Caseware UK (AP4) 2023.0.135 2023.0.135 2023-12-310002600000039000000402699436200598036728792023-01-01A C De Changy2024-07-18false2false42023-12-31134233000.23520.19 13423300 2023-01-01 2023-12-31 13423300 2022-01-01 2022-12-31 13423300 2023-12-31 13423300 2022-12-31 13423300 2022-01-01 13423300 c:Director1 2023-01-01 2023-12-31 13423300 c:Director2 2023-01-01 2023-12-31 13423300 c:Director3 2023-01-01 2023-12-31 13423300 c:Director3 2023-12-31 13423300 c:Director4 2023-01-01 2023-12-31 13423300 c:Director4 2023-12-31 13423300 c:RegisteredOffice 2023-01-01 2023-12-31 13423300 d:LandBuildings 2023-01-01 2023-12-31 13423300 d:LandBuildings 2022-01-01 2022-12-31 13423300 d:LandBuildings 2023-12-31 13423300 d:LandBuildings 2022-12-31 13423300 d:LandBuildings 2022-01-01 13423300 d:MotorVehicles 2023-01-01 2023-12-31 13423300 d:FurnitureFittings 2023-01-01 2023-12-31 13423300 d:Goodwill 2023-01-01 2023-12-31 13423300 d:CurrentFinancialInstruments 2023-12-31 13423300 d:CurrentFinancialInstruments 2022-12-31 13423300 d:Non-currentFinancialInstruments 2023-12-31 13423300 d:Non-currentFinancialInstruments 2022-12-31 13423300 d:ShareCapital 2023-01-01 2023-12-31 13423300 d:ShareCapital 2023-12-31 13423300 d:ShareCapital 2022-01-01 2022-12-31 13423300 d:ShareCapital 2022-12-31 13423300 d:ShareCapital 2022-01-01 13423300 d:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 13423300 d:RetainedEarningsAccumulatedLosses 2023-12-31 13423300 d:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 13423300 d:RetainedEarningsAccumulatedLosses 2022-12-31 13423300 c:OrdinaryShareClass1 2023-01-01 2023-12-31 13423300 c:OrdinaryShareClass1 2023-12-31 13423300 c:FRS101 2023-01-01 2023-12-31 13423300 c:Audited 2023-01-01 2023-12-31 13423300 c:FullAccounts 2023-01-01 2023-12-31 13423300 c:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 13423300 d:Non-currentFinancialInstruments d:Secured 2023-12-31 13423300 d:Non-currentFinancialInstruments d:Secured 2022-12-31 13423300 d:CurrentFinancialInstruments d:Secured 2023-12-31 13423300 d:CurrentFinancialInstruments d:Secured 2022-12-31 13423300 30 2023-01-01 2023-12-31 13423300 d:FinancialInstrumentsFairValueThroughProfitOrLoss 2023-01-01 2023-12-31 13423300 e:PoundSterling 2023-01-01 2023-12-31 iso4217:GBP xbrli:pure xbrli:shares
Registered number: 13423300


CARE TREE INVEST 2 LTD
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

 
CARE TREE INVEST 2 LTD
 
 
 
COMPANY INFORMATION

 
Directors
A C De Changy 
B Duplat 
S T Foxall-Smith (appointed 4 January 2023)
M H Lefebvre (appointed 4 January 2023)




Registered number
13423300



Registered office
1st Floor
1 Lakeside Headlands Business Park

Salisbury Road

Blashford

Ringwood

BH243PB




Independent auditors
Menzies LLP
Chartered Accountants & Statutory Auditor

3000a Parkway

Whiteley

Hampshire

PO15 7FX





 
CARE TREE INVEST 2 LTD
 
 
 
CONTENTS


Page
Group Strategic Report
1 - 3
Directors' Report
4 - 6
Independent Auditors' Report
7 - 10
Consolidated Statement of Profit or Loss and Other Comprehensive Income
11
Consolidated Statement of Financial Position
12 - 13
Company Statement of Financial Position
14 - 15
Consolidated Statement of Changes in Equity
16
Company Statement of Changes in Equity
17
Consolidated Statement of Cash Flows
18
Notes to the Consolidated Financial Statements
19 - 37
Company Detailed Profit and Loss Account and Summaries
37

 
CARE TREE INVEST 2 LTD
 
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
Introduction
 
The directors are pleased to give their report for the financial year to December 2023. 

Business review
 
The directors are satisfied with the results for the period, which have been achieved in a challenging world. The directors aim to provide a balanced and comprehensive review of the development and performance of the business, which despite market pressure has seen the company continue to build its residential home and supported living units principally in the north of England as supported by the financial statements for the year.

Financial key performance indicators
 
The Group constantly reviews Key Performance Indicators (KPI’s) that include fees received, payroll costs and operating profit which are detailed in the financial statements, some key KPI’s are as follows: 

2023
2022
        £
        £
Revenue

7,464,756

8,346,678

Operating profit

9,648,331

(11,348,840)

Property, plant and equipment value

3,257,786

3,483,536

Net assets

8,506,217

559,532


Page 1

 
CARE TREE INVEST 2 LTD
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Principal risks and uncertainties
 
Financial
The group has outstanding finance of £7.2M.  The company acknowledges the level of debt and remains vigilant. The company also faces risk from inflationary pressure on costs, in particular to changes in the National Living Wage.
The company realises that its relationships with its suppliers and customers is key to its success and as such works closely with them to build long lasting business relationships. 
• Staff recruitment
The group’s success is dependent on its staff and the ability to recruit and maintain good quality staff. The company invests in training and through induction and aims to provide a safe and secure workplace for all individuals. Where challenges have been faced with recruitment the organisation has evolved with the market trends to ensure the organisation is able to recruit and retain staff. This done by proactively investing in staff development and providing clear development pathways for staff to progress through the organisation as we grow.
• Occupancy
The group’s occupancy levels are key to its continued success and any significant reduction would have an adverse effect on the results of the company.  Occupancy levels are maintained through continued close working with the local authorities. Our reputation as an organisation that can provide care and support to some of the most challenging in our society has been developed over 17 plus years and our local relationships continue to develop as we are able to offer bespoke care packages that meet the needs of a changing market. We continue to monitor local joint strategic needs to ensure that we are well positioned to meet the needs of changing demand, now and in the future.
• Legislation and regulation
The group’s care home activities are monitored by the Care Quality Commission (CQC). The company takes its responsibility seriously and puts into place the necessary checks and monitoring to ensure compliance and is always willing to work with the CQC to maintain and improve standards. Our quality drives and initiatives within all our services ensure that standards and regulatory compliance remains at the core of what we do. When things go wrong, we have the capabilities and capacity to ensure services are supported through a quality outcomes framework and at its core is always the safety and wellbeing of our service users.
• Community and environment
The group understands how important friendship and interaction with others are as part of life in the community. Therefore, we create an environment that encourages this to happen naturally. It's why you'll see excellent interaction between staff and service users in each of our homes, with close friendships also developing between the service users themselves. We acknowledge that the care homes are deeply within communities and all efforts are made to blend in and respect all parties concerned. All of our services are embedded within local communities. We work hard to ensure all of our service users have access to their community in order for them to feel an integral part of it. We would with local residents, community groups and organisations to offer the best possible outcomes for our service users and we feel this can only be achieved in complete partnership with our local communities. 

Page 2

 
CARE TREE INVEST 2 LTD
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Directors' statement of compliance with duty to promote the success of the Group
 
Section 172 Companies Act Statement
The directors acknowledge their duty under Section 172 (1) (a) to (f) of the Companies Act 2006 to set out a statement explaining issues the considered in complying with this section in engaging with stakeholders, employees, suppliers and other parties the company interacted with during the period. The directors act in good faith to promote the company’s success for the benefit of the members as a whole and having regard to the provisions of Section 172 as follows: 
S172 (1) (A) – The likely consequences of any decision in the long term
The directors acknowledge that every decision has an impact on the people employed and the level of service and quality provided to continue growing its business and strives to understand the importance of such decisions.
S 172(1) (B) - The interests of the Company and Group's employees
The directors appreciate the company’s employees are key to its success and as such strive to maintain a safe workplace and remain a responsible employer in maintaining the workplace environment and the pay and benefits of its employees through constant review and monitoring and seeking feedback at every juncture, providing training and support as necessary.
SI72(1) (C) - The need to foster the Company and Group’s business relationships with suppliers, customers, and others
The company continually monitors the relationships it holds with its suppliers, customers and local authorities to ensure they are strong and mutually beneficial to all parties concerned.
S172(1) (D)  - The impact of the Company and Group's operations on the community and the environment
The company is proud of the level of care it provides in its care homes and via Residential & supported living. We believe it’s important to work towards a future of improvement and enrichment. Even if the steps are small and the journey is long, our optimistic approach makes the future a highly desirable destination for our service users.
Individuals enjoy their own space to ensure, as much as possible, they can have independence and pride ourselves on this belief that this approach provides the very best care possible.
S172(1) (E) - The desirability of the Company and Group maintaining a reputation for high standards of business conduct
The company is regulated by the Care Quality Commission (CQC) and takes this responsibility for the provision of care with the upmost dedication with regular reviews to ensure a high level of standards are always maintained. Where standards do fall short, all remedial measures are put into place to improve matters and this continual striving to improve quality is something the company is proud of.
The company’s reputation of quality is paramount to its reputation to ultimately provide high levels of care within its operations.
S 172(1) (F) - The need to act fairly between members of the Company
The directors take the necessary actions to operate the company with the values it has set, balancing these between the stakeholders of the business and the overall desire to maintain high levels of care and build an operation based on fairness and appreciating service users, employees and suppliers and customers alike in delivering this mission.


This report was approved by the board and signed on its behalf.





................................................
A C De Changy
Director

Date: 18 July 2024

Page 3

 
CARE TREE INVEST 2 LTD
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, Directors' Report and the consolidated financial statements, in accordance with applicable law.

Company law requires the directors to prepare consolidated financial statements for each financial year. Under that law they have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK and the Parent Company financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 101 'Reduced Disclosure Framework' (FRS 101).

Under company law the directors must not approve the consolidated financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing each of the consolidated and Parent Company financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgments and estimates that are reasonable and prudent;

for the consolidated financial statements, state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;

for the Parent Company financial statements, state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

assess the Group and Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

use the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Principal activity

The principal activity of the group in the year under review was that of the operation of care home facilities for the disabled and infirmed in the U.K.

Results and dividends

The profit for the year, after taxation, amounted to £7,946,685 (2022 - loss £11,698,156).

No dividends will be distributed for the year ended 31 December 2023 (2022- £nil).

Directors

The directors who served during the year were:

A C De Changy 
B Duplat 
S T Foxall-Smith (appointed 4 January 2023)
M H Lefebvre (appointed 4 January 2023)

Page 4

 
CARE TREE INVEST 2 LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Future developments

There have been no significant matters to note that have occured post year end. 

Financial instruments

The group's operations expose it to financial risks that include credit risk and liquidity risk. Management have delegated the responsibility of monitoring financial risk management to the finance director.
The principal risks are detailed in the Strategic Report.
Although the group trades wholly in the U.K. the uncertainty caused by the Brexit vote in June 2016 means that there is a higher level of uncertainty in the UK economy which can potentially impact upon future interest rates and the level of financing that may be available. The group continues to plan to mitigate any effect.

Engagement with employees

The 'Care Tree Invest 2 Group' is committed to ensuring equal opportunities for all and nurturing a diverse organisation. We promote a working environment of inclusiveness where all participants value each other's different contributions, skills and experience and are opposed to any form of less favourable treatment for employees or job applicants. This includes less favourable treatment caused by direct or indirect discrimination, on the grounds of disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, colour, nationality and ethnic or national origins, religion or belief, sex and/or sexual orientation or any other irrelevant factors.
We recognise the benefits to the organisation of a diverse and inclusive culture where everyone has the opportunity to thrive and fulfil their potential. It is committed to building a workforce that is diverse and reflects the community in which it works and to ensuring it can meet the needs of service users from all backgrounds. 
We strive to ensure that the work environment is free from harassment and bullying and that everyone is treated with dignity and respect. Care Tree puts its commitment to equality of opportunity and diversity into practice through its procedures for both recruitment and employment. 
The Group's full policy is given to employees at the start of employment. 

Disabled employees

The Group gives full consideration to applications for employment from disabled persons where the candidate's particular aptitudes and abilities are consistent with adequately meeting the requirements of the job. Opportunities are available to disabled employees for training, career development and promotion. Where existing employees become disabled, it is the Group's policy to provide continuing employment wherever practicable in the same or an alternative position and to provide appropriate training to achieve this aim. 

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Page 5

 
CARE TREE INVEST 2 LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Auditors

Under section 487(2) of the Companies Act 2006Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board and signed on its behalf.
 



................................................
A C De Changy
Director

Date: 18 July 2024
Page 6

 
CARE TREE INVEST 2 LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CARE TREE INVEST 2 LTD
 

Opinion


We have audited the financial statements of Care Tree Invest 2 Ltd (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023 which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Incomethe Consolidated Statement of Financial Position, the Company Statement of Financial Positionthe Consolidated Statement of Cash Flowsthe Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies set out on pages 21 - 24. The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. The financial reporting framework that has been applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 'Reduced Disclosure Framework' (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 December 2023 and of the Group's profit for the year then ended;

the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the United Kingdom

the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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. Our evaluation of the directors' assessment of the Group's and the Parent Company's ability to continue to adopt the going concern basis of accounting included:

Conversations with management and review of formal and informal forecasts and budgets for the period of 12 months from the date of signing of the financial statements. The forecasts are deemed reasonable based on expected sales and margins remaining at current levels taking into account liabilities as they fall due.

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 or the Parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Page 7

 
CARE TREE INVEST 2 LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CARE TREE INVEST 2 LTD (CONTINUED)


Other information


The other information comprises the information included in the Annual Report, other than the financial statements and our auditors' report thereon.  The directors are responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006


In our opinion, based on the work undertaken in the course of the audit: 

the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.

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

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

the Parent Company financial statements are not in agreement with the accounting records and returns; or

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

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


Responsibilities of directors

As explained more fully in the directors' responsibilities statement on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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





Page 8

 
CARE TREE INVEST 2 LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CARE TREE INVEST 2 LTD (CONTINUED)


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 an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation, and general regulations such as health and safety. Compliance with CQC regulations and reviews are also key requirements on the Company and Group that may impact the Financial Statements. We assessed the extent of compliance with the appropriate laws and regulations as part of our procedures on the related financial statement items.
We understood how the Company is complying with the legal and regulatory frameworks by, making inquiries to
management and those responsible for legal and compliance procedures.
The engagement partner assessed whether the engagement team collectively had the appropriate competence and
capabilities to identify or recognize non-compliance with laws and regulations. The assessment did not identify any
issues in this area.
We assessed the susceptibility of the Company financial statements to material misstatement, including how fraud
might occur. Audit procedures performed by the engagement team included:
- Identifying and assessing the design effectiveness of controls management has in place to prevent and detect
fraud;
- Understanding how those charged with governance considered and addressed the potential for override of controls
or other inappropriate influence over the financial reporting process;
- Challenging assumptions and judgments made by management in its significant accounting estimates; and
- Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
As a result of the above procedures, we considered the opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential for fraud in the following areas:
- Posting of unusual journals and complex transactions.
- Misappropriation of funds through fraudulent purchase ledger.
- Manipulation of amounts subject to significant judgment or estimate.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities 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 auditors' report.








Page 9

 
CARE TREE INVEST 2 LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CARE TREE INVEST 2 LTD (CONTINUED)


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 auditors' 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.




 
 
Andrew Galliers FCA (Senior Statutory Auditor)
  
for and on behalf of
Menzies LLP
 
Chartered Accountants
Statutory Auditor
  
3000a Parkway
Whiteley
Hampshire
PO15 7FX

23 July 2024
Page 10

 
CARE TREE INVEST 2 LTD
 
 
 
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Revenue
 4 
7,464,756
8,346,678

Cost of sales
  
(6,110,262)
(6,821,024)

Gross profit
  
1,354,494
1,525,654

  

Other operating income
 5 
11,905,509
4,052

Administrative expenses (including exceptional legal costs of £2,027,457 in the current year and exceptional impairment charge in relation to Goodwill of £12,073,593 in the prior year)
  
(3,611,672)
(12,878,546)

Profit/(loss) from operations
  
9,648,331
(11,348,840)

  

Finance expense
 9 
(1,128,927)
(1,131,909)

Other finance income
  
(259,049)
591,863

Profit/(loss) before tax
  
8,260,355
(11,888,886)

  

Tax (expense)/credit
 10 
(313,670)
190,730


Total comprehensive income

  
7,946,685
(11,698,156)

Profit for the year attributable to:
  

Owners of the parent
  
7,946,685
(11,698,156)

  
7,946,685
(11,698,156)



Total comprehensive income attributable to:
  

Owners of the parent
  
7,946,685
(11,698,156)

  
7,946,685
(11,698,156)

The notes on pages 21 to 37 form part of these financial statements.

Page 11

 
CARE TREE INVEST 2 LTD
REGISTERED NUMBER: 13423300
 
 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£


Assets

Non-current assets
  

Property, plant and equipment
 11 
3,257,786
3,483,536

Goodwill
 12 
14,741,379
14,741,379

  
17,999,165
18,224,915

Current assets
 15 

Contract assets
 15 
378,246
637,295

Trade and other receivables
 14 
1,576,134
698,849

Cash and cash equivalents
  
1,690,525
2,882,823

  
3,644,905
4,218,967

  

Total assets

  

21,644,070
22,443,882

Liabilities

Non-current liabilities
  

Loans and borrowings
 17 
6,774,000
16,100,000

  
6,774,000
16,100,000

Current liabilities
  

Trade and other liabilities
 16 
5,913,853
5,334,350

Loans and borrowings
 17 
450,000
450,000

  
6,363,853
5,784,350

  

Total liabilities
  
13,137,853
21,884,350

  

  

Net assets
  
8,506,217
559,532
Page 12

 
CARE TREE INVEST 2 LTD
REGISTERED NUMBER: 13423300
 
 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£


Issued capital and reserves attributable to owners of the parent
 19 

Share capital
 18 
13,000,000
13,000,000

Retained earnings
  
(4,493,783)
(12,440,468)

  
8,506,217
559,532

  

TOTAL EQUITY
  
8,506,217
559,532

The financial statements on pages 1 to 37 were approved and authorised for issue by the board of directors and were signed on its behalf by:




................................................
A C De Changy
Director

Date: 18 July 2024

The notes on pages 21 to 37 form part of these financial statements.

Page 13

 
CARE TREE INVEST 2 LTD
REGISTERED NUMBER: 13423300
 
 
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£


Assets

Non-current assets
  

Property, plant and equipment
 11 
2,860,360
3,140,874

Other non-current investments
  
13,062,008
13,062,008

  
15,922,368
16,202,882

Current assets
 15 

Contract assets
 15 
378,246
637,295

Trade and other receivables
 14 
6,678,493
5,097,546

Cash and cash equivalents
  
923,605
2,390,335

  
7,980,344
8,125,176

  

Total assets

  

23,902,712
24,328,058

Liabilities

Non-current liabilities
  

Loans and borrowings
 17 
6,774,000
16,100,000

  
6,774,000
16,100,000

Current liabilities
  

Trade and other liabilities
 16 
5,692,209
6,553,765

Loans and borrowings
 17 
450,000
450,000

  
6,142,209
7,003,765

  

Total liabilities
  
12,916,209
23,103,765

  

  

Net assets
  
10,986,503
1,224,293
Page 14

 
CARE TREE INVEST 2 LTD
REGISTERED NUMBER: 13423300
 
 
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023
2023
2022
Note
£
£


Issued capital and reserves attributable to owners of the parent
 19 

Share capital
 18 
13,000,000
13,000,000

Retained earnings
  
(2,013,497)
(11,775,707)

TOTAL EQUITY
  
10,986,503
1,224,293

The Company's profit for the year was £9,762,210 (2022 - loss £10,902,230).

The financial statements on pages 1 to 37 were approved and authorised for issue by the board of directors and were signed on its behalf by:




................................................
A C De Changy
Director

Date: 18 July 2024

The notes on pages 21 to 37 form part of these financial statements.

Page 15

 
CARE TREE INVEST 2 LTD

 
 
FOR THE YEAR ENDED 31 DECEMBER 2023


Share capital
Retained earnings
Total attributable to equity holders of parent
Total equity


£
£
£
£

At 1 January 2022
13,000,000
(742,312)
12,257,688
12,257,688

Comprehensive income for the year



Loss for the year
-
(11,698,156)
(11,698,156)
(11,698,156)

Total comprehensive income for the year
-
(11,698,156)
(11,698,156)
(11,698,156)

Contributions by and distributions to owners





At 31 December 2022
13,000,000
(12,440,468)
559,532
559,532

At 1 January 2023
13,000,000
(12,440,468)
559,532
559,532

Comprehensive income for the year



Profit for the year
-
7,946,685
7,946,685
7,946,685

Total comprehensive income for the year
-
7,946,685
7,946,685
7,946,685

Contributions by and distributions to owners





At 31 December 2023
13,000,000
(4,493,783)
8,506,217
8,506,217

The notes on pages 21 to 37 form part of these financial statements.

Page 16

 
CARE TREE INVEST 2 LTD

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


Share capital
Retained earnings
Total equity


£
£
£

At 1 January 2022
13,000,000
(873,477)
12,126,523

Comprehensive income for the year



Loss for the year
-
(10,902,230)
(10,902,230)

Total comprehensive income for the year
-
(10,902,230)
(10,902,230)

Contributions by and distributions to owners




At 31 December 2022
13,000,000
(11,775,707)
1,224,293

At 1 January 2023
13,000,000
(11,775,707)
1,224,293

Comprehensive income for the year



Profit for the year
-
9,762,210
9,762,210

Total comprehensive income for the year
-
9,762,210
9,762,210

At 31 December 2023
13,000,000
(2,013,497)
10,986,503

The notes on pages 21 to 37 form part of these financial statements.

Page 17

 
CARE TREE INVEST 2 LTD

 
 
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

Cash flows from operating activities
  

Profit/(loss) for the year
  
7,946,685
(11,698,156)

Adjustments for
  

Depreciation of property, plant and equipment
 11 
192,883
105,884

Impairment losses on intangible assets
  
-
12,073,593

Finance expense
 9 
1,387,976
1,131,909

Loss on sale of property, plant and equipment
  
351,445
-

Income tax expense
 10 
313,670
-

  
10,192,659
1,613,230

Movements in working capital:
  

Increase in trade and other receivables
  
(879,611)
(523,182)

Decrease/(increase) in contract assets
  
259,049
(591,863)

Increase in trade and other payables
  
654,429
4,441,567

Cash generated from operations
  
10,226,526
4,939,752

  

Income taxes paid
  
(386,271)
(389,324)

Net cash from operating activities

  
9,840,255
4,550,428

Cash flows from investing activities
  

Purchases of property, plant and equipment
  
(318,577)
(327,849)

Net cash used in investing activities

  
(318,577)
(327,849)

Cash flows from financing activities
  

Repayment of bank borrowings
  
(9,326,000)
(1,450,000)

Interest paid on convertible loan notes
  
(1,387,976)
(1,131,909)

Net cash used in financing activities
  
(10,713,976)
(2,581,909)

Net (decrease)/increase in cash and cash equivalents
  
(1,192,298)
1,640,670

  

Cash and cash equivalents at the beginning of year
  
2,882,823
1,242,153

Cash and cash equivalents at the end of the year
  
1,690,525
2,882,823

The notes on pages 21 to 37 form part of these financial statements.

Page 18

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


Basis of preparation

Care Tree Invest 2 Ltd (the 'Company') is a private company, limited by shares, registered in England and Wales. The company's registered office is disclosed on the company information page. 
The presentation and functional currency of the financial statements is the Pound Sterling (£).

The Group's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively IFRSs). The Company's individual financial statements were prepared in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' (FRS 101) and the Companies Act 2006. They were authorised for issue by the Company's board of directors on 18 July 2024.

Details of the Group's accounting policies, including changes during the year, are included in note 2.

The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and elected not to present its own Statement of Comprehensive Income in these financial statements.

In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of the Group accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

The areas where judgments and estimates have been made in preparing the consolidated financial statements and their effects are disclosed in note 3.

Page 19

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Basis of preparation (continued)


1.1 Basis of measurement

The financial statements have been prepared on a historical cost basis, except for certain items that are held at fair value and valued at market rate each period (namely Contract assets).


1.2 Changes in accounting policies

i) New standards, interpretations and amendments effective from 1 January 2023

The following amendments are effective for the period beginning 1 January 2023:
• IFRS 17 Insurance Contracts;
• Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements);
• Definition of Accounting Estimates (Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors);
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12 Income Taxes); and
• International Tax Reform – Pillar Two Model Rules (Amendment to IAS 12 Income Taxes) (effective immediately upon the issue of the amendments and retrospectively).

ii) 

New standards, interpretations and amendments not yet effective

The following new standards, interpretations and amendments, which are not yet effective and have not been adopted early in these financial statements, will or may have an effect on the Company's future financial statements:


The following amendments are effective for the period beginning 1 January 2024:

• Liability in a Sale and Leaseback (Amendments to IFRS 16 Leases);
• Classification of Liabilities as Current or Non-Current (Amendments to IAS 1 Presentation of Financial Statements);
• Non-current Liabilities with Covenants (Amendments to IAS 1 Presentation of Financial Statements); and
• Supplier Finance Arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures).
The following amendments are effective for the period beginning 1 January 2025:
• Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates)

The directors anticipate that the adoption of other Standards and interpretations that are not yet effective in future periods will only have an impact on the presentation in the financial statements of the Company.



Page 20

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies

 
2.1

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:
the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
potential voting rights held by the Company, other vote holders or other parties;
rights arising from other contractual arrangements; and
any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at this time that decisions need to be made, including voting patterns at previous shareholders' meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Page 21

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.2

Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

 
2.3

Revenue

Revenue represents the amounts derived from the provision of the group's principal activity of the operation of care home facilities for the disabled and infirmed in the U.K.
Revenue is recognised in the financial statements on the basis of room occupation on a daily basis.
Revenue is billed on a weekly and monthly basis and standard credit terms of 1 month from the date of billing are applied to all customers.

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

 
2.4

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.


Current and deferred tax for the year

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

Page 22

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.5

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:

Freehold property
2% straight line
Motor vehicles
25% reducing balance
Fixtures and fittings
25% straight line

 
2.6

Financial assets

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.


Classification of financial assets

Debt instruments that meet the following conditions are subsequently measured at amortised cost:

the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (FVOCI):

the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and

the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

By default, all other financial assets are subsequently measured at fair value through profit or loss (FVTPL).

Despite the aforegoing, the Group may make the following irrevocable election/designation at initial recognition of a financial asset:

the Group may irrevocably elect to present subsequent changes in fair value of an equity instrument in other comprehensive income if certain criteria are met; and

the Group may irrevocably designate a debt investment that meets the amortised cost or FVOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch (see  Financial assets at FVTPL).

Page 23

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.6
Financial assets (continued)


Financial assets at FVTPL

Financial assets that do not meet the criteria for being measured at amortised cost or FVOCI are measured at FVTPL. Specifically:

investments in equity instruments are classified as at FVTPL, unless the Group designates an equity instrument that is neither held for trading nor a contingent consideration arising from a business combination as at FVOCI on initial recognition.

debt instruments that do not meet the amortised cost criteria or the FVOCI criteria are classified as at FVTPL. In addition, debt instruments that meet either the amortised cost criteria or the FVOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in profit or loss to the extent they are not part of a designated hedging relationship (see note ). The net gain or loss recognised in profit or loss includes any dividend or interest earned on the financial asset and is included in the 'fair value gains/losses' line item. Fair value is determined in the manner described in note 20.


Impairment of financial assets

The Group recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at amortised costs or at FVOCI, lease receivables, amounts due from customers under contracts, as well as on loan commitments and financial guarantee contracts. No impairment loss is recognised for investments in equity instruments. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

The Group always recognises lifetime ECL for trade receivables, amounts due from customers under contracts and lease receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the Group's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.

For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12m ECL. The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or an actual default occurring.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12m ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

Page 24

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Critical accounting judgements and key sources of estimation uncertainty

Management make estimates and assumptions concerning the future. The resulting accounting estimates and judgements by definition, seldom equal the related actual results.
In the course of preparing financial statements, management have made significant judgements and estimates that can have an impact on the financial statements. The most critical of these relate to estimation of the useful economic lives of and impairment of assets.
In particular management have considered the impact of IFRS16 Leases regarding motor vehicles and property.
For Motor Vehicles, management are of the opinion that monthly rentals be charged to the statement of
comprehensive income as they are due and have not recognised a "right to use" asset on the basis any adjustment
for this financial period and prior periods would be immaterial.
For Properties, management are of the opinion that where the parent entity and owner of the property is directing
the use of the asset as a care facility, then no "right to use" asset exists, as such, there is no lease to recognise
under IFRS16.
On a group level, the estimation around valuation of goodwill is reviewed on an annual basis, and if indicators exist an impairment is made to the figure.
On a company level, the estimation around valuation of investments in subsidiaries is reviewed on a regular basis, and if indicators exist an impairment is made to the figure.


4.


Revenue


The following is an analysis of the Group's revenue for the year from continuing operations:


2023
2022
£
£


Care home services
7,464,756
8,346,678

7,464,756
8,346,678

All turnover arose within the United Kingdom.


5.


Other operating income

2023
2022
£
£


Other operating income
280,772
4,052

Exceptional income - Damages award
8,602,423
-

Exceptional income - Reimbursement of legal costs
1,940,000
-

Exceptional income - Interest award
1,082,314
-

11,905,509
4,052

Upon the conclusion of the legal hearing over the investment in Hollingwood Care Group, the above amounts were awarded. The Directors took the decision to impair the investment upon the commencement of the legal proceedings, which was recognised in the prior period.

Page 25

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Operating profit

The operating profit is stated after charging:


2023
2022
£
£


Depreciation
192,883
105,884


7.


Auditors' remuneration

During the year, the Group obtained the following services from the Group's auditors:


2023
2022
£
£

Fees payable to the 's auditors for the audit of the consolidated and parent Company's financial statements
25,975
24,750

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.

Page 26

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Employee benefit expenses

Group


2023
2022
£
£

Employee benefit expenses comprise:

Wages and salaries
5,177,896
5,841,813

National insurance
390,030
410,902

CoS staff pens costs - defined contribution scheme
114,107
120,199

5,682,033
6,372,914

The Directors do not receive remuneration from any of the Companies within the Group.
Key management personnel are remunerated through a Company in the wider Care Tree Holding Group and disclosures around this can be found in those accounts.


The monthly average number of persons, including the directors, employed by the Group during the year was as follows:


2023
2022
No.
No.

Employees
201
211

Directors
4
2

205
213


9.


Finance income and expense

Recognised in profit or loss


2023
2022
£
£
Finance income



Finance expense

Bank interest payable
1,128,927
1,128,959

Other interest payable
-
2,950

Total finance expense
1,128,927
1,131,909


Net finance expense recognised in profit or loss
(1,128,927)
(1,131,909)






Page 27

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Tax expense

10.1 Income tax recognised in profit or loss



2023
2022
£
£

Current tax

Current tax on profits for the year
32,074
107,270

Adjustments in respect of prior years
281,596
-

Total current tax
313,670
107,270


Deferred tax expense

Origination and reversal of timing differences
-
(298,000)

Total deferred tax
-
(298,000)


313,670
(190,730)

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:


2023
2022
£
£


Profit/(loss) for the year
7,946,685
(11,698,156)

Income tax credit/expense (including income tax on associate, joint venture and discontinued operations)
313,670
(190,730)

Profit/(loss) before income taxes
8,260,355
(11,888,886)


Tax using the Company's domestic tax rate of 23.52% (2022:19%)
1,942,835
(2,258,888)

Non-tax deductible amortisation of goodwill and impairment
-
2,293,983

Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment
874,607
(113,814)

Adjustments to tax charge in respect of prior periods
281,596
-

Non-taxable income
(2,806,030)
-

Group relief
20,662
185,989

De-recognition of deferred tax
-
(298,000)

Total tax expense
313,670
(190,730)

Page 28

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Property, plant and equipment


Group





Freehold property
Motor vehicles
Fixtures and fittings
Total

£
£
£
£



Cost or valuation






At 1 January 2022
3,235,000
91,777
34,256
3,361,033


Additions
-
-
327,849
327,849


Disposals
-
(61,975)
-
(61,975)



At 31 December 2022
3,235,000
29,802
362,105
3,626,907


Additions
-
29,995
288,582
318,577


Disposals
(260,000)
-
(196,079)
(456,079)



At 31 December 2023
2,975,000
59,797
454,608
3,489,405


Freehold property
Motor vehicles
Fixtures and fittings
Total

£
£
£
£



Accumulated depreciation and impairment






At 1 January 2022
29,426
68,323
1,713
99,462


Charge owned for the year
64,700
3,321
37,863
105,884


Disposals
-
(61,975)
-
(61,975)



At 31 December 2022
94,126
9,669
39,576
143,371


Charge owned for the year
64,700
12,960
115,222
192,882


Disposals
(44,186)
-
(60,448)
(104,634)



At 31 December 2023
114,640
22,629
94,350
231,619



Net book value


At 1 January 2022
3,205,574
23,454
32,543
3,261,571


At 31 December 2022
3,140,874
20,133
322,529
3,483,536


At 31 December 2023
2,860,360
37,168
360,258
3,257,786

Page 29

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Company





Freehold property

£



Cost or valuation



At 1 January 2022
3,235,000



At 31 December 2022
3,235,000


Disposals
(260,000)



At 31 December 2023
2,975,000


Freehold property

£



Accumulated depreciation and impairment



At 1 January 2022
29,426


Charge owned for the year
64,700



At 31 December 2022
94,126


Charge owned for the year
64,700


Disposals
(44,186)



At 31 December 2023
114,640



Net book value


At 1 January 2022
3,205,574


At 31 December 2022
3,140,874


At 31 December 2023
2,860,360

Page 30

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Goodwill

Group


2023
2022
£
£


Cost
26,814,972
26,814,972

Accumulated impairment
(12,073,593)
(12,073,593)

14,741,379
14,741,379

2023
2022
£
£

Cost

At 1 January
26,814,972
26,814,972

At 31 December

26,814,972
26,814,972

Accumulated impairment

At 1 January
12,073,593
-

Impairment charge
-
12,073,593

At 31 December
12,073,593
12,073,593

Page 31

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Subsidiaries

Details of the Group's material subsidiaries at the end of the reporting period are as follows:

Name of subsidiary
Place of incorporation and operation
Proportion of ownership interest and voting power held by the Group (%)


2023
2022






1Hollingwood Care Home Limited


Intermediate holding company
 
100

100

2Elmcare Limited


Care home operator
 
100

100

3Whitwell Park Care Home Limited


Care home operator
 
100

100


All subsidiaries are incorporated and domiciled in England and Wales. All of the subsidiaries have a registered office address at 1st Floor, 1 Lakeside, Headlands Business Park, Salisbury Road, Blashford Ringwood, BH24 3PB.


Company

2023
2022
Note
£
£

Investments in subsidiary companies
 13 
13,062,008
13,062,008

  
13,062,008
13,062,008

Investments in subsidiary companies


£

Cost

At 1 January 2023
25,135,601


25,135,601


Accumulated impairment

At 1 January 2023
12,073,593


12,073,593

Net book value

At 1 January 2023
13,062,008

At 31 December 2023
13,062,008

Page 32

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Trade and other receivables



Group

2023
2022
£
£


Trade receivables
106,409
65,260

Trade receivables - net
106,409
65,260

Receivables from related parties
-
2,905

Total financial assets other than cash and cash equivalents classified as loans and receivables
106,409
68,165

Prepayments and accrued income
10,140
-

Other receivables
1,459,585
630,684

Total trade and other receivables
1,576,134
698,849

Total current portion
(1,576,134)
(698,849)


Company

2023
2022
£
£


Receivables from related parties
5,269,535
4,470,535

Total financial assets other than cash and cash equivalents classified as loans and receivables
5,269,535
4,470,535

Other receivables
1,408,958
627,011

Total trade and other receivables
6,678,493
5,097,546

Total current portion
(6,678,493)
(5,097,546)

Balances with group undertakings are on demand and carry no interest or repayment terms.


15.

Contract assets


Group

2023
£

Balance at 1 January
637,295

(Decreases)/Increases as a result of changes in the measure of progress
(22,716)

Other changes
(236,333)

Balance at 31 December
378,246



Page 33

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Company

2023
£

Balance at 1 January
637,295

(Decreases)/Increases as a result of changes in the measure of progress
(22,716)

Other changes
(236,333)

Balance at 31 December
378,246

Contract assets relate to an interest rate cap that was set up on the inception of the loan with the bank.
The interest rate on the banking facility is set at SONIA + 5%, whilst the product taken out, caps the SONIA measure.
This product will terminate 01 September 2025.
Due to the swings in the bank rates seen in the economy over the past 12 months, the value of this instrument has decreased.


16.


Trade and other payables



Group

2023
2022
£
£


Trade payables
131,448
670,550

Payables to related parties
5,150,524
6,324

Other payables
452,626
4,389,223

Accruals
58,749
32,000

Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost
5,793,347
5,098,097

Other payables - tax and social security payments
120,506
236,253

Total trade and other payables
5,913,853
5,334,350

Less: current portion - trade payables
(131,448)
(670,550)

Less: current portion - payables to related parties
(5,150,524)
(6,324)

Less: current portion - other payables
(573,132)
(4,625,476)

Less: current portion - accruals
(58,749)
(32,000)

Total current portion
(5,913,853)
(5,334,350)

Total non-current position
-
-

Page 34

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Company

2023
2022
£
£


Trade payables
-
396,681

Payables to related parties
5,623,386
2,049,390

Other payables
-
4,000,000

Accruals
36,749
10,000

Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost
5,660,135
6,456,071

Other payables - tax and social security payments
32,074
97,694

Total trade and other payables
5,692,209
6,553,765

Less: current portion - trade payables
-
(396,681)

Less: current portion - payables to related parties
(5,623,386)
(2,049,390)

Less: current portion - other payables
(32,074)
(4,097,694)

Less: current portion - accruals
(36,749)
(10,000)

Total current portion
(5,692,209)
(6,553,765)

Total non-current position
-
-

Balances with group undertakings are on demand and carry no interest or repayment terms.


17.


Loans and borrowings


Group

2023
2022
£
£

Non-current

Bank loans - secured
6,774,000
16,100,000

6,774,000
16,100,000

Current

Bank loans - secured
450,000
450,000

450,000
450,000

Total loans and borrowings
7,224,000
16,550,000

Page 35

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Company

2023
2022
£
£

Non-current

Bank loans - secured
6,774,000
16,100,000

6,774,000
16,100,000

Current

Bank loans - secured
450,000
450,000

450,000
450,000

Total loans and borrowings
7,224,000
16,550,000

Bank loans are repayable on a quarterly basis at 1.25% of the original loan amount.
The remaining outstanding balance will be paid in a single lump sum in July 2027.

18.


Share capital

Authorised

2023
2023
Number
£

Shares treated as equity
Ordinary Shares shares of £2,500.00 each

5,200

13,000,000

5,200

13,000,000


Issued and fully paid


2023
2023
Number
£

Ordinary Shares shares of £2,500.00 each

At 1 January and 31 December
5,200

13,000,000


All shares carry the same voting and dividend rights.


19.


Reserves


Retained earnings

This reserve records retained earnings and accumulated losses. 

Page 36

 
CARE TREE INVEST 2 LTD
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.


Financial instruments - fair values and risk management


20.1 Price risk management

Price risk is the associated risk that revenue contracts may not be profitable for the business. The company’s revenue is based mainly on the services provided to local authorities, NHS and CCG. Annual increases of inflation and National Minimum Wage (NMW) can directly impact profitability if not met by corresponding revenue increases. It is expected that a regular increases in the NMW rate will significantly impact the wage cost in the care sector, however annual increases received from local authorities are not always in line with these cost increases. In order to mitigate this risk the directors implement strict cost controls to keep the business profitable despite these factors.


20.2 Interest rate risk management

Interest rate risk is the risk that long term financing may not be available on favourable terms and interest rates may rise in the future. The directors are mindful of the debt the Group holds, and the associated risk of maintaining an ongoing facility. Sudden interest rate increases will directly impact the businesses cash surplus which will ultimate impact cash flow and liquidity. The Group has a reporting system in place to strictly monitor the liquidity of the business and to ensure no bank covenants are broken. Should any issues be identified the directors will take direct action to manage these risk areas. The Group also has hedging agreements in place to implement upper boundary restrictions on interest rates to avoid them experiencing the negative impacts of sudden increases in interest rates in the future.



Interest rate swap contracts

Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on the fair value of issued fixed rate debt and the cash flow exposures on the issued variable rate debt. The fair value of interest rate swaps at the end of the reporting period is determined by discounting the future cash flows using the curves at the end of the reporting period and the credit risk inherent in the contract, and is disclosed below. The average interest rate is based on the outstanding balances at the end of the reporting period. 


20.3 Credit risk management

Credit risk is the risk that customers may default on payments due to the Company. The majority of income is driven from Local authorities and the NHS, with only a small number of service users being privately funded. There is a minimal credit risk as the Company does not place significant reliance on these users, as such the directors do not deem this to be a significant risk.


21.


Controlling party

The company's immediate and ultimate parent undertaking is Care Tree Holding Ltd, a company incorporated in England and Wales and whose registered office is 1st Floor, 1 Lakeside Headlands Business Park, Salisbury Road, Blashford Ringwood, United Kingdom, BH23 3PB. Copies of group financial statements may be obtained from the Registrar of Companies for England & Wales.

Page 37