The directors present the strategic report for the period ended 31 August 2023.
The Halliwell Group of companies offers "clinically informed practice" through the medium of education, fostering and residential care. Our objective is to enhance the psychological health of children within the care system. Our Restorative Parenting® Recovery Programme is a therapeutic re-parenting programme which focuses on addressing the emotional, behavioural, social, and developmental needs of the child. Our approach sets us apart from standard residential childcare providers in that it is clinically informed in every aspect of the child’s lived therapeutic experience with the specific aim of helping traumatised children achieve psychological wellbeing.
The Restorative Parenting® Recovery Programme operates on an environmental, interpersonal, and individual level. Psychological growth and recovery are facilitated through the applied understanding of childhood trauma and attachment needs, Positive Behaviour Support and a focus on engagement and achievement through active participation in education and a wide range of activities. Our practice is guided by knowledge and experience of the power of the narrative and reframing, solution focused approaches and is responsive, consistent, and attuned to the child’s needs.
The progress of Individual children is monitored monthly through the Restorative Parenting Recovery Index and using additional normed psychological scales where appropriate. Detailed discussion of children’s progress takes place at monthly consultations with a psychologist and additional input is provided on a flexible basis by Halliwell’s clinical team, which includes Psychiatry and Clinical Psychology.
We operate 4 homes in the Northwest of England alongside our sister company Halliwell Home (Midlands Division) who operate 2 in the Midlands area with ambitions for more homes in that region in the future.
Results for the period ended 31st August 2023
The directors are pleased to report a successful financial period to 31st August 2023. Halliwell Homes Limited achieved high levels of occupancy, stable staff teams with reducing agency costs and a good, consistent level of service quality. We are also pleased to continue to report successful outcomes for the children placed with us. We have an average programme completion rate of more than 85%, meaning that more than 4 out of five of the children we care for move out of our programme and into a foster family, meeting the objectives of our Restorative Parenting Programme.
Adjusted EBITDA for the period was £1,243k and 9 children made a successful transition from the programme having sufficiently recovered from childhood trauma whilst placed with Halliwell. 96% Staffing was also achieved by the end of the period.
Principal Risks and Uncertainties
The Board of Directors expect the business to run at >90% total occupancy in the future given the large number of children in the looked after sector that require a specialist placement.
The primary risk for the business in the upcoming period is the ongoing staffing shortage within the sector. In order achieve the expected outcomes for the children on the programme, a stable team of highly qualified and experienced practitioners is required. The sector has historically had a high staff turnover due to the relatively low wages, requirement to work unsociable hours and the impact of working with children suffering complex trauma who can sometimes exhibit challenging behaviours.
The Halliwell Group that Halliwell Homes Limited is part of have and will continue to invest significantly in the recruitment, development and retention of the staff team to ensure this risk is mitigated. Our in-house clinical and Learning and Development teams provide an extensive and in-depth programme of continuous professional development for our practitioners as well as clinical oversight and support. This has enabled Halliwell to achieve >95% staffing during this period and to support significant positive outcomes for the children in the looked after system. We intend to continue and build on our focus and investment in the development of our practitioners in the coming year with the goal of achieving and maintaining full staffing and continuing to improve the length of time that they stay with the company.
The restructuring of Halliwell to become an Employee Ownership Trust during the previous financial year has had a positive effect on staff recruitment and retention with Halliwell achieving staffing capacity well above the average in sector which will support achieving and maintaining high occupancy levels in the coming year. It will also enable Halliwell to offer greater engagement opportunities for all employees in the development of the organisation going forward as well as greater benefits and rewards when the business performs well.
This structure allows Halliwell to most closely align the best interests of the children in its care, our local authority customers and our skilled and committed staff team, meaning the business is well placed to deliver its service objectives and perform successfully financially.
All other risks are managed day to day in the normal course of business.
On behalf of the board
The directors present their annual report and financial statements for the period ended 31 August 2023.
The results for the period are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Halliwell Care Holding Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 August 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows 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).
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 group and parent 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 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 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are 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 directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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 parent company or to cease operations, or have no realistic alternative but to do so.
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.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management and from our knowledge and experience of the client and businesses in similar sectors;
we assessed the extent of compliance with the laws and regulations identified through making enquiries of management and inspecting any available legal correspondence; and
the audit team were in regular communication in relation to laws and regulations and potential instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias: and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigations and claims;
reviewing legal and professional expenses for ongoing litigation work: and
reviewing correspondence with HMRC.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. The 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.
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.
These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £1,271,980.
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
Halliwell Care Holding Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Pearce House, 80 Cawdor Street, Eccles, Manchester, M30 0QF.
The group consists of Halliwell Care Holding Limited and its subidiary companies Halliwell Homes Limited and Halliwell Homes (Midlands Division) Limited.
The company was incorporated 24th May 2022 and its first period of account is a 15 month period to 31st August 2023. The accounting reference date is 31st August to be coterminous with its subsidiary companies.
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.
The consolidated group financial statements consist of the financial statements of the parent company Halliwell Care Holding Limited together with its subsidiaries Halliwell Homes Limited and Halliwell Homes (Midlands Division) Limited.
All financial statements are made up to 31 August 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future and not less than one year from the date of approval. The directors of the company regularly monitor profit and loss and cash flow forecasts and monitor actual and forecast compliance with bank covenants. Under all scenarios reviewed the group has sufficient cash flow to enable it to continue as a going concern and for this reason the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
The company recognises revenue when the amount of revenue can be measured reliably and when it is probable future economic benefits will flow to the entity.
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 recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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, 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its 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.
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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
The costs of short-term employee benefits are recognised as a liability and an expense.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 leased asset are consumed.
In the application of the group’s accounting policies, the directors are 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.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
As described in note 12 to the financial statements, land and buildings are stated at fair value based on the valuation performed by an independent professional valuer Christie & Co as at 31st August 2021. The valuer used observable market prices adjusted as necessary for any difference in the location or condition of the specific asset. However, the rise in interest rates and inflation has caused significant disruption and uncertainty in the UK property market which has inevitably increased the degree of judgement involved in the property valuation.
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates based on future investments, economic utilisation and the physical condition of the assets. See note 12 for the carrying amount of fixed assets, and note 1.7 for the useful economic lives for each class of assets.
The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers each balance on a line by line basis. See note 15 for the net carrying amount of the debtors and associated impairment provision.
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
The actual charge for the period can be reconciled to the expected credit for the period based on the profit or loss and the standard rate of tax as follows:
Land and buildings with a carrying amount of £ 3,881,384 have been pledged to secure borrowings of Halliwell Care Holding Limited. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.
Land and buildings were revalued at 31st August 2021 by Christie & Co, who are independent valuers, not connected with the company, on the basis of fair value. The valuation was undertaken in accordance with the Royal Institute of Chartered Surveyors Valuation Standards and was based on recent market transactions on arms length terms for similar properties.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
Details of the company's subsidiaries at 31 August 2023 are as follows:
Amounts owed by group undertakings are shown as being due within one year as there is no set repayment date and there is no formal agreement in place. Commercially there are no plans for these amounts to be recalled in the next 12 months.
The company has a loan with Shawbrook Bank, which is repayable by instalments over 20 years. The interest rate on the loan is SONIA + 5.685%.
The bank loan is secured by a fixed and floating charge over all the assets of the group including (without limitation) a legal mortgage on all freehold land and buildings and a floating charge on all other assets in the group.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
On incorporation the company issued 2 Ordinary A shares at par value of £1 per share.
On 25th May 2022 the company issued £1,829,4998 Ordinary A shares at par value of £1 per share.
On 30th May 2022 a capital reduction was undertaken and the nominal value of each Ordinary A share was reduced by £0.9999 to £0.0001 per share.
On 31st May the company issued 1,756 Ordinary B shares at a par value of £1 per share.
The contribution to Halliwell Homes EOT represents contributions paid to the Employee Ownership Trust to enable it to fund the initial consideration to purchase shares.
On 30 May 2022 Halliwell Care Holding Limited acquired 100 percent of the issued share capital of Halliwell Homes Limited in a share for share exchange. The principal activity of Halliwell Homes Limited is that of education, fostering and residential care.
The acquisition has been accounted for under the acquisition method. It has been determined by the company directors that the book value of assets and liabilities acquired materially agrees to fair value.
On 30 May 2022 the group acquired 100 percent of the issued capital of Halliwell Homes (Midlands Division) Limited. The principal activity is that of education, fostering and residential care.
The acquisition has been accounted for under the acquisition method. It has been determined by the company directors that the book value of assets and liabilities acquired materially agrees to fair value.
Deferred Consideration
On 31st May 2022 the previous shareholders of the Halliwell Homes Group transferred their shares to Halliwell Homes Employee Ownership Trust. Halliwell Care Holdings Limited made a contribution to the Trust to fund the initial consideration. The company and its subsidiaries Halliwell Homes Limited and Halliwell Homes Midlands Division Limited are committed to funding quarterly contributions to cover deferred consideration and accrued interest to former shareholders. As at 31 August 2023 the amount of deferred consideration due was £12.4m plus accrued interest.
Bank loans
The company has charges over its assets in the form of debentures as senior first-ranking security for the bank loans of £9,895,833. These bank loans are secured on all the assets of the group including (without limitation) a legal charge on land and buildings with a value of £3,881,384 and a floating charge over all other assets.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The group is reporting not insignificant losses brought about by high interest charges on restructuring loans and large amortisation charges against goodwill. EBITDA for the group is £1,243,000 and is a key performance indicator. Bank covenants are carefully monitored. As explained in note 23, the founders are due deferred consideration from the Employee Ownership Trust which is funded by the group. The Founders have agreed in writing not to jeopardise the liquidity and going concern basis of the group should their deferred payments be delayed and any interest accrued would not be demanded until a time when the group can manage the cashflow sucessfully.
The group as taken advantage of the exemption provided in Financial Reporting Standards 102. Disclosures need not be given of transactions entered in to between two or members of a group, provided that any subsidiary which is party to the transaction is wholly owned by such a member.