Normanton Lodge Limited 05410931 false 2023-01-01 2023-12-31 2023-12-31 The principal activity of the company is Residential homes for the elderly Digita Accounts Production Advanced 6.30.9574.0 true true true true 05410931 2023-01-01 2023-12-31 05410931 2023-12-31 05410931 bus:OrdinaryShareClass1 2023-12-31 05410931 bus:Consolidated 2023-12-31 05410931 core:RetainedEarningsAccumulatedLosses 2023-12-31 05410931 core:RevaluationReserve 2023-12-31 05410931 core:ShareCapital 2023-12-31 05410931 core:CurrentFinancialInstruments 2023-12-31 05410931 core:CurrentFinancialInstruments core:WithinOneYear 2023-12-31 05410931 core:Goodwill 2023-12-31 05410931 core:FurnitureFittingsToolsEquipment 2023-12-31 05410931 core:LandBuildings 2023-12-31 05410931 core:MotorVehicles 2023-12-31 05410931 core:OtherPropertyPlantEquipment 2023-12-31 05410931 core:DeferredTaxation 2023-12-31 05410931 core:OtherRelatedParties 2023-12-31 05410931 bus:FRS102 2023-01-01 2023-12-31 05410931 bus:Audited 2023-01-01 2023-12-31 05410931 bus:FullAccounts 2023-01-01 2023-12-31 05410931 bus:RegisteredOffice 2023-01-01 2023-12-31 05410931 bus:Director1 2023-01-01 2023-12-31 05410931 bus:OrdinaryShareClass1 2023-01-01 2023-12-31 05410931 bus:Consolidated 2023-01-01 2023-12-31 05410931 bus:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 05410931 1 2023-01-01 2023-12-31 05410931 core:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 05410931 core:RevaluationReserve 2023-01-01 2023-12-31 05410931 core:ShareCapital 2023-01-01 2023-12-31 05410931 core:Goodwill 2023-01-01 2023-12-31 05410931 core:PlantEquipmentOtherAssetsUnderOperatingLeases 2023-01-01 2023-12-31 05410931 core:FurnitureFittings 2023-01-01 2023-12-31 05410931 core:FurnitureFittingsToolsEquipment 2023-01-01 2023-12-31 05410931 core:LandBuildings 2023-01-01 2023-12-31 05410931 core:MotorCars 2023-01-01 2023-12-31 05410931 core:MotorVehicles 2023-01-01 2023-12-31 05410931 core:OfficeEquipment 2023-01-01 2023-12-31 05410931 core:OtherPropertyPlantEquipment 2023-01-01 2023-12-31 05410931 core:DeferredTaxation 2023-01-01 2023-12-31 05410931 core:OtherRelatedParties 2023-01-01 2023-12-31 05410931 core:UKTax 2023-01-01 2023-12-31 05410931 countries:EnglandWales 2023-01-01 2023-12-31 05410931 2022-12-31 05410931 core:RetainedEarningsAccumulatedLosses 2022-12-31 05410931 core:RevaluationReserve 2022-12-31 05410931 core:ShareCapital 2022-12-31 05410931 core:Goodwill 2022-12-31 05410931 core:FurnitureFittingsToolsEquipment 2022-12-31 05410931 core:LandBuildings 2022-12-31 05410931 core:MotorVehicles 2022-12-31 05410931 core:OtherPropertyPlantEquipment 2022-12-31 05410931 core:DeferredTaxation 2022-12-31 05410931 core:OtherRelatedParties 2022-12-31 05410931 2022-01-01 2022-12-31 05410931 2022-12-31 05410931 bus:OrdinaryShareClass1 2022-12-31 05410931 core:RetainedEarningsAccumulatedLosses 2022-12-31 05410931 core:RevaluationReserve 2022-12-31 05410931 core:ShareCapital 2022-12-31 05410931 core:CurrentFinancialInstruments 2022-12-31 05410931 core:CurrentFinancialInstruments core:WithinOneYear 2022-12-31 05410931 core:Goodwill 2022-12-31 05410931 core:FurnitureFittingsToolsEquipment 2022-12-31 05410931 core:LandBuildings 2022-12-31 05410931 core:MotorVehicles 2022-12-31 05410931 core:OtherPropertyPlantEquipment 2022-12-31 05410931 core:OtherRelatedParties 2022-12-31 05410931 1 2022-01-01 2022-12-31 05410931 core:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 05410931 core:RevaluationReserve 2022-01-01 2022-12-31 05410931 core:ShareCapital 2022-01-01 2022-12-31 05410931 core:PlantEquipmentOtherAssetsUnderOperatingLeases 2022-01-01 2022-12-31 05410931 core:OtherRelatedParties 2022-01-01 2022-12-31 05410931 core:UKTax 2022-01-01 2022-12-31 05410931 2021-12-31 05410931 core:RetainedEarningsAccumulatedLosses 2021-12-31 05410931 core:RevaluationReserve 2021-12-31 05410931 core:ShareCapital 2021-12-31 05410931 core:OtherRelatedParties 2021-12-31 iso4217:GBP xbrli:pure xbrli:shares

Registration number: 05410931

Normanton Lodge Limited

Annual Report and Financial Statements

for the Year Ended 31 December 2023

 

Normanton Lodge Limited

Contents

Company Information

1

Strategic Report

2 to 4

Director's Report

5

Independent Auditor's Report

6 to 8

Profit and Loss Account

9

Balance Sheet

10

Statement of Changes in Equity

11

Statement of Cash Flows

12 to 13

Notes to the Financial Statements

14 to 23

 

Normanton Lodge Limited

Company Information

Director

Mr Paul Hearn

Registered office

The TAX Partnership
2 Cheapside
Derby
Derbyshire
DE1 1BR

Accountants

The TAX Partnership
2 Cheapside
Derby
Derbyshire
DE1 1BR

Auditors

Just Audit Limited
Chartered Accountants & Statutory Auditors
Strelley Hall
Main Street
Strelley
Nottinghamshire
NG8 6PE

 

Normanton Lodge Limited

Strategic Report for the Year Ended 31 December 2023

The director presents his strategic report for the year ended 31 December 2023.

Principal activity

The principal activity of the company is Residential homes for the elderly

Fair review of the business

We aim to present a balanced and comprehensive review of the development and performance of our business during the year and its position at the year end. Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face.

The company continues to operate two separate care homes for the elderly:

- Normanton Lodge, South Normanton, Alfreton.
- Manorfields - Derby.

We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these being occupancy levels, turnover and direct wage costs of the business.

The company's key financial and other performance indicators during the year were as follows:

Unit

2023

2022

Turnover

£

3,256,125

2,943,065

Average number of residents

90

87

Average weekly fee

£

696

650

Direct wages and national insurance

£

1,887,724

1,521,073

Wages as a percentage of turnover

%

56

52

The above indicators show an 11% increase in turnover for the year to 31 December 2023, there was a 7% increase in average weekly fees and a 3% increase in average number of residents.

Both residential homes maintained a steady flow of residents throughout the year, and operation at an average of 75% occupancy. The new Care Village (The Glen), was built during the prior year for the purpose of assisted living. However, due to low uptake, it was decided in August 2023 that it should be treated as being care home accommodation within Normanton Lodge.

When analysing the profitability of the company we use the earnings before interest, taxation, depreciation and amortisation (EBITDA) as the key indicator and also ignore any management charges. Using this method, the profitability of the company was as follows:

 

Normanton Lodge Limited

Strategic Report for the Year Ended 31 December 2023

31 December
2023
£

31 December
2022
£

Profit before tax

316,816

381,814

Depreciation

275,771

281,825

Bank loan interest payable

-

3,010

EBITDA

592,587

666,649

Management fees

104,400

104,400

696,987

771,049

The balance sheet on page 10 of the financial statements shows that the net assets of the company have increased from £1,928,209 to £2,039,017.
 

Principal risks and uncertainties

Financial risk includes credit risk and cashflow management. The company closely monitors its debtors to ensure credit risk is mitigated; in addition, the company monitors its cash reserves closely to ensure it is able to meet its commitments.

The government announced the introduction of the National Living Wage during 2016, with the intention of increasing this to £9.00 per hour for anyone over the age of 25. In 2019 it was recommended that workers should become entitled to the National Living Wage at the age of 21 instead of 25. In April 2021, the age of entitlement was lowered to 23. The increase has been staggered over the last few years with the rate at the year end being £10.42 for employees over the age of 23, from 1 April 2024 the National Living Wage will increase to £11.44 for employees over the age of 21. To minimise the impact of this increase a full review of staffing is continuously carried out with the aim of removing duplication of duties whilst ensuring the efficient operation of the homes. It is believed that by implementing the recommendations of this review there will be little overall impact on the key performance indicators.

Following the UK's exit from the EU, there were changes to immigration rules, with a points based system being introduced. The company does not employ any EU resident care workers and, whilst some nursing staff are recruited from the EU, these are all qualified to the required level and their pay is above the general salary threshold.

In February 2022, Russia invaded Ukraine, this caused a shortage in imported gas supplies, resulting in the price of gas becoming considerably more volatile, and supplies limited. During 2022 the cost of gas rose by over 50%. Ofgem set a price cap for domestic customers but no price cap on business energy, this had a large financial impact on the costs during the prior year. Even though prices did fall during 2023, they remained above pre-crisis levels.

Fluctuating price inflation is a risk. The annual rate of inflation peaked at 11.1% in October 2022 and this had a knock-on effect on prices in 2023, however, the annual rate of inflation has since decreased to 7.3% for 2023.

The company has a normal level of exposure to price, credit and liquidity risk arising from its trading activities which are only conducted in sterling.

 

Normanton Lodge Limited

Strategic Report for the Year Ended 31 December 2023

Approved by the director on 25 September 2024

.........................................
Mr Paul Hearn
Director

 

Normanton Lodge Limited

Director's Report for the Year Ended 31 December 2023

The director presents his report and the financial statements for the year ended 31 December 2023.

Director of the company

The director who held office during the year was as follows:

Mr Paul Hearn

Statement of Director's Responsibilities

The director acknowledges his responsibilities for preparing the Strategic Report, the Director's Report and the financial statements in accordance with applicable law and regulations.

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

select suitable accounting policies and 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the company 's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Information included in the Strategic Report

The company has chosen, in accordance with Section 414C (11) of the Companies Act 2006 to include certain matters in its strategic report that would otherwise be required to be disclosed in this Director's Report. The Strategic Report can be found on page 2 of these accounts.

Disclosure of information to the auditors

The director has taken steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. The director confirms that there is no relevant information that he knows of and of which he knows the auditors are unaware.

Approved by the director on 25 September 2024

.........................................
Mr Paul Hearn
Director

 

Normanton Lodge Limited

Independent Auditor's Report to the Members of Normanton Lodge Limited

Opinion

We have audited the financial statements of Normanton Lodge Limited (the 'company') for the year ended 31 December 2023, which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, 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 company's affairs as at 31 December 2023 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

 

Normanton Lodge Limited

Independent Auditor's Report to the Members of Normanton Lodge Limited

Other Information

The director is responsible for the other information. The other information comprises the information included in the Strategic Report and the Director's 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 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 the audit:

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

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

Matters on which we are required to report by exception

In the light of 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 Director's 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, or returns adequate for our audit have not been received from branches not visited by us; or

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

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

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

Responsibilities of the director

As explained more fully in the Statement of Director's Responsibilities on page 5, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

 

Normanton Lodge Limited

Independent Auditor's Report to the Members of Normanton Lodge Limited

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, 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 or intentional misrepresentations, or through collusion. We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006, UK tax legislation and Care Quality Commission regulation, recognising the regulated nature of the company's activities. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. There are inherent limitations in the audit procedures described above 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 would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the director that represented a risk of material misstatement due to fraud.

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.

......................................
David Fletcher BA BFP FCA (Senior Statutory Auditor)
For and on behalf of Just Audit Limited,
Chartered Accountants & Statutory Auditors
Strelley Hall
Main Street
Strelley
Nottinghamshire
NG8 6PE

25 September 2024

 

Normanton Lodge Limited

Profit and Loss Account for the Year Ended 31 December 2023

Note

2023
£

2022
£

Turnover

3

3,256,125

2,943,065

Cost of sales

 

(163,566)

(157,373)

Gross profit

 

3,092,559

2,785,692

Administrative expenses

 

(2,775,743)

(2,400,868)

Operating profit

4

316,816

384,824

Interest payable and similar expenses

5

-

(3,010)

Profit before tax

 

316,816

381,814

Tax on profit

8

(206,008)

(106,220)

Profit for the financial year

 

110,808

275,594

 

Normanton Lodge Limited

(Registration number: 05410931)
Balance Sheet as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

10

11,738,543

11,985,478

Current assets

 

Debtors

11

762,316

615,346

Cash at bank and in hand

 

193,353

248,797

 

955,669

864,143

Creditors: Amounts falling due within one year

12

(10,295,292)

(10,637,051)

Net current liabilities

 

(9,339,623)

(9,772,908)

Total assets less current liabilities

 

2,398,920

2,212,570

Provisions for liabilities

13

(359,903)

(284,361)

Net assets

 

2,039,017

1,928,209

Capital and reserves

 

Called up share capital

1

1

Revaluation reserve

1,272,698

1,272,698

Retained earnings

766,318

655,510

Shareholders' funds

 

2,039,017

1,928,209

Approved and authorised by the director on 25 September 2024
 

.........................................
Mr Paul Hearn
Director

 

Normanton Lodge Limited

Statement of Changes in Equity for the Year Ended 31 December 2023

Share capital
£

Revaluation reserve
£

Retained earnings
£

Total
£

At 1 January 2023

1

1,272,698

655,510

1,928,209

Profit for the year

-

-

110,808

110,808

Total comprehensive income

-

-

110,808

110,808

At 31 December 2023

1

1,272,698

766,318

2,039,017

Share capital
£

Revaluation reserve
£

Retained earnings
£

Total
£

At 1 January 2022

1

1,272,698

488,266

1,760,965

Profit for the year

-

-

275,594

275,594

Total comprehensive income

-

-

275,594

275,594

Dividends

-

-

(108,350)

(108,350)

At 31 December 2022

1

1,272,698

655,510

1,928,209

The revaluation reserve, which is non distributable, represents the cumulative effect of the revaluation of the freehold land and buildings up to date of transition to FRS 102, after which the company has adopted a deemed cost accounting policy.

The Retained earnings account records retained earnings and accumulated losses.
 

 

Normanton Lodge Limited

Statement of Cash Flows for the Year Ended 31 December 2023

Note

2023
£

2022
£

Cash flows from operating activities

Profit for the year

 

110,808

275,594

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

4

275,771

281,825

Finance costs

5

-

3,010

Income tax expense

8

206,008

106,220

 

592,587

666,649

Working capital adjustments

 

(Increase)/decrease in debtors

11

(147,387)

16,427

(Decrease)/increase in creditors

12

(365,928)

566,633

Increase/(decrease) in deferred income

 

10,443

(3,580)

Cash generated from operations

 

89,715

1,246,129

Income taxes paid

8

(116,383)

(116,383)

Net cash flow from operating activities

 

(26,668)

1,129,746

Cash flows from investing activities

 

Acquisitions of tangible assets

(28,836)

(915,785)

Cash flows from financing activities

 

New loan from related party

 

-

4,721,248

Repayments by director

 

310,000

108,350

Amounts paid to director

 

(309,940)

(108,809)

Interest paid

5

-

(3,010)

Repayments of bank borrowing

 

-

(4,721,247)

Dividends paid

-

(108,350)

Net cash flows from financing activities

 

60

(111,818)

Net (decrease)/increase in cash and cash equivalents

 

(55,444)

102,143

Cash and cash equivalents at 1 January

 

248,797

146,654

Cash and cash equivalents at 31 December

 

193,353

248,797

 

Normanton Lodge Limited

Statement of Cash Flows for the Year Ended 31 December 2023

Analysis of changes in net debt

At 1 Jan 2023

Cash Flows

At 31 Dec 2023

Cash and cash equivalents

£

£

£

Cash at bank

248,797

(55,444)

193,353

248,797

(55,444)

193,353

Borrowings

Related party loans

(10,240,252)

454,860

(9,785,392)

(10,240,252)

454,860

(9,785,392)

Total

(9,991,455)

399,416

(9,592,039)

 

Normanton Lodge Limited

Notes to the Financial Statements for the Year Ended 31 December 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:
The TAX Partnership
2 Cheapside
Derby
Derbyshire
DE1 1BR
England

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 UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention.

The financial statements are presented in £ sterling, which is the functional currency of the company.

Going concern

At the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future due to the fact that the company has continued to trade well and has the support of companies under common control. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

 

Normanton Lodge Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Judgements

In preparing these financial statements, the director has made the following judgements:

Determined whether there are indicators of impairment of the company's tangible assets. Factors taken into consideration in reaching such a decision included the economic conditions and estimated market values of the assets.

Key sources of estimation uncertainty

Freehold properties, included at deemed cost and other tangible fixed assets included at cost, are depreciated over their useful lives taking into account residual values, where appropriate. The land value, the estimated lives of the assets and their residual values are assessed annually and may vary depending on a number of factors. In addition, deferred tax is provided on the difference between the deemed cost and the indexed cost of the properties.

Revenue recognition

Turnover represents the amount chargeable during the period in respect of the provision of care services.

The company recognises revenue when it can be reliably measured and it is probable that future economic benefits will flow to the entity.

Tax

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

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Freehold properties are measured at deemed cost less accumulated depreciation and any accumulated impairment losses. Other assets are measured at cost less accumulated depreciation and 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 less estimated residual value, other than land, over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Freehold property

2% on deemed cost

Fixtures and fittings and equipment

20% on reducing balance

 

Normanton Lodge Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Motor vehicles

20% on reducing balance

Other tangible assets

20% on reducing balance

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the company’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 amortised over its useful life.

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

15 years

Borrowings

Interest-bearing borrowings are carried at amortised cost, with the interest 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 company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company 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.

3

Turnover

The analysis of the company's revenue for the year from continuing operations is as follows:

2023
 £

2022
 £

Rendering of services

3,256,125

2,943,065

All of which arose in the United Kingdom

 

Normanton Lodge Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

4

Operating profit

Arrived at after charging/(crediting)

2023
 £

2022
 £

Depreciation expense

275,771

281,825

Operating lease expense - plant and machinery

27,311

11,309

Auditors' remuneration

21,600

25,760

5

Interest payable and similar expenses

2023
 £

2022
 £

Interest on bank overdrafts and borrowings

-

3,010

6

Staff costs

The aggregate payroll costs (including director's remuneration) were as follows:

2023
 £

2022
 £

Wages and salaries

1,797,999

1,433,532

Social security costs

89,725

87,541

Pension costs, defined contribution scheme

17,332

16,026

Other employee expense

15,353

12,935

1,920,409

1,550,034

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

2023
No.

2022
No.

Nurses, care and general staff

88

87

88

87

 

Normanton Lodge Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

7

Director's remuneration

The director's remuneration for the year was as follows:

2023
 £

2022
 £

Director's Remuneration

-

-

Director's pension contributions

-

-

-

-

8

Taxation

Tax charged in the profit and loss account

2023
 £

2022
 £

Current taxation

UK corporation tax

130,466

116,383

Deferred taxation

Arising from origination and reversal of timing differences

75,542

(10,163)

Tax charge in the profit and loss account

206,008

106,220

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2022 - higher than the standard rate of corporation tax in the UK) of 23.52% (2022 - 19%).

The differences are reconciled below:

2023
 £

2022
 £

Profit before tax

316,816

381,814

Corporation tax at standard rate

74,517

72,545

Deferred tax expense (credit) relating to changes in tax rates or laws

75,542

(10,163)

Tax increase (decrease) from effect of capital allowances and depreciation

55,949

43,838

Total tax charge

206,008

106,220

From 1 April 2023, the Corporation Tax main rate for non-ring fenced profits has been increased to 25% applying to profits over £250,000.

 

Normanton Lodge Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

9

Intangible assets

Goodwill
 £

Total
£

Cost

At 1 January 2023

444,000

444,000

At 31 December 2023

444,000

444,000

Amortisation

At 1 January 2023

444,000

444,000

At 31 December 2023

444,000

444,000

Carrying amount

At 31 December 2023

-

-

At 31 December 2022

-

-

10

Tangible assets

Land and buildings
£

Furniture, fittings and equipment
 £

Motor vehicles
 £

Other tangible assets
£

Total
£

Cost

At 1 January 2023

12,473,517

744,702

24,980

32,116

13,275,315

Additions

5,850

20,726

-

2,260

28,836

At 31 December 2023

12,479,367

765,428

24,980

34,376

13,304,151

Depreciation

At 1 January 2023

739,360

505,916

22,418

22,143

1,289,837

Charge for the year

222,161

50,591

641

2,378

275,771

At 31 December 2023

961,521

556,507

23,059

24,521

1,565,608

Carrying amount

At 31 December 2023

11,517,846

208,921

1,921

9,855

11,738,543

At 31 December 2022

11,734,157

238,786

2,562

9,973

11,985,478

Included within the net book value of land and buildings above is £11,517,846 (2022 - £11,734,157 in respect of freehold land and buildings.

Included in deemed cost of the land and buildings is the estimated cost of freehold land of £1,435,000 (31 December 2022 - £1,435,000) which is not depreciated.
 

 

Normanton Lodge Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

11

Debtors

Current

Note

2023
£

2022
£

Trade debtors

 

220,587

84,512

Amounts owed by related parties

16

513,699

517,149

Other debtors

 

-

417

Prepayments

 

28,030

13,268

   

762,316

615,346

12

Creditors

Note

2023
 £

2022
 £

Due within one year

 

Trade creditors

 

162,214

100,508

Amounts due to related parties

16

9,785,392

10,240,252

Social security and other taxes

 

161,184

132,888

Outstanding defined contribution pension costs

 

3,763

1,434

Other payables

 

69,466

8,207

Accrued expenses

 

72,245

123,177

Deferred income

 

41,028

30,585

 

10,295,292

10,637,051

13

Provisions for liabilities

Deferred tax
£

Total
£

At 1 January 2023

284,361

284,361

Increase (decrease) in existing provisions

75,542

75,542

At 31 December 2023

359,903

359,903

Included in the above is a deferred tax liability of £307,963 (31 December 2022 - £239,094) in respect of freehold properties which the company is not currently intending to sell but for which provision has been made in compliance with FRS 102.

 

Normanton Lodge Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

14

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary of £1 each

1

1

1

1

         

15 Loans and borrowings

The company's bank loans were repaid in full during the prior year as part of a bank refinancing deal with companies under common control, whereby companies under common control assumed additional bank loan liabilities in return for repayment of this company's bank loan.

During the prior year standard interest was charged between 2.1% and 2.85%, plus LIBOR.

Santander UK plc holds a legal charge and debenture over the properties and assets of Normanton Lodge Limited.

There are composite cross guarantees between companies under common control and bank loans in the accounts of these companies are secured by the legal charge and debenture from Normanton Lodge Limited. At 31 December 2023, these loans totalled £14,590,392 (2022 - £15,453,849).

 

Normanton Lodge Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

16

Related party transactions

Transactions with director

Dividends paid to the director

   

2023
£

 

2022
£

Mr Paul Hearn

       

Mr Paul Hearn

 

-

 

108,350

         

Summary of transactions with other related parties

Loans were made to and from related companies under common control.
 The loans are interest free and repayable on demand.
 

Loans to related parties

2023

Other related parties
£

Total
£

At start of period

517,148

517,148

Advanced

2,400

2,400

Repaid

(5,850)

(5,850)

At end of period

513,698

513,698

2022

Other related parties
£

Total
£

At start of period

510,727

510,727

Advanced

15,783

15,783

Repaid

(9,362)

(9,362)

At end of period

517,148

517,148

Loans from related parties

2023

Other related parties
£

Total
£

At start of period

10,240,251

10,240,251

Advanced

3,120

3,120

Repaid

(456,120)

(456,120)

At end of period

9,787,251

9,787,251

 

Normanton Lodge Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

2022

Other related parties
£

Total
£

At start of period

4,992,484

4,992,484

Advanced

5,527,507

5,527,507

Repaid

(279,740)

(279,740)

At end of period

10,240,251

10,240,251

During the year, Normanton Lodge Limited was charged a management fee by a company under common control of £104,400 (31 December 2022 - £104,400).

17

Controlling Party

Mr Paul Hearn is the controlling party.