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Registration number: 03828106

Chanctonbury Health Care Ltd

Annual Report and Consolidated Financial Statements

for the Year Ended 30 April 2023

 

Chanctonbury Health Care Ltd

Contents

Company Information

1

Directors' Report

2

Strategic Report

3

Statement of Directors' Responsibilities

4

Independent Auditor's Report

5 to 7

Consolidated Profit and Loss Account

8

Consolidated Balance Sheet

9

Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Statement of Changes in Equity

12

Consolidated Statement of Cash Flows

13

Notes to the Financial Statements

14 to 27

 

Chanctonbury Health Care Ltd

Company Information

Directors

B J Sinclair

S R Sinclair

G K Wood

Registered office

Windsor House
Bayshill Road
Cheltenham
GL50 3AT

Auditors

Hazlewoods LLP
Windsor House
Bayshill Road
Cheltenham
GL50 3AT

 

Chanctonbury Health Care Ltd

Directors' Report for the Year Ended 30 April 2023

The directors present their report and the for the year ended 30 April 2023.

Directors of the company

The directors who held office during the year were as follows:

B J Sinclair

S R Sinclair

G K Wood

Financial instruments

Objectives and policies

The board constantly monitors the group's trading results and revise projections as appropriate to ensure that the company can meet its future obligations as they fall due.

Price risk, credit risk, liquidity risk and cash flow risk

The company is exposed to the usual credit and cash flow risk associated with selling on credit and manages this through credit control procedures. The Board constantly monitors the company's trading results and revises projections as appropriate to ensure that the company can meet its future obligations as they fall due.

The company's bank loan is subject to price and liquidity risk as detailed in note 16 to the financial statements.

The company has sufficient resources available, the directors have prepared forecasts for the next 12 months that indicate that this will continue to be the case. Since the year end, the company sold one of its care homes for £2,700,000 and repaid part of the bank loan from the proceeds. The directors have also taken steps post year end to returning the remaining three care homes to overall profitability at an EBITDA level. The directors therefore have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and have continued to adopt the going concern basis in preparing the financial statements.

Disclosure of information to the auditor

Each director has taken the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditors

Hazlewoods LLP have expressed their willingness to continue in office.

Approved by the Board on 20 August 2024 and signed on its behalf by:


B J Sinclair
Director

 

Chanctonbury Health Care Ltd

Strategic Report for the Year Ended 30 April 2023

The directors present their strategic report for the year ended 30 April 2023.

Principal activity

The principal activity of the group is nursing and residential care of the elderly.

Fair review of the business

The results for the year, which are set out in the profit and loss account, show turnover of £5,483,655 and an operating loss of £1,405,076. At 30 April 2023, the group had net assets of £2,595,923. The directors consider the performance for the year and the financial position at the year end to be satisfactory.

Given the nature of the business the group's directors are of the opinion that key performance indicators are important. The group uses a number of indicators to monitor and improve development, performance or the position of the business. Indicators are reviewed and altered to meet changes both in the internal and external environment. The directors do not consider the inclusion of an analysis using key performance indicators to be necessary to assist users of the financial statements in their understanding of the financial performance or position of the group.


Principal risks and uncertainties

Price risk
Room occupancy continues to be a risk to the financial success of any care home as do the fee levels being paid by social services and the private sector. In 2022, the councils were still under pressure to make savings in their adult social care budget due to the government's austerity policies. Consequently the company continues to focus more on the provision of space to privately funded individuals.

Operating costs continue to rise especially in respect of utility and labour costs. The combination of increasing vacancies and costs means profit margins continue to be under pressure. The company has a well organised procurement process and operational structure to mitigate these risks.

Interest rate risk
The company is exposed to interest rate risk because its freehold properties are financed by funds at floating interest rates. The company's financial risk management objective is broadly to seek to reduce this exposure. As the counter party to all financial instruments is its banker, the company is exposed to minimal credit and liquidity risks in respect of these instruments.

Credit risk
The company is exposed to the usual credit risk and cash flow associated with selling on credit and manages this through credit control procedures.

Reputational risk
Provision of poor or inappropriate levels of care would cause severe damage to our brand and the ability of the business to attract new residents. The business operates sophisticated levels of performance monitoring with regular reporting to senior management and the Board of any potential issues. In addition, a comprehensive programme of service audits are undertaken across all Homes with reports and resulting action plans being the subject of comprehensive reviews. Perhaps most importantly, the Board encourages a culture of reporting any minor concerns from staff, residents and relatives all of which are appropriately investigated.

Approved by the Board on 20 August 2024 and signed on its behalf by:


B J Sinclair
Director

 

Chanctonbury Health Care Ltd

Statement of Directors' Responsibilities

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

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

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

Chanctonbury Health Care Ltd

Independent Auditor's Report to the Members of Chanctonbury Health Care Ltd

Opinion

We have audited the financial statements of Chanctonbury Health Care Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 2023, which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the group's and the parent company's affairs as at 30 April 2023 and of the group's loss for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.

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

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Chanctonbury Health Care Ltd

Independent Auditor's Report to the Members of Chanctonbury Health Care Ltd

Opinion on other matter prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

In the light of our 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 and the Directors' Report.

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

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

the parent company financial statements are not in agreement with the accounting records and returns; or

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

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

Responsibilities of directors

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

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

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.

Extent to which the audit was capable of detecting irregularities, including fraud

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 considered the nature of the group’s industry and its control environment and reviewed the groups’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory framework that the group operates in and identified the key laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements, including the UK Companies Act and tax legislation, and, those that do not have a direct effect on the financial statements but compliance with which may be fundamental to the group’s ability to operate or to avoid a material penalty.

We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

 

Chanctonbury Health Care Ltd

Independent Auditor's Report to the Members of Chanctonbury Health Care Ltd

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override of controls. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgments made in accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:

reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatements due to fraud;

enquiring of management concerning actual and potential litigation and claims and instances of non-compliance with laws and regulations; and

reading minutes of meetings of those charged with governance.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council's website at 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.





Simon Worsley (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor

Windsor House
Bayshill Road
Cheltenham
GL50 3AT

20 August 2024

 

Chanctonbury Health Care Ltd

Consolidated Profit and Loss Account for the Year Ended 30 April 2023

Note

2023
 £

2022
 £

Turnover

3

5,483,655

5,434,297

Cost of sales

 

(5,141,969)

(3,135,418)

Gross profit

 

341,686

2,298,879

Administrative expenses

 

(1,746,762)

(1,128,179)

Operating (loss)/profit

4

(1,405,076)

1,170,700

Other interest receivable and similar income

5

91

39

Interest payable and similar charges

6

(328,753)

(241,895)

(Loss)/profit before tax

 

(1,733,738)

928,844

Taxation

10

251,476

(500,621)

(Loss)/profit for the financial year

 

(1,482,262)

428,223

The above results were derived from continuing operations.

 

Chanctonbury Health Care Ltd

(Registration number: 03828106)
Consolidated Balance Sheet as at 30 April 2023

Note

2023
 £

2022
 £

Fixed assets

 

Tangible assets

12

12,374,646

8,499,306

Current assets

 

Stocks

14

20,672

13,697

Debtors

15

507,642

346,732

Cash at bank and in hand

 

687

551,532

 

529,001

911,961

Creditors: Amounts falling due within one year

16

(8,377,515)

(1,541,422)

Net current liabilities

 

(7,848,514)

(629,461)

Total assets less current liabilities

 

4,526,132

7,869,845

Creditors: Amounts falling due after more than one year

16

-

(5,241,794)

Provisions for liabilities

10

(1,930,209)

(1,140,046)

Net assets

 

2,595,923

1,488,005

Capital and reserves

 

Called up share capital

19

850

850

Capital redemption reserve

200,250

200,250

Revaluation reserve

2,703,644

-

Profit and loss account

(308,821)

1,286,905

Equity attributable to owners of the company

 

2,595,923

1,488,005

Total equity

 

2,595,923

1,488,005

Approved and authorised by the Board on 20 August 2024 and signed on its behalf by:
 

B J Sinclair
Director

 

Chanctonbury Health Care Ltd

(Registration number: 03828106)
Balance Sheet as at 30 April 2023

Note

2023
 £

2022
 £

Fixed assets

 

Tangible assets

12

12,102,274

8,499,306

Investments

13

100

-

 

12,102,374

8,499,306

Current assets

 

Stocks

14

13,697

13,697

Debtors

15

814,533

346,732

Cash at bank and in hand

 

-

551,532

 

828,230

911,961

Creditors: Amounts falling due within one year

16

(7,686,369)

(1,541,422)

Net current liabilities

 

(6,858,139)

(629,461)

Total assets less current liabilities

 

5,244,235

7,869,845

Creditors: Amounts falling due after more than one year

16

-

(5,241,794)

Provisions for liabilities

10

(2,100,078)

(1,140,046)

Net assets

 

3,144,157

1,488,005

Capital and reserves

 

Called up share capital

19

850

850

Capital redemption reserve

200,250

200,250

Revaluation reserve

2,703,644

-

Profit and loss account

239,413

1,286,905

Total equity

 

3,144,157

1,488,005

The company made a loss after tax for the financial year of £934,028 (2022 - profit of £428,223).

Approved and authorised by the Board on 20 August 2024 and signed on its behalf by:
 

B J Sinclair
Director

 

Chanctonbury Health Care Ltd

Consolidated Statement of Changes in Equity for the Year Ended 30 April 2023
Equity attributable to the parent company

Share capital
£

Capital redemption reserve
£

Revaluation reserve
£

Profit and loss account
£

Total
£

At 1 May 2022

850

200,250

-

1,286,905

1,488,005

Loss for the year

-

-

-

(1,482,262)

(1,482,262)

Other comprehensive income

-

-

2,740,180

-

2,740,180

Dividends

-

-

-

(150,000)

(150,000)

Transfers

-

-

(36,536)

36,536

-

At 30 April 2023

850

200,250

2,703,644

(308,821)

2,595,923

Share capital
£

Capital redemption reserve
£

Revaluation reserve
£

Profit and loss account
£

Total
£

At 1 May 2021

850

250

-

1,427,522

1,428,622

Profit for the year

-

-

-

428,223

428,223

Dividends

-

-

-

(368,840)

(368,840)

Purchase of own share capital

-

-

-

(200,000)

(200,000)

Other capital redemption reserve movements

-

200,000

-

-

200,000

At 30 April 2022

850

200,250

-

1,286,905

1,488,005

 

Chanctonbury Health Care Ltd

Statement of Changes in Equity for the Year Ended 30 April 2023

Share capital
£

Capital redemption reserve
£

Revaluation reserve
£

Profit and loss account
£

Total
£

At 1 May 2022

850

200,250

-

1,286,905

1,488,005

Loss for the year

-

-

-

(934,028)

(934,028)

Other comprehensive income

-

-

2,740,180

-

2,740,180

Dividends

-

-

-

(150,000)

(150,000)

Transfers

-

-

(36,536)

36,536

-

At 30 April 2023

850

200,250

2,703,644

239,413

3,144,157

Share capital
£

Capital redemption reserve
£

Revaluation reserve
£

Profit and loss account
£

Total
£

At 1 May 2021

850

250

-

1,427,522

1,428,622

Profit for the year

-

-

-

428,223

428,223

Dividends

-

-

-

(368,840)

(368,840)

Purchase of own share capital

-

-

-

(200,000)

(200,000)

Other capital redemption reserve movements

-

200,000

-

-

200,000

At 30 April 2022

850

200,250

-

1,286,905

1,488,005

 

Chanctonbury Health Care Ltd

Consolidated Statement of Cash Flows for the Year Ended 30 April 2023

Note

2023
 £

2022
 £

Cash flows from operating activities

(Loss)/profit for the year

 

(1,482,262)

428,223

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

4

233,424

190,228

Finance income

5

(91)

(39)

Finance costs

6

328,753

310,236

Income tax expense

10

(251,476)

500,621

 

(1,171,652)

1,429,269

Working capital adjustments

 

Increase in trade debtors

15

(160,910)

(121,230)

Increase/(decrease) in trade creditors

16

1,484,177

(60,700)

Cash generated from operations

 

151,615

1,247,339

Corporation tax paid

10

(157,118)

(141,041)

Net cash flow from operating activities

 

(5,503)

1,106,298

Cash flows from investing activities

 

Interest received

91

39

Acquisitions of tangible assets

(455,190)

(128,902)

Net cash flows from investing activities

 

(455,099)

(128,863)

Cash flows from financing activities

 

Interest paid

 

(119,359)

(167,105)

Proceeds from bank borrowing draw downs

 

419,754

5,805,550

Repayment of bank borrowing

 

(278,348)

(6,094,415)

Preference share redemption repayment

 

-

(200,000)

Interest on preference shares

 

-

(6,247)

Dividends paid

(150,000)

(368,840)

Net cash flows from financing activities

 

(127,953)

(1,031,057)

Net decrease in cash and cash equivalents

 

(588,555)

(53,622)

Cash and cash equivalents at 1 May

 

551,532

605,154

Cash and cash equivalents at 30 April

 

(37,023)

551,532

 

Chanctonbury Health Care Ltd

Notes to the Financial Statements for the Year Ended 30 April 2023

 

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Windsor House
Bayshill Road
Cheltenham
GL50 3AT

 

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 30 April 2023.

No Profit and Loss Account is presented for the company as permitted by section 408 of the Companies Act 2006. The company made a loss after tax for the financial year of £934,028 (2022: profit of £428,223)

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

 

Chanctonbury Health Care Ltd

Notes to the Financial Statements for the Year Ended 30 April 2023

Going concern

After reviewing the group’s forecasts and projections, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group has incurred significant start-up losses in the first period of trade of its subsidiary and this has continued to be the case post period end. As a result, the subsidiary is reliant on ongoing financial support from both its parent company and landlord of the property from which the company trades, both of whom are the principal creditors as at the date of approval of the financial statements. The directors have confirmed the ongoing support of both creditors, and the group has sufficient occupancy at the care homes to be able to generate positive operating cashflows over the next 12 months and beyond. The group therefore continues to adopt the going concern basis in preparing its financial statements.

Judgements and estimation uncertainty

These financial statements do not contain any significant judgements or estimation uncertainty.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company. The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the group's activities.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Fixtures, fittings and office equipment

25% reducing balance

Motor vehicles

20% reducing balance

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquiisition date if the adjustment is probable and can be measured reliably.

 

Chanctonbury Health Care Ltd

Notes to the Financial Statements for the Year Ended 30 April 2023

Intangible assets

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date.

Negative goodwill arising on an acquisition is recognised on the face of the balance sheet on the acquisition date and subsequently the excess up to the fair value of non-monetary assets acquired is recognised in profit or loss in the periods in which the non-monetary assets are recovered.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Goodwill

Straigh line over 5 years

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the debtors.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

 

Chanctonbury Health Care Ltd

Notes to the Financial Statements for the Year Ended 30 April 2023

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the group’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Financial instruments (continued)

Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 

Chanctonbury Health Care Ltd

Notes to the Financial Statements for the Year Ended 30 April 2023

Financial instruments (continued)

Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.

For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

 

3

Turnover

The total turnover of the company has been derived from its principal activity wholly undertaken in the United Kingdom.

 

4

Operating profit

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

233,424

190,228

Operating lease expense - property

378,077

39,306

Operating lease expense - plant and machinery

85,969

52,051

 

5

Other interest receivable and similar income

2023
£

2022
£

Interest income on bank deposits

91

39

 

Chanctonbury Health Care Ltd

Notes to the Financial Statements for the Year Ended 30 April 2023

 

6

Interest payable and similar expenses

2023
£

2022
£

Interest on bank overdrafts and borrowings

306,348

167,191

Interest on preference shares

-

6,247

Interest expense on other finance liabilities

22,405

68,457

328,753

241,895

 

7

Staff costs

Group
The aggregate payroll costs (including directors' remuneration) were as follows:

2023
 £

2022
 £

Wages and salaries

4,564,410

2,915,239

Social security costs

338,590

223,882

Pension costs, defined contribution scheme

63,866

48,710

4,966,866

3,187,831

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

2023
 No.

2022
 No.

Care staff

192

146

Administration and support

10

10

202

156

Company
The aggregate payroll costs (including directors' remuneration) were as follows:

2023
 £

2022
 £

Wages and salaries

3,919,411

2,915,239

Social security costs

287,063

223,882

Pension costs, defined contribution scheme

56,861

48,710

4,263,335

3,187,831

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
 No.

2022
 No.

Care staff

158

146

Administration and support

10

10

168

156

 

Chanctonbury Health Care Ltd

Notes to the Financial Statements for the Year Ended 30 April 2023

 

8

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

50,000

50,000

Contributions paid to money purchase schemes

1,313

1,312

51,313

51,312

 

9

Auditors' remuneration

2023
£

2022
£

Audit of these financial statements

18,500

13,500

 

10

Taxation

Tax charged/(credited) in the consolidated profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

(135,269)

183,538

UK corporation tax adjustment to prior periods

7,024

1,517

(128,245)

185,055

Deferred taxation

Arising from origination and reversal of timing differences

(123,231)

315,566

Tax (receipt)/expense in the income statement

(251,476)

500,621

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2022 - the same as the standard rate of corporation tax in the UK) of 19.49% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

(Loss)/profit before tax

(1,733,738)

928,844

Corporation tax at standard rate

(337,906)

176,480

Effect of expense not deductible in determining taxable profit (tax loss)

-

3,577

UK deferred tax expense relating to changes in tax rates or laws

46,878

273,611

Increase in UK and foreign current tax from unrecognised temporary difference from a prior period

7,024

20,820

Tax increase from effect of capital allowances and depreciation

32,528

26,133

Total tax (credit)/charge

(251,476)

500,621

 

Chanctonbury Health Care Ltd

Notes to the Financial Statements for the Year Ended 30 April 2023

Deferred tax

Group

Deferred tax assets and liabilities

2023

Liability
£

Accelerated capital allowances

357,023

Revaluation surplus

1,743,055

Unused losses

(169,869)

1,930,209

2022

Liability
£

Accelerated capital allowances

310,385

Revaluation surplus

829,661

1,140,046

Company

Deferred tax assets and liabilities

2023

Liability
£

Accelerated capital allowances

357,023

Revaluation on tangible assets

1,743,055

2,100,078

2022

Liability
£

Accelerated capital allowances

310,385

Revaluation on tangible assets

829,661

1,140,046

 

11

Intangible assets

Group and company

Goodwill
 £

Cost

At 1 May 2022 and at 30 April 2023

2,327,999

Amortisation

At 1 May 2022 and at 30 April 2023

2,327,999

Carrying amount

At 30 April 2022 and at 30 April 2023

-

 

Chanctonbury Health Care Ltd

Notes to the Financial Statements for the Year Ended 30 April 2023

 

12

Tangible assets

Group

Freehold land and buildings
£

Furniture, fittings and equipment
 £

Total
£

Cost

At 1 May 2022

9,129,862

806,731

9,936,593

Revaluations

2,706,201

-

2,706,201

Additions

351,505

103,685

455,190

At 30 April 2023

12,187,568

910,416

13,097,984

Depreciation

At 1 May 2022

780,477

656,810

1,437,287

Charge for the year

170,022

63,402

233,424

Impairment

(947,373)

-

(947,373)

At 30 April 2023

3,126

720,212

723,338

Carrying amount

At 30 April 2023

12,184,442

190,204

12,374,646

At 30 April 2022

8,349,385

149,921

8,499,306

Fixed assets include £933,260 (2022 - £933,260) in respect of land which is not subject to depreciation.

Freehold land and buildings were revalued in February 2021 by Knight Frank LLP, Chartered Surveyors, including with regard to trading potential. The market valuations were made in accordance with the RICS Valuation - Professional Standards.

Comparable historical cost for the freehold property is £6,932,730 (2022 - £6,843,793). The accumulated depreciation on the historical cost is £998,995 (2022 - £939,889).

 

Chanctonbury Health Care Ltd

Notes to the Financial Statements for the Year Ended 30 April 2023

Company

Land and buildings
£

Furniture, fittings and equipment
 £

Total
£

Cost

At 1 May 2022

9,129,862

806,731

9,936,593

Revaluations

2,706,201

-

2,706,201

Additions

88,937

86,445

175,382

At 30 April 2023

11,925,000

893,176

12,818,176

Depreciation

At 1 May 2022

780,477

656,810

1,437,287

Charge for the year

166,896

59,092

225,988

Impairment

(947,373)

-

(947,373)

At 30 April 2023

-

715,902

715,902

Carrying amount

At 30 April 2023

11,925,000

177,274

12,102,274

At 30 April 2022

8,349,385

149,921

8,499,306

Fixed assets include £933,260 (2022 - £933,260) in respect of land which is not subject to depreciation.

Freehold land and buildings were revalued in February 2021 by Knight Frank LLP, Chartered Surveyors, including with regard to trading potential. The market valuations were made in accordance with the RICS Valuation - Professional Standards.

Comparable historical cost for the freehold property is £6,932,730 (2022 - £6,843,793). The accumulated depreciation on the historical cost is £998,995 (2022 - £939,889).

 

Chanctonbury Health Care Ltd

Notes to the Financial Statements for the Year Ended 30 April 2023

 

13

Investments

Company

2023
£

2022
£

Investments in subsidiaries

100

-

Subsidiaries

£

Cost and carrying amount

Additions and at 30 April 2023

100

Details of undertakings

Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2023

2022

Subsidiary undertakings

Chanctonbury Healthcare (Weymouth) Limited

England and Wales

Ordinary

100%

0%

Subsidiary undertakings

Chanctonbury Healthcare (Weymouth) Limited

The principal activity of Chanctonbury Healthcare (Weymouth) Limited is that of a nursing and residential care home.

 

14

Stocks

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Stocks

20,672

13,697

13,697

13,697

 

15

Debtors

 

Group

Company

2023
 £

2022
 £

2023
 £

2022
 £

Trade debtors

157,326

181,167

82,311

181,167

Amounts owed by group undertakings

-

-

394,486

-

Other debtors

327,704

149,827

325,989

149,827

Prepayments

22,612

15,738

11,747

15,738

 

507,642

346,732

814,533

346,732

 

Chanctonbury Health Care Ltd

Notes to the Financial Statements for the Year Ended 30 April 2023

 

16

Creditors

   

Group

Company

Note

2023
 £

2022
 £

2023
 £

2022
 £

Due within one year

 

Loans and borrowings

17

5,932,928

355,855

5,932,928

355,855

Trade creditors

 

472,268

151,258

362,875

151,258

Social security and other taxes

 

622,912

57,543

544,210

57,543

Outstanding defined contribution pension costs

 

7,899

-

-

-

Other creditors

 

542,147

299,927

403,195

299,927

Accrued expenses

 

712,390

328,118

372,462

328,118

Corporation tax liability

10

70,699

348,721

70,699

348,721

Deferred income

 

16,272

-

-

-

 

8,377,515

1,541,422

7,686,369

1,541,422

Due after one year

 

Loans and borrowings

17

-

5,241,794

-

5,241,794

 

17

Loans and borrowings

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Current loans and borrowings

Bank borrowings

5,895,218

355,855

5,895,218

355,855

Bank overdrafts

37,710

-

37,710

-

5,932,928

355,855

5,932,928

355,855

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Non-current loans and borrowings

Bank borrowings

-

5,241,794

-

5,241,794

The bank loan held by Chanctonbury Health Care Limited is secured by first legal charges over the company's freehold properties together with a first fixed and floating charge on all the assets of the company. The loan is being repaid by monthly regular instalments of £30,099 and a final instalment of an amount sufficient to repay the loan and interest in full in March 2026. The interest rate applicable on the loan is 2.65% over base.

Due to a breach of financial covenants at the year end, the bank loan is shown as fully repayable within one year. Following the year end, circa £800,000 of the bank loan was repaid, following the sale of one of the group's care homes. The bank continues to be supportive of the group and this support is expected to continue for the foreseeable future.

 

 

Chanctonbury Health Care Ltd

Notes to the Financial Statements for the Year Ended 30 April 2023

 

18

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £63,866 (2022 - £48,710).

Contributions totalling £7,899 (2022 - £Nil) were payable to the scheme at the end of the year and are included in creditors.

 

Chanctonbury Health Care Ltd

Notes to the Financial Statements for the Year Ended 30 April 2023

 

19

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary A shares of £1 each

700

700

700

700

Ordinary B shares of £1 each

50

50

50

50

Ordinary C shares of £1 each

50

50

50

50

Ordinary D shares of £1 each

50

50

50

50

 

850

850

850

850

Rights, preferences and restrictions

The ordinary A to D shares rank pari passu in all respects, other than dividend rights.

 

20

Obligations under leases and hire purchase contracts

Group

Finance leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

825,000

-

Later than one year and not later than five years

3,300,000

-

Later than five years

23,925,000

-

28,050,000

-

 

21

Dividends

2023
 £

2022
 £

Dividends paid

150,000

368,840

 

22

Related party transactions

Company

Summary of transactions with key management

Key management personnel are considered to be the directors of the company and key management personnel compensation is disclosed in note 8 to the financial statements.

At the balance sheet date, the company was owed £317,135 (2022 - £133,059) by director B J Sinclair in the form of a director's loan account. The loan is interest free and has no fixed repayment terms.

 

23

Non adjusting events after the financial period

After the year end, the company sold one of its care homes for £2,700,000 and used the majority of the proceeds to repay bank and other debt.