REGISTERED NUMBER: |
EXTEL LIMITED |
T/A |
CARE THROUGH THE MILLENNIUM |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2023 |
REGISTERED NUMBER: |
EXTEL LIMITED |
T/A |
CARE THROUGH THE MILLENNIUM |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2023 |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 5 |
Report of the Independent Auditors | 7 |
Profit and Loss Account | 11 |
Other Comprehensive Income | 12 |
Balance Sheet | 13 |
Statement of Changes in Equity | 14 |
Cash Flow Statement | 15 |
Notes to the Cash Flow Statement | 16 |
Notes to the Financial Statements | 17 |
EXTEL LIMITED |
T/A CARE THROUGH THE MILLENNIUM |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 MARCH 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
SENIOR STATUTORY AUDITOR: |
AUDITORS: |
Chartered Certified Accountants |
& Statutory Auditors |
Cash's Business Centre |
1st Floor |
228 Widdrington Road |
Coventry |
West Midlands |
CV1 4PB |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MARCH 2023 |
The directors present their strategic report for the year ended 31 March 2023. |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MARCH 2023 |
REVIEW OF BUSINESS |
The objective of the company is to provide high quality care and support services to people with challenging behaviour, both within its residential care homes and those under the 'Supported Living Service', in Birmingham and neighbouring areas. This is achieved through the implementation of robust company policies and procedures, employment of qualified and experienced staff in key positions of care, provision of ongoing training and support to staff and, as a registered care provider with the Care Quality Commission (CQC), compliance with regulatory requirements. |
On 10 July 2015, the company changed from being a family owned business in the hands of two shareholders, to becoming a majority employee owned company. However, on 21st December 2022, there was a change of ownership from being a majority employee owned company and back to a family owned business with the two shareholders. Despite the structural change, there was a complete continuity of business activity with no interruption. |
The company generated turnover for the financial year of £15.199m (2022: £14.514m), an increase of 4.72% and total comprehensive income for the financial year of £1.976m (2021: £3.225m). At the balance sheet date, net assets were £9.484m (2022: £5.992m). At the start of the financial year, average occupancy for residential care was 93% which decreased to 91% by the end of the financial year. Nearly all the company's turnover is derived from UK Government funded Local Authorities and Clinical Commissioning Groups (CCGs). The company continued to provide quality care and support to its service users and funding was adequate to meet their need despite the ongoing economic challenges such as cost of living crisis and inflation. |
The company was able to access financial support provided by the UK Government during the year in the form of Government apprenticeship training schemes to cover overhead expenditure relating to staff training. |
The company is well placed to continue its operational activities through this period with a healthy cash balance. The directors are confident that the company is in a good position to continue performing well by increasing its occupancy levels and meet its debts as and when they fall due. |
BUSINESS STRATEGY |
The company's success to date is largely the result of providing high quality care and support services and attracting new service users to maximise occupancy levels within its residential care homes, whilst maintaining compliance with regulatory requirements. |
Investment in the Supported Living Service continues to remain a key strategic development for the company which will continue to improve its profitability and position. |
The company continually attracts expressions of interest from friends and families of potential service users including referrals from Local Authorities and CCGs. |
The directors will also consider diversification into new relevant markets based on geography and type of service to compliment the existing services provided. |
KEY PERFORMANCE INDICATORS |
The directors consider the most appropriate key performance indicators to be Turnover, Gross Profit, Operating Profit, Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) and liquidity. The results of these key performance indicators for the year were as follows: |
2023 | 2022 |
£ | £ |
Turnover | 15.199m | 14.514m |
Gross profit | 5.492m | 6.556m |
Operating profit | 2.699m | 3.893m |
EBITDA | 2.891m | 4.054m |
Cash at bank and in hand | 5.538m | 4.084m |
Gross profit margin for the year was 36.14% (2022: 45.17%). |
Operating profit margin for the year was 17.76% (2022: 26.82%). |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MARCH 2023 |
PRINCIPAL RISKS AND UNCERTAINTIES |
There are various risks and uncertainties affecting the business some of which are inherent to the industry in which the company operates such as economic instability and healthcare and social care challenges.There are increased pressures in the healthcare system and funding shortages however, the directors believe that despite these significant challenges from the wider economy, the company is well placed to maintain the high quality care and support it provides to its service users and therefore attract expressions of interest from various sources and maximise occupancy levels. The directors have carried out their risk assessments and have taken all reasonable steps to mitigate those risks. The specialist nature of the care homes market in the UK and increasing external regulation continues to benefit quality care providers such as Extel Limited. |
FINANCIAL INSTRUMENTS |
The company's principal financial instruments comprises trade and other debtors, trade creditors, cash deposits and bank borrowing. The company manages its risks in relation to these as follows: |
Liquidity risk |
The company manages its cash and borrowing requirements so as to maximise interest income and minimise interest expense whilst ensuring that the company has sufficient liquid resources to meet the operating needs of the business. |
Credit risk |
The company's customers are predominantly public sector councils however there are some private customers who supplement public sector funding. Both are provided with credit and are encouraged to settle their invoices within 28 days, from the inception of raising fee invoices. Monies due are monitored on a on-going basis and chased as part of the company credit control procedures. There are instances when cost of care package for individual service user is under review with the customer and invoices are continually raised at the current rate for payment which are put on hold until a new cost is agreed. Although the company continues to chase payment for such invoices the directors acknowledge there can be a delay in payment. Consequently, debtor days for the year ended 31 March 2023 was 37 days (2022: 38 days). |
Price risk |
The company conducts an initial assessment of all potential service users to assess their individual needs prior to admission. Bespoke care package is based around a person centred approach. Therefore, the company does not have material exposure to price risks. |
Regulatory risk |
The company is a registered care service provider and therefore regulated by the Care Quality Commission (CQC), the independent regulator of health and social care in England. The company ensures the provision of high quality care and support to its service users at all times. Any serious breach of regulatory requirements could result in public censure, penalties and/or removal of its registration. |
Internal control risk |
The company employs external consultant to review the system of internal controls both financial and non-financial. These include controls designated to ensure proper accounting records are maintained. |
FUTURE DEVELOPMENTS |
The company remains fortunate not to have been significantly affected, financially or otherwise by the ongoing economic instability and healthcare and social care challenges, for which it is able to access government financial support as and when required. By keeping the standard of the care homes at a high level together with providing quality care and support service the business will continue to attract new service users and maximise occupancy levels. |
ON BEHALF OF THE BOARD: |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 MARCH 2023 |
The directors present their report with the financial statements of the company for the year ended 31 March 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of the provision of high quality care and support services to people with challenging behaviour, both within in its residential care homes and those under the supported living service in Birmingham and neighbouring areas. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 March 2023. |
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. |
ENGAGEMENT WITH EMPLOYEES |
During the financial year the company continued with its arrangements aimed at: |
- providing employees systematically with information on matters of concern to them as employees; |
- consulting employees or their representatives on a regular basis so that their views can be taken into account in |
making decisions which affect their interests; |
- encouraging the involvement of employees in the company's performance through employee benefits or by some |
other means; and |
- achieving a common awareness on the part of all employees of the financial and economic factors affecting the |
performance of the company; |
DISABLED PERSONS |
Full and fair consideration is given to applications for employment from disabled persons and to continuing the employment of those who become disabled while employed. The policy is to give equal opportunity for training, career development and promotion. |
DISCLOSURE IN THE STRATEGIC REPORT |
In accordance with Section 414C(11) of the Companies Act 2006, the Directors have set out certain information in the Strategic Report which would otherwise be required by Schedule 7 to be contained in the Report of the Directors. It has done so in respect of principal risks and uncertainties, financial instruments and future developments. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the 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 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; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 MARCH 2023 |
STATEMENT OF DIRECTORS' RESPONSIBILITIES - continued |
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. |
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 company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, Shah & Co (Accountants) Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
EXTEL LIMITED |
Opinion |
We have audited the financial statements of Extel Limited (the 'company') for the year ended 31 March 2023 which comprise the Profit and Loss Account, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the 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 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. |
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 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. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the 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 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 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 |
EXTEL 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 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, 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 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 pages five and six, 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 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
EXTEL 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. |
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud and other irregularities rests with both management and those charged with governance of the company. |
Based on our understanding of the company and industry in which it operates, we identified that the principal risks of |
non-compliance with laws and regulations relate to the Care Quality Commission regulations, and we considered the |
extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements of the company and determined that the most significant are those that relate to the United Kingdom Generally Accepted Accounting Practice, Companies Act 2006 and UK corporate taxation laws. |
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements |
(including the risk of override of controls) and determined that the principal risks were related to revenue recognition, |
and posting inappropriate journal entries to manipulate financial results. Audit procedures performed included: |
- Discussions with management and those charged with governance including consideration of known or suspected |
instances of non-compliance with laws and regulation and fraud; |
- Review of correspondence between the company and regulator in relation to compliance with laws and regulation; |
- Review of correspondence between the company and tax authorities; |
- Carry out testing, on a sample basis, on the company's main income and expenditure cycle and consider the impact |
on our assessment of irregularities; |
- Identifying and understanding related party relationships and transactions including rationale for any significant |
transactions outside the normal course of business; |
- Identifying and testing of significant journal entries throughout the year and at the year-end; |
- Review of financial statement disclosures and agreeing these to underlying supporting evidence for compliance |
with applicable laws and regulations; |
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. |
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 |
EXTEL 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. |
for and on behalf of |
Chartered Certified Accountants |
& Statutory Auditors |
Cash's Business Centre |
1st Floor |
228 Widdrington Road |
Coventry |
West Midlands |
CV1 4PB |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
PROFIT AND LOSS ACCOUNT |
FOR THE YEAR ENDED 31 MARCH 2023 |
31.3.23 | 31.3.22 |
Notes | £ | £ |
TURNOVER | 3 |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
2,576,213 | 3,561,437 |
Other operating income | 4 |
OPERATING PROFIT |
Profit/loss on sale of tangibl |
e fixed assets | 6 |
2,702,542 | 3,892,837 |
Interest receivable and similar income |
2,720,141 | 3,893,104 |
Interest payable and similar expenses | 7 |
PROFIT BEFORE TAXATION | 8 |
Tax on profit | 9 |
PROFIT FOR THE FINANCIAL YEAR |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 MARCH 2023 |
31.3.23 | 31.3.22 |
Notes | £ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
BALANCE SHEET |
31 MARCH 2023 |
31.3.23 | 31.3.22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 10 |
Tangible assets | 11 |
CURRENT ASSETS |
Debtors | 12 |
Cash at bank and in hand | 13 |
CREDITORS |
Amounts falling due within one year | 14 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
15 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 19 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 20 |
Retained earnings | 21 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 MARCH 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 April 2021 |
Changes in equity |
Total comprehensive income | - |
Gifts to Employee Ownership |
Trust | - | (407,569 | ) | (407,569 | ) |
Balance at 31 March 2022 |
Changes in equity |
Total comprehensive income | - |
Gifts to Employee Ownership |
Trust | - | 1,516,365 | 1,516,365 |
Balance at 31 March 2023 |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 MARCH 2023 |
31.3.23 | 31.3.22 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
Interest paid | ( |
) | ( |
) |
Tax paid | ( |
) | ( |
) |
Government grants |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of intangible fixed assets | ( |
) |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Sale of tangible fixed assets |
Interest received |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
Bank loan capital repayments | ( |
) | ( |
) |
Amount introduced by directors | 11,799 | 13,615 |
Amount withdrawn by directors | (3,129,239 | ) | (5,128 | ) |
Gifts to Employee Ownership Trust paid | ( |
) |
Net cash from financing activities | ( |
) | ( |
) |
Increase in cash and cash equivalents |
Cash and cash equivalents at beginning of year |
2 |
2,112,310 |
Cash and cash equivalents at end of year | 2 | 5,537,974 | 4,083,713 |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
NOTES TO THE CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 MARCH 2023 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
31.3.23 | 31.3.22 |
£ | £ |
Profit before taxation |
Depreciation charges |
Government grants | ( |
) | ( |
) |
Finance costs | 264,640 | 170,312 |
Finance income | (17,599 | ) | (267 | ) |
2,752,615 | 3,730,805 |
Decrease/(increase) in trade and other debtors | ( |
) |
Increase/(decrease) in trade and other creditors | ( |
) |
Cash generated from operations |
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 | 5,537,974 | 4,083,713 |
Year ended 31 March 2022 |
31/3/22 | 1/4/21 |
£ | £ |
Cash and cash equivalents | 4,083,713 | 2,112,310 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1/4/22 | Cash flow | At 31/3/23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 4,083,713 | 1,454,261 | 5,537,974 |
4,083,713 | 5,537,974 |
Debt |
Debts falling due within 1 year | (170,906 | ) | (123,209 | ) | (294,115 | ) |
Debts falling due after 1 year | (2,957,049 | ) | 281,354 | (2,675,695 | ) |
(3,127,955 | ) | 158,145 | (2,969,810 | ) |
Total | 955,758 | 1,612,406 | 2,568,164 |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2023 |
1. | STATUTORY INFORMATION |
Extel Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Going concern |
At the balance sheet date, the company is showing net current assets of £3,997,992 (2021: £1,265,790) and a net assets of £5,992,391 (2021: £3,175,191). On 11 May 2021, the company successfully secured a £3,333,000 funding for the re-finance of its bank loan with HSBC Bank Plc. On the same date, the company also entered into a new cross guarantee on the £2,841,000 bank borrowing of CTTM Trustees Limited with the same lender. Both loans are on a four year term. |
The directors continually monitor the impact of Coronavirus pandemic on the company with information available to it and do not believe it will affect the company's ability to continue its operations for the foreseeable future. The company has utilised government support where applicable and appropriate. |
The directors have reviewed the company's financial forecast and they show that the company has adequate cash available during the foreseeable future. |
At the date of approving these financial statements, the directors are satisfied that the company will continue its activities for a period of at least twelve months from the date of signing these financial statements. On that basis, the directors have prepared these financial statements on a going concern basis. |
Turnover |
Turnover represents fees receivable in respect of residential care and supported living services provided to service users. |
Turnover is generally recognised to the extent that performance occurs and is measured at fair value of the fees receivable. Fees not invoiced to customers by the balance sheet date are included in debtors as accrued income. Fees invoiced to customers in advance of a future period is included in creditors as deferred income. |
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. |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2023 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Freehold land and buildings | - |
Improvements to property | - |
Plant and machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Computer equipment | - |
All fixed assets are stated at cost. Each purchase is considered on its merits as to whether it is a fixed asset irrespective of value. |
Freehold land is not depreciated. Freehold buildings represents residential care homes owned by the company and occupied by service users. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Profit and Loss Account, 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. |
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 company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2023 |
2. | ACCOUNTING POLICIES - continued |
Short term debtors and creditors |
Short term debtors and creditors with no stated interest rate or that are receivable or payable within one year are stated at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses. |
Cash and cash equivalents |
Cash and cash equivalents comprise cash at bank and in hand and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk to changes in value. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet. |
Loans and borrowings |
Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently, they are measured at amortised cost using the effective interest rate method, less impairment. Loans and borrowings that are receivable within one year are not discounted. If an arrangement constitutes a finance transaction it is measured at present value of future payments discounted at a market rate of interest for a similar loan. |
Employee benefits |
The cost of short term employee benefits are recognised as a liability and an expense. The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received. Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits. |
Employee ownership trust |
Where payments made to the Care Through The Millennium Employee Ownership Trust (the 'Trust') results in no future economic benefits to the company and where the company does not have control over the right or other access to future economic benefit it is expected to receive, payments are expensed in the profit and loss account. |
Where the company distributes its shares to the Trust and in the opinion of the directors de-facto control over the Trust does not exist, the assets and liabilities of the Trust is not recognised in the company's balance sheet in accordance with the UK GAAP. |
Where in the opinion of the directors, de-facto control exists, the company shall account for the assets and liabilities of the Trust in its own financial statements as follows: |
i. Consideration paid for the shares shall be shown as a deduction from shareholders' funds until the equity |
instruments vest unconditionally with the employees; |
ii. Other assets and liabilities of the Trust shall be recognised as being assets and liabilities of the company; |
iii. No gain or loss shall be recognised in the profit and loss on the purchase, sale, issue or cancellation of |
the company's own shares; |
iv. Finance costs and any administrative expenses shall be recognised on an accruals basis; |
v. Dividend income arising from the company's own shares shall be excluded from the profit and loss and |
deducted from the aggregate of dividends paid; |
The directors are of the opinion that de-facto control of the Trust does not exist and therefore have excluded the assets and liabilities of the Trust from the financial statements. |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2023 |
2. | ACCOUNTING POLICIES - continued |
Judgements and key sources of estimation uncertainty |
Preparation of the financial statements requires directors to make judgements, estimates and assumptions that affect the amounts reported of assets and liabilities at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. |
The following judgements have been made in the process of applying the above accounting policies that have had the most significant effect on amounts recognised in the financial statements: |
- Revenue recognition |
In determining revenue recognition where there is a change in cost of care package in respect of individual service user, the customer may give due regard to the fee applied from an earlier date to the date of re-negotiating a new fee. In such cases, the directors firmly believe a retrospective change in fee should be recognised in the period in which negotiations have successfully concluded and new fee subsequently applied. |
- Finance lease or operating lease |
In determining whether leases entered into by the company, either as a lessor or lessee, are operating or finance leases, the directors have assessed whether the risks and rewards of ownership have been transferred from the lessor to the lessee on an individual lease by lease basis. |
- Impairment of tangible fixed assets |
In determining whether there are indicators of impairment of the company's tangible fixed assets, factors taken into consideration by the directors include the economic value in use and whether there are any expected future cash flows to be generated from such assets. |
The following are key sources of estimation uncertainty: |
- Tangible fixed assets |
Depreciation is provided in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter. The actual lives of these assets are reviewed annually and may vary depending on a number of factors. In assessing asset lives, factors such as life cycles and maintenance programmes are taken into account. Residual value assessment considers issues such as the remaining life of the assets and projected disposal values. |
- Trade debtors |
Trade debtors is reviewed annually at the balance sheet date for recoverability of fees for the provision of service. If there is any evidence of impairment, the carrying value is reduced to its recoverable amount. The impairment loss is recognised immediately in the profit and loss account. |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the company which is wholly undertaken in the United Kingdom. |
4. | OTHER OPERATING INCOME |
31.3.23 | 31.3.22 |
£ | £ |
Management service |
Government grants |
122,868 | 331,400 |
Included within Government grants is Government apprenticeship training schemes for employees totalling to £79,862. There were no Coronavirus related funding received under the Adult Social Care Infection Control Fund, Workforce Capacity Fund and Coronavirus Job Retention Scheme (2022: £227,459). |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2023 |
5. | EMPLOYEES AND DIRECTORS |
31.3.23 | 31.3.22 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
31.3.23 | 31.3.22 |
Directors | 3 | 4 |
Management and administration | 9 | 12 |
Direct care staff | 304 | 291 |
31.3.23 | 31.3.22 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
Information regarding the highest paid director is as follows: |
31.3.23 | 31.3.22 |
£ | £ |
Emoluments etc |
6. | EXCEPTIONAL ITEMS |
31.3.23 | 31.3.22 |
£ | £ |
Profit/loss on sale of tangibl |
e fixed assets |
7. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31.3.23 | 31.3.22 |
£ | £ |
Bank loan interest |
Interest payable |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2023 |
8. | PROFIT BEFORE TAXATION |
The profit is stated after charging/(crediting): |
31.3.23 | 31.3.22 |
£ | £ |
Other operating leases |
Depreciation - owned assets |
Auditors' remuneration |
Government grants (see note 4) | ( |
) | ( |
) |
9. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
31.3.23 | 31.3.22 |
£ | £ |
Current tax: |
UK corporation tax |
Deferred tax | ( |
) |
Tax on profit |
UK corporation tax was charged at 19%) in 2022. |
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: |
31.3.23 | 31.3.22 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2022 - |
Effects of: |
Depreciation in excess of capital allowances |
Research and Development | - | (225,377 | ) |
respect of previous period |
Deferred taxation | 4,184 | (536 | ) |
Total tax charge | 479,911 | 498,043 |
Factors that may affect future tax charges |
On 3 March 2021, the Chancellor of the Exchequer announced that the corporation tax rate would increase to a maximum of 25% from 1 April 2023. |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2023 |
10. | INTANGIBLE FIXED ASSETS |
Computer |
software |
£ |
COST |
Additions |
At 31 March 2023 |
AMORTISATION |
Reclassification/transfer |
At 31 March 2023 |
NET BOOK VALUE |
At 31 March 2023 |
11. | TANGIBLE FIXED ASSETS |
Freehold | Improvements |
land and | to | Plant and |
buildings | property | machinery |
£ | £ | £ |
COST |
At 1 April 2022 |
Additions |
Disposals |
Reclassification/transfer | ( |
) | ( |
) |
At 31 March 2023 |
DEPRECIATION |
At 1 April 2022 |
Charge for year |
Eliminated on disposal |
Reclassification/transfer | ( |
) | ( |
) |
At 31 March 2023 |
NET BOOK VALUE |
At 31 March 2023 |
At 31 March 2022 |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2023 |
11. | TANGIBLE FIXED ASSETS - continued |
Fixtures |
and | Motor | Computer |
fittings | vehicles | equipment | Totals |
£ | £ | £ | £ |
COST |
At 1 April 2022 |
Additions |
Disposals | ( |
) | ( |
) |
Reclassification/transfer |
At 31 March 2023 |
DEPRECIATION |
At 1 April 2022 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
Reclassification/transfer | ( |
) | ( |
) |
At 31 March 2023 |
NET BOOK VALUE |
At 31 March 2023 |
At 31 March 2022 |
12. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.3.23 | 31.3.22 |
£ | £ |
Trade debtors |
Provision for doubtful debts | (14,906 | ) | - |
Other debtors |
Directors' current accounts | 3,035,587 | - |
Prepayments and accrued income |
13. | CASH AT BANK AND IN HAND |
31.3.23 | 31.3.22 |
£ | £ |
Bank deposit account | ( |
) |
Santander - General | - | 2,662,673 |
Santander Head Office | - | 35,494 |
HSBC Bank account | 5,441,739 | 654,670 |
Bank - other Santander a/cs | - | 30,716 |
Homes - Petty Cash |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2023 |
14. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.3.23 | 31.3.22 |
£ | £ |
Bank loans and overdrafts (see note 16) |
Trade creditors |
Tax |
Social security and other taxes |
Other creditors |
Wages | 534,498 | 451,976 |
Directors' current accounts | 3,689 | 85,542 |
Accruals and deferred income |
15. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
31.3.23 | 31.3.22 |
£ | £ |
Bank loans (see note 16) |
16. | LOANS |
An analysis of the maturity of loans is given below: |
31.3.23 | 31.3.22 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans |
Amounts falling due between one and two years: |
Bank loans - 1-2 years |
Amounts falling due between two and five years: |
Bank loans - 2-5 years |
17. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
31.3.23 | 31.3.22 |
£ | £ |
Within one year |
Between one and five years |
In more than five years |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2023 |
18. | SECURED DEBTS |
The following secured debts are included within creditors: |
31.3.23 | 31.3.22 |
£ | £ |
Bank loans |
At the balance sheet date, the bank loan is secured by way of the following: |
i. Legal charge on the freehold properties; |
ii. Legal charge on the leasehold properties; and |
iii. Fixed and floating charge over all the current and future assets of the company; |
Bank loan outstanding at the balance sheet date is repaid in monthly instalments and attracts interest at a rate of 2.150% per annum over the Bank of England Base Rate until June 2025. |
19. | PROVISIONS FOR LIABILITIES |
31.3.23 | 31.3.22 |
£ | £ |
Deferred Tax | 142,266 | 138,082 |
Deferred |
tax |
£ |
Balance at 1 April 2022 |
Charge / (Credit) for the year | 4,184 |
Balance at 31 March 2023 |
Deferred taxes are calculated on all temporary differences using the liability method at the prevailing corporation tax rate of 25% (2022: 19%) due to accelerated capital allowance. The deferred tax is attributed as above. |
20. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.3.23 | 31.3.22 |
value: | £ | £ |
Ordinary | £1 | 100 | 100 |
21. | RESERVES |
Retained |
earnings |
£ |
At 1 April 2022 |
Profit for the year |
Gifts to Employee Ownership |
Trust | 1,516,365 |
At 31 March 2023 |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2023 |
22. | PENSION COMMITMENTS |
The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £143,489 (2022: £133,124). Contributions outstanding to the pension fund at 31 March 2023 amounted to £17,928 (2022: £26,510) |
23. | CONTINGENT LIABILITIES |
On 10 July 2015, the company entered into a composite banking arrangement. Under this arrangement the company provided a guarantee to the bank for the bank borrowing of CTTM Trustees Limited acting as trustee of the Care Through the Millennium Employee Ownership Trust. Total bank loans outstanding at 31 March 2023 amounted to £5,497,300 (2022: £5,797,447). |
24. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
In July 2015, Mr C M Higgins and Mrs S J Higgins, the current shareholders, provided a loan to the company in the form of deferred consideration on which interest is charged at 4% per annum (see note 25). Total net interest charged to the company during the year amounted to £5,935 (2022: £13,615). |
During the year, monies overdrawn from the company by the directors amounted to £3,13million. This resulted to amounts falling due within one year within debtors to total to £3.03million (2022: -£85,543) owed from Mr C M Higgins and Mrs S J Higgins. The amount is unsecured and interest free with no set terms for repayment. |
25. | RELATED PARTY DISCLOSURES |
The company occupies various residential properties leased by Tenrol Limited, a company in which Mr C M Higgins is the director and has an interest. Rent paid by the company at market value for the year amounted to £483,827 (2022: £483,827). |
At the beginning of the year, the company owed Tenrol Limited £16,650. During the year the company provided management services and made payments on behalf of the related party. At the balance sheet date, the company is owed £23,425 by Tenrol Limited. |
At the balance sheet date, the company accrued rent charge of £61,620 (2022: £66,820) payable to C M Higgins Limited, a company in which Mr C M Higgins is the sole director and shareholder. Rent charge is in relation service users occupying purpose built premises as part of maintaining the Supported Living Scheme. |
The directors consider there to be no key management personnel, other than the directors, who have authority and responsibility for planning, directing and controlling the activities of the company. |
26. | POST BALANCE SHEET EVENTS |
Corporation tax rate increased from 19% to 25%, effective 01 April 2023, impacting the company’s future tax liabilities and financial position. |
An interim dividend for the subsequent financial year was paid on 30 April 2023 in respect to the changes in shareholdings. Dividend payable amounted to £3.05million. |
27. | ULTIMATE CONTROLLING PARTY |
During the year, there was a change of ownership. The company was an employee owned company through an Employee Ownership Trust, therefore was ultimate controlling party. Due to the change of ownership, the company is under joint control of Mr C M Higgins and Mrs S J Higgins by virtue of the 100% ownership of the entire issued share capital in the company. |
EXTEL LIMITED (REGISTERED NUMBER: 03275554) |
T/A CARE THROUGH THE MILLENNIUM |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2023 |
28. | CHANGES IN OWNERSHIP STRUCTURE |
On 10 July 2015, 75% of the issued share capital of Extel Limited T/A Care Through The Millennium was sold and became a majority 'employee owned' company. To achieve this aim a new trustee company named CTTM Trustees Limited was incorporated which acts as the corporate trustee of the Care Through The Millennium Employee Ownership Trust (the 'Trust'). As a result, the Trust owned 75% of the issued share capital of Extel Limited T/A Care Through The Millennium. |
The funding for this transaction was achieved as follows: |
i. Initial contribution from the company of £1,000,000; |
ii. Loan from a third party financial institution of £3,940,928; and |
iii. Loan from the previous majority shareholders of the company of £5,222,414; |
The initial contribution was paid by the company out of its distributable reserves in 2016. The remaining loans are held within the Trust, however, the funding for the repayment of these loans is intended to be made by Extel Limited. The intended annual minimum repayments are expected to be in the region of £440,000 with additional repayments to the previous majority shareholders subject to a minimum cash balance held by the company and meeting its working capital requirements. |
Loan from the third party, which was subject to short term facility extensions during the year, is repaid in quarterly instalments, with a final balloon repayment of £3,283,236 due on the termination date of 30 June 2021. On 11 May 2021, the company secured re-finance with a new £3,333,000 loan on a four year term with a new third party financial institution. Loan from the previous majority shareholders is repaid in monthly instalments with interest charged on the outstanding balance at 4% per annum. The final repayment date of this loan cannot be determined due to uncertainty in timing and amount of any additional repayments. The payments made to the Trust in relation to these loans amounted to £370,563.29 (2022: £407,572). |
During the year ended, Mr C M Higgins bought back all the shareholding from CTTM Trustees Limited. This increased the gifts to the employee ownership trust, which is also offset by the loan interest payment on a monthly basis on the capital repayment. Payments made to and from the Trust have been disclosed as a gift of profits from the company; disclosure is made in the Statement of Changes in Equity. |