Company Registration No. 02993647 (England and Wales)
LUKKA CARE HOMES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
LUKKA CARE HOMES LIMITED
COMPANY INFORMATION
Directors
Mr N J Lukka
Mr B N Lukka
Secretary
Mrs A N Lukka
Company number
02993647
Registered office
Macneil House
9-17 Lodge Lane
London
N12 8JH
Auditor
HW Fisher LLP
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
Bankers
Royal Bank of Scotland
5-10 Great Tower Street
London
EC3P 3HX
Handelsbanken plc
2nd Floor Hathaway House
Popes Drive
Finchley Central
London
N3 1QF
LUKKA CARE HOMES LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 22
LUKKA CARE HOMES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 1 -

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

Fair review of the business

The principal activity of the company continues to be the provision of nursing home facilities for the elderly.

 

The company made a pre-tax profit of £1,267,484 (2022: £1,196,200 ) for the year on a turnover of £4,280,234 (2022: £3,597,783 ).

 

At 30 November 2023 the company had net assets of £16,211,105 (2022: £15,236,757 ).

Principal risks and uncertainties

The directors recognise that within the business there are a number of risks which may affect the performance of the company. These risks are subject to regular review and, where appropriate, processes are established to minimise the level of exposure.

 

Regulatory - the company's nursing home is regulated by the Care Quality Commission and is exposed to adverse findings that the Commission may raise. The company ensures that the nursing home is run to a high standard and to-date no such adverse findings have been reported.

 

Financial risk - the company is exposed to financial risk through its assets and liabilities. The key financial risk is that, in the current climate, the proceeds from its assets may not be sufficient to fund the obligations from liabilities as they fall due. The most important components of financial risk are:

 

1) Credit risk - the company continues to minimise commercial credit risk and has not suffered unduly from bad debts.

 

2) Interest rate risk - the company's borrowings are on a variable rate basis and the company is exposed to potential increases in interest rates. The company continues to monitor its interest obligations and its investment portfolio to ensure that future increases in interest rates will not unduly affect the performance of the business.

Key performance indicators

In the opinion of the directors, occupancy percentage and average fee per resident are considered key performance indicators when assessing business performance and is reviewed monthly by the management team, with both having remained in line with the directors' expectations, in the current climate.

 

EBITDA is also considered a key performance indicator and is reviewed on a monthly basis, by the management team.

 

 

 

On behalf of the board

Mr N J Lukka
Director
29 August 2024
LUKKA CARE HOMES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 2 -

The directors present their annual report and financial statements for the year ended 30 November 2023.

Results and dividends

The results for the year are set out on page 7.

An ordinary dividend was declared and paid amounting to £nil (2022: £37,000).

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr N J Lukka
Mr B N Lukka
Auditor
The auditor, HW Fisher LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the director has taken all the necessary steps that he ought to have taken as director in order to be aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr N J Lukka
Director
29 August 2024
LUKKA CARE HOMES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 3 -

The directors are responsible for preparing the annual 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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

LUKKA CARE HOMES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LUKKA CARE HOMES LIMITED
- 4 -
Opinion

We have audited the financial statements of Lukka Care Homes Limited (the 'company') for the year ended 30 November 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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 FRS 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:

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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 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:

LUKKA CARE HOMES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LUKKA CARE HOMES LIMITED
- 5 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report 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:

Responsibilities of directors

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 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 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.

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.

As part of our planning process:

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

LUKKA CARE HOMES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LUKKA CARE HOMES LIMITED
- 6 -

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. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

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.

Gilles Siow (Senior Statutory Auditor)
For and on behalf of HW Fisher LLP
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
29 August 2024
LUKKA CARE HOMES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
4,280,234
3,597,783
Cost of sales
(2,527,118)
(2,217,184)
Gross profit
1,753,116
1,380,599
Administrative expenses
(353,909)
(344,084)
Other operating income
3,420
65,750
Operating profit
4
1,402,627
1,102,265
Interest receivable and similar income
6
29,542
16,521
Interest payable and similar expenses
7
(188,040)
(95,106)
Investment gain/(loss)
8
23,355
172,520
Profit before taxation
1,267,484
1,196,200
Tax on profit
9
(293,136)
(262,302)
Profit for the financial year
974,348
933,898
Other comprehensive income
Tax relating to other comprehensive income
-
0
38,780
Total comprehensive income for the year
974,348
972,678

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

LUKKA CARE HOMES LIMITED
BALANCE SHEET
AS AT
30 NOVEMBER 2023
30 November 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
8,039,256
8,136,612
Investments
12
1,166,586
1,166,586
9,205,842
9,303,198
Current assets
Debtors
14
8,736,856
9,029,652
Investments
15
512,003
488,648
Cash at bank and in hand
2,231,151
789,722
11,480,010
10,308,022
Creditors: amounts falling due within one year
16
(707,671)
(1,529,861)
Net current assets
10,772,339
8,778,161
Total assets less current liabilities
19,978,181
18,081,359
Creditors: amounts falling due after more than one year
17
(2,691,851)
(1,755,084)
Provisions for liabilities
Deferred tax liability
19
1,075,225
1,089,518
(1,075,225)
(1,089,518)
Net assets
16,211,105
15,236,757
Capital and reserves
Called up share capital
21
10,000
10,000
Revaluation reserve
5,297,545
5,402,529
Profit and loss reserves
10,903,560
9,824,228
Total equity
16,211,105
15,236,757
The financial statements were approved by the board of directors and authorised for issue on 29 August 2024 and are signed on its behalf by:
Mr N J Lukka
Director
Company Registration No. 02993647
LUKKA CARE HOMES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 9 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 December 2021
10,000
5,468,529
8,822,550
14,301,079
Year ended 30 November 2022:
Profit for the year
-
-
933,898
933,898
Other comprehensive income:
Tax relating to other comprehensive income
-
38,780
-
0
38,780
Total comprehensive income for the year
-
0
38,780
933,898
972,678
Dividends
10
-
-
(37,000)
(37,000)
Transfers
-
(104,780)
104,780
-
Balance at 30 November 2022
10,000
5,402,529
9,824,228
15,236,757
Year ended 30 November 2023:
Profit and total comprehensive income for the year
-
-
974,348
974,348
Transfers
-
(104,984)
104,984
-
Balance at 30 November 2023
10,000
5,297,545
10,903,560
16,211,105
LUKKA CARE HOMES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
23
2,003,495
(3,375)
Interest paid
(188,040)
(95,106)
Income taxes paid
(200,000)
(261,931)
Net cash inflow/(outflow) from operating activities
1,615,455
(360,412)
Investing activities
Purchase of tangible fixed assets
(99,510)
(155,296)
Proceeds on disposal of current asset investments
(2,900)
-
0
Interest received
10,766
927
Dividends received
18,776
15,594
Net cash used in investing activities
(72,868)
(138,775)
Financing activities
Repayment of bank loans
(101,158)
(209,270)
Dividends paid
-
0
(37,000)
Net cash used in financing activities
(101,158)
(246,270)
Net increase/(decrease) in cash and cash equivalents
1,441,429
(745,457)
Cash and cash equivalents at beginning of year
789,722
1,535,179
Cash and cash equivalents at end of year
2,231,151
789,722
LUKKA CARE HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 11 -
1
Accounting policies
Company information

Lukka Care Homes Limited is a private company limited by shares incorporated in England and Wales. The registered office is Macneil House, 9-17 Lodge Lane, London, N12 8JH.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Going concern

The truedirectors have considered the effect of the on-going Covid-19 pandemic. As the company operates in the care sector, the pandemic caused some disruption to the company’s business. However with tighter operational controls, accompanied by various government grants and financial assistance, the directors have been able to mitigate the Covid-19 impact on the business such that it has continued to trade and generate positive cash flows throughout the pandemic.

Accordingly, the directors have a reasonable expectation that the company has adequate resources to continue in operation for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for care services provided in the normal course of business.

Revenue for the provision of nursing home services is recognised by reference to the occupation and use of the facilities of the nursing home.

1.4
Tangible fixed assets

Freehold land and buildings are initially measured at cost and subsequently measured at valuation, net of depreciation and any impairment losses.

 

Fixtures, fittings and equipment are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
2% straight line (excluding land)
Fixtures, fittings & equipment
15% reducing balance

The excess depreciation between revalued land and buildings and historical cost is transferred between the profit and loss reserve and revaluation reserve.

 

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

 

 

LUKKA CARE HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.5
Fixed asset investments

Investments in equity instruments that are not publically traded and whose fair values cannot be measured reliably are measured at costs less impairment.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

1.7
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Other financial assets, including current asset 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 the profit or loss.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

LUKKA CARE HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors and loans 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 receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.8
Equity instruments

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.

1.9
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax is provided in full on timing differences which result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the accounts. Deferred tax is not provided on timing differences arising from the revaluation of fixed assets where there is no commitment to sell the assets. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted.

1.10
Employee benefits

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.

1.11
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

LUKKA CARE HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.12
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the 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.

Key sources of estimation uncertainty

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.

Valuation of land and buildings

The company carries its property used in the business at fair value, with changes in fair value being recognised through other comprehensive income. The company has consulted with external valuers to ascertain the fair value of the land and buildings. The valuation of the company’s land and buildings is inherently subjective due to, among other factors, the individual nature, location and condition of the nursing home premises. The land element of the land and buildings is also a subjective judgement. As a result the valuation is subject to a degree of uncertainty.

 

The most recent external valuation took place in January 2021 and was reflected in the 2020 financial statements. Since then the Directors have assessed the market value of the property each year and deem the net book value to be materially in line with the market value at the year-end date.

 

Deferred tax has been recognised on revalued property, based on the estimated fair value at the year-end date.

Related Party Debtors

Included in the accounts are amounts due from companies under the control of Mr N J Lukka and members of his close family. The directors have considered the quality and performance of the underlying assets and deemed these amounts to be recoverable and not impaired.

LUKKA CARE HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 15 -
3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover
Nursing home fees
4,280,234
3,597,783
Turnover analysed by geographical market
2023
2022
£
£
United Kingdom
4,280,234
3,597,783
Other significant revenue
Interest income
10,766
927
Dividends received
18,776
15,594
Grants received
3,420
57,312
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(3,420)
(57,312)
Fees payable to the company's auditor for the audit of the company's financial statements
13,222
9,930
Depreciation of owned tangible fixed assets
196,866
188,588
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Administration and care staff
87
84
LUKKA CARE HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
5
Employees
(Continued)
- 16 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,993,755
1,734,270
Social security costs
166,824
153,730
Pension costs
32,729
31,377
2,193,308
1,919,377
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
10,766
927
Other income from investments
Dividends received
18,776
15,594
Total income
29,542
16,521
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
188,040
95,106
8
Investment gains/(losses)
2023
2022
£
£
Fair value gains on financial instruments
Change in value of financial assets held at fair value through profit or loss
23,355
172,520
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
307,429
203,071
Deferred tax
Origination and reversal of timing differences
(14,293)
59,231
Total tax charge
293,136
262,302
LUKKA CARE HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
9
Taxation
(Continued)
- 17 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
1,267,484
1,196,200
Expected tax charge based on the standard rate of corporation tax in the UK of 23.01% (2022: 19.00%)
291,648
227,278
Tax effect of expenses that are not deductible in determining taxable profit
188
60
Effect of revaluations of investments
(5,372)
(32,779)
Dividend income
(4,318)
(2,963)
Origination and reversal of timing differences
(14,293)
83,428
Depreciation add back
45,279
35,832
Capital allowances
(19,996)
(24,356)
Deferred tax on capital losses brought forward
-
0
(24,198)
Taxation charge for the year
293,136
262,302

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2023
2022
£
£
Deferred tax arising on:
Revaluation of property
-
(38,780)
10
Dividends
2023
2022
£
£
Ordinary interim and final
-
0
37,000
LUKKA CARE HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 18 -
11
Tangible fixed assets
Freehold land and buildings
Fixtures, fittings & equipment
Total
£
£
£
Cost or valuation
At 1 December 2022
8,196,495
1,219,354
9,415,849
Additions
10,199
89,311
99,510
At 30 November 2023
8,206,694
1,308,665
9,515,359
Depreciation and impairment
At 1 December 2022
294,070
985,167
1,279,237
Depreciation charged in the year
148,341
48,525
196,866
At 30 November 2023
442,411
1,033,692
1,476,103
Carrying amount
At 30 November 2023
7,764,283
274,973
8,039,256
At 30 November 2022
7,902,425
234,187
8,136,612

The carrying value of land and buildings was revalued as at 30 November 2020. The revaluation was based on a valuation report prepared on 7 January 2021 by a third party RICS certified property consultant. Their valuation was based on the special assumption that the land and buildings are fully equipped as operational entities and valued having regard to trading potential, as at the date of valuation. As at 30 November 2023 the directors believe that the carrying value of the land and buildings correctly reflect their fair value.

If revalued assets were stated on an historical cost basis rather than a fair value basis, the carrying amounts included would have been £1,475,029 (2022: £1,508,187), being cost of £2,351,862 (2022: £2,341,663) and depreciation of £876,833 (2022: £833,476).

12
Fixed asset investments
2023
2022
£
£
Unlisted investments
1,166,586
1,166,586
Movements in fixed asset investments
Investments other than loans
£
Cost or valuation
At 1 December 2022 & 30 November 2023
1,166,586
Carrying amount
At 30 November 2023
1,166,586
At 30 November 2022
1,166,586
LUKKA CARE HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 19 -
13
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
512,003
488,648
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
313,949
283,061
Amounts owed by companies under common control
7,824,349
8,721,766
Other debtors
563,400
-
0
Prepayments and accrued income
35,158
24,825
8,736,856
9,029,652
15
Current asset investments
2023
2022
£
£
Listed investments
512,003
488,648
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
18
84,955
1,122,880
Trade creditors
86,859
77,131
Corporation tax
205,606
98,177
Other taxation and social security
43,709
34,150
Other creditors
182,239
144,100
Director's current accounts
-
157
Accruals and deferred income
104,303
53,266
707,671
1,529,861
17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans
18
2,691,851
1,755,084
Amounts included above which fall due after five years are as follows:
Payable by instalments
783,292
-
LUKKA CARE HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 20 -
18
Loans and overdrafts
2023
2022
£
£
Bank loans
2,776,806
2,877,964
Payable within one year
84,955
1,122,880
Payable after one year
2,691,851
1,755,084
2,776,806
2,877,964

The bank loans are secured by a legal charge over the freehold property and a debenture over the assets of the company, as well as by a cross-guarantee given by the other companies under the control of the shareholder. The loans are repayable on a monthly basis and interest of base rates plus 1.25%/2.15%/2.25% is payable on the loans. The loan terms range between 5 and 15 years.

 

At 30 November 2023, the net bank loans subject to the cross guarantee amounted to £22,379,565 (2022: £23,425,315).

 

There is a second tier fixed and floating charge over the assets of the company.

19
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
57,535
77,584
Short term timing differences
(780)
(697)
Revaluations
991,710
991,710
Capital losses
26,760
20,921
1,075,225
1,089,518
2023
Movements in the year:
£
Liability at 1 December 2022
1,089,518
Credit to profit or loss
(14,293)
Liability at 30 November 2023
1,075,225

Deferred tax is based on the future expected rate of corporation tax of 25% (2022: 25%).

LUKKA CARE HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 21 -
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
32,729
31,377

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10,000
10,000
10,000
10,000
LUKKA CARE HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 22 -
22
Related party transactions

At 30 November 2023 the company was owed £7,824,348 by companies under common control (2022: £8,721,766). The company charged no interest on this balance in the current or prior year.

 

All of the above companies are related parties by virtue of the significant interest in the share capital of each by Mr N J Lukka and members of his close family, and the balances arose from loans made to/received from the above companies.

 

During the year ended 30 November 2023 a dividend of £nil (2022: £6,000) was paid to the director Mr N J Lukka.

 

At the year end the company was owed £2,900 (2022: owed £157) from the director Mr N J Lukka.

 

The assets of the company are subject to a cross-guarantee given in relation to the borrowings of other companies under the control of the shareholders.

23
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
974,348
933,898
Adjustments for:
Taxation charged
293,136
262,302
Finance costs
188,040
95,106
Investment income
(29,542)
(16,521)
Depreciation and impairment of tangible fixed assets
196,866
188,588
Amounts written off/(back on) investments
(23,355)
(172,520)
Movements in working capital:
Decrease/(increase) in debtors
295,696
(1,335,964)
Increase in creditors
108,306
41,736
Cash generated from/(absorbed by) operations
2,003,495
(3,375)
24
Analysis of changes in net debt
1 December 2022
Cash flows
30 November 2023
£
£
£
Cash at bank and in hand
789,722
1,441,429
2,231,151
Borrowings excluding overdrafts
(2,877,964)
101,158
(2,776,806)
(2,088,242)
1,542,587
(545,655)
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