Company registration number 05940625 (England and Wales)
DIGNUS HEALTHCARE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
DIGNUS HEALTHCARE LIMITED
COMPANY INFORMATION
DIRECTOR
Mr S S Sandhu
SECRETARY
Mr S S Sandhu
COMPANY NUMBER
05940625
REGISTERED OFFICE
19 Highfield Road
Edgbaston
Birmingham
B15 3BH
AUDITOR
JW Hinks LLP
Chartered Accountants
19 Highfield Road
Edgbaston
Birmingham
B15 3BH
DIGNUS HEALTHCARE LIMITED
CONTENTS
PAGE
Strategic report
1
Director's report
2
Director's responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 21
DIGNUS HEALTHCARE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 1 -
The director presents the strategic report for the twelve months ended 31 October 2023.
REVIEW OF THE BUSINESS
The principal activity of the company during the period was to provide specialist care and support to individuals with learning disabilities, mental health conditions and other complex needs.
The company’s performance has been generally in line with the director’s expectations for the period.
There has been no material change in the operation or the services offered.
We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover operating profit.
Turnover and operating profit of the company were as follows:
2023 2022
£ £
Turnover 13,584,279 10,226,556
Operating profit 1,789,195 1,529,654
Principal Risks and Uncertainties
The current principal risk to the ongoing performance of the company, is our good reputation with the Stakeholders with whom we work. These include Commissioning authorities, Social Services, NHS & the Care Quality Commission. We have maintained good relationships with these authorities and look forward to building upon these in the future.
The ongoing challenges in the Health and Social Care Sector remain significant, with the continued pressure of the NLW (National Living Wage) and its knock-on effect to total wages, workplace pension auto enrolment charges, and the apprenticeship levy, alongside other inflationary pressures.
Outlook
We will continue to pursue new opportunities and look forward with a positive attitude.
Mr S S Sandhu
DIRECTOR
29 July 2024
DIGNUS HEALTHCARE LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -
The director presents his annual report and financial statements for the year ended 31 October 2023.
PRINCIPAL ACTIVITIES
The principal activity of the company continued to be that of Person Centred care and support for people with learning disabilities, mental health conditions and other complex needs.
RESULTS AND DIVIDENDS
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £200,000. The director does not recommend payment of a further dividend.
DIRECTOR
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr S S Sandhu
DISABLED PERSONS
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees. Dignus is recognised as a Disability Confident Committed employer.
EMPLOYEE INVOLVEMENT
The company's policy is to consult and discuss with employees, through meetings and written communication, matters likely to affect employees' interests.
Information about matters of concern to employees is given through an annual ‘Town Hall’, line manager briefings, a group newsletter and direct e-mails which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
The employees are fundamental to the delivery the company's plans. The health, safety and wellbeing of our employees is one of our primary considerations in the way we go about business.
AUDITOR
In accordance with the company's articles, a resolution proposing that JW Hinks LLP be reappointed as auditor of the company will be put at a General Meeting.
STATEMENT OF DISCLOSURE TO AUDITOR
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
MEDIUM-SIZED COMPANIES EXEMPTION
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr S S Sandhu
DIRECTOR
29 July 2024
DIGNUS HEALTHCARE LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 3 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
DIGNUS HEALTHCARE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DIGNUS HEALTHCARE LIMITED
- 4 -
OPINION
We have audited the financial statements of Dignus Healthcare Limited (the 'company') for the year ended 31 October 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 October 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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 director with respect to going concern are described in the relevant sections of this report.
OTHER INFORMATION
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
DIGNUS HEALTHCARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DIGNUS HEALTHCARE LIMITED
- 5 -
RESPONSIBILITIES OF DIRECTOR
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements and discussed the policies and procedures regarding compliance.
Specific areas considered were as follows:
Enquiring with management and others to gain an understanding of the organisation itself including operations, financial reporting and known fraud or error.
Evaluating and understanding the internal control system.
Performing analytical procedures as expected or unexpected variances in account balances or classes of transactions appear.
Testing documentation supporting account balances or classes of transactions.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected all irregularities including those leading to material misstatements in the financial statements or non-compliance with regulation, even though we have properly planned and performed our audit in accordance with auditing standards.
This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
DIGNUS HEALTHCARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DIGNUS HEALTHCARE LIMITED
- 6 -
USE OF OUR REPORT
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
JAMES CRUSE ACA, FCCA, BSC (ECON) HONS (SENIOR STATUTORY AUDITOR)
CHARTERED ACCOUNTANTS
STATUTORY AUDITOR
Chartered Accountants
19 Highfield Road
Edgbaston
Birmingham
B15 3BH
29 July 2024
DIGNUS HEALTHCARE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023
- 7 -
2023
2022
Notes
£
£
TURNOVER
5
13,584,279
10,226,556
Cost of sales
(7,772,813)
(5,282,015)
GROSS PROFIT
5,811,466
4,944,541
Administrative expenses
(4,049,158)
(3,454,896)
Other operating income
26,887
40,009
OPERATING PROFIT
3
1,789,195
1,529,654
Interest receivable and similar income
6
53,737
3,186
Interest payable and similar expenses
7
(308,080)
(158,010)
PROFIT BEFORE TAXATION
1,534,852
1,374,830
Tax on profit
10
236,707
(166,302)
PROFIT FOR THE FINANCIAL YEAR
1,771,559
1,208,528
The profit and loss account has been prepared on the basis that all operations are continuing operations.
DIGNUS HEALTHCARE LIMITED
BALANCE SHEET
AS AT
31 OCTOBER 2023
31 October 2023
- 8 -
2023
2022
Notes
£
£
£
£
FIXED ASSETS
Intangible assets
11
Tangible assets
12
17,170,954
12,808,440
Investments
13
2
2
17,170,956
12,808,442
CURRENT ASSETS
Debtors
15
1,763,003
3,226,126
Cash at bank and in hand
2,640,947
4,483,597
4,403,950
7,709,723
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
16
(3,643,733)
(2,791,696)
NET CURRENT ASSETS
760,217
4,918,027
TOTAL ASSETS LESS CURRENT LIABILITIES
17,931,173
17,726,469
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
17
(6,463,916)
(7,520,771)
PROVISIONS FOR LIABILITIES
23
(36,000)
(346,000)
NET ASSETS
11,431,257
9,859,698
CAPITAL AND RESERVES
Called up share capital
21
100
100
Profit and loss reserves
11,431,157
9,859,598
TOTAL EQUITY
11,431,257
9,859,698
The financial statements were approved and signed by the director and authorised for issue on 29 July 2024
Mr S S Sandhu
DIRECTOR
COMPANY REGISTRATION NO. 05940625
DIGNUS HEALTHCARE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 9 -
Share
Profit and loss
Total
capital
reserves
Notes
£
£
£
BALANCE AT 1 NOVEMBER 2021
100
8,851,070
8,851,170
YEAR ENDED 31 OCTOBER 2022:
Profit and total comprehensive income for the year
-
1,208,528
1,208,528
Dividends
9
-
(200,000)
(200,000)
BALANCE AT 31 OCTOBER 2022
100
9,859,598
9,859,698
YEAR ENDED 31 OCTOBER 2023:
Profit and total comprehensive income for the year
-
1,771,559
1,771,559
Dividends
9
-
(200,000)
(200,000)
BALANCE AT 31 OCTOBER 2023
100
11,431,157
11,431,257
DIGNUS HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 10 -
1
ACCOUNTING POLICIES
COMPANY INFORMATION
Dignus Healthcare Limited is a company limited by shares incorporated in England and Wales. The registered office is 19 Highfield Road, Edgbaston, Birmingham, B15 3BH. The company operates from 10 Hatherton Road, Walsall, WS1 1XS.
1.1
ACCOUNTING CONVENTION
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Dignus Healthcare Limited is a wholly owned subsidiary of Dignus Group Limited and the results of Dignus Healthcare Limited are included in the consolidated financial statements of Dignus Group Limited which are available from their registered office, 19 Highfield Road, Edgbaston, Birmingham, B15 3BH.
1.2
GOING CONCERN
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
TURNOVER
Turnover represents the value of care services provided to the individual.
Revenue from the service provided is only recognised when the care has been provided to the individual, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
INTANGIBLE FIXED ASSETS - GOODWILL
Goodwill, being the amount paid in connection with the acquisition of a business in 2008, is being amortised evenly over its estimated usefull life of ten years and is subject to annual impairment reviews.
1.5
TANGIBLE FIXED ASSETS
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
DIGNUS HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
ACCOUNTING POLICIES
(Continued)
- 11 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Freehold
2% and 10% on cost. Land not depreciated.
Fixtures, fittings & equipment
15% on reducing balance
Computer equipment
33% on cost
Motor vehicles
25% on reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
FIXED ASSET INVESTMENTS
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
Investments are recognised initially at fair value which is normally the transaction price excluding transaction costs. Subsequently, they are measured at fair value through income or expenditure if the shares are publicly traded or their fair value can otherwise be measured reliably.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
IMPAIRMENT OF FIXED ASSETS
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
CASH AND CASH EQUIVALENTS
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
DIGNUS HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
ACCOUNTING POLICIES
(Continued)
- 12 -
1.9
FINANCIAL INSTRUMENTS
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
DIGNUS HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
ACCOUNTING POLICIES
(Continued)
- 13 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
EQUITY INSTRUMENTS
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
TAXATION
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
EMPLOYEE BENEFITS
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
RETIREMENT BENEFITS
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the profit and loss account in the period to which they relate.
DIGNUS HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
ACCOUNTING POLICIES
(Continued)
- 14 -
1.14
LEASES
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
GOVERNMENT GRANTS
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
OPERATING PROFIT
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(26,687)
(40,009)
Fees payable to the company's auditor for the audit of the company's financial statements
12,000
10,320
Depreciation of owned tangible fixed assets
574,097
530,631
Depreciation of tangible fixed assets held under finance leases
10,676
-
(Profit)/loss on disposal of tangible fixed assets
(173,689)
844
Operating lease charges
(30,048)
29,542
4
EMPLOYEES
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Support and administration staff
348
260
DIGNUS HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
4
EMPLOYEES
(Continued)
- 15 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
8,736,159
6,084,921
Social security costs
693,673
517,098
Pension costs
248,279
222,852
9,678,111
6,824,871
5
TURNOVER AND OTHER REVENUE
An analysis of the company's turnover is as follows:
2023
2022
£
£
TURNOVER ANALYSED BY CLASS OF BUSINESS
Care for people with learning difficulties, mental health conditions and other complex needs
13,584,279
10,226,556
2023
2022
£
£
OTHER SIGNIFICANT REVENUE
Interest income
53,737
3,186
Grants received
26,687
40,009
6
INTEREST RECEIVABLE AND SIMILAR INCOME
2023
2022
£
£
INTEREST INCOME
Interest on bank deposits
33,959
3,186
Other interest income
19,778
Total income
53,737
3,186
7
INTEREST PAYABLE AND SIMILAR EXPENSES
2023
2022
£
£
Interest on bank overdrafts and loans
308,080
156,858
Interest on finance leases and hire purchase contracts
-
1,152
308,080
158,010
DIGNUS HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 16 -
8
DIRECTOR'S REMUNERATION
2023
2022
£
£
Remuneration for qualifying services
125,000
125,000
Company pension contributions to defined contribution schemes
40,000
40,000
165,000
165,000
9
DIVIDENDS
2023
2022
£
£
Final paid
200,000
200,000
10
TAXATION
2023
2022
£
£
CURRENT TAX
UK corporation tax on profits for the current period
257,931
292,185
Adjustments in respect of prior periods
(184,638)
(158,883)
Total current tax
73,293
133,302
DEFERRED TAX
Origination and reversal of timing differences
(310,000)
33,000
Total tax (credit)/charge
(236,707)
166,302
The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,534,852
1,374,830
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
383,713
261,218
Tax effect of expenses that are not deductible in determining taxable profit
3,862
22,819
Group relief
(1,459)
(1,607)
Other permanent differences
(2,863)
Under/(over) provided in prior years
(184,638)
(158,883)
Depreciation in excess of capital allowances
(125,322)
9,755
Deferred tax movement
(310,000)
33,000
Taxation (credit)/charge for the year
(236,707)
166,302
DIGNUS HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
10
TAXATION
(Continued)
- 17 -
The UK corporation tax rate increased from 19% to 25% from 1 April 2023 and this will increase the future tax charge accordingly.
11
INTANGIBLE FIXED ASSETS
Goodwill
£
COST
At 1 November 2022 and 31 October 2023
316,458
AMORTISATION AND IMPAIRMENT
At 1 November 2022 and 31 October 2023
316,458
CARRYING AMOUNT
At 31 October 2023
At 31 October 2022
12
TANGIBLE FIXED ASSETS
Land &
Fixtures &
Computer
Motor
buildings
fittings
equipment
vehicles
Total
£
£
£
£
£
COST
At 1 November 2022
15,168,519
724,879
144,927
509,181
16,547,506
Additions
4,925,381
85,733
69,831
42,705
5,123,650
Disposals
(221,634)
(11,131)
(16,985)
(249,750)
At 31 October 2023
19,872,266
799,481
214,758
534,901
21,421,406
DEPRECIATION AND IMPAIRMENT
At 1 November 2022
3,017,528
373,314
67,932
280,292
3,739,066
Depreciation charged in the year
426,821
65,776
39,037
53,139
584,773
Eliminated in respect of disposals
(55,322)
(7,337)
(10,728)
(73,387)
At 31 October 2023
3,389,027
431,753
106,969
322,703
4,250,452
CARRYING AMOUNT
At 31 October 2023
16,483,239
367,728
107,789
212,198
17,170,954
At 31 October 2022
12,150,991
351,565
76,995
228,889
12,808,440
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Motor vehicles
32,029
Included in the cost of freehold property is freehold land of £1,393,038 (2022: £1,393,038) which is not depreciated.
DIGNUS HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 18 -
13
FIXED ASSET INVESTMENTS
2023
2022
Notes
£
£
Investments in subsidiaries
14
2
2
MOVEMENTS IN FIXED ASSET INVESTMENTS
Shares in group undertakings
£
COST OR VALUATION
At 1 November 2022 & 31 October 2023
2
CARRYING AMOUNT
At 31 October 2023
2
At 31 October 2022
2
14
SUBSIDIARIES
Details of the company's subsidiaries at 31 October 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Dignus Support Limited
England
Ordinary
100.00
15
DEBTORS
2023
2022
AMOUNTS FALLING DUE WITHIN ONE YEAR:
£
£
Trade debtors
1,161,049
3,002,831
Corporation tax recoverable
404,084
77,635
Amounts owed by group undertakings
23,027
Other debtors
30,722
14,400
Prepayments and accrued income
167,148
108,233
1,763,003
3,226,126
DIGNUS HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 19 -
16
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023
2022
Notes
£
£
Bank loans
19
1,073,052
504,603
Obligations under finance leases
18
6,152
Trade creditors
166,951
120,658
Amounts owed to group undertakings
155,425
388,020
Taxation and social security
204,035
156,863
Other creditors
1,116,846
778,488
Accruals and deferred income
921,272
843,064
3,643,733
2,791,696
The director considers that the carrying amount of trade payables approximates to their fair value.
17
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2023
2022
Notes
£
£
Bank loans and overdrafts
19
6,444,526
7,520,771
Obligations under finance leases
18
19,390
6,463,916
7,520,771
Amounts included above which fall due after five years are as follows:
Payable by instalments
2,230,015
2,908,486
18
FINANCE LEASE OBLIGATIONS
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
6,152
In two to five years
19,390
25,542
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
DIGNUS HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 20 -
19
LOANS AND OVERDRAFTS
2023
2022
£
£
Bank loans
7,517,578
8,025,374
Payable within one year
1,073,052
504,603
Payable after one year
6,444,526
7,520,771
The bank loans are secured by various fixed and floating legal charges over the assets of the company.
20
RETIREMENT BENEFIT SCHEMES
2023
2022
DEFINED CONTRIBUTION SCHEMES
£
£
Charge to profit or loss in respect of defined contribution schemes
248,279
222,852
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
21
SHARE CAPITAL
2023
2022
2023
2022
ORDINARY SHARE CAPITAL
Number
Number
£
£
ISSUED AND FULLY PAID
Ordinary of £1 each
100
100
100
100
22
DEFERRED TAXATION
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
BALANCES:
£
£
Accelerated capital allowances
36,000
346,000
2023
MOVEMENTS IN THE YEAR:
£
Liability at 1 November 2022
346,000
Credit to profit or loss
(310,000)
Liability at 31 October 2023
36,000
DIGNUS HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
22
DEFERRED TAXATION
(Continued)
- 21 -
The deferred tax liability set out relates to accelerated capital allowances.
23
CAPITAL COMMITMENTS
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
408,441
-
24
ULTIMATE CONTROLLING PARTY
The company is a subsidiary of Dignus Group Limited Limited, a company incorporated in England.
The consolidated financial statements of Dignus Group Limited are available from their registered office, 19 Highfield Road, Edgbaston, Birmingham, B15 3BH.
The company is under the ultimate control of Mr S S Sandhu.
25
RELATED PARTY TRANSACTIONS
REMUNERATION OF KEY MANAGEMENT PERSONNEL
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
490,600
465,588
The company has taken advantage of Section 33 of FRS102 (Related Party Disclosures), not to disclose related party transactions with wholly owned subsidiaries within the group.
Better & Better Residential Limited
Mr S S Sandhu is a director of both Better & Better Residential Limited and Dignus Healthcare Limited.
During the year, Better & Better Residential Limited charged management charges of £17,115 (2022: £17,115) to the company.
At the year end, an amount of £9,944 remained due to Dignus Healthcare Limited (2022: £7,659 due to Dignus Healthcare Limited).
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