KEELEX 176 LIMITED
COMPANY INFORMATION
Directors
Mrs D Keely
SJ Hopkins
Company number
02839981
Registered office
Peat House
Newham Road
TRURO
Cornwall
TR1 2DP
Auditor
RRL LLP
Peat House
Newham Road
TRURO
Cornwall
TR1 2DP
KEELEX 176 LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 25
KEELEX 176 LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
The directors present the strategic report and financial statements for the year ended 31 March 2023.
Review of the business
This review provides a fair assessment of the business during the year and its position at the year end. The review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face.
The principal activity of the business is the operation of care homes for adults with physical and learning disabilities.
The company operates six care homes providing more than 40 beds offering specialist residential adult care for residents with complex learning and physical disabilities at our Station Villa, Breage House and Cross Keys homes. All of our services are located within South-West Cornwall.
During the financial year, the company continued to face the challenges and fallout of the Covid-19 pandemic and is proud of the valuable contribution of all colleagues whose unwavering commitment to supporting all of our residents has been remarkable, particularly in light of the continually evolving government guidance.
The company has continued to build on its strong relationships with the Local Authority, Clinical Commissioning Groups and, latterly, the Integrated Care Partnership and Board, allowing us to evolve and develop our services to meet the needs of the local populations we serve.
The company’s medium and long-term objective is to support, develop and deliver the highest standards of care and support services to those in need in Cornwall. To that end the group’s shareholders have initiated a corporate reorganisation of the group along with the refinancing of the existing debt. This reorganisation will separate the group’s freehold property assets from the trading business, leasing the elderly care homes back to the company, allowing the company to focus on the delivery of its core care services whilst providing the group with a dedicated vehicle to invest in the development of the real estate in line with the current and future business needs of the company. As part of the reorganisation, loans within the company will be repaid and it is anticipated that regular dividends will be paid to company’s parent. The directors anticipate the reorganisation completing during the next financial year.
Average occupancy for the year for the company (the elderly care homes) was 35 (2022: 38).
Other key measures that demonstrate performance for the company (on an unconsolidated basis) are:
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Transferred to profit and loss account | | |
The directors therefore view the results as satisfactory. | | |
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KEELEX 176 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Principal risks and uncertainties
The challenges placed upon the health and social care sector over recent years have been significant and emergence from the pandemic continues to present a turbulent operating environment with both short and longer term unpredictability.
The company is exposed to supplier and labour price risk as a result of its operations. The company has a dedicated contracts manager who monitors and reviews suppliers on a regular basis. The recruitment and retention of a skilled and dedicated workforce continues to be an issue faced by the sector across the UK at this time, with the areas in which the company operates being particularly challenging. The company has a dedicated human resources manager and training manager, and actively seeks to differentiate itself in the labour market through its employment opportunities and benefits.
The nature of the company’s operations exposes it to a level of liquidity and cash-flow risk as public sector payors are often tardy in assessing and settling fees for residents they fund and private funders may rely on the sale of assets, such as property, to fund their care. The company maintains a good relationship with its public sector payors to encourage the rapid resolution of issues. The company actively monitors and pursues its debtors.
A significant proportion of the company’s revenue is derived from government funded clients and as such the continuation of this policy and annual fee increases is important for the company to maintain its margins. If fee rates do not increase in line with costs then the company’s margins will suffer. The company actively monitors local and national policy that might impact the business.
Financial risk management objectives and policies
The company’s operations expose it to a variety of risks, both financial and non-financial. The company uses a range of key performance indicators, both financial and non-financial, to monitor its business. Monthly budgets are set annually by management with the direct involvement of home managers and other budget-holders. These are approved by the board of directors and detailed monthly management accounts are prepared comparing actual performance to budget on both a monthly and year-to-date basis. The senior management team meet regularly to monitor and analyse performance for the company as a whole as well as meeting with individual budget-holders. The directors, shareholders and lenders receive and review the monthly management accounts.
Along side the corporate reorganisation process, the company is looking to improve its overall governance structure as well as exploring ways of enhancing its suite of key performance indicators and ensuring that its reporting, analysis and insight tools are appropriate. It is anticipated that these changes will be made and embedded during the course of the next financial year once the corporate reorganisation has been completed.
SJ Hopkins
Director
29 July 2023
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KEELEX 176 LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
The directors present their report and financial statements for the year ended 31 March 2023.
Principal activities
The company continues to provide specialist residential care for residents with learning disabilities at Station Villa, Breage House and Cross Keys. All services are located within South-West Cornwall.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mrs D Keely
SJ Hopkins
Mrs LM Marsh
(Resigned 31 March 2023)
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Auditor
The auditor, RRL LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
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KEELEX 176 LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
SJ Hopkins
Director
29 July 2023
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KEELEX 176 LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company 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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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 transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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KEELEX 176 LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KEELEX 176 LIMITED
Opinion
- 6 -
We have audited the financial statements of Keelex 176 Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 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 company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
KEELEX 176 LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KEELEX 176 LIMITED
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
As part of our audit work, we obtained an understanding of the legal and regulatory frameworks applicable to the company and the sector in which they operate. We determined that the laws and regulations most significant to the company, as well as the laws and regulations that have a direct impact on the preparation of the financial statements are: the Companies Act.
The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud is detailed below:
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KEELEX 176 LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KEELEX 176 LIMITED
Obtain an understanding of the legal and regulatory frameworks applicable to the company and the sector in which it operates. We determined that the following laws and regulations were most significant: the Companies Act 2006 and the Care Quality Standards;
Review of the disclosures in the financial statements and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
Enquiries of management concerning actual and potential litigation and claims;
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
Reviewing minutes of meetings and correspondence with regulators;
Performing audit work in connection with the risk of management override of controls, including testing journal entries for reasonableness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for potential bias.
We also communicate relevant identified laws and regulations and potential fraud risk to all engagement team members and remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit approach also considered the opportunities and incentives that may exist within the company for fraud and identified the greatest potential for fraud being in respect of cut off and completion risk around revenue recognition. Under ISA (UK) we are also required to undertake procedures to respond to the risk of management override of controls. Our procedures included the following:
Undertaking transactional testing on revenue
Performing reconciliation work from the resident management system to the nominal ledger to prove income in total between the different operating systems
Performing cut off testing on income
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale for significant transactions outside the normal course of business
Reviewing estimates and judgements made in the accounts for any indication of bias and challenged assumptions used by management in making estimates.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
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KEELEX 176 LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KEELEX 176 LIMITED
Josh Stevens ACA
Senior Statutory Auditor
For and on behalf of RRL LLP
31 July 2023
Chartered Accountants
Statutory Auditor
Peat House
Newham Road
TRURO
Cornwall
TR1 2DP
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KEELEX 176 LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
2023
2022
Notes
£
£
Turnover
3
3,166,909
3,367,538
Cost of sales
(2,176,521)
(2,115,450)
Gross profit
990,388
1,252,088
Administrative expenses
(498,671)
(495,543)
Other operating income
14,442
107,887
Operating profit
4
506,159
864,432
Interest receivable and similar income
6
15
Interest payable and similar expenses
7
(70,736)
(39,509)
Profit before taxation
435,423
824,938
Tax on profit
8
(78,816)
(153,207)
Profit for the financial year
356,607
671,731
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
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KEELEX 176 LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
4,891,586
4,920,308
Current assets
Stocks
11
8,400
13,977
Debtors
12
2,322,481
1,762,948
Cash at bank and in hand
532,813
968,218
2,863,694
2,745,143
Creditors: amounts falling due within one year
13
(554,444)
(692,897)
Net current assets
2,309,250
2,052,246
Total assets less current liabilities
7,200,836
6,972,554
Creditors: amounts falling due after more than one year
14
(1,484,876)
(1,609,901)
Provisions for liabilities
Deferred tax liability
16
368,800
372,100
(368,800)
(372,100)
Net assets
5,347,160
4,990,553
Capital and reserves
Called up share capital
19
2
2
Revaluation reserve
1,297,461
1,297,461
Profit and loss reserves
4,049,697
3,693,090
Total equity
5,347,160
4,990,553
The financial statements were approved by the board of directors and authorised for issue on 29 July 2023 and are signed on its behalf by:
SJ Hopkins
Director
Company Registration No. 02839981
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KEELEX 176 LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 April 2021
2
1,297,461
3,021,359
4,318,822
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
-
671,731
671,731
Balance at 31 March 2022
2
1,297,461
3,693,090
4,990,553
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
356,607
356,607
Balance at 31 March 2023
2
1,297,461
4,049,697
5,347,160
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KEELEX 176 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
Company information
Keelex 176 Limited is a private company limited by shares incorporated in England and Wales. The registered office is Peat House, Newham Road, TRURO, Cornwall, TR1 2DP.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The company's accounts are included within the consolidated accounts of its parent company Swallowcourt Holdings Limited which can be obtained from its registered office.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
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KEELEX 176 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
1.3
Turnover
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Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
2% per annum
Plant and machinery
5%-20% per annum
Fixtures, fittings & equipment
15%-33% per annum
Motor vehicles
20% per annum
Freehold land is not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
KEELEX 176 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
1.6
Impairment of fixed assets
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At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
KEELEX 176 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
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KEELEX 176 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
- 17 -
KEELEX 176 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
- 18 -
KEELEX 176 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The key area of estimation uncertainty as assessed by management is the valuation of properties, where there has been no formal valuation at the year end and property values are based on management’s estimate.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Services rendered
3,166,909
3,367,538
2023
2022
£
£
Other revenue
Interest income
-
15
Grants received
14,442
15,673
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(14,442)
(15,673)
Fees payable to the company's auditor for the audit of the company's financial statements
6,500
6,000
Depreciation of owned tangible fixed assets
49,727
46,058
(Profit)/loss on disposal of tangible fixed assets
-
466
Operating lease charges
7,358
7,358
Government grant income consists of receipts regarding Infection Control Grants recognised in income when the performance conditions have been met, in accordance with the accounting policy.
- 19 -
KEELEX 176 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Employees
92
98
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,859,880
1,844,162
Social security costs
115,620
110,775
Pension costs
27,169
25,240
2,002,669
1,980,177
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
15
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
70,736
39,509
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
40,548
127,957
Group tax relief
41,568
28,650
Total current tax
82,116
156,607
Deferred tax
Origination and reversal of timing differences
(3,300)
(3,400)
Total tax charge
78,816
153,207
- 20 -
KEELEX 176 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
8
Taxation
(Continued)
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
435,423
824,938
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
82,730
156,738
Tax effect of expenses that are not deductible in determining taxable profit
44
50
Tax effect of income not taxable in determining taxable profit
(2,744)
(2,744)
Deferred tax (credit)/charge for year
(3,300)
(3,400)
Depreciation in excess of capital allowances
2,086
2,563
Taxation charge for the year
78,816
153,207
9
Intangible fixed assets
Goodwill
£
Cost
At 1 April 2022 and 31 March 2023
15,000
Amortisation and impairment
At 1 April 2022 and 31 March 2023
15,000
Carrying amount
At 31 March 2023
At 31 March 2022
- 21 -
KEELEX 176 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
10
Tangible fixed assets
Freehold land and buildings
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 April 2022
4,770,000
622,846
270,193
7,701
5,670,740
Additions
2,815
18,190
21,005
Disposals
(2,815)
(2,815)
At 31 March 2023
4,770,000
622,846
288,383
7,701
5,688,930
Depreciation and impairment
At 1 April 2022
498,045
247,588
4,799
750,432
Depreciation charged in the year
39,695
8,033
1,999
49,727
Eliminated in respect of disposals
(2,815)
(2,815)
At 31 March 2023
534,925
255,621
6,798
797,344
Carrying amount
At 31 March 2023
4,770,000
87,921
32,762
903
4,891,586
At 31 March 2022
4,770,000
124,801
22,605
2,902
4,920,308
The revaluation of freehold land and buildings was carried out by Christie & Co., Surveyors and Valuers as at 3 August 2021 and is based on an open market value. The valuation as at 31 March 2023 is as per the directors.
If revalued assets were measured using the cost model, the carrying amounts would have been as follows:
2023
2022
£
£
Cost
3,169,439
3,169,439
11
Stocks
2023
2022
£
£
Raw materials and consumables
8,400
13,977
- 22 -
KEELEX 176 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
209,743
305,642
Amounts owed by group undertakings
2,090,058
1,393,807
Prepayments and accrued income
22,680
63,499
2,322,481
1,762,948
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
15
126,370
140,096
Trade creditors
139,187
113,354
Corporation tax
(23,495)
59,958
Other taxation and social security
39,563
53,629
Government grants
17
12,382
14,442
Other creditors
101,169
114,545
Accruals and deferred income
159,268
196,873
554,444
692,897
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
15
1,484,876
1,597,520
Government grants
17
12,381
1,484,876
1,609,901
Amounts included above which fall due after five years are as follows:
Payable by instalments
979,397
1,037,134
15
Loans and overdrafts
2023
2022
£
£
Bank loans
1,611,246
1,737,616
Payable within one year
126,370
140,096
Payable after one year
1,484,876
1,597,520
- 23 -
KEELEX 176 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
15
Loans and overdrafts
(Continued)
The bank loans are secured by a fixed charge over the freehold property, and a floating charge over the remaining assets, and an unlimited cross guarantee over the assets of Swallowcourt Limited.
The bank loans carry interest at rate of 2% above the bank rate per annum.
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
65,700
69,000
Revaluations
303,100
303,100
368,800
372,100
17
Government grants
2023
2022
£
£
Arising from government grants
12,382
26,823
Included in the financial statements as follows:
Current liabilities
12,382
14,442
Non-current liabilities
12,381
12,382
26,823
Deferred grants consist of Infection Control Grants received from Cornwall Council.
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
27,169
25,240
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2
2
2
2
- 24 -
KEELEX 176 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
19
Share capital
(Continued)
20
Financial commitments, guarantees and contingent liabilities
An unlimited cross guarantee is in place over assets owned by Keelex 176 Limited to secure the indebtedness of its immediate parent undertaking to the company's bankers. At 31 March 2023 that company's indebtedness was £2,857,777 (2022: £3,096,442).
21
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
15,527
18,316
Between two and five years
17,335
26,310
32,862
44,626
22
Ultimate controlling party
The company's ultimate parent is Swallowcourt Holdings Limited, a company registered in England and Wales and whose registered office is Peat House, Newham Road, Truro, Cornwall, TR1 2DP.
The parent company is Swallowcourt Limited, a company registered in England and Wales and whose registered office is Peat House, Newham Road, Truro, Cornwall, TR1 2DP.
23
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is charged to the company's parent company, Swallowcourt Limited.
- 25 -
2023-03-312022-04-01falseCCH SoftwareCCH Accounts Production 2023.200Mrs D KeelySJ HopkinsMrs LM Marsh356607028399812022-04-012023-03-3102839981bus:Director12022-04-012023-03-3102839981bus:Director22022-04-012023-03-3102839981bus:Director32022-04-012023-03-3102839981bus:RegisteredOffice2022-04-012023-03-31028399812023-03-31028399812021-04-012022-03-3102839981core:RetainedEarningsAccumulatedLosses2021-04-012022-03-3102839981core:RetainedEarningsAccumulatedLosses2022-04-012023-03-31028399812022-03-3102839981core:LandBuildingscore:OwnedOrFreeholdAssets2023-03-3102839981core:PlantMachinery2023-03-3102839981core:FurnitureFittings2023-03-3102839981core:MotorVehicles2023-03-3102839981core:LandBuildingscore:OwnedOrFreeholdAssets2022-03-3102839981core:PlantMachinery2022-03-3102839981core:FurnitureFittings2022-03-3102839981core:MotorVehicles2022-03-3102839981core:CurrentFinancialInstrumentscore:WithinOneYear2023-03-3102839981core:CurrentFinancialInstrumentscore:WithinOneYear2022-03-3102839981core:Non-currentFinancialInstrumentscore:AfterOneYear2023-03-3102839981core:Non-currentFinancialInstrumentscore:AfterOneYear2022-03-3102839981core:CurrentFinancialInstruments2023-03-3102839981core:CurrentFinancialInstruments2022-03-3102839981core:Non-currentFinancialInstruments2023-03-3102839981core:Non-currentFinancialInstruments2022-03-3102839981core:ShareCapital2023-03-3102839981core:ShareCapital2022-03-3102839981core:RevaluationReserve2023-03-3102839981core:RevaluationReserve2022-03-3102839981core:RetainedEarningsAccumulatedLosses2023-03-3102839981core:RetainedEarningsAccumulatedLosses2022-03-3102839981core:ShareCapital2021-03-3102839981core:RevaluationReserve2021-03-3102839981core:RetainedEarningsAccumulatedLosses2021-03-3102839981core:Goodwill2022-04-012023-03-3102839981core:LandBuildingscore:OwnedOrFreeholdAssets2022-04-012023-03-3102839981core:PlantMachinery2022-04-012023-03-3102839981core:FurnitureFittings2022-04-012023-03-3102839981core:MotorVehicles2022-04-012023-03-3102839981core:UKTax2022-04-012023-03-3102839981core:UKTax2021-04-012022-03-310283998112022-04-012023-03-310283998112021-04-012022-03-310283998122022-04-012023-03-310283998122021-04-012022-03-3102839981core:Goodwill2022-03-3102839981core:Goodwill2023-03-3102839981core:Goodwill2022-03-3102839981core:LandBuildingscore:OwnedOrFreeholdAssets2022-03-3102839981core:PlantMachinery2022-03-3102839981core:FurnitureFittings2022-03-3102839981core:MotorVehicles2022-03-31028399812022-03-3102839981core:WithinOneYear2023-03-3102839981core:WithinOneYear2022-03-3102839981core:BetweenTwoFiveYears2023-03-3102839981core:BetweenTwoFiveYears2022-03-3102839981bus:PrivateLimitedCompanyLtd2022-04-012023-03-3102839981bus:FRS1022022-04-012023-03-3102839981bus:Audited2022-04-012023-03-3102839981bus:FullAccounts2022-04-012023-03-31xbrli:purexbrli:sharesiso4217:GBP