled, or they expire.

Derivative financial instruments are recognised at fair value using a valuation technique with any gains or losses being reported in profit or loss. Outstanding derivatives at reporting date are included under the appropriate format heading depending on the nature of the derivative.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


2. ACCOUNTING POLICIES - continued

Hire purchase and leasing commitments
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Going concern
At 31 March 2023 the Group, which includes the non-controlling interests, had a loss for the financial period of £682,243 (2022: £19,500 profit) and net liabilities of £3,103,394 (2022: £2,121,220). The company is a holding company and as such relies on its investments in its subsidiaries and the support of other group companies to ensure that it has sufficient funds to pay its debts as they fall due.

The directors have reviewed the working capital requirement forecasts and projections for the Group of companies headed up by Tristone Capital Ltd for the next twelve months, taking account of reasonably possible changes in trading performance, together with the planned capital investment over that same period. The group is expected to have a sufficient level of financial resources available through operating cash flows and existing borrowing facilities for a period of at least 12 months from approval of these financial statements ("the going concern period").

Consequently, the directors are confident that the Group and the Company will have sufficient funds to continue to meet their liabilities as they fall due for at least 12 months from the date of approval of the financial statements and have therefore prepared the financial statements on a going concern basis.

Restatement of prior year profit and loss account
The group has restated its 2022 comparatives for cost of sales and administrative expenses, in order to realign the results with their business plan. The restatement moves costs of £1,923,072 from administrative expenses to cost of sales. The overall operating profit remains unchanged from the prior year reported financial statements.

Mobilisation assets
Mobilisation assets relate to the set-up cost of individual income generating units (IGU) and reflect the investment required to bring these IGU to operational status, being when a first service user moves in to the home. These IGU are each residential accommodation capable of providing care for people with complex care needs. All are set up to be capable of long-term accommodation support for their respective service users of between 15 and 25 years.

A 7-year useful economic life for amortising the mobilisation asset into the P&L result is used to reflect the period of time over which that initial investment is expected to realise financial benefits until further expenditure is likely to be needed to maintain the IG asset at the high standard required.

3. EMPLOYEES AND DIRECTORS
2023 2022
£    £   
Wages and salaries 11,751,030 7,839,647
Social security costs 896,082 472,604
Other pension costs 288,641 151,165
12,935,753 8,463,416

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


3. EMPLOYEES AND DIRECTORS - continued

The average number of employees during the year was as follows:
2023 2022

Directors 5 4
Staff 477 283
482 287

The average number of employees by undertakings that were proportionately consolidated during the year was 194 (2022 - 49 ) .

2023 2022
£    £   
Directors' remuneration 445,626 243,074
Directors' pension contributions to money purchase schemes 33,654 7,198

Information regarding the highest paid director is as follows:
2023 2022
£    £   
Emoluments etc 160,000 129,808
Pension contributions to money purchase schemes 16,321 1,321

4. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2023 2022
£    £   
Hire of plant and machinery 14,919 11,343
Other operating leases 817,694 77,553
Depreciation - owned assets 176,177 36,789
(Profit)/loss on disposal of fixed assets (8,893 ) 1,418
Goodwill amortisation 914,735 507,113
Computer software amortisation 2,736 -
Auditors' remuneration 100,000 53,500

Auditors remuneration for the non-audit services of accountancy and taxation compliance was £25,800 (2022: £38,758).

5. EXCEPTIONAL ITEMS
2023 2022
£    £   
Exceptional items 740,418 -

Exceptional credits of £740,418 arise as a result of historic input VAT not previously claimed.

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


6. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£    £   
Bank loan interest - 249,503
Other interest payable 5,512 -
Loan note interest 35,303 -
Interest payable - 326,944
Amortised finance costs 233,773 64,157
Loan interest 2,077,860 435,178
Preference dividend 68,179 -
2,420,627 1,075,782

7. TAXATION

Analysis of the tax charge
The tax charge on the loss for the year was as follows:
2023 2022
£    £   
Current tax:
UK corporation tax 110,630 144,728

Deferred tax 8,378 (18,518 )
Tax on (loss)/profit 119,008 126,210

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
£    £   
(Loss)/profit before tax (563,235 ) 145,710
(Loss)/profit multiplied by the standard rate of corporation tax in the UK of 19 %
(2022 - 19 %)

(107,015

)

27,685

Effects of:
Expenses not deductible for tax purposes 71,843 25,597
Depreciation in excess of capital allowances 199,754 97,068
Utilisation of tax losses (24,134 ) (5,622 )
Adjustments to tax charge in respect of previous periods (29,818 ) -
Deferred tax movement 8,378 (18,518 )
Total tax charge 119,008 126,210

Tax effects relating to effects of other comprehensive income


TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


7. TAXATION - continued
2022
Gross Tax Net
£    £    £   
Property revaluation 114,746 (28,685 ) 86,061

8. INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.


9. INTANGIBLE FIXED ASSETS

Group
Computer
Goodwill software Totals
£    £    £   
COST
At 1 April 2022 6,164,889 - 6,164,889
Additions 6,304,125 82,840 6,386,965
At 31 March 2023 12,469,014 82,840 12,551,854
AMORTISATION
At 1 April 2022 727,959 - 727,959
Amortisation for year 914,735 2,736 917,471
At 31 March 2023 1,642,694 2,736 1,645,430
NET BOOK VALUE
At 31 March 2023 10,826,320 80,104 10,906,424
At 31 March 2022 5,436,930 - 5,436,930

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


9. INTANGIBLE FIXED ASSETS - continued

Group

Goodwill arises on the consolidation of the group's acquisitions that were acquired under the acquisition method of accounting.

Goodwill of £2,819,525 arising on the acquisition of 100% of Sportfit Support Services Limited is being amortised over 10 years.

Goodwill of £1,127,239 arising on the acquisition of 100% of Procare Wales Limited and its subsidiary Bangor Centre for Developmental Disabilities Limited is being amortised over 10 years.

Goodwill of £881,375 arising on the acquisition of 100% of Premier Care Management Limited is being amortised over 10 years.

Goodwill of £1,336,750 arising on the acquisition of 100% of Seaside Care Homes Limited is being amortised over 10 years.


Goodwill of £4,194,485 arising on the acquisition of 100% of K Bond Healthcare Ltd is being amortised over 10 years.


Goodwill of £2,109,640 arising on the acquisition of 100% of Beyond Limits (Plymouth) Ltd is being amortised over 10 years.

Company
Computer
software
£   
COST
Additions 82,840
At 31 March 2023 82,840
AMORTISATION
Amortisation for year 2,736
At 31 March 2023 2,736
NET BOOK VALUE
At 31 March 2023 80,104

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


10. TANGIBLE FIXED ASSETS

Group
Improvements
to Plant and
Property property machinery
£    £    £   
COST OR VALUATION
At 1 April 2022 5,620,000 62,216 154,437
Additions 163,146 - 2,465
Disposals - - -
Business combinations 454,853 24,075 -
At 31 March 2023 6,237,999 86,291 156,902
DEPRECIATION
At 1 April 2022 - 47,951 124,747
Charge for year 132,184 5,425 6,485
Eliminated on disposal - - -
Business combinations 60,926 13,348 -
At 31 March 2023 193,110 66,724 131,232
NET BOOK VALUE
At 31 March 2023 6,044,889 19,567 25,670
At 31 March 2022 5,620,000 14,265 29,690

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


10. TANGIBLE FIXED ASSETS - continued

Group

Fixtures
and Motor Computer
fittings vehicles equipment Totals
£    £    £    £   
COST OR VALUATION
At 1 April 2022 79,382 46,653 67,620 6,030,308
Additions 13,025 - 17,925 196,561
Disposals - (17,100 ) (2,246 ) (19,346 )
Business combinations 85,917 29,933 51,937 646,715
At 31 March 2023 178,324 59,486 135,236 6,854,238
DEPRECIATION
At 1 April 2022 67,085 31,761 43,754 315,298
Charge for year 12,347 4,755 14,981 176,177
Eliminated on disposal - (16,797 ) (2,246 ) (19,043 )
Business combinations 57,109 24,053 45,478 200,914
At 31 March 2023 136,541 43,772 101,967 673,346
NET BOOK VALUE
At 31 March 2023 41,783 15,714 33,269 6,180,892
At 31 March 2022 12,297 14,892 23,866 5,715,010

Property includes freehold and leasehold property. At 31 March 2023 property carrying value of £6,044,889 consisted of £5,762,426 freehold land and buildings, £282,463 long leasehold land and buildings.

Freehold property was revalued at 31 March 2022 to its fair value of £5,620,000 by Harry Torrance MRICS and Russell Lane FRICS, of Aitchison Rafferty, who are independent of the company and have experience of valuing similar properties. At 31 March 2023 the directors consider that the market value is not materially different to the carrying value of £6,044,889.

If freehold property were included in the balance sheet on an historical cost basis, then the carrying amount would be £4,040,153 with accumulated depreciation of £268,597.

Property additions of £163,146 and business combination additions of £454,853 are included at cost. The directors consider that the cost of these additions are not materially different from their market value at 31 March 2023.

Plant and machinery, improvements to property, fixtures and fittings, computer equipment and motor vehicles are included at cost.

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


10. TANGIBLE FIXED ASSETS - continued

Company
Computer
equipment
£   
COST
At 1 April 2022 1,972
Additions 3,296
Disposals (1,187 )
At 31 March 2023 4,081
DEPRECIATION
At 1 April 2022 956
Charge for year 1,349
Eliminated on disposal (1,187 )
At 31 March 2023 1,118
NET BOOK VALUE
At 31 March 2023 2,963
At 31 March 2022 1,016

11. FIXED ASSET INVESTMENTS

Company
Shares in
group
undertakings
£   
COST
At 1 April 2022
and 31 March 2023 221
NET BOOK VALUE
At 31 March 2023 221
At 31 March 2022 221

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


11. FIXED ASSET INVESTMENTS - continued

The group or the company's investments at the Balance Sheet date in the share capital of companies include the following:

Subsidiaries

THL Investments Limited
Registered office: 5 Brooklands Place, Brooklands Road, Sale, Cheshire M33 3SD
Nature of business: Sub holding company
%
Class of shares: holding
Ordinary 100.00

Direct ownership

Seaside Care Homes Limited
Registered office: 5 Brooklands Place, Brooklands Road, Sale, Cheshire M33 3SD
Nature of business: Residential care
%
Class of shares: holding
Ordinary 100.00

Indirect ownership

Roundhouse Care Holdings Limited
Registered office: 5 Brooklands PLace, Brooklands Road, Sale, Cheshire, M33 3SD
Nature of business: Dormant
%
Class of shares: holding
Ordinary 100.00

Direct ownership

Tristone PW Holdings Limited
Registered office: 5 Brooklands Place, Brooklands Road, Sale, Cheshire M33 3SD
Nature of business: Sub holding company
%
Class of shares: holding
Ordinary 70.00

Indirect ownership

Procare Wales Limited
Registered office: Kinmel Place, 56-56 Kinmel Street, Rhyl, Denbighshire, LL18 1AR
Nature of business: Care in the community
%
Class of shares: holding
Ordinary 70.00

Indirect ownership

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


11. FIXED ASSET INVESTMENTS - continued

Bangor Centre for Developmental Disabilities Limited
Registered office: Kinmel Place, 56-56 Kinmel Street, Rhyl, Denbighshire, LL18 1AR
Nature of business: Residential care
%
Class of shares: holding
Ordinary 70.00

Indirect ownership

Tristone SSS Holdings Limited
Registered office: 5 Brooklands PLace, Brooklands Road, Sale, Cheshire M33 3SD
Nature of business: Sub holding company
%
Class of shares: holding
Ordinary 76.00

Indirect ownership

Sportfit Support Services Limited
Registered office: Portman House, 53 Millbrook Road East, Southampton, Hampshire, SO15 1HN
Nature of business: Residential care
%
Class of shares: holding
Ordinary 76.00

Indirect ownership

Tristone PCM Holdings Limited
Registered office: 5 Brooklands Place, Brooklands Road, Sale, Cheshire, M33 3SD
Nature of business: Sub holding company
%
Class of shares: holding
Ordinary 61.00

Indirect ownership

Premier Care Management Limited
Registered office: 1 Grantham Lane, Kingswood, Bristol, BS15 1EU
Nature of business: Residential care
%
Class of shares: holding
Ordinary 61.00

Indirect ownership

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


11. FIXED ASSET INVESTMENTS - continued

Tristone NS Holdings Limited
Registered office: 5 Brooklands Place, Brooklands Road, Sale, Cheshire, M33 3SD
Nature of business: Sub holding company
%
Class of shares: holding
Ordinary 88.00

Indirect ownership

K Bond Healthcare Ltd
Registered office: 5 Brooklands Place, Brooklands Road, Sale, Cheshire, M33 3SD
Nature of business: Residential care
%
Class of shares: holding
Ordinary 88.00

Indirect ownership

Tristone BL Holdings Limited
Registered office: 5 Brooklands Place, Brooklands Road, Sale, Cheshire, M33 3SD
Nature of business: Sub holding company
%
Class of shares: holding
Ordinary 82.00

Indirect ownership

Beyond Limits (Plymouth) Ltd
Registered office: 5 Brooklands Place, Brooklands Road, Sale, Cheshire, M33 3SD
Nature of business: Long term care
%
Class of shares: holding
Ordinary 82.00

Indirect ownership

Tristone Healthcare Properties Limited
Registered office: 5 Brooklands Place, Brooklands Road, Sale, Cheshire, M33 3SD
Nature of business: Investment company
%
Class of shares: holding
Ordinary 100.00

Direct ownership


TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


11. FIXED ASSET INVESTMENTS - continued


The company's wholly owned subsidiary undertakings are Roundhouse Care Holdings Limited, Tristone Healthcare Properties Limited and THL Investments Limited. In addition, via its investment in THL Investments Limited, it also indirectly owns shares in companies which are subsidiaries or sub-subsidiaries of THL Investments Limited.

The group has granted put options to the minority shareholders to purchase the remaining share capital of Tristone SSS Holdings Limited, Tristone PW Holdings Limited, Tristone NS Holdings Limited and Tristone BL Holdings Limited, should each minority shareholder wish to exercise that option. The excise period is generally between 36 and 60 months from date of acquisition of each of those companies subsidiary companies.

12. DEBTORS

Group Company
2023 2022 2023 2022
£    £    £    £   
Amounts falling due within one year:
Trade debtors 1,441,232 7,972,163 - -
Amounts owed by group undertakings - 1,000 14,436,982 8,630,207
Amounts owed by associates 154,628 213,239 154,628 213,239
Other debtors 134,332 118,533 5,327 -
Directors' current accounts 27,215 26,682 27,215 26,682
Tax 30,566 74,246 8,294 8,294
VAT - - 23,860 22,549
Called up share capital not paid 12,500 12,500 12,500 12,500
Prepayments and accrued income 318,950 323,842 7,909 49,378
2,119,423 8,742,205 14,676,715 8,962,849

Amounts falling due after more than one year:
Prepayments and accrued income 161,100 - - -

Aggregate amounts 2,280,523 8,742,205 14,676,715 8,962,849

Included within Trade debtors are £nil (2022: £7,859,222) of debts due from local authorities in respect of historic VAT liabilities.

Included within prepayments are mobilisation assets of £193,992 (2022: £39,041), of which £161,100 is included within debtors greater than one year. An explanation of this asset and its accounting policy is included within note 2 of these financial statements.

Amounts owed by group undertakings are repayable on demand.

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
2023 2022 2023 2022
£    £    £    £   
Trade creditors 318,200 108,766 220,941 68,013
Amounts owed to group undertakings 6,048 - 920,830 274,796
Tax 125,973 216,135 - -
Social security and other taxes 445,577 224,173 28,235 43,707
VAT 283,739 6,740,852 - -
Other creditors 170,031 49,782 6,464 2,281
Directors' current accounts - 1,000 - 1,000
Accruals and deferred income 876,248 799,952 176,227 148,336
Deferred consideration 1,375,125 991,250 - -
3,600,941 9,131,910 1,352,697 538,133

Included within the VAT balance are historic VAT liabilities of £nil (2022: £6,763,401) identified within two of the group's subsidiary companies. The subsidiary companies concerned had entered into time to pay arrangements with HMRC in respect of these historic liabilities which have since been fully settled.

Amounts owed to group undertakings are repayable on demand.

14. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group Company
2023 2022 2023 2022
£    £    £    £   
Other loans (see note 15) 17,579,065 10,995,292 16,728,065 10,994,292
Deferred consideration 1,278,304 1,833,429 - -
18,857,369 12,828,721 16,728,065 10,994,292

15. LOANS

An analysis of the maturity of loans is given below:

Group Company
2023 2022 2023 2022
£    £    £    £   
Amounts falling due between two and five years:
Preference shares 1,000 - - -
Amounts falling due in more than five years:
Repayable otherwise than by instalments
Other loans more 5yrs non-inst 18,449,000 12,100,000 17,599,000 12,099,000
Finance costs (870,935 ) (1,104,708 ) (870,935 ) (1,104,708 )
17,578,065 10,995,292 16,728,065 10,994,292

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


15. LOANS - continued

Other loans of £17,599,000 (2022: £12,099,000) have a term of 30 years and attract interest at 13.5% per annum, which is charged to the profit and loss account in the period it is incurred.
Financing costs related to the raising of the loan finance are being amortised over 5 years.

Also included within other loans are loan notes 2027 7% of £350,000 and loan notes 2027 8% of £500,000 issued during the year to former owners of the subsidiary companies acquired in the year. These are unsecured and attract monthly interest of 7% and 8% pa respectively, payable in arrears until they are repaid in 2027.

Preference shares of £1,000 (2022: £1,000 (included within loans), accounted for as debt, have an annual dividend paid defined by organic growth of the group, and are in favour of Duke Royalty UK Limited.

16. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group
Non-cancellable operating leases
2023 2022
£    £   
Within one year 622,944 322,477
Between one and five years 824,019 581,076
In more than five years 380,234 -
1,827,197 903,553

Operating leases are in respect of properties that the group rent for their clients.

17. SECURED DEBTS

The following secured debts are included within creditors:

Group
2023 2022
£    £   
Other loans 17,599,000 12,099,000
Preference shares 1,000 1,000
17,600,000 12,100,000

On 15 December 2021 the company entered into guarantees in the form of fixed and floating charges over the company's assets along with guarantees provided by its direct and indirect subsidiary companies; Premier Care Management Limited, Tristone PCM Limited, Procare Wales Limited, Bangor Centre for Developmental Disabilities Limited, Sportfit Support Services Limited, Tristone PW Holdings Limited, Roundhouse Care Holdings Limited, Tristone SSS Holdings Limited, Seaside Care Homes Limited (from 2 March 2022), Tristone NS Holdings (from 25 November 2022), K Bond Healthcare Ltd (from 12 December 2022), Tristone BL Holdings Limited (from 10 March 2022), Beyond Limits (Plymouth) Ltd (from 19th April 2022) and THL Investments Limited, to secure the company's borrowings. At 31 March 2023 the amount outstanding in respect of these borrowings was £17,599,000 (2022: £12,099,000). The beneficiary of the securities are Duke Royalty UK Limited.

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


18. FINANCIAL INSTRUMENTS

GROUP

Carrying amount of financial assets
At 31 March 2023 debt instruments measured at amortised cost amounted to £2,972,756 (2022: £9,119,885).

Carrying amount of financial liabilities
Carrying amount of financial liabilities measured at amortised cost at 31 March 2023 amounted to £20,726,773 (2022: £15,084,226).


COMPANY

Carrying amount of financial assets
At 31 March 2023 debt instruments measured at amortised cost amounted to £14,725,904 (2022: £8,912,898).
At 31 March 2023 equity instruments measured at cost less impairment £221 (2022: £221).

Carrying amount of financial liabilities
Carrying amount of financial liabilities measured at amortised cost at 31 March 2023 amounted to £17,876,300 (2022: £12,445,090).

19. PROVISIONS FOR LIABILITIES

Group Company
2023 2022 2023 2022
£    £    £    £   
Deferred tax 539,195 528,856 731 193

Other provisions 75,000 - - -

Aggregate amounts 614,195 528,856 731 193

Group
Deferred
tax Dilapidation
£    £   
Balance at 1 April 2022 528,856 -
Provided during year 8,378 75,000
Business combinations 1,961 -
Balance at 31 March 2023 539,195 75,000

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


19. PROVISIONS FOR LIABILITIES - continued

Company
Deferred
tax
£   
Balance at 1 April 2022 193
Provided during year 538
Balance at 31 March 2023 731

Deferred tax liabilities of £539,195 (2022: £528,856) comprise £539,195 (2022: £528,856) of capital allowances in excess of depreciation.

Dilapidation provision of £75,000 (2022: £nil) are in respect of properties occupied by the customers of one of the group's subsidiary companies.

20. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
6,562,500 Ordinary £0.01 65,625 65,625

Allotted and issued:
Number: Class: Nominal 2023 2022
value: £    £   
1,250,000 Ordinary E £0.01 12,500 12,500

The 4,000 Ordinary E shares remain unpaid at the year end.

Ordinary shares have full voting, dividend and capital distribution (including winding up) rights. They do not have any rights of redemption.

Ordinary E shares are entitled to receive notice of, and to attend any general meeting of the company. They do not have voting rights.

21. RESERVES

Group
Retained Share Revaluation
earnings premium reserve Totals
£    £    £    £   

At 1 April 2022 (3,033,595 ) 748,189 86,061 (2,199,345 )
Deficit for the year (982,174 ) (982,174 )
Transfer 38,518 - (38,518 ) -
At 31 March 2023 (3,977,251 ) 748,189 47,543 (3,181,519 )

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


21. RESERVES - continued

Company
Retained Share
earnings premium Totals
£    £    £   

At 1 April 2022 (3,352,076 ) 748,189 (2,603,887 )
Deficit for the year (693,976 ) (693,976 )
At 31 March 2023 (4,046,052 ) 748,189 (3,297,863 )

Share premium has arisen in respect of the shares issued during the year to Duke Royalty UK Limited and Aurium Capital Limited.

Revaluation reserve arises as a result of the revaluation of the group's freehold properties at 31 March 2022.

22. PENSION COMMITMENTS

During the year the group contributed £288,641 (2022: £150,198) to a defined contribution pension scheme. At 31 March 2023 outstanding contributions of £59,112 (2022: £28,038) are included within other creditors.

23. ULTIMATE PARENT COMPANY

Tristone Capital Ltd is regarded by the directors as being the company's ultimate parent company.

Tristone Capital Ltd is incorporated in England and its registered office is, 5 Brooklands Place, Brooklands Road, Sale, Cheshire, M33 3SD. Copies of group accounts can be obtained from Companies House.

24. DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

The following advances and credits to a director subsisted during the years ended 31 March 2023 and 31 March 2022:

2023 2022
£    £   
R Finney
Balance outstanding at start of year 26,682 26,189
Amounts advanced 533 493
Amounts repaid - -
Amounts written off - -
Amounts waived - -
Balance outstanding at end of year 27,215 26,682

Interest is charged on Directors' advances, credits and guarantees at 2%pa 2023 (2022: 2%pa).

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


25. RELATED PARTY DISCLOSURES

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.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

At 31 March 2023 as a result of acquisitions during the year and prior year, the group have £3,173,429 (2022: £2,824,679) in respect of deferred consideration payable to former shareholders of certain subsidiary companies now controlled by the group.

At 31st March 2023 the group have £350,000 loan notes (7%) and £500,000 of loan notes (8%) payable to former shareholders of certain subsidiary companies now controlled by the group. These are due to be repaid in 2027.

During the year the group paid £40,000 for rent to a company controlled by a minority shareholder of a subsidiary company. In addition, £10,000 was paid to another minority shareholder of a subsidiary company in respect of utility bills for property rented.

During the year ended 31 March 2023 the company made sales to companies in which the director, Y Loucopoulos, is a director and shareholder, of £296,819 (2022: £380,891). At 31 March 2023 the company was owed the following amounts in respect of those sales:

CFS Care Limited £nil (balance of £11,400 provided for) (2022: £9,562)
Dimensions Care Limited £14,659 (2022: £171,332)
Juventas Services Limited £117,065 (2022: £32,255)

In addition the company has accrued expenses of £40,000 owing to YML Holdings Limited, a company controlled by Y Loucopoulos.

At 31 March 2023 the company was owed £19,504 by Hathaway House Holdings Limited, a company owned and controlled by Helen Shepherd, a minority shareholder within the group.

Key management personnel are the directors.

26. POST BALANCE SHEET EVENTS

During June 2023 the group purchased 100% of the share capital of South West Intervention Services Holdings Limited for £1.46m.

27. ULTIMATE CONTROLLING PARTY

The controlling party is Y A Loucopoulos.

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


28. BUSINESS ACQUISITIONS

During the year Tristone NS Holdings Limited, a subsidiary of THL Investments Limited, acquired 100% of the issued share capital of K Bond Healthcare Ltd.

Net assets acquired Book Value Adjustments Fair value
£    £    £   

Tangible fixed assets 24,269 24,269

Trade debtors 139,042 139,042
Cash and cash equivalents 389,222 389,222
Other debtors 648,609 648,609
Trade and other creditors (195,418 ) (149,285 ) (346,948 )
Corporation tax (257,529 ) (257,529 )
Deferred tax

745,951 (149,285 ) 596,665

Goodwill 4,194,485
Total consideration 4,791,150

The consideration was satisfied by: £   

Cash 3,639,843
Vendor loan notes 500,000
Deferred consideration 435,000
Costs of acquisition 216,307
4,791,150

Contribution by the acquired business for the reporting period included in the group statement of
comprehensive income since acquisition:
£   
Turnover 670,904
Profit before tax 195,494

During the year, Tristone BL Holdings Limited, a subsidiary of THL Investments Limited, acquired 100% of the issued share capital of Beyond Limits (Plymouth) Ltd.


Net assets acquired Book Value Adjustments Fair value
£    £    £   

Tangible fixed assets 421,532 421,532
Trade debtors 21,662 21,662
Cash and cash equivalents 999,219 999,219

TRISTONE HEALTHCARE LIMITED (REGISTERED NUMBER: 09826810)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023

Other assets 100,376 100,376
Trade and other creditors (421,444 ) (421,444 )
Corporation tax (102,607 ) (102,607 )
Deferred tax (1,961 ) (1,961 )
1,016,777 nil 1,016,777

Goodwill 2,109,640
Total consideration 3,126,417

The consideration was satisfied by: £   

Cash and debt 2,237,041
Deferred consideration 385,000
Costs of acquisition 154,376
Vendor loan notes 350,000
3,126,417

Contribution by the acquired business for the reporting period included in the group statement of
comprehensive income since acquisition:
£   
Turnover 4,225,086
Profit before tax 278,275