REGISTERED NUMBER: 11176393 (England and Wales) |
SAFFRONLAND INVESTMENTS LIMITED |
GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023 |
REGISTERED NUMBER: 11176393 (England and Wales) |
SAFFRONLAND INVESTMENTS LIMITED |
GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023 |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 JULY 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 3 |
Report of the Independent Auditors | 4 |
Consolidated Income Statement | 7 |
Consolidated Other Comprehensive Income | 8 |
Consolidated Balance Sheet | 9 |
Company Balance Sheet | 10 |
Consolidated Statement of Changes in Equity | 11 |
Company Statement of Changes in Equity | 12 |
Consolidated Cash Flow Statement | 13 |
Notes to the Consolidated Cash Flow Statement | 14 |
Notes to the Consolidated Financial Statements | 15 |
SAFFRONLAND INVESTMENTS LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 JULY 2023 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditors |
Chartered Accountants |
Fryern House |
125 Winchester Road |
Chandlers Ford |
Hampshire |
SO53 2DR |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
GROUP STRATEGIC REPORT |
FOR THE YEAR ENDED 31 JULY 2023 |
The directors present their strategic report of the company and the group for the year ended 31 July 2023. |
REVIEW OF BUSINESS |
The care homes continue to provide qualitative services as verified by independent regulatory authority checks. |
There has been a focus on pivoting the Group’s activities incrementally into provision of complex care including conversion of buildings/facilities into accomodation that is more suitably aligned to the needs to such service users, the emphasis being an offering both on qualitative care and accomodation. |
As noted in the prior year, the directors had anticipated some contraction in revenue to accommodate the process of buildings' conversion and build-up of appropriate referrals for the complex care facilities, which is reflected in the current year turnover. Due to this ongoing strategy one home closed during the period, with another closing post year end. |
The Group has also been dealing with a challenging year given the UK economic conditions, with impacts from rising costs across the board, particularly in energy costs. The transition period to more complex care services, combined with these difficult conditions, have lead to decrease in the results. |
However the directors are confident of sustained incremental revenue and margin contribution as the re-provisioned facilities mature given the limited provision of such facilities nationally. |
Turnover for the year ended 31 July 2023 totalled £14,322,631 (2022: £15,042,582), with a gross profit of £2,904,684 (2022: £3,730,688). |
The average occupancy rate during the year was 84% (2022: 77%). |
FUTURE DEVELOPMENTS |
The site based in Redhill, Surrey has now opened and is operational having been converted and registered for complex care provision. In addition several elderly care services have been decanted and closed pending conversion into complex care facilities for people with Acquired Brain Injuries and Mental Health related needs. It is anticipated these will take the form of specialist care apartments, similar to the Redhill site. The form of building conversion will also ensure the facilities are person centred and exceed current and possibly future regulatory requirements. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The key business risks and uncertainties relate to the current economic climate and possible cut backs by the referring agencies in terms of care purchasing. The Group has taken measures to refine its services provision and reconfigure its care categories with a view to targeting new sustainable income streams. |
FINANCIAL RISK MANAGEMENT |
The Group recognises the potential of financial risks given the current economic climates and is active in managing such risks. |
LIQUIDITY RISKS |
The directors recognise the importance of funding and liquidity under the current economic climate and will continue to monitor the Group's financial resources to ensure that the Group is able to support its activities and future growth. |
INTEREST RATE AND CASH FLOW RISKS |
The Group has interest bearing liabilities such as bank loans which attracts interest at variable SONIA rates. The Group manages the liquidity risk by ensuring there are sufficient funds to meet amounts due. |
ON BEHALF OF THE BOARD: |
27 June 2024 |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 JULY 2023 |
The directors present their report with the financial statements of the company and the group for the year ended 31 July 2023. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 July 2023. |
EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 August 2022 to the date of this report. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
AUDITORS |
The auditors, Rothmans Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SAFFRONLAND INVESTMENTS LIMITED |
Opinion |
We have audited the financial statements of Saffronland Investments Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 July 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 31 July 2023 and of the group's loss for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SAFFRONLAND INVESTMENTS LIMITED |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so. |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
We obtained an understanding of the legal and regulatory framework that the Group operates in, focusing on those laws and regulations that had a direct effect on the Financial Statements or that had a fundamental effect of the operations of the Group. The key laws and relations we considered in this context included the UK Companies Act and the Care Quality Commission (CQC) regulations. |
Discussions were held within the engagement team regarding how and where fraud might occur in the Financial Statements and any potential indicators of fraud. As part of this discussion, we identified potential risk areas such as the completeness of revenue and liabilities. Audit procedures were designed to ensure all of the risks were addressed. |
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
o | enquiring of management as to actual and potential litigation and claims; |
o | reviewing any correspondence with regulators and the Group's legal advisors; and |
o | reviewing reports from CQC inspections and action plans. |
To address the risk of fraud through management bias and override of controls, we: |
o | performed analytical procedures to identify any unusual or unexpected relationships; and |
o | tested journal entries to identify unusual transactions and bias. |
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the director and other management and the inspection of regulatory and legal correspondence, if any. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SAFFRONLAND INVESTMENTS LIMITED |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Statutory Auditors |
Chartered Accountants |
Fryern House |
125 Winchester Road |
Chandlers Ford |
Hampshire |
SO53 2DR |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
CONSOLIDATED |
INCOME STATEMENT |
FOR THE YEAR ENDED 31 JULY 2023 |
2023 | 2022 |
Notes | £ | £ |
TURNOVER | 3 | 14,322,631 | 15,042,582 |
Cost of sales | 11,417,947 | 11,311,894 |
GROSS PROFIT | 2,904,684 | 3,730,688 |
Administrative expenses | 2,580,775 | 2,156,004 |
323,909 | 1,574,684 |
Other operating income | 4 | 43,639 | 494,359 |
OPERATING PROFIT | 6 | 367,548 | 2,069,043 |
Interest receivable and similar income | 2,770 | 1,693 |
370,318 | 2,070,736 |
Interest payable and similar expenses | 7 | 803,048 | 880,620 |
(LOSS)/PROFIT BEFORE TAXATION | (432,730 | ) | 1,190,116 |
Tax on (loss)/profit | 8 | (275,222 | ) | 307,131 |
(LOSS)/PROFIT FOR THE FINANCIAL YEAR | ( |
) |
(Loss)/profit attributable to: |
Owners of the parent | (157,508 | ) | 882,985 |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
CONSOLIDATED |
OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 JULY 2023 |
2023 | 2022 |
Notes | £ | £ |
(LOSS)/PROFIT FOR THE YEAR | (157,508 | ) | 882,985 |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
(157,508 |
) |
882,985 |
Total comprehensive income attributable to: |
Owners of the parent | (157,508 | ) | 882,985 |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
CONSOLIDATED BALANCE SHEET |
31 JULY 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 10 | 39,457,391 | 39,670,579 |
Investments | 11 | - | - |
39,457,391 | 39,670,579 |
CURRENT ASSETS |
Stocks | 12 | 960,550 | 960,550 |
Debtors | 13 | 1,131,007 | 1,443,605 |
Cash at bank | 116,883 | 1,351,740 |
2,208,440 | 3,755,895 |
CREDITORS |
Amounts falling due within one year | 14 | 22,442,318 | 8,237,222 |
NET CURRENT LIABILITIES | (20,233,878 | ) | (4,481,327 | ) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
19,223,513 |
35,189,252 |
CREDITORS |
Amounts falling due after more than one year |
15 |
- |
(15,950,496 |
) |
PROVISIONS FOR LIABILITIES | 18 | (197,178 | ) | (54,912 | ) |
NET ASSETS | 19,026,335 | 19,183,844 |
CAPITAL AND RESERVES |
Called up share capital | 19 | 200 | 200 |
Merger reserve | 20 | 15,000,222 | 15,000,222 |
Retained earnings | 20 | 4,025,913 | 4,183,422 |
SHAREHOLDERS' FUNDS | 19,026,335 | 19,183,844 |
The financial statements were approved by the Board of Directors and authorised for issue on 27 June 2024 and were signed on its behalf by: |
Mr A M Lakhani - Director |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
COMPANY BALANCE SHEET |
31 JULY 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 10 |
Investments | 11 |
CURRENT ASSETS |
Debtors | 13 |
CREDITORS |
Amounts falling due within one year | 14 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 19 | 200 | 200 |
Merger reserve | 20 | 15,000,222 | 15,000,222 |
Retained earnings | 20 | 1,285,881 | 1,285,881 |
SHAREHOLDERS' FUNDS |
Company's loss for the financial year | - | (222,000 | ) |
The financial statements were approved by the Board of Directors and authorised for issue on |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 JULY 2023 |
Called up |
share | Retained | Merger | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 August 2021 | 200 | 3,300,437 | 15,000,222 | 18,300,859 |
Changes in equity |
Total comprehensive income | - | 882,985 | - | 882,985 |
Balance at 31 July 2022 | 200 | 4,183,422 | 15,000,222 | 19,183,844 |
Changes in equity |
Total comprehensive income | - | (157,508 | ) | - | (157,508 | ) |
Balance at 31 July 2023 | 200 | 4,025,914 | 15,000,222 | 19,026,336 |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
COMPANY STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 JULY 2023 |
Called up |
share | Retained | Merger | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 August 2021 | 200 | 1,507,881 | 15,000,222 | 16,508,303 |
Changes in equity |
Total comprehensive income | - | (222,000 | ) | - | (222,000 | ) |
Balance at 31 July 2022 | 200 | 1,285,881 | 15,000,222 | 16,286,303 |
Changes in equity |
Balance at 31 July 2023 | 200 | 1,285,881 | 15,000,222 | 16,286,303 |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
CONSOLIDATED CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 JULY 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | 943,184 | 2,407,129 |
Interest paid | (917,795 | ) | (589,508 | ) |
Tax paid | (212,681 | ) | (55,073 | ) |
Taxation refund | - | 137,046 |
Net cash from operating activities | (187,292 | ) | 1,899,594 |
Cash flows from investing activities |
Purchase of tangible fixed assets | (225,703 | ) | (131,627 | ) |
Interest received | 2,770 | 369 |
Net cash from investing activities | (222,933 | ) | (131,258 | ) |
Cash flows from financing activities |
Loan repayments in year | (346,000 | ) | (1,210,780 | ) |
Amount withdrawn by directors | (478,632 | ) | (802,609 | ) |
Net cash from financing activities | (824,632 | ) | (2,013,389 | ) |
Decrease in cash and cash equivalents | (1,234,857 | ) | (245,053 | ) |
Cash and cash equivalents at beginning of year |
2 |
1,351,740 |
1,596,793 |
Cash and cash equivalents at end of year | 2 | 116,883 | 1,351,740 |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 JULY 2023 |
1. | RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£ | £ |
(Loss)/profit before taxation | (432,730 | ) | 1,190,116 |
Depreciation charges | 438,890 | 411,485 |
Finance costs | 803,048 | 880,620 |
Finance income | (2,770 | ) | (1,693 | ) |
806,438 | 2,480,528 |
Decrease/(increase) in trade and other debtors | 312,598 | (598,911 | ) |
(Decrease)/increase in trade and other creditors | (175,852 | ) | 525,512 |
Cash generated from operations | 943,184 | 2,407,129 |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 July 2023 |
31/7/23 | 1/8/22 |
£ | £ |
Cash and cash equivalents | 116,883 | 1,351,740 |
Year ended 31 July 2022 |
31/7/22 | 1/8/21 |
£ | £ |
Cash and cash equivalents | 1,351,740 | 1,596,793 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
Other |
non-cash |
At 1/8/22 | Cash flow | changes | At 31/7/23 |
£ | £ | £ | £ |
Net cash |
Cash at bank | 1,351,740 | (1,234,857 | ) | 116,883 |
1,351,740 | (1,234,857 | ) | 116,883 |
Debt |
Debts falling due |
within 1 year | (1,068,251 | ) | 346,000 | (15,835,749 | ) | (16,558,000 | ) |
Debts falling due |
after 1 year | (15,950,496 | ) | - | 15,950,496 | - |
(17,018,747 | ) | 346,000 | 114,747 | (16,558,000 | ) |
Total | (15,667,007 | ) | (888,857 | ) | 114,747 | (16,441,117 | ) |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 JULY 2023 |
1. | STATUTORY INFORMATION |
Saffronland Investments Limited was incorporated on 30 January 2018 under the Companies Act 2006 as a private limited company and is registered in England and Wales. The Company is a holding company and the Group's principal activity is that of residential care facilities. The address of its registered office is 121B Winchester Road, Chandlers Ford, Eastleigh, Hampshire, SO53 2DR. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The presentation currency is £ sterling. |
Going concern |
The financial statements have been prepared on the going concern basis. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The parent company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
- | the requirements of Section 7 Statement of Cash Flows; |
- | the requirement of Section 3 Financial Statement Presentation paragraph 3.17(d); |
- | the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a), 11.48(b) and 11.48(c); |
- | the requirement of Section 33 Related Party Disclosures paragraph 33.7. |
Basis of consolidation |
The consolidated financial statements incorporate the financial statements of the company and all group undertakings. These are adjusted, where appropriate, to conform to group accounting policies. Acquisitions are accounted for under the acquisition method. The results of companies acquired or disposed of are included in the consolidated Income Statement after or up to the date that control passes respectively. As a consolidated Group Income Statement is published, a separate Income Statement for the parent company is omitted from the Group financial statements by virtue of section 408 of the Companies Act 2006. |
Related party disclosures |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements. |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
2. | ACCOUNTING POLICIES - continued |
Significant judgements and estimates |
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date, and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. |
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements. |
Impairment of assets |
Management use their judgement to determine if there are any indicators of impairment. |
Classification of freehold properties |
Management use their judgment to determine the use of properties and to determine that these are correctly | classified. |
Other key sources of estimation uncertainty; |
Tangible fixed assets |
Management estimate the useful life and residual value of tangible assets based on market information and | their knowledge of the business, the remaining life of the asset and projected disposal value. |
Turnover |
Turnover is generated from the provision of residential care services. |
Turnover is recognised based on the occupation of the residential care homes and adjusted for accrued and deferred income where necessary. |
Turnover is exempt from Value Added Tax. |
Tangible fixed assets |
All fixed assets are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses. |
The cost of fixed assets initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in a manner intended by management. |
Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows: |
Freehold property | Straight line over 120 - 150 years |
Plant and machinery | 25% reducing balance |
Fixtures and fittings | 25% reducing balance |
Motor vehicles | 25% reducing balance |
Computer equipment | 25% reducing balance |
Freehold land is not depreciated. |
The assets' residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively. |
Fixed assets are derecognised on disposal or when no future economic benefits are expected. On disposal, the difference between the net disposal proceeds and the carrying amount is recognised in the Consolidated Income Statement. |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Net realisable value is based on estimated selling price less additional costs to completion and disposal. |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
2. | ACCOUNTING POLICIES - continued |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Investments |
Investments in subsidiaries are stated at cost less provision for impairment. |
Operating lease agreements |
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remaining with the lessor are charged to the Consolidated Income Statement on a straight line basis over the period of the lease. |
Financial instruments |
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. |
Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the Consolidated Income Statement. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability. |
Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity. |
Finance costs |
Finance costs are charged to the Consolidated Income Statement over the term of the debt using the effective interest rate method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction on the proceeds of the associated capital instrument. |
Pension costs and other post-retirement benefits |
The Group operates a defined contribution pension scheme. Contributions payable to the Group's pension scheme are charged to the Consolidated Income Statement in the period to which they relate. |
Government grants |
Grants of a revenue nature are credited to the Consolidated Income Statement in the period which they relate in accordance with the terms of the grant, on an accruals basis. Any accrued or deferred element of the grant is included in debtors or creditors as applicable. All grants received in both the current and prior period relate to COVID-19 support. |
3. | TURNOVER |
The turnover and profits before taxation are attributable to one principal activity of the group and all arose in the United Kingdom. |
The turnover is generated from the provision of residential care services. |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
4. | OTHER OPERATING INCOME |
2023 | 2022 |
£ | £ |
Sundry receipts | - | 2,302 |
Government grants | 43,639 | 492,057 |
43,639 | 494,359 |
5. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries | 9,999,320 | 9,996,330 |
Social security costs | 422,165 | 361,535 |
Other pension costs | 103,844 | 88,914 |
10,525,329 | 10,446,779 |
The average number of employees during the year was as follows: |
2023 | 2022 |
Nursing and catering - full time | 171 | 171 |
Nursing and catering - part time | 53 | 69 |
2023 | 2022 |
£ | £ |
Directors' remuneration | - | - |
6. | OPERATING PROFIT |
The Group operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Depreciation - owned assets | 438,740 | 411,485 |
Hire of plant and machinery | 28,983 | 40,568 |
Operating lease payments | 29,400 | 33,600 |
Fees payable to the company's auditor for: |
Audit of the company's annual accounts | 4,500 | 3,600 |
7. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Other interest | 29,950 | 116,061 |
Bank interest | 769,592 | 737,248 |
Other similar charges | 3,506 | 27,311 |
803,048 | 880,620 |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
8. | TAXATION |
Analysis of the tax (credit)/charge |
The tax (credit)/charge on the loss for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax | (44,979 | ) | 295,000 |
Over/under provision in prior |
year | (372,510 | ) | (42,781 | ) |
Total current tax | (417,489 | ) | 252,219 |
Deferred tax | 142,267 | 54,912 |
Tax on (loss)/profit | (275,222 | ) | 307,131 |
Reconciliation of total tax (credit)/charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
(Loss)/profit before tax | (432,730 | ) | 1,190,116 |
(Loss)/profit multiplied by the standard rate of corporation tax in the UK of 25 % (2022 - 19 %) |
(108,183 |
) |
226,122 |
Effects of: |
Expenses not deductible for tax purposes | 82,091 | 68,996 |
Adjustments to tax charge in respect of previous periods | (372,510 | ) | (42,781 | ) |
Movement in deferred tax unprovided | (280 | ) | 48,191 |
Movement in deferred tax - changes in tax rates | 187 | 13,178 |
Impact of super deduction | (4,814 | ) | (6,575 | ) |
Differences in tax rates on losses carried back | 14,204 | - |
Provision for deferred tax on capital allowance claim | 114,083 | - |
Total tax (credit)/charge | (275,222 | ) | 307,131 |
9. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
10. | TANGIBLE FIXED ASSETS |
Group |
Fixtures |
Freehold | Plant and | and |
property | machinery | fittings |
£ | £ | £ |
COST |
At 1 August 2022 | 40,547,649 | 23,744 | 622,661 |
Additions | 55,261 | - | 161,786 |
Disposals | - | (15,342 | ) | (77,446 | ) |
At 31 July 2023 | 40,602,910 | 8,402 | 707,001 |
DEPRECIATION |
At 1 August 2022 | 1,147,538 | 19,856 | 375,402 |
Charge for year | 340,820 | 1,248 | 88,226 |
Eliminated on disposal | - | (15,342 | ) | (77,446 | ) |
At 31 July 2023 | 1,488,358 | 5,762 | 386,182 |
NET BOOK VALUE |
At 31 July 2023 | 39,114,552 | 2,640 | 320,819 |
At 31 July 2022 | 39,400,111 | 3,888 | 247,259 |
Motor | Computer |
vehicles | equipment | Totals |
£ | £ | £ |
COST |
At 1 August 2022 | 9,095 | 40,817 | 41,243,966 |
Additions | - | 8,656 | 225,703 |
Disposals | - | (9,237 | ) | (102,025 | ) |
At 31 July 2023 | 9,095 | 40,236 | 41,367,644 |
DEPRECIATION |
At 1 August 2022 | 8,881 | 21,711 | 1,573,388 |
Charge for year | 214 | 8,382 | 438,890 |
Eliminated on disposal | - | (9,237 | ) | (102,025 | ) |
At 31 July 2023 | 9,095 | 20,856 | 1,910,253 |
NET BOOK VALUE |
At 31 July 2023 | - | 19,380 | 39,457,391 |
At 31 July 2022 | 214 | 19,106 | 39,670,578 |
Included in cost of land and buildings is freehold land of £2,060,000 (2022: £2,060,000) which is not depreciated. |
The freehold properties are secured against the groups bank loan. |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
11. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 August 2022 |
and 31 July 2023 |
NET BOOK VALUE |
At 31 July 2023 |
At 31 July 2022 |
The principal undertakings in which the Company had an interest at the year end are as follows: |
Subsidiary undertakings |
Class of share capital held |
Proportion of share capital held |
Nature of business |
Saffronland Group Limited | Ordinary | 100% | Holding company |
Saffronland Homes 1 Limited | * | Ordinary | 100% | Nursing & residential care homes |
Saffronland Homes 2 Limited | * | Ordinary | 100% | Nursing & residential care homes |
Saffronland Homes 3 Limited | * | Ordinary | 100% | Nursing & residential care homes |
Saffronland Care Limited | * | Ordinary | 100% | Holding company |
Homebeech Limited | * | Ordinary | 100% | Nursing & residential care homes |
* - subsidiaries indirectly held by Saffronland Investments Limited. |
All of the above companies are incorporated in England and Wales, and their registered office address is 121B Winchester Road, Chandlers Ford, Eastleigh, Hampshire, SO53 2DR. |
12. | STOCKS |
Group |
2023 | 2022 |
£ | £ |
Stocks | 960,550 | 960,550 |
The carrying value of stock includes £910,000 (2022: £910,000) pledged as security against the groups bank loan. |
13. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Trade debtors | 939,304 | 1,182,312 |
Amounts owed by group undertakings | - | - |
Other debtors | 32,950 | 9,609 |
Prepayments and accrued income | 158,753 | 251,684 |
1,131,007 | 1,443,605 |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
14. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank loans and overdrafts (see note 16) | 16,558,000 | 1,068,251 |
Trade creditors | 1,659,366 | 1,668,562 |
Corporation tax | 523,791 | 1,153,960 |
Social security and other taxes | 35,952 | 27,437 |
Other creditors | 610,723 | 696,810 |
Director's current account | 2,837,856 | 3,316,488 | 2,837,856 | 3,316,488 |
Accruals and deferred income | 216,630 | 305,714 |
22,442,318 | 8,237,222 |
15. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group |
2023 | 2022 |
£ | £ |
Bank loans (see note 16) | - | 15,950,496 |
16. | LOANS |
An analysis of the maturity of loans for the Group is given below: |
2023 | 2022 |
£ | £ |
Amounts falling due within one year | 16,558,000 | 1,034,223 |
Amounts falling due between one and two years | - | 15,948,160 |
16,558,000 | 16,982,383 |
The above represents the liability at the year end, before amortised cost adjustments. |
The Group's loans are with Coutts & Company. |
The loan facilities are due for repayment in full before 20 August 2023. Capital and interest payments are paid quarterly. Until August 2021, interest was charged on the loans at variable LIBOR plus 2.55% until termination of the loans. From August 2021, interest is charged on the loans at variable SONIA plus 2.55% until termination of the loans. |
The loans are secured by way of legal charge on the following: |
a) | Freehold properties of the subsidiary companies of Saffronland Group Limited - Saffronland Homes 1 Limited, Saffronland Homes 2 Limited, Saffronland Homes 3 Limited and Homebeech Limited. |
b) | Unlimited cross guarantee from all subsidiaries of Saffronland Investments Limited. |
c) | Fixed floating debenture over the assets and undertakings of all subsidiaries of Saffronland Investments Limited. |
17. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
Group |
Non-cancellable |
operating leases |
2023 | 2022 |
£ | £ |
Within one year | 37,855 | 38,411 |
Between one and five years | 158,904 | 7,253 |
In more than five years | 86,250 | - |
283,009 | 45,664 |
18. | PROVISIONS FOR LIABILITIES |
Group |
2023 | 2022 |
£ | £ |
Deferred tax | 197,178 | 54,912 |
Group |
Deferred tax |
£ |
Balance at 1 August 2022 | 54,912 |
Charge to Income Statement during year | 142,266 |
Balance at 31 July 2023 | 197,178 |
The deferred tax liability relates solely to accelerated capital allowances. |
19. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1 |
Shares rank equally for voting purposes. On a show of hands each member shall have one vote and on a poll each member shall have one vote per share. The voting rights are more particularly described in the articles of association. |
20. | RESERVES |
Group |
Retained | Merger |
earnings | reserve | Totals |
£ | £ | £ |
At 1 August 2022 | 4,183,421 | 15,000,222 | 19,183,643 |
Deficit for the year | (157,508 | ) | (157,508 | ) |
At 31 July 2023 | 4,025,913 | 15,000,222 | 19,026,135 |
SAFFRONLAND INVESTMENTS LIMITED (REGISTERED NUMBER: 11176393) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
20. | RESERVES - continued |
Company |
Retained | Merger |
earnings | reserve | Totals |
£ | £ | £ |
At 1 August 2022 | 1,285,881 | 15,000,222 | 16,286,103 |
Profit for the year | - | - |
At 31 July 2023 | 1,285,881 | 15,000,222 | 16,286,103 |
Retained earnings includes all current and prior period retained profits. |
On 26 July 2018 Saffronland Investments Limited acquired Saffronland Group Limited via a share for share exchange. At the same time, Saffronland Group Limited acquired Saffronland Homes 1 Limited, Saffronland Homes 2 Limited and Saffronland Homes 3 Limited through a share for share exchange. The consideration was the issue by the two holding companies of 100 ordinary share of £1 each. The investments acquired have been recognised at fair value, resulting in a merger reserve on acquisition. |
21. | RELATED PARTY DISCLOSURES |
At the balance sheet date the Group owed Mr A M Lakhani £2,837,856 (2022: £3,316,488) in the form of a Director's loan. During the year interest of £Nil (2022: £125,000) was charged to the Consolidated Income Statement in relation to this loan. |
Associated entities which have common control with the group have outstanding balances at the period end. At the period end there is £Nil (2022: £Nil) included within other debtors and £130,000 (2022: £130,000) included within other creditors. During the year £nil was charged from associated entities (2022: £130,000). |
22. | POST BALANCE SHEET EVENTS |
On 18 March 2024 the company renewed its loan facility with Coutts bank. The facility totalled £17m with a margin of 2.55% over base rate. The facility is in place for 5 years. |
Sandmartins care home closed in August 2023, with a view to redevelop the property to maximise its potential for complex care provision. |
23. | ULTIMATE CONTROLLING PARTY |
Mr A M Lakhani is the ultimate controlling party of the Company by virtue of his majority shareholding. |