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Registered number: 04611507










ST. MATTHEWS LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2023

 
ST. MATTHEWS LIMITED
 
 
COMPANY INFORMATION


Directors
K K Sandhu 
N S Sidhu Brar 




Company secretary
K K Sandhu



Registered number
04611507



Registered office
Boughton House Broomhill
Holdenby Road

Spratton

Northampton

NN6 8LD




Independent auditors
MHA

Century House

The Lakes

Northampton

NN4 7HD





 
ST. MATTHEWS LIMITED
 

CONTENTS



Page
Strategic Report
 
1 - 3
Directors' Report
 
4 - 7
Independent Auditors' Report
 
8 - 10
Statement of Comprehensive Income
 
11
Balance Sheet
 
12
Statement of Changes in Equity
 
13
Notes to the Financial Statements
 
14 - 31


 
ST. MATTHEWS LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2023

Introduction
 
The directors present the strategic report and financial statements for the year ended 31 August 2023.

Business review
 
The principal activity of the Company continued to be that of owning and operating 3 nursing homes and a mental health facility.
Following the refurbishment projects undertaken at both Kingsthorpe Grange and St Matthews Hospital, the company was able to provide much needed local capacity. St Matthews Hospital is a key partner in the St Matthews Healthcare circular care pathway, playing a major part in increasing the number of step-down service users from the sister hospital Broomhill.
Other refurbishment projects were undertaken at The Avenue as well as additional refurbishment of rooms at Kingsthorpe Grange.
Notwithstanding the challenges faced by St Matthews Unit in the prior year, the CQC inspection undertaken in June 2023 resulted in an upgrade in the rating to 'Requires Improvement'.
The company has been able to provide care to an average of 138 service users, reflecting a 90% utilisation of capacity.

Principal risks and uncertainties
 
Commissioners
The principal risks and uncertainties for the business relate to the large proportion of revenue derived from public bodies such as Local Authorities, ICB's (Integrated Care Boards) and other NHS (National Health Service) Trusts. The directors are aware that pressure on fees and volume of placements could cause such publicly funded bodies to allcoate less money to the types of services provided by the Company. Also, in  common with the majority of government-funded service providers, most of the Company's price changes take effect annually on 1 April and are linked to general inflation indices such as the Retail Price Index ("RPI"). Such changes could have material impact on the Company's revenue. These factors are to a great extent, beyond the control of the Company although it manages its risk by spreading its customer base and maintaining good relationships with the commissioners.
Regulators
The Company's services are subject to a high level of regulation by various regulatory bodies. New regulations may be introduced that could impose increased costs on the Company's operations. The Company is unable to predict the content of new legislation and regulations and their effect on its business.
Inspections are carried out by regulators on both an announced and unannounced basis. The failure to comply with Government Regulations, the receipt of a negative report that leads to a finding of non-compliance, or the failure of the Company to cure any defect noted in an inspection, could result in the revocation of the Company's registration. The Company conducts regular internal audits of safety and compliance with regulatory requirements.
Finance
The Company's main financial composition of cash, trade debtors and trade creditors as well as its debt are well managed. These financial instruments provide the Company with the necessary funding to undertake its activities. Their risks are managed through robust policies and procedures as well as key performance indicators that are monitored monthly. In the current high inflationary environment, strong cost control and strategies to
Page 1

 
ST. MATTHEWS LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023

deal with price risks are mitigated to manage some of the impact. As a specialist niche provider, the directors believe that the Company's position is stable and that demand for their care pathways will not diminish. However, the directors are in constant communication with the Company's stakeholders to ensure that actions are taken in pre-emption of any possible unwillingness by funders to adjust fees in line with inflation.
The majority of the Company's debt is in relation to fixed term loans with High Street lenders with pre-agreed terms and specified loan interest margins. The Company monitors interest rate movements and would review its gearing levels should rates rise significantly.

Financial key performance indicators
 
The directors monitor progress on the overall strategy and the individual elements by reference to the following key performance indicators:
Turnover for the year is £10,979,268 (2022 - £9,905,373). The increase is as a result of an increase in occupancy rates compared to the prior year, coupled with an increase in rates.
Operating loss for the year is £2,410,837 (2022 - £4,680,868).
The bed occupancy rate percentage for the year is 90% (2022 - 79%).

Going concern

The financial statements have been prepared on a going concern basis. The Directors have a reasonable
expectation and consider that the Group has sufficient resources to continue in operations for the foreseeable
future. The directors do, however, acknowledge that uncertainty around the timing of re-admissions due to the
delayed rating report of The Broomhill Hospital (caused by internal IT technical issues within CQC) and the
maturity of the loan liabilities falling due within one year, may be perceived as material uncertainties that may
cast some doubt on the ability of the group to continue as a going concern. Further details of this assessment
can be found in note 2.3 of the financial statements.

Future Developments
 
It is the intention of the directors to assess the remainder of the Company's assets and seek to review the need for any further refurbishment. In addition, the medium-term strategy remains to ensure the relevance of any services being provided to the needs of the local market. Notwithstandings, St Matthews Hospital remains an integral part of the Group's circular pathway provision, supporting the correct environment for our service users for their rehabilitation. Should any directional change be required to support the local market, the Directors will seek to review and change accordingly.

Page 2

 
ST. MATTHEWS LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023

Directors' statement of compliance with duty to promote the success of the Company
 
The directors always consider that they have acted in the way they consider, in good faith, would be most likely to promote the sucess of the Company for the benefit of its members as a whole, having regard to the stakeholders and matters set out is s172(1) (a) - (f) of the Companies Act 2006, in the decisions taken during the year ended 31 August 2023.
The overall Group strategy, which was delivered by the directors and senior manager to the Company in the Autumn of 2022, is designed to have a long term beneficial impact and to contribute to its sucess in delivering a high quality of service accross the Company.
The strategy, built around the 6 main pillars of People Development, Care and Clinical Excellence, Innovation and Digitalisation, Social Values, Financial Stability, Growth and Development, which are underpinned by our shared values of People First, Passion for Care, Pursue Diversity, Positivity, Partnership and Progressive. This strategy has been widely acknowledged as a positive step throughout the Company, reflecting in tangible improvements in retention of staff and recruitment both externally and from placed temporary (agency) staff.


This report was approved by the board and signed on its behalf.





................................................
K K Sandhu
Director

Date: 1 October 2024

Page 3

 
ST. MATTHEWS LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2023

The directors present their report and the financial statements for the year ended 31 August 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgments 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;

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 Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Results and dividends

The loss for the year, after taxation, amounted to £3,306,787 (2022 - loss £5,059,015).

Dividends of £Nil (2022 - £Nil) were paid in the year.

Directors

The directors who served during the year were:

K K Sandhu 
N S Sidhu Brar 

Page 4

 
ST. MATTHEWS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023

Financial instruments

The Company has various financial assets and liabilities such as trade receivables and trade payables arising directly from its operations. In addition the Company has other financial instruments including loans and overdrafts. 
i) Liquidity risk
The Company manages its cash and borrowing requirements to optimise interest income and minimise expense,
whilst ensuring that the Company has sufficient liquid resources to meet the operating needs of its business. 
ii) Interest rate risk 
The Company is exposed to interest rate risk on various credit facilities.
iii) Credit risk
Receivable balances are monitored on an ongoing basis and provision is made for doubtful debts where
necessary.

Engagement with employees

The Company comunicates to employees in the following ways:
• Quarterly newsletter
• Annual update session for all staff that gives updates about the Company in general (including finances)
• A monthly learning alert which details any incidents that other staff should learn from
• A monthly training newsletter detailing when training is being held
• A monthly management meeting – minutes are put online
• An annual satisfaction survey for staff to feed into
• The latest CQC report is kept in reception for employees to review
• A comments/suggestion/employee award box is in each unit for staff to feed into
• A quarterly carer forum for patients/family/mangers – minutes are sent to all units
• A bi-monthly ‘reg-17’ visit where a director walks around each unit – a report is given to units

Engagement with suppliers, customers and others

The Company strives to provide a high quality service to both our service users and funders. This is delivered through the comprehensive and extensive quality management systems that support all aspects of the Companys delivery. The recruitment, retention and training processes are designed to ensure our staff are equipped to provide the highest quality of service to support the needs of our service users. The Company consults regularly with its customers through surveys as well as receiving feedback directly from communications with our employees.
Our suppliers are fundamental to our ability to deliver safe and quality care. The Company aims to develop open and honest communication with its key suppliers to ensure the relationships are mutually beneficial and support the needs of our service users

Disabled employees

The Company gives full and fair consideration to applications for employment made by disabled persons, having regard to their particular aptitudes and abilities.
The Directors endeavour to ensure that as far as possible the training, career development and promotion of disabled persons is the same as for other employees. Should employees become disabled, every effort is made to ensure that their employment continues and appropriate retraining is received.

Page 5

 
ST. MATTHEWS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023

Greenhouse gas emissions, energy consumption and energy efficiency action



The Company has used the year to 31 August 2023, (with year ending 31 August 2022 as its benchmark year) to calculate the emission of the following tonnes of CO2e, in undertaking its business activities.

Energy consumption:       FY23   FY22
          KWh   KWh
Electricity         211,107  259,900
Gas          1,262,091  1,892,067
Aggregate of energy consumption in the year    1,473,198  2,151,967
Emission of CO2 equivalent      FY23   FY22
          Metric tonnes Metric tonnes
Scope 1 – Gas        230   345
Scope 2 - Electricity       41   50
Aggregate of energy consumption in the year    271   395

Intensity ratio (per bed)       FY23   FY22
Kg Co2 per bed        1,773   2,587
Quantification and reporting methodology
The consumption has been collected from the energy bills from our suppliers.  The emissions have been calculated from KWh using the conversion factors published by BEIS in June 2022.



Matters covered in the Strategic Report

In accordance with Section 414c (ii) of the Companies Act 2006, the Directors have chosen to include the
following items in the Company Strategic report:
- Future Developments 

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Page 6

 
ST. MATTHEWS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023


Auditors

The auditor, MHA, will be proposed for reappointment in accordance with section 485 of the Companies Act
2006.

This report was approved by the board and signed on its behalf.
 





................................................
K K Sandhu
Director

Date: 1 October 2024

Page 7

 
ST. MATTHEWS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ST. MATTHEWS LIMITED
 

Opinion


We have audited the financial statements of St. Matthews Limited (the 'Company') for the year ended 31 August 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and notes to the financial statements, including significant accounting policiesThe 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 August 2023 and of its 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 Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our ethical responsibilities in accordance with those requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Material uncertainty related to going concern


We draw attention to Note 2.2 in the financial statements, which indicates that the group, which this entity belongs to, received an Inadequate Care Quality Commission rating in February 2024, resulting in the inactivity of admissions for the largest care facility. This note also refers to the bank loan facility terms which extend to a period of fewer than twelve months.
As stated in Note 2.2, these events or conditions, along with other matters as set forth in Note 2.2, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.


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. 


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


Page 8

 
ST. MATTHEWS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ST. MATTHEWS LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and  our Auditors' 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.


Opinion 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 the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


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 or the Directors' Report.


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


adequate accounting records have not been kept, 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 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 Directors' Responsibilities Statement 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 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.


Page 9

 
ST. MATTHEWS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ST. MATTHEWS LIMITED (CONTINUED)


Auditor 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 Auditors' 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:
-Enquiry of management around actual and potential litigation and claims;
-  Enquiry of staff to identify any instances of non-compliance with laws and regulations;
-  Performing audit work over the risk of management override of controls, including testing of journal 
 entries and other adjustments for appropriateness and review of accounting estimates for bias;
-  Reviewing financial statement disclosures and testing supporting documentation to assess compliance 
 with applicable laws and regulations.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 2006Our 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 Auditors' 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.





Rebecca Hughes BSc(Hons) FCCA (Senior Statutory Auditor)
for and on behalf of
MHA
Statutory Auditors
Northampton, United Kingdom

Date: 3 October 2024
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales 
(registered number OC312313) 
Page 10

 
ST. MATTHEWS LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2023

2023
2022
Note
£
£

  

Turnover
 4 
10,979,268
9,905,373

Cost of sales
  
(8,374,227)
(7,765,355)

Gross profit
  
2,605,041
2,140,018

Administrative expenses
  
(1,959,317)
(1,904,633)

Exceptional administrative expenses
 6 
(3,056,561)
(5,091,223)

Other operating income
 5 
-
174,970

Operating loss
 7 
(2,410,837)
(4,680,868)

Interest receivable and similar income
 11 
1,579
-

Interest payable and similar expenses
 12 
(866,190)
(373,629)

Loss before tax
  
(3,275,448)
(5,054,497)

Tax on loss
 13 
(31,339)
(4,518)

Loss for the financial year
  
(3,306,787)
(5,059,015)

There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 14 to 31 form part of these financial statements.

Page 11

 
ST. MATTHEWS LIMITED
REGISTERED NUMBER: 04611507

BALANCE SHEET
AS AT 31 AUGUST 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 14 
574,273
803,023

Tangible assets
 15 
5,011,023
5,213,800

  
5,585,296
6,016,823

Current assets
  

Stocks
 16 
15,020
11,000

Debtors: amounts falling due within one year
 17 
13,680,859
16,468,261

Cash at bank and in hand
 18 
187,304
42,045

  
13,883,183
16,521,306

Creditors: amounts falling due within one year
 19 
(17,350,625)
(17,145,875)

Net current liabilities
  
 
 
(3,467,442)
 
 
(624,569)

Total assets less current liabilities
  
2,117,854
5,392,254

Provisions for liabilities
  

Deferred tax
 20 
(219,485)
(187,098)

Net assets
  
1,898,369
5,205,156


Capital and reserves
  

Called up share capital 
 21 
1,000
1,000

Profit and loss account
 22 
1,897,369
5,204,156

  
1,898,369
5,205,156


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 1 October 2024.




................................................
N S Sidhu Brar
Director

The notes on pages 14 to 31 form part of these financial statements.

Page 12

 
ST. MATTHEWS LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 September 2021
1,000
10,263,171
10,264,171


Comprehensive income for the year

Loss for the year
-
(5,059,015)
(5,059,015)
Total comprehensive income for the year
-
(5,059,015)
(5,059,015)



At 1 September 2022
1,000
5,204,156
5,205,156


Comprehensive income for the year

Loss for the year
-
(3,306,787)
(3,306,787)
Total comprehensive income for the year
-
(3,306,787)
(3,306,787)


At 31 August 2023
1,000
1,897,369
1,898,369


The notes on pages 14 to 31 form part of these financial statements.

Page 13

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

1.


General information

St. Matthews Limited is a private company limited by shares, incorporatd in England and Wales, registered number 04611507. The registered office is at Boughton House Broomhill, Holdenby Road, Spratton, Northampton, NN6 8LD. 
There are three principal places of business, located at the registered office; 296 Harborough Road, Northampton, NN2 8LT; and 2 The Avenue, Spinney Hill, Northampton, NN3 6BA.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Seebeck 122 Limited as at 31 August 2023 and these financial statements may be obtained from Companies House.

Page 14

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)

 
2.3

Going concern

The financial statements have been prepared on a going concern basis. The Directors have a reasonable expectation and consider that the Company has sufficient resources to continue in operations for the foreseeable future.  To support this consideration, the Directors have prepared budgets for the coming 12 months as well as forecasts of future performance (which include future cash flows). These budgets and forecast have reflected not only the increased occupancy anticipated but also other regulatory and governmental challenges as well as staff investment needed to meet the expected growth of occupancy. The mitigating actions being undertaken in response to Care Quality Commission (CQC) and local Integrated Care Board (ICB) inspections, have been critical in the assumptions used in the evaluation of future occupancy and therefore performance.  In particular, the Directors have assessed, conservatively, the growth in occupancy of its largest hospital facility, The Broomhill Hospital, following its re-rating by CQC to “Requires Improvement”.
 
Despite the current actions being taken and the comments below, the directors do, however, acknowledge that uncertainty around the timing of re-admissions due to the delayed rating report of The Broomhill Hospital (caused by internal IT technical issues within CQC) and the maturity of the loan liabilities falling due within one year, may be perceived as material uncertainties that may cast some doubt on the ability of the company to continue as a going concern. However, the Directors believe strongly that there is sufficient evidence to support their confidence that these challenges can be met.
(i) The Directors have an expectation to see admissions commence following the circulation of an open letter from the Chief Nursing Officer of the local ICB to all stakeholders.  They have confirmed the unexpected serious IT challenges being faced by CQC (who acknowledged this occurrence and impact) in publishing the new report on their portal.  This communication intervention has not only seen an increase in discussions about referral of new cases for Broomhill but also paved a pathway for long term strategic collaborative partnerships. New placements are now being approved for admission by the respective funders.  Furthermore, a clear timeline and phases of admissions was identified by them, confirming the importance of this hospital to the ICB and their continued support of Broomhill.   
(ii) With the backing from and relationship with their banks, the Directors strongly believe that these facilities will be renegotiated to beyond the current terms and point to a number of important key factors: (a) the support being provided by the banks in refinancing its facilities over the last few years and (b) the continued support being provided as evidenced in the latest agreed refinancing of the existing facility agreement, provided to align with the Group’s current needs.
On this basis, and having given due regards to the main issues, the Directors continue to believe that the going concern basis of accounting in preparing the financial statements remains appropriate.

 
2.4

Revenue

Turnover represents amounts receivable for services for long term residential contracts. Revenue is recognised when the company's contractual obligation is fulfilled, that is typically when the service user has received care services from the company, which is usually provided on a weekly basis. 
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts and rebates.

Page 15

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)

 
2.5

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.6

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.

 
2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.10

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 16

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)

 
2.11

Current and deferred taxation

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

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

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.12

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

 
2.13

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Statement of Comprehensive Income over its useful economic life.


All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Goodwill
-
20
years straight line

Page 17

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)

 
2.14

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Freehold property
-
2%
Motor vehicles
-
25%
Fixtures and fittings
-
25%
Office equipment
-
33%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.15

Valuation of investments

Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

 
2.16

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.17

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.18

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Page 18

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)

 
2.19

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.

Page 19

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The following are the critical estimations that the directors have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.
Key source of estimation uncertainty - Determining the residual values and useful economic lives
of property, plant and equipment
The Company depreciates tangible assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes.
Judgment is applied by management when determining the residual values for plant, machinery and equipment. When determining the residual value, management aim to assess the amount that the Company would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life. Where possible this is done with reference to external market prices.


4.


Turnover

2023
2022
£
£

Turnover
10,979,268
9,905,373



5.


Other operating income

2023
2022
£
£

Government grants receivable
-
174,970



6.


Exceptional items

2023
2022
£
£


Intercompany loan write-off
-
5,091,223

Impairment of amounts owed by joint ventures and associated undertakings
3,056,561
-

3,056,561
5,091,223

The exceptional item for the year ended 31 August 2022 was in relation to the write-off of an intercompany loan with St Matthews (North) Limited. The directors agreed to waive the loan between the two companies and formal deed was sought.

Page 20

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

7.


Operating loss

The operating loss is stated after charging/(crediting):

2023
2022
£
£

Depreciation on tangible fixed assets
344,996
388,775

Exchange differences
228,750
228,750

Other operating lease rentals
5,286
31,033

Profit on sale of tangible assets
-
(2,630)

Impairment of amounts owed by joint ventures and associated undertakings
3,056,561
-


8.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors and their associates:


2023
2022
£
£

Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements

19,500
18,758

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.

Page 21

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

9.


Employees

Staff costs were as follows:


2023
2022
£
£

Wages and salaries
7,165,347
6,643,446

Social security costs
474,123
456,924

Pension costs
89,256
89,762

7,728,726
7,190,132


Included within Wages and Salaries is agency staff costs of £1,891,914 (2022: £1,546,923).

The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Managers
7
6



Nurses and care workers
215
229



Kitchen
24
19



Administration and others
6
3

252
257


10.


Directors' remuneration



The Directors did not receive remuneration during the year (2022 - £Nil).


11.


Interest receivable

2023
2022
£
£


Other interest receivable
1,579
-

Page 22

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

12.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
863,719
369,594

Other loan interest payable
2,471
4,035

866,190
373,629


13.


Taxation


2023
2022
£
£

Corporation tax


Adjustments in respect of previous periods
(1,048)
(1,048)

Total current tax
(1,048)
(1,048)

Deferred tax


Origination and reversal of timing differences
32,387
5,566

Total deferred tax
32,387
5,566


Tax on loss
31,339
4,518
Page 23

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023
 
13.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 25% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Loss on ordinary activities before tax
(3,275,448)
(5,054,497)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2022 - 19%)
(818,862)
(960,354)

Effects of:


Non-tax deductible amortisation of goodwill and impairment
143,437
43,463

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
3,299
(2,347)

Adjustments to tax charge in respect of prior periods
(1,048)
(1,048)

Short-term timing difference leading to an increase (decrease) in taxation
(11,799)
38,106

Changes in provisions leading to an increase (decrease) in the tax charge
796,666
(2,035)

Other tax charge (relief) on exceptional items
-
967,332

Changes due to change in tax rate in the year
(19,048)
-

Group relief
(61,306)
(78,599)

Total tax charge for the year
31,339
4,518


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 24

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

14.


Intangible assets




Goodwill

£



Cost


At 1 September 2022
4,574,999



At 31 August 2023

4,574,999



Amortisation


At 1 September 2022
3,771,976


Charge for the year on owned assets
228,750



At 31 August 2023

4,000,726



Net book value



At 31 August 2023
574,273



At 31 August 2022
803,023



Page 25

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

15.


Tangible fixed assets





Freehold property
Motor vehicles
Fixtures and fittings
Office equipment
Total

£
£
£
£
£



Cost or valuation


At 1 September 2022
6,311,696
18,914
1,770,304
14,208
8,115,122


Additions
-
-
138,249
3,970
142,219



At 31 August 2023

6,311,696
18,914
1,908,553
18,178
8,257,341



Depreciation


At 1 September 2022
1,648,457
18,914
1,220,873
13,078
2,901,322


Charge for the year on owned assets
108,584
-
234,457
1,955
344,996



At 31 August 2023

1,757,041
18,914
1,455,330
15,033
3,246,318



Net book value



At 31 August 2023
4,554,655
-
453,223
3,145
5,011,023



At 31 August 2022
4,663,239
-
549,431
1,130
5,213,800

Included in freehold property is land valued at £882,500 which has not been depreciated.

Page 26

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

16.


Stocks

2023
2022
£
£

Consumables
15,020
11,000




17.


Debtors

2023
2022
£
£


Trade debtors
918,935
585,211

Amounts owed by group undertakings
316,040
-

Amounts owed by joint ventures and associated undertakings
10,582,512
13,891,540

Other debtors
1,414,748
1,412,187

Prepayments and accrued income
49,736
187,649

Tax recoverable
398,888
391,674

13,680,859
16,468,261


Amounts owed by group undertakings are unsecured, interest free and are repayable on demand.
Amounts owed by joint ventures and associated undertakings are unsecured, interest free, have no fixed
date of repayment and are repayable on demand. This is stated after a provisison for impairment of £3,056,561 (2022 - £nil). 
Trade debtors are stated after provision for impairment of £114,785 (2022 - £124,908).


18.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
187,304
42,045

Less: bank overdrafts
-
(31,742)

187,304
10,303


Page 27

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

19.


Creditors: Amounts falling due within one year

2023
2022
£
£

Bank overdrafts
-
31,742

Bank loans
11,330,333
11,451,972

Trade creditors
477,930
949,841

Amounts owed to group undertakings
4,347,537
4,000,385

Amounts owed to joint ventures and associated undertakings
53,070
-

Other taxation and social security
266,698
193,829

Other creditors
66,004
34,376

Accruals and deferred income
809,053
483,730

17,350,625
17,145,875


Bank loans are secured by way of a legal charge over the assets of the business.
Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
Amounts owed to joint ventures and associated undertakings are unsecured, interest free and repayable
on demand.

Page 28

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

20.


Deferred taxation




2023
2022


£

£






At beginning of year
(187,098)
(181,532)


Charged to profit or loss
(32,387)
(5,566)



At end of year
(219,485)
(187,098)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
221,734
195,577

Pension surplus
(2,249)
(8,479)

219,485
187,098


21.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



1,000 (2022 - 1,000) Ordinary shares of £1.00 each
1,000
1,000



22.


Reserves

Profit and loss account

The profit and loss account reserve includes all current and prior periods retained profits and losses.


23.


Contingent liabilities

The Company forms part of a cross guarantee securing the bank borrowings of its fellow companies: St Matthews Holdings Limited, St Matthews (North) Limited and St Matthews (West) Limited. At 31 August 2023 these borrowings amounted to £11,425,492 (2022 - £11,287,332).

Page 29

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

24.


Pension commitments

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £89,256 (2022 - £89,762). Contributions totalling £43,137 (2022 - £33,916) were payable to the fund at the balance sheet date and are included in other creditors.


25.


Commitments under operating leases

At 31 August 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
-
24,146

Later than 1 year and not later than 5 years
-
54,330

-
78,476


26.


Related party transactions

The Company has taken advantage of the provisions available under FRS102 section 33.1A not to report transactions with fellow group members wholly owned by the ultimate parent undertaking.
The Company was owed £1,264,976 (2022 - £1,264,976) from companies with common directors. 
The Company was owed £9,317,536 relating to a loan made to companies with common directors (2022 - £12,543,097). This is stated after a provision for impairment of £3,056,536 (2022- £nil).  
The Company owed £53,070 to companies with common directors (2022 - £63,024). 


27.


Transactions with directors

During the year the Company advanced £9,775 (2022 - £11,600) and was repaid £nil (2022 - £nil) to/from a director of the Company. At 31 August 2023 amounts owed to the Company from this director totalled £1,008,745 (2022 - £998,970). No interest is charged on this advance and the amount is due on demand.
At 31 August 2023 amounts owed to the Company from this director totalled £204,545 (2022 - £204,545). No interest is charged on this advance and the amount is due on demand.

Page 30

 
ST. MATTHEWS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

28.


Controlling party

The parent undertaking is St Matthews Holdings Limited, a limited liability company registered in England and Wales.
The ultimate parent undertaking is Seebeck 122 Limited, a limited liability company registered in England and Wales. This parent company heads both the smallest and largest group for which consolidated financial statements containing the results and position of the Company are prepared and copies of these can be obtained from Seebeck 122 Limited's registered office at Boughton House Broomhill, Holdenby Road, Spratton, Northampton, NN6 8LD.
In the opinion of the directors, there is no ultimate controlling party of St Matthews Limited.

 
Page 31