The directors present the strategic report for the year ended 31 August 2023.
Recruitment
Given the well documented "Cost Of Living Crisis" in 2023, and National Minimum Wage increases of 10% in 2023, we have found it increasingly expensive to hire carers. Whilst The Good Care Group Scotland continues to invest in pay and benefits, to stay competitive, resourcing continues to be as difficult as it has been in recent years. We believe the intended changes to the ability to bring in carers workers from overseas will have a detrimental impact on the sector in 2024. At The Good Care Group Scotland, we have never used this option, but it will inevitably squeeze the market further.
Client Needs
The same "Cost Of Living Crisis" that makes hiring carers more expensive, also impacted on the cost of providing services and the renewal of contracts we have with suppliers, driving up the cost of providing care. The combined impact of clients having their finances squeezed and the increased cost of care has led to people choosing to delay the decision to start care until later. We continue to react to the changing needs of our client base to counter this.
KPIs
TGCGSL recognised 100% revenue billed to clients in Scotland in the year (2022: 100%) and pays TGCGLL a fee equivalent to 95% (2022: 95%) of those revenues for the services it provides, under its direction, to clients in Scotland. Consequently, revenues for the year were £3,905,914 and Operating Profit was £195,920.
Future Developments & Risk Management
Health, Safety and Wellbeing
We will continue to put the health, safety and wellbeing of our clients and professional carers first in everything we do.
Pricing
We continue to work closely with our funders and clients to ensure we deliver the very best care at a competitive price which reflects the investment we continue to make in our workforce and the inflationary environment in which the company is operating.
Pay
We will continue to invest in pay and benefits to ensure that our professional carers and support teams are fairly rewarded for the outstanding job that they do, and will continue to scale up our recruitment activity in order to return the business to growth.
Principal risks and uncertainties
The external economic environment and continued cost pressures present a risk for the business as we balance the costs of running the business with pricing that presents value for money to our clients.
The Good Care Group Scotland provides a high quality of care to its clients, rated as Excellent by the Care Quality Commission and Care Inspectorate. Deterioration in the standard of care leading to reputational damage is a principal risk. This will be managed through maintaining rigorous internal controls, staff training and a strong compliance programme.
Equally maintaining adequate staffing levels is key to providing quality care. We manage this risk by providing competitive pay and benefits to carers along with well developed training and support. There is also a continual focus on recruitment within the business.
Changes to government policy affecting the care industry could present a significant risk, however the company believes it is suitably equipped to mitigate such risks and uncertainties.
Future developments
The Good Care Group Scotland will continue to focus on delivering the highest quality care for our clients. Maintaining the level of care is central to our plans as we expand geographic coverage and look to strengthen our range of services throughout the UK, enabling our clients to live in the comfort of their own homes for as long as possible.
Directors' statement of compliance with duty to promote the success of the Company
We describe in this section of the report how the directors have had regard to the matters set out in section 172(1)(a) to (f) of the Companies Act 2006. In particular, the section outlines how the directors have acted in a way which is most likely to promote the success of the Company for the benefit of the members as a whole and in doing so having regard for stakeholders’ interests.
The following paragraphs summarise how the Directors’ fulfil their duties and engage with each of the key stakeholder groups.
We take the opportunity here to explain how both:
- The directors have regard to section 172(1) of the Companies Act 2006 in respect of the interests of the Company’s employees; and
- The directors have engaged with employees and the effect of this engagement on principal decisions of the Company.
Employees
The Board recognises that, as a leading provider of care services, its professional carers and support teams are key to the Company´s strength and success. The Board is committed to ensuring:
• Health & Safety
• Ongoing support to all employees
• High levels of employee engagement, wellbeing and communications
• A diverse and inclusive workforce and culture.
Health & Safety
The Company is committed to ensuring a safe and healthy working environment for all its employees, contractors and visitors. Through suitable and sufficient risk assessment and the creation of resulting safe systems of work, the Company provides employees with information, training and instruction to enable them to work safely and to protect the safety and health of those who may be affected by its activities. Compliance with legislative requirements underpins its purpose. The Company tests and challenges itself to continually improve and to engage with its people to ensure everyone has a voice and is properly informed.
The Company believes that health and safety is everyone’s responsibility and through strong leadership, supervision and holding each other to account, health and safety can become a way of life that adds value and drives improved performance. Management and monitoring of performance is achieved through robust reporting, strong audit and monitoring regimes.
Employee engagement
We measure the effectiveness Employee Value Proposition (EVP) by conducting annual employee engagement surveys and ad hoc surveys to address specific areas of concern. The data is thematically and statistically analysed to distil an action plan to address the points raised through the survey.
We monitor attrition rates, feedback from exit interviews, and absenteeism levels in an effort to identify emerging people risks, trends, and to ensure appropriate action is taken to address these. Emerging people risks and trends are highlighted to the Board together with proposed action plans.
The Company continues to provide ongoing support to all employees and provides a confidential route (‘Speak-Up’) for staff to raise concerns
The Company is proud of all of its teams and their dedication and agility as our client and business needs continue to evolve.
Clients
We recognise that client retention is the first step to growth. We provide the best possible care to our clients and carefully monitor and act on their feedback.
Suppliers
The Company manages their end-to-end supply chain to meet legislative requirements, mitigate risks and satisfy customer demands for supply chain transparency. All suppliers of goods and services to the Company are prequalified to ensure they are capable and competent to deliver the goods or carry out the work they are being contracted to supply. Vendors are assessed against the Company’s Supplier Code of Conduct. The level of initial assessment and ongoing monitoring relates directly to the services/products provided or to be performed and the associated risk.
The Company is committed to ensuring that slavery and human trafficking is not taking place in any of its supply chains or any part of its business and has in place measures to manage this risk.
Shareholder
The Board of the Company duly considers the views of its ultimate shareholder, the Halifax Group, and the interests of the Group as a whole as part of any major decisions and transactions undertaken by the Company. The Chair and the Board members provide the channel of communication between the Company and its shareholder.
Long-term decision making
The directors continue to review the Company’s organisational structure, cost base, service offers, investments and other business plans to ensure all are optimal as our environment evolves.
Standards of business conduct
The Company’s Code of Ethics applies to all Directors and employees of the Company, and it embodies the Group´s commitment to maintaining the highest standards of ethical business conduct and integrity. This is underpinned through regular training and an embedded ethical culture. The Company has implemented a Whistleblower facility whereby staff can raise issues that could be misconduct. Regular mandatory training for staff on the principles of Responsible Business Conduct is in place and completion rates are monitored.
The Ethics & Compliance Committee receives, considers, and manages concerns raised under the Code of Ethics, Anti Bribery Policy, Gifts & Hospitality Policy and Whistleblower Policy (including any allegations of bribery and corruption), conducts investigations, takes appropriate action, monitors and reviews incidents and training, measures trends and reports appropriately to the Board. The Committee maintains an incident log.
The Company shares the same ethical principles as those set out in the Modern Slavery Act, 2015. We believe in the elimination of all forms of compulsory labour and work to ensure slavery and human trafficking do not take place within any part of our business supply chain.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 August 2023.
The results for the year are set out on page 11. The company's profit after tax for the year was £153,273 (2022: £160,495) and net assets as at 31 August 2023 were £357,470 (2022: £204,197).
No ordinary dividends were paid (2022: £nil). The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The company's current policy concerning the payment of trade creditors is to:
settle the terms of payment with suppliers when agreeing the terms of each transaction;
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
pay in accordance with the company's contractual and other legal obligations.
Trade creditors of the company at the year end were equivalent to 0 day's purchases, based on the average daily amount invoiced by suppliers during the year.
Following the change in ownership of the Company, KPMG LLP will not be seeking reappointment as the Company auditor and a new auditor will be appointed.
The company does not qualify as a large company under the Streamlined Energy and Carbon Reporting (SECR) regulations and is not required to report on its emissions, energy consumption or energy efficiency activities in this reporting period.
The directors continue to adopt the going concern basis in the preparation of the financial statements.
As at 31st October 2023, the shareholders of GCG Holdings Limited agreed to sell all their shares to Elevate Care International Limited, a newly created entity under the ownership of The Halifax Group a mid-tier US private equity firm.
The new shareholders have a strong belief in the future success of the Company, due to the essential nature of the service it provides and can see opportunities for organic growth provided we can continue to attract, recruit and retain professional carers in an increasingly tight labour market.
As inflationary pressures continue, we work with our clients to ensure we receive a fair price for the services that we provide, so that we can continue to invest in our workforce. Agility, good commercial management, and careful cost control continue to be critical to our ongoing success.
To inform the basis of preparation of these accounts, the directors have performed a going concern assessment to consider cash and profit scenarios for forward trade over the next 12 months. The directors manage cash requirements across the Good Care Group headed by The Good Care Group London Limited with routine peaks in cash requirements during the trading cycle funded from the cash balance the of the Company / The Good Care Group of companies. The Good Care Group of companies have indicated their intention to continue make available such funds as are needed by the Company, through the Good Care Group cash pool, during the going concern assessment period. As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.
Based on these analyses and facts, the directors believe that the Company will be able to continue to meet its liabilities as they fall due for at least the next 12 months and therefore have prepared the financial statements on a going concern basis.
We have audited the financial statements of The Good Care Group Scotland Limited (the 'Company') for the year ended 31 August 2023 which comprise the Income statement, Statement of Financial Position, Statement of Changes in Equity and related notes, including the accounting policies in note 1.
Basis for opinion
Going concern
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its operations, and as they have concluded that the Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).
In our evaluation of the directors’ conclusions, we considered the inherent risks to the Company’s business model and analysed how those risks might affect the Company’s financial resources or ability to continue operations over the going concern period.
Our conclusions based on this work:
we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;
we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for the going concern period.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Company will continue in operation.
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
Enquiring of directors and inspection of policy documentation as to the Company’s high-level policies and procedures to prevent and detect fraud, as well as whether they have knowledge of any actual, suspected or alleged fraud.
Reading Board minutes.
Considering remuneration incentive schemes and performance targets for management and directors.
Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.
As required by auditing standards, and taking into account possible pressures to meet profit targets, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make inappropriate accounting entries. On this audit we do not believe there is a fraud risk related to revenue recognition because there is no material judgement or estimation and, given the low value and high-volume nature of transactions, limited opportunity for recording material fraudulent accounting entries.
We did not identify any additional fraud risks.
We performed procedures including identifying journal entries to test based on risk criteria and comparing the identified entries to supporting documentation. These included those posted to unusual accounts.
Identifying and responding to risks of material misstatement related to compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, through discussion with the directors and others management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. As the Company is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity’s procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: health and social care act, health and safety, data protection laws, anti-bribery and employment law. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
Strategic report and directors' report
The directors are responsible for the strategic report and the directors’ report. Our opinion on the financial statements does not cover those reports and we do not express an audit opinion thereon.
Our responsibility is to read the strategic report and the directors’ report and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:
we have not identified material misstatements in the strategic report and the directors’ report;
in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
in our opinion those reports have been prepared in accordance with the Companies Act 2006
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The purpose of our audit work and to whom we owe our responsibilities
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.
All amounts above relate to continuing operations. The notes on pages 14 to 20 form part of these financial statements.
The notes on pages 14 to 20 form part of these financial statements.
The notes on pages 14 to 20 form part of these financial statements.
The Good Care Group Scotland Limited is a private company limited by shares incorporated in England and Wales. The registered office is 120 Leman Street, London, E1 8EU. The company's principal activities and nature of its operations are disclosed in the strategic report.
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 £.
In these financial statements, the Company has applied the exemptions available under FRS 101 in respect of the following disclosures:
Cash Flow Statement and related notes;
Certain disclosures regarding revenue;
Certain disclosures regarding leases;
Comparative period reconciliations for share capital;
Disclosures in respect of transactions with wholly owned subsidiaries; and
Disclosures in respect of the compensation of Key Management Personnel;
The Company’s ultimate parent undertaking at 31 August 2023, Sodexo S.A. includes the Company in its consolidated financial statements. The consolidated financial statements of Sodexo S.A. are prepared in accordance with International Financial Reporting Standards and are available to the public and are published on the company's website at www.sodexo.com.
Revenue from contracts for the provision of care services are recognised when the service has been provided and is based on time spent by staff during the period.
An Inter-Company Services Agreement between The Good Care Group Scotland Ltd (TGCGSL) and its parent company, The Good Care Group London Ltd (TGCGLL), took effect on 1 September 2021. Under the terms of this agreement, TGCGLL provides a range of services to TGCGSL to enable it to serve its clients in Scotland. TGCGSL are responsible for the quality of the service and compliance with all relevant legislation. In return for providing TGCGSL with these services, TGCGLL receives a fee equivalent to 95% of the revenue billed to clients in Scotland. Previously, TGCGLL recognised all of the revenues attributable to Scottish clients
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The tax expense represents the sum of the tax currently payable and deferred tax.
The preparation of financial statements requires the management to make estimates and judgements which affect the amounts reported for assets, liabilities and contingent liabilities as of the date of preparation of the financial statements, and for revenues and expenses for the period.
Estimates and underlying assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
There are no critical estimates or judgments in applying the Company's accounting policies.
A new Inter-Company Services Agreement between The Good Care Group Scotland Ltd (TGCGSL) and its parent company, The Good Care Group London Ltd (TGCGLL), took effect on 1 September 2021. Under the terms of this agreement, TGCGLL provides a range of services to TGCGSL to enable it to serve its clients in Scotland. TGCGSL are responsible for the quality of the service and compliance with all relevant legislation.
In return for providing TGCGSL with these services, TGCGLL receives a fee equivalent to 95% of the revenue billed to clients in Scotland. Previously, TGCGLL recognised all of the revenues attributable to Scottish clients. This change is reflected in the table below.
The average monthly number of persons (including directors) employed by the company during the year was:
Directors received no remuneration from The Good Care Group Scotland Limited during the year. Directors receive remuneration from another of the Sodexo group companies.
On 1 April 2023, the standard rate of corporation tax changed from 19% to 25% for companies with profits of over £250,000. For the purpose of the company accounts to 31 August 2023, a blended rate of 21.52% corporation tax has been applied.
The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 25% (2022 - 19%).
The charge for the year can be reconciled to the profit per the income statement as follows:
Amounts receivable from parent undertakings are repayable on demand and interest free.
As at 31 October 2023, the shareholders of GCG Holdings Limited agreed to sell all their shares to Elevate Care International Limited, a newly created entity under the ownership of The Halifax Group a mid-tier US private equity firm.
On completion of the sale of the business to The Halifax Group, the inter-company loans and other payables to Sodexo Limited, as shown in the financial statements, were fully repaid and sufficient funding strategies put in place by the new owners.
From 31 October 2023, the ultimate controlling party is HCP V CK LP.