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Registration number: 14283410

Koala Ruby Bidco Limited

Annual Report and Consolidated Financial Statements

for the Period from 8 August 2022 to 31 March 2023

 

Koala Ruby Bidco Limited

Contents

Company Information

1

Strategic Report

2 to 3

Director's Report

4

Statement of Director's Responsibilities

5

Independent Auditor's Report

6 to 8

Consolidated Profit and Loss Account

9

Consolidated Balance Sheet

10

Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Statement of Changes in Equity

13

Notes to the Financial Statements

14 to 27

 

Koala Ruby Bidco Limited

Company Information

Director

G M Norman

Registered office

1st Floor South
101 New Cavendish Street
London
W1W 6XH

Auditors

Hazlewoods LLP
Windsor House
Bayshill Road
Cheltenham
GL50 3AT

 

Koala Ruby Bidco Limited

Strategic Report for the period from 8 August 2022 to 31 March 2023

The director presents his strategic report for the period from 8 August 2022 to 31 March 2023.

Principal activity

The principal activity of the group is as a holding company.

The principal activity of the group is the provision of care and support services to adults with learning disabilities, mental illness, challenging behaviour and other long term conditions.

Fair review of the business

The results for the period, which are set out in the profit and loss account, show turnover of £11,230,192 and an operating loss of £1,616,111. At 31 March 2023, the group had net liabilities of £2,363,616. The director considers the performance for the period and the financial position at the period end to be satisfactory.

Environment
The Group is aware of its environmental impact and is monitoring this. There have been some initiatives implemented to aid in decreasing the Group's carbon footprint, measures to minimise waste across the Group where possible, with items being recycled wherever possible and training of managers on environmental awareness.

Energy and carbon reporting
The company has not disclosed information in respect of energy and carbon reporting as its energy consumption is less than 40,000kWh.

Outlook for the business
The Director expects that the next year will have a mix of challenges as the health and social care industry changes and evolves. However, the Director believes that the Group is well positioned to manage resultant risk and prosper during the period due to its committed workforce, good working relationships with local authorities in the United Kingdom, strong balance sheet and continued investment in staff development, best practice and modern processes and systems.

Section 172 statement
The Director believes that they have effectively implemented their duties under section 172 of the Companies Act 2006. The Company has considered the long term-strategy of the business and consider that this strategy will continue to deliver long term success to the business and it's stakeholders.

The Company is committed to maintaining an excellent reputation and strives to achieve high standards. We are highly selective about the employees that we take on in order to deliver the best value to service users while also maintaining an awareness of the environmental impact of the work done, and strive to reduce carbon footprint where possible.

The Director recognises the importance of wider stakeholders in delivering their strategy and achieving sustainability within the business. The main stakeholders in the company are considered to be the employees, suppliers and service users.

In ensuring that all stakeholders are considered as part of every decision process, we believe we act fairly between all members of the Company.

Strategy
The Group's primary area of activity was providing care services in residential, nursing and supported living facilities. The Group believes that the key three drivers for its success are the continual focus on the high quality provision of care services, the high level of effort from staff and strong financial control. These drivers support the delivery of the Group's objectives, customer's priorities and future opportunities. This is demonstrated through the successful tender processes being entered into by members of the Group with local authorities.

Given the nature of the business, the directors are of the opinion that key performance indicators are important. The group uses a number of indicators to monitor and improve the position of the business. Indicators are reviewed and altered to meet changes both in the internal and external environments. The directors do not consider the inclusion of an analysis using key performance indicators to be necessary to assist users of the financial statements in their understanding of the financial performance or position of the group.

 

Koala Ruby Bidco Limited

Strategic Report for the period from 8 August 2022 to 31 March 2023

Principal risks and uncertainties

The management of the business and the execution of the group's strategy are subject to a number of risks. The key business risks and uncertainties affecting the group are considered to relate to ongoing compliance with current and future legislation affecting the sector.

Approved by the director on 17 April 2024


G M Norman
Director

 

Koala Ruby Bidco Limited

Director's Report for the Period from 8 August 2022 to 31 March 2023

The director presents his report and the for the period from 8 August 2022 to 31 March 2023.

Incorporation

The company was incorporated on 8 August 2022.

Director of the company

The director who held office during the period was as follows:

G M Norman (appointed 8 August 2022)

Financial instruments

Objectives and policies

The board constantly monitors the group's trading results and revise projections as appropriate to ensure that the group can meet its future obligations as they fall due.

Price risk, credit risk, liquidity risk and cash flow risk

The group is exposed to the usual credit and cash flow risks associated with selling on credit and manages this through credit control procedures. The group's other borrowings were repaid post year end following the sale and leaseback is its freehold property portfolio.

The business' principal financial instruments comprise bank balances, trade debtors, trade creditors and bank debts. The main purpose of these instruments is to finance the business operations.

In respect of bank balances, the liquidity risk is managed by maintaining a balance between the availability of cash reserves, future operational commitments and future proposed capital expenditure.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.

Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due as and when they arise

Going concern

The group has sufficient resources available and the directors have prepared forecasts for the next 12 months that indicate that this will continue to be the case and that these cash flows will be sufficient for the group to meet its financing commitments as they fall due. The directors therefore have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future and have continued to adopt the going concern basis in preparing the financial statements.

Important non adjusting events after the financial period

Following the period end, the company sold and leased back its freehold property portfolio and the majority of proceeds received were used to repay the other borrowings included in note 16 to the financial statements.

Disclosure of information to the auditor

The director has taken the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditor is aware of that information. The director confirms that there is no relevant information that he knows of and of which he knows the auditor is unaware.

Appointment of auditors

Hazlewoods LLP were appointed as auditors to the company during the period and have expressed their willingness to continue in office.

Approved by the director on 17 April 2024


G M Norman
Director

 

Koala Ruby Bidco Limited

Statement of Director's Responsibilities

The director is responsible for preparing the Strategic Report, Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and company and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

select suitable accounting policies and 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; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

Koala Ruby Bidco Limited

Independent Auditor's Report to the Members of Koala Ruby Bidco Limited

Opinion

We have audited the financial statements of Koala Ruby Bidco Limited (the 'parent company') and its subsidiaries (the 'group') for the period from 8 August 2022 to 31 March 2023, which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the group's and the parent company's affairs as at 31 March 2023 and of the group's loss for the period 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 auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.

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

Other information

The director are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Koala Ruby Bidco Limited

Independent Auditor's Report to the Members of Koala Ruby Bidco Limited

Opinion on other matter 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 Director's Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Director's Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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 and the Director's Report.

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

adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

the parent company financial statements are not in agreement with the accounting records and returns; or

certain disclosures of director's remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of the director

As explained more fully in the Statement of Director's Responsibilities set out on page 5, the director is 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 director determines 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 director is responsible for assessing the group’s and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the group or the parent 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.

Extent to which the audit was capable of detecting irregularities, including fraud

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:

We considered the nature of the group’s industry and its control environment and reviewed the groups’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory framework that the group operates in and identified the key laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements, including the UK Companies Act and tax legislation, and, those that do not have a direct effect on the financial statements but compliance with which may be fundamental to the group’s ability to operate or to avoid a material penalty.

We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

 

Koala Ruby Bidco Limited

Independent Auditor's Report to the Members of Koala Ruby Bidco Limited

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override of controls. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgments made in accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:

reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatements due to fraud;

enquiring of management concerning actual and potential litigation and claims and instances of non-compliance with laws and regulations; and

reading minutes of meetings of those charged with governance.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.





Simon Worsley (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor

Windsor House
Bayshill Road
Cheltenham
GL50 3AT

18 April 2024

 

Koala Ruby Bidco Limited

Consolidated Profit and Loss Account for the Period from 8 August 2022 to 31 March 2023

Note

8 August 2022 to 31 March 2023
 £

Turnover

3

11,230,192

Cost of sales

 

(7,820,884)

Gross profit

 

3,409,308

Administrative expenses

 

(5,025,551)

Other operating income

132

Operating loss

4

(1,616,111)

Other interest receivable and similar income

5

16,519

Interest payable and similar charges

6

(1,230,893)

Loss before tax

 

(2,830,485)

Taxation

9

(19,545)

Loss for the financial period

 

(2,850,030)

Profit/(loss) attributable to:

 

Owners of the company

 

(2,850,030)

The above results were derived from continuing operations.

The group has no other comprehensive income for the period.

 

Koala Ruby Bidco Limited

(Registration number: 14283410)
Consolidated Balance Sheet as at 31 March 2023

Note

31 March 2023
 £

Fixed assets

 

Intangible assets

10

22,215,973

Tangible assets

11

14,448,918

 

36,664,891

Current assets

 

Debtors

14

1,106,956

Cash at bank and in hand

 

5,532,209

 

6,639,165

Creditors: Amounts falling due within one year

15

(42,824,645)

Net current liabilities

 

(36,185,480)

Total assets less current liabilities

 

479,411

Creditors: Amounts falling due after more than one year

15

(2,216,692)

Provisions for liabilities

9

(626,335)

Net liabilities

 

(2,363,616)

Capital and reserves

 

Called up share capital

18

100

Profit and loss account

(2,823,203)

Equity attributable to owners of the company

 

(2,823,103)

Minority interests

 

459,487

Total equity

 

(2,363,616)

Approved and authorised by the director on 17 April 2024
 

G M Norman
Director

 

Koala Ruby Bidco Limited

(Registration number: 14283410)
Balance Sheet as at 31 March 2023

Note

31 March 2023
 £

Fixed assets

 

Investments

12

300

Current assets

 

Debtors

14

1,999,800

Total assets less current liabilities

 

2,000,100

Creditors: Amounts falling due after more than one year

15

(2,184,110)

Net liabilities

 

(184,010)

Capital and reserves

 

Called up share capital

18

100

Profit and loss account

(184,110)

Total equity

 

(184,010)

The company made a loss after tax for the financial period of £184,110.

Approved and authorised by the director on 17 April 2024
 

G M Norman
Director

 

Koala Ruby Bidco Limited

Consolidated Statement of Changes in Equity for the Period from 8 August 2022 to 31 March 2023
Equity attributable to the parent company

Share capital
£

Profit and loss account
£

Total
£

Non- controlling interests
£

Total equity
£

Loss for the period

-

(2,850,030)

(2,850,030)

-

(2,850,030)

New share capital subscribed

100

-

100

-

100

Transfers

-

26,827

26,827

(26,827)

-

Acquisition of non-controlling interest, increase/decrease in equity

-

-

-

486,314

486,314

At 31 March 2023

100

(2,823,203)

(2,823,103)

459,487

(2,363,616)

 

Koala Ruby Bidco Limited

Statement of Changes in Equity for the Period from 8 August 2022 to 31 March 2023

Share capital
£

Profit and loss account
£

Total
£

Loss for the period

-

(184,110)

(184,110)

New share capital subscribed

100

-

100

At 31 March 2023

100

(184,110)

(184,010)

 

Koala Ruby Bidco Limited

Notes to the Financial Statements for the Period from 8 August 2022 to 31 March 2023

 

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
1st Floor South
101 New Cavendish Street
London
W1W 6XH

 

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Summary of disclosure exemptions

The company has not presented a cash flow statement on the grounds that the company is a wholly owned subsidiary and a group cash flow statement is included in the financial statements of the ultimate parent company.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 March 2023.

No Profit and Loss Account is presented for the company as permitted by section 408 of the Companies Act 2006. The company made a loss after tax for the financial period of £184,110.

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

 

Koala Ruby Bidco Limited

Notes to the Financial Statements for the Period from 8 August 2022 to 31 March 2023

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

Disclosure of long or short period

The financial statements cover a period of 236 days. This is to bring the year end in line with that of the rest of the group.

Going concern

Notwithstanding the net liability position shown on the balance sheet, the financial statements have been prepared on the going concern basis. The directors have considered the forecast cash flows and the cash requirements of the business in their assessment of going concern. As a result of this assessment it was concluded that the cash requirements of the business for the 12 months from signing will be met through a combination of operational cash flows and intergroup loans and thus the business is deemed to operate as a going concern.

Judgements and estimation uncertainty

These financial statements do not contain any significant judgements or estimation uncertainty.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the group. The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the group's activities.

Government grants

Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised. Grants relating to assets are recognised over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

 

Koala Ruby Bidco Limited

Notes to the Financial Statements for the Period from 8 August 2022 to 31 March 2023

Depreciation

Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Freehold buildings

Straight line over 100 years

Leasehold buildings

Over the term of the lease

Plant and machinery

Straight line over 5 years

Fixtures and fittings

Straight line over 5 years

Computer equipment

Straight line over 4 years

Motor vehicles

Straight line over 4 years

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

Intangible assets

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date.

Negative goodwill arising on an acquisition is recognised on the face of the balance sheet on the acquisition date and subsequently the excess up to the fair value of non-monetary assets acquired is recognised in profit or loss in the periods in which the non-monetary assets are recovered.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Goodwill

5 years straight line

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the debtors.

 

Koala Ruby Bidco Limited

Notes to the Financial Statements for the Period from 8 August 2022 to 31 March 2023

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the group’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

Koala Ruby Bidco Limited

Notes to the Financial Statements for the Period from 8 August 2022 to 31 March 2023

Financial instruments


Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.

For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

 

Koala Ruby Bidco Limited

Notes to the Financial Statements for the Period from 8 August 2022 to 31 March 2023

 

3

Turnover

The total turnover of the group has been derived from its principal activity wholly undertaken in the United Kingdom.

 

4

Operating profit

Arrived at after charging/(crediting)

8 August 2022 to 31 March
2023
£

Depreciation expense

186,692

Amortisation expense

2,934,185

Operating lease expense - property

386,028

Hire of plant and machinery

27,928

 

5

Other interest receivable and similar income

8 August 2022 to 31 March
2023
£

Interest income on bank deposits

16,519

 

6

Interest payable and similar expenses

8 August 2022 to 31 March
2023
£

Interest on bank overdrafts and borrowings

2,659

Interest on preference shares

184,110

Interest on obligations under finance leases and hire purchase contracts

5,519

Interest expense on other finance liabilities

1,038,605

1,230,893

 

Koala Ruby Bidco Limited

Notes to the Financial Statements for the Period from 8 August 2022 to 31 March 2023

 

7

Staff costs

Group
The aggregate payroll costs (including director's remuneration) were as follows:

8 August 2022 to 31 March 2023
 £

Wages and salaries

7,211,512

Social security costs

550,223

Pension costs, defined contribution scheme

145,645

7,907,380

 

The average number of persons employed by the company (including the director) during the period, was as follows:

8 August 2022 to 31 March 2023
 No.

Average number of employees

524

Company
The company incurred no staff costs and had no employees other than the director.

 

8

Auditors' remuneration

8 August 2022 to 31 March
2023
£

Audit of these financial statements

30,000

 

Koala Ruby Bidco Limited

Notes to the Financial Statements for the Period from 8 August 2022 to 31 March 2023

 

9

Taxation

Tax charged/(credited) in the consolidated profit and loss account

8 August 2022 to 31 March
2023
£

Current taxation

UK corporation tax adjustment to prior periods

2,505

Deferred taxation

Arising from origination and reversal of timing differences

17,040

Tax expense in the income statement

19,545

The tax on profit before tax for the period is the same as the standard rate of corporation tax in the UK of 19%.

The differences are reconciled below:

8 August 2022 to 31 March 2023
£

Loss before tax

(2,830,485)

Corporation tax at standard rate

(537,792)

Effect of expense not deductible in determining taxable profit (tax loss)

639,164

Effect of tax losses

120,432

UK deferred tax credit relating to changes in tax rates or laws

(2,460)

Increase in UK and foreign current tax from unrecognised temporary difference from a prior period

2,505

Tax decrease from other short-term timing differences

(202,304)

Total tax charge

19,545

Deferred tax

Group

Deferred tax assets and liabilities

31 March 2023

Liability
£

Accelerated capital allowances

626,335

 

Koala Ruby Bidco Limited

Notes to the Financial Statements for the Period from 8 August 2022 to 31 March 2023

 

10

Intangible assets

Group

Goodwill
 £

Cost

Additions and at 31 March 2023

25,150,158

Amortisation

Amortisation charge and at 31 March 2023

2,934,185

Carrying amount

At 31 March 2023

22,215,973

Details of additions are disclosed in note 13 to the financial statements.

 

11

Tangible assets

Group

Land and buildings
£

Furniture, fittings and equipment
 £

Motor vehicles
 £

Total
£

Cost

Acquisitions

12,940,183

426,937

129,282

13,496,402

Additions in the year

950,047

178,162

11,000

1,139,209

Disposals

-

-

(10,310)

(10,310)

At 31 March 2023

13,890,230

605,099

129,972

14,625,301

Depreciation

At 8 August 2022

-

-

1

1

Charge for the period

55,228

103,590

27,874

186,692

Eliminated on disposal

-

-

(10,310)

(10,310)

At 31 March 2023

55,228

103,590

17,565

176,383

Carrying amount

At 31 March 2023

13,835,002

501,509

112,407

14,448,918

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

 

2023
£

Fixtures and fittings

45,936

Motor vehicles

98,634

 

144,570

 

Koala Ruby Bidco Limited

Notes to the Financial Statements for the Period from 8 August 2022 to 31 March 2023

 

12

Investments

Company

31 March 2023
£

Investments in subsidiaries

300

Subsidiaries

£

Cost and carrying amount

Additions and at 31 March 2023

300

Details of undertakings

Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2023

Subsidiary undertakings

M & D Care Operations Limited

England and Wales

Ordinary

90%

M & D Care Group Limited

England and Wales

Ordinary

90%

M & D Care (Holdings) Limited

England and Wales

Ordinary

90%

M & D Care Limited

England and Wales

Ordinary

90%

Inspiration Lifestyle Services Limited

England and Wales

Ordinary

90%

M & D Care Operations Limited is held directly. The principal activity of M & D Care Operations Limited, M & D Care Group Limited and M & D Care (Holdings) Limited is as holding companies. The principal activity of all other subsidiaries is provision of residential, domiciliary and supported living care services.

 

Koala Ruby Bidco Limited

Notes to the Financial Statements for the Period from 8 August 2022 to 31 March 2023

 

13

Business combinations

On 19 August 2022, M & D Care Operations Limited acquired 100% of the share capital of M & D Group Limited and its subsidiary companies, obtaining control.

M & D Care Limited contributed £10,213,389 revenue and £1,064,050 profit before taxation for the period between the date of acquisition and the balance sheet date.

Inspiration Lifestyle Services Limited contributed £1,016,803 revenue and £264,873 of profit before taxation for the period between the date of acquisition and the balance sheet date.

The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below:

Fair value
2023
£

Assets and liabilities acquired

Financial assets

6,144,281

Tangible assets

13,496,402

Financial liabilities

(14,777,839)

Total identifiable assets

4,862,844

Non-controlling interest

(486,314)

Goodwill

25,150,158

Total consideration

29,526,688

Satisfied by:

Cash

13,126,834

Equity instruments

3,000,000

Deferred consideration

12,399,854

Total consideration transferred

28,526,688

Cash flow analysis:

Cash consideration

13,126,834

Less: cash and cash equivalent balances acquired

(1,237,106)

Net cash outflow arising on acquisition

11,889,728

The useful life of goodwill is 5 years.

 

14

Debtors

 

Group

Company

31 March 2023
 £

31 March 2023
 £

Trade debtors

546,453

-

Amounts owed by group undertakings

-

1,999,800

Other debtors

163,038

-

Prepayments and accrued income

397,465

-

 

1,106,956

1,999,800

 

Koala Ruby Bidco Limited

Notes to the Financial Statements for the Period from 8 August 2022 to 31 March 2023

 

15

Creditors

   

Group

Company

Note

31 March 2023
 £

31 March 2023
 £

Due within one year

 

Loans and borrowings

16

26,315,780

-

Trade creditors

 

237,837

-

Social security and other taxes

 

405,665

-

Outstanding defined contribution pension costs

 

44,782

-

Other creditors

 

1,670,762

-

Accrued expenses

 

13,957,814

-

Corporation tax liability

9

142,572

-

Deferred income

 

49,433

-

 

42,824,645

-

Due after one year

 

Loans and borrowings

16

2,216,692

2,184,110

 

16

Loans and borrowings

 

Group

Company

31 March 2023
£

31 March 2023
£

Current loans and borrowings

Other loans

26,261,493

-

HP and finance lease liabilities

54,287

-

26,315,780

-

 

Group

Company

31 March 2023
£

31 March 2023
£

Non-current loans and borrowings

HP and finance lease liabilities

32,582

-

Redeemable preference shares

2,184,110

2,184,110

2,216,692

2,184,110

Other loans were repaid in full after the period on the sale and leaseback of the group's freehold property.

Hire purchase contracts are secured on the assets to which they relate.

Redeemable preference shares
The preference shares are redeemable on 18 August 2027. The preference shares accrue a fixed cumulative preferential dividend per annum. They are redeemable at £1 per share and carry no voting rights On a winding up of the company the holders of the shares have a right to receive £2,000,000 plus any cumulative dividends not paid.

 

Koala Ruby Bidco Limited

Notes to the Financial Statements for the Period from 8 August 2022 to 31 March 2023

 

17

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the group to the scheme and amounted to £145,645.

Contributions totalling £44,782 were payable to the scheme at the end of the period and are included in creditors.

 

18

Share capital

Allotted, called up and fully paid shares

 

31 March 2023

 

No.

£

Ordinary A shares of £1 each

30

30

Ordinary B shares of £1 each

70

70

 

100

100

1 Ordinary share of £1 was allotted upon incorporation. On 19 August 2022, this share was redesignated as 1 Ordinary B share of £1.

New shares allotted

During the period, 30 Ordinary A shares having an aggregate nominal value of £30 were allotted for an aggregate consideration of £30. These shares were allotted on 19 August 2022.

During the period, 69 Ordinary B shares having an aggregate nominal value of £69 were allotted for an aggregate consideration of £69. These shares were allotted on 19 August 2022.

Rights, preferences and restrictions

The different classes of ordinary share referred to above carry separate rights to dividends but in all other significant respects, rank pari passu.

 

19

Obligations under leases and hire purchase contracts

Group

Finance leases

The total of future minimum lease payments is as follows:

31 March 2023
£

Not later than one year

54,287

Later than one year and not later than five years

32,582

86,869

Operating leases

The total of future minimum lease payments is as follows:

31 March 2023
£

Not later than one year

221,242

Later than one year and not later than five years

530,786

Later than five years

85,500

837,528

 

Koala Ruby Bidco Limited

Notes to the Financial Statements for the Period from 8 August 2022 to 31 March 2023

 

20

Related party transactions

Summary of transactions with key management

Key management personnel are considered to be the directors of the company and key management personnel compensation is disclosed in note 7 to the financial statements.

 

21

Non adjusting events after the financial period

Following the period end, the company sold and leased back its freehold property portfolio and the majority of proceeds received were used to repay the other borrowings included in note 16 to the financial statements.

 

22

Parent and ultimate parent undertaking

The company's immediate parent is Koala Care Holdings Limited, incorporated in England and Wales .