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Registered number: 07281576
















FAIRLIE HEALTHCARE LIMITED




ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2023


































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FAIRLIE HEALTHCARE LIMITED

 
COMPANY INFORMATION


DIRECTORS
J Clarke 
A Norman 




REGISTERED NUMBER
07281576



REGISTERED OFFICE
2-6 Uffington Road
West Norwood

London

SE27 0RW




INDEPENDENT AUDITORS
Bishop Fleming Bath Limited
Chartered Accountants & Statutory Auditors

10 Temple Back

Bristol

BS1 6FL






FAIRLIE HEALTHCARE LIMITED


CONTENTS



Page
Strategic Report
 
 
Directors' Report
 
 
Directors' Responsibilities Statement
 
 
Independent Auditors' Report
 
 
Statement of Comprehensive Income
 
 
Statement of Financial Position
 
 
Statement of Changes in Equity
 
 
Notes to the Financial Statements
 
 



FAIRLIE HEALTHCARE LIMITED

 
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023

BUSINESS REVIEW
 
Year on year turnover within the company grew from £10.6m to £11.25m. Profit before tax, was £1.1m compared to £1.4m (restated) in 2022.
Increased turnover is attributable to a moderate increase in occupancy over the year as well as increased complexity of care provided in line with the company’s specialism in complex neurological care.
The directors consider that annual fluctuations in financial performance are primarily linked to the lasting impact of COVID-19 within the care sector. In particular, the lasting impact mandatory vaccination legislation within the care sector caused significant challenges around both retention and recruitment of staff. The legislation also resulted in a continued increase in usage of agency staff. Increased agency and staff costs are largely responsible for decreased profitability in the year. The directors have implemented a robust recruitment plan to reduce reliance of agency staff in future years.
The directors expect the lasting impact of COVID-19 and ongoing effects of Brexit to continue to put inflationary pressures on the company’s cost base but feel that company is well placed to mitigate the effect.

PRINCIPAL RISKS AND UNCERTAINTIES
 
The management of the business and the execution of the company’s strategy are subject to a number of risks. The company manages its cash, borrowing requirements and interest rate risk through variable rate loan finance in the overall group. 
In common with other businesses operating in the sector, the company’s future prospects are reliant on maintaining strong collaborative links with the local Integrated Commissioning Boards (ICBs) from whom residents are primarily referred. 
The directors have worked to establish productive and proactive dialogues to ensure that these relationships are maintained. Maintaining the highest standards of residential care is dependent on the ability to recruit and retain a highly qualified and motivated workforce. The directors are confident that they have the right team in place to ensure that the company is viewed as a desirable employer in a competitive labour market, despite the pressures of mandatory vaccination legislation. 
The directors continue to invest in recruitment and retention initiatives which strengthen our workforce, reduce reliance on agency staff and ensure that the home is able to maintain high standards of care at high levels of occupancy. 

FINANCIAL KEY PERFORMANCE INDICATORS
 
The directors consider that turnover, net profit and cash generated from operations are the financial key performance indicators of the business.
OTHER KEY PERFORMANCE INDICATORS
The key non-financial performance indicator is occupancy rates in the available 45 beds space – this was at 94% for the year (93% in the previous year). The directors consider that recent performance is currently a near optimal performance when turnaround time is considered.



FAIRLIE HEALTHCARE LIMITED


STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023

FUTURE DEVELOPMENTS
 
We continue to seek new opportunities for further growth as well as focusing on maintaining the highest levels of residential care at Fairlie House.


This report was approved by the board on 30 October 2024 and signed on its behalf.



J Clarke
Director



FAIRLIE HEALTHCARE LIMITED

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023

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

PRINCIPAL ACTIVITY

The principal activity of the company during the year was that of a nursing home.

RESULTS AND DIVIDENDS

The profit for the year, after taxation, amounted to £889,725 (2022: £1,641,906).

DIRECTORS

The directors who served during the year were:

J Clarke 
A Norman 

ENGAGEMENT WITH EMPLOYEES

The group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the group. This is achieved through formal and informal meetings. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests.

MATTERS COVERED IN THE STRATEGIC REPORT

The Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 requires a Strategic Reports to be prepared. Where mandatory disclosures in the Directors' Report are considered by the directors to be of strategic importance, these may alternatively be contained in the Strategic Report, provided that the Directors' Report contains a statement disclosing which information has been placed there.

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.

AUDITORS

The auditorsBishop Fleming Bath Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.



FAIRLIE HEALTHCARE LIMITED
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
This report was approved by the board and signed on its behalf.
 






J Clarke
Director

Date: 30 October 2024

2-6 Uffington Road
West Norwood
London
SE27 0RW



FAIRLIE HEALTHCARE LIMITED

 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023

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 judgements and accounting estimates that are reasonable and prudent;


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.



FAIRLIE HEALTHCARE LIMITED

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FAIRLIE HEALTHCARE LIMITED
OPINION


We have audited the financial statements of Fairlie Healthcare Limited (the 'company') for the year ended 30 June 2023, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, including a summary of 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 30 June 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 Auditors' 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 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.


MATERIAL UNCERTAINTY RELATED TO GOING CONCERN


We draw attention to note 2.3 in the financial statements, which indicates that bank facilities held in fellow subsidiaries were in breach of a financial covenant. Whilst the directors are confident of a successful outcome to ongoing negotiations with the bank, no formal waiver of enforcement action as a result of this breach has been obtained by the directors. The company holds intercompany debtors and creditors with these subsidiaries and the ultimate parent company, which is a necessary part of the company’s working capital. In the event of default these balances may become payable or irrecoverable.
As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, 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 evaluation of the directors' assessment of the company's ability to continue to adopt the going concern basis of accounting included all matters referred to in note 2.3.


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




FAIRLIE HEALTHCARE LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FAIRLIE HEALTHCARE 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 ReportOur 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 , 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.




FAIRLIE HEALTHCARE LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FAIRLIE HEALTHCARE LIMITED (CONTINUED)

AUDITORS' 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:

We have considered the following:
The nature of the industry and sector, control environment and business performance;
Results of our enquires of management and directors in relation to their own identification and assessment of the risks of irregularities within the Company; and
Any matters we identified having obtained and reviewed the Company’s documentation of their policies and procedures relating to: identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; the internal controls established to mitigate risks of fraud or noncompliance with laws and regulations.
 
As a result of these procedures, we have considered the opportunities and incentives that may exist within the organisation for fraud and identified the areas of high risk to be in relation to revenue recognition. In common with all audits under ISAs (UK) we are also required to perform specific procedures to respond to the risk of management override.
We have also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focussing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures within the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, Financial Reporting Standard 102 and UK tax legislation. In addition we considered the provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental for the Company’s ability to operate or avoid a material penalty. These included the provisions pertaining to the employment of overseas workers, safeguarding regulations, health and safety regulations; employment legislation; and data protection laws.
Our audit procedures performed to respond to the risks identified included, but were not limited to:
Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
Reviewing the financial statement disclosures and testing to supporting documentation to assess the recognition of revenue;
Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
Identifying and testing journal entries, evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud; and
Challenging assumptions and judgements made by management in their significant accounting estimates.
 
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements,


FAIRLIE HEALTHCARE LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FAIRLIE HEALTHCARE LIMITED (CONTINUED)

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


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.






Andrew Sandiford BCom FCA (Senior Statutory Auditor)
for and on behalf of
Bishop Fleming Bath Limited
Chartered Accountants
Statutory Auditors
10 Temple Back
Bristol
BS1 6FL

30 October 2024


FAIRLIE HEALTHCARE LIMITED

 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023

As restated
2023
2022
Note
£
£

  

Turnover
 4 
11,247,046
10,602,545

Cost of sales
  
(435,619)
(387,703)

GROSS PROFIT
  
10,811,427
10,214,842

Administrative expenses
  
(9,719,885)
(8,843,972)

OPERATING PROFIT
 5 
1,091,542
1,370,870

Interest payable and similar expenses
 9 
(26,443)
-

PROFIT BEFORE TAX
  
1,065,099
1,370,870

Tax on profit
 10 
(175,374)
271,036

PROFIT FOR THE FINANCIAL YEAR
  
889,725
1,641,906

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

The notes on  form part of these financial statements.



FAIRLIE HEALTHCARE LIMITED
REGISTERED NUMBER:07281576

STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023

As restated
2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 13 
89,258
84,398

  
89,258
84,398

Current assets
  

Stocks
 14 
95,350
95,350

Debtors: amounts falling due within one year
 15 
11,894,423
12,921,874

Cash at bank and in hand
 16 
1,424,636
331,048

  
13,414,409
13,348,272

Creditors: amounts falling due within one year
 17 
(10,554,225)
(10,068,715)

Net current assets
  
 
 
2,860,184
 
 
3,279,557

Total assets less current liabilities
  
2,949,442
3,363,955

Creditors: amounts falling due after more than one year
 18 
(195,762)
-

  

Net assets
  
2,753,680
3,363,955


Capital and reserves
  

Called up share capital 
 21 
1,000
1,000

Profit and loss account
 22 
2,752,680
3,362,955

  
2,753,680
3,363,955


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 





J Clarke
Director

Date: 30 October 2024



FAIRLIE HEALTHCARE LIMITED


STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 July 2021 (as restated)
1,000
2,935,007
2,936,007

Prior year adjustment
-
(213,958)
(213,958)


At 1 July 2021 (as restated)
1,000
2,721,049
2,722,049



Profit for the year
-
1,641,906
1,641,906

Dividends: Equity capital
-
(1,000,000)
(1,000,000)


At 1 July 2022 (as previously stated)
1,000
3,476,551
3,477,551

Prior year adjustment
-
(113,596)
(113,596)


At 1 July 2022 (as previously stated)
1,000
3,362,955
3,363,955



Profit for the year
-
889,725
889,725

Dividends: Equity capital
-
(1,500,000)
(1,500,000)


AT 30 JUNE 2023
1,000
2,752,680
2,753,680



FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

1.


GENERAL INFORMATION

Fairlie Healthcare Limited is a limited liability company incorporated in England. The registered office is 2-6 Uffington Road, West Norwood, London, SE27 0RW.

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 judgement 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 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Fairlie Holdings Limited as at 30 June 2023 and these financial statements may be obtained from Companies House.



FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.ACCOUNTING POLICIES (continued)

 
2.3

GOING CONCERN

The revenue streams for the company are provided by Integrated Care Boards (ICBs) and Social Services and have remained strong and are forecast to continue to do so for the foreseeable future. The company continues to provide a high-quality provision for its patients to secure its revenue streams. 
The Company is a part of the Fairlie Holdings Limited group (“the Group”) and the Group has two distinct and separate funding groups, one of which, at the year end, has borrowings from Barclays (“the Barclays borrowing group”) and the other which has borrowings from Triodos (“the Triodos borrowing group”).  As disclosed in Note 24, the company is part of the Barclays borrowing group and cross guarantees exist amongst the members of the Barclays borrowing group.  
At the balance sheet date and subsequently the Barclays borrowing group funding facilities’ financial covenants are being met. As set out in Note 24, the Barclays facility is due to expire with 12 months of the year end date, and subsequent to the year end was replaced with a facility with Cynergy Bank. Based on financial performance to date and forecasts, the directors are satisfied that the Company and other companies in the Barclays borrowing group have sufficient resources to meet the covenant, debt finance service and working capital requirements of these debt facilities.
At the balance sheet date the Company has balances totalling £4,172,756 due from fellow subsidiaries which are members of the Triodos borrowing group. The Company does not intend to seek repayment of these balances in the short or medium term.   Companies within each borrowing group are dependent upon the continued availability of these advances, which is in turn dependent upon the companies within the other borrowing group continuing as going concerns and vice versa.  The directors expect this to be the case. At the Balance sheet date, the company has balances totalling £2,192,421 due to fellow subsidiaries which are members of the Triodos borrowing group.
At the balance sheet date, the Triodos facilities totalling £17,841,546 were in default due to a year end financial covenant not being achieved.  Notwithstanding this breach, based on financial performance to date and forecasts, the directors of the companies in the Triodos Borrowing group believe that those companies will comply with future requirements of the Triodos banking facilities and that they will have sufficient resources to meet future covenant, debt finance service and working capital requirements. 
Whilst the directors believe that Triodos will continue to be supportive of the Group, Triodos has recently issued a reservation of rights letter and also instructed an independent review of likely future trading performance of companies in the Triodos borrowing group.  The outcome of this review is currently unknown, and whilst the directors believe the outcome is likely to be positive, this is uncertain.
Should Triodos not continue to support the group, the directors believe that it will be possible to secure alternative sources of funding.  However, this is uncertain.
If companies in the Triodos borrowing group were unsuccessful in securing ongoing facilities, from Triodos or an alternative funder, and were to seek immediate repayment of the intercompany balances payable by the Company, the Company would need to seek additional sources of funding.  It is uncertain as to whether such funding would be available.  The recoverability of balances due from members of the Triodos borrowing group would also become uncertain.
The directors are confident that such funding can be secured and therefore consider that it is appropriate to prepare the group accounts on a going concern basis.
If the group were unable to obtain adequate funding, it would not be able to continue trading and adjustments would have to be made to reduce the assets to their realisable amount and to provide for any further liabilities



FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.ACCOUNTING POLICIES (continued)

 
2.4

TURNOVER

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Rendering of services

Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of turnover can be measured reliably;
it is probable that the company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.5

INTANGIBLE ASSETS

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the 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 Income statement over its useful economic life of 10 years.

 
2.6

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.

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.



FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.ACCOUNTING POLICIES (continued)


2.6
TANGIBLE FIXED ASSETS (CONTINUED)

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:

Plant and machinery
-
25%
straight line
Motor vehicles
-
25%
straight line
Fixtures and fittings
-
25%
straight line

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.

 
2.7

STOCKS

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.8

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.

 
2.9

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.

 
2.10

FINANCIAL INSTRUMENTS

The company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Financial liabilities


FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.ACCOUNTING POLICIES (continued)


2.10
FINANCIAL INSTRUMENTS (CONTINUED)


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

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

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

 
2.11

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.

 
2.12

DIVIDENDS

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

 
2.13

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.

 
2.14

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.



FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.ACCOUNTING POLICIES (continued)

 
2.15

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 Statement of Financial Position. The assets of the plan are held separately from the company in independently administered funds.

 
2.16

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 reporting 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 reporting 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 reporting date.


3.



JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Preparation of the financial statements requires management to make significant judgements and estimates. Management have considered the period of time over which the benefits of goodwill will be realised and have deemed it reasonable to amortise the goodwill over a period of 10 years.


4.


TURNOVER

The whole of the turnover is attributable to the principal activity of the company.

All turnover arose within the United Kingdom.



FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

5.


OPERATING PROFIT

The operating profit is stated after charging:

2023
2022
£
£

Other operating lease rentals
600,231
590,207


6.


AUDITORS' REMUNERATION

During the year, the company obtained the following services from the company's auditors:


2023
2022
£
£

Fees payable to the company's auditors for the audit of the company's financial statements
13,500
11,000

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.


7.


EMPLOYEES

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
6,112,408
5,624,094

Social security costs
601,334
462,833

Cost of defined contribution scheme
246,166
159,241

6,959,908
6,246,168


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


        2023
        2022
            No.
            No.







Nursing and care staff
212
218



Directors
2
2

214
220



FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

8.


DIRECTORS' REMUNERATION

2023
2022
£
£

Directors' emoluments
142,509
218,581

Company contributions to defined contribution pension schemes
24,633
19,651

167,142
238,232


During the year retirement benefits were accruing to 2 directors (2022: 2) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £142,509 (2022: £135,437).

The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £15,983 (2022: £11,433).


9.


INTEREST PAYABLE AND SIMILAR EXPENSES

2023
2022
£
£


Other loan interest payable
26,443
-

26,443
-


10.


TAXATION


As restated
2023
2022
£
£

CORPORATION TAX


Adjustments in respect of previous periods
178,187
(256,747)


178,187
(256,747)


TOTAL CURRENT TAX
178,187
(256,747)

DEFERRED TAX


Origination and reversal of timing differences
(2,813)
(14,289)

TOTAL DEFERRED TAX
(2,813)
(14,289)


TAXATION ON PROFIT/(LOSS) ON ORDINARY ACTIVITIES
175,374
(271,036)


FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
 
10.TAXATION (CONTINUED)


FACTORS AFFECTING TAX CHARGE FOR THE YEAR

The tax assessed for the year is lower than (2022: lower than) the standard rate of corporation tax in the UK of 20.5% (2022: 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
1,065,099
1,370,870


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 20.5% (2022: 19%)
218,302
282,049

EFFECTS OF:


Expenses not deductible for tax purposes
763
1,091

Capital allowances for year in excess of depreciation
(468)
304

Adjustments to tax charge in respect of prior periods
178,187
(256,747)

Remeasurement of deferred tax for changes in tax rates
(5,583)
(4,898)

Group relief
(215,827)
(292,835)

TOTAL TAX CHARGE FOR THE YEAR
175,374
(271,036)

No consideration has been paid in respect of group relief utilised throughout the group in the current or prior year.


FACTORS THAT MAY AFFECT FUTURE TAX CHARGES

There were no factors that may affect future tax charges.


11.


DIVIDENDS

2023
2022
£
£


Dividends paid
1,500,000
1,000,000

1,500,000
1,000,000



FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

12.


INTANGIBLE ASSETS




Goodwill

£



COST


At 1 July 2022
2,000,000



At 30 June 2023

2,000,000



AMORTISATION


At 1 July 2022
2,000,000



At 30 June 2023

2,000,000



NET BOOK VALUE



At 30 June 2023
-



At 30 June 2022
-





FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

13.


TANGIBLE FIXED ASSETS





Plant and machinery
Motor vehicles
Fixtures and fittings
Total

£
£
£
£



COST OR VALUATION


At 1 July 2022
67,029
12,830
396,018
475,877


Additions
10,031
-
37,503
47,534



At 30 June 2023

77,060
12,830
433,521
523,411



DEPRECIATION


At 1 July 2022
45,232
12,830
333,417
391,479


Charge for the year on owned assets
7,516
-
35,158
42,674



At 30 June 2023

52,748
12,830
368,575
434,153



NET BOOK VALUE



At 30 June 2023
24,312
-
64,946
89,258



At 30 June 2022
21,797
-
62,601
84,398


14.


STOCKS

2023
2022
£
£

Consumables
95,350
95,350

95,350
95,350


15.


DEBTORS

2023
2022
£
£


Trade debtors
71,437
1,897,361

Amounts owed by group undertakings
11,297,375
10,708,659

Other debtors
95,075
107,875

Prepayments and accrued income
426,607
206,863

Deferred taxation
3,929
1,116

11,894,423
12,921,874


Amounts owed by group undertakings are unsecured, repayable on demand and bear no interest. However, the directors do not expect to demand repayment within one year. 



FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

16.


CASH AND CASH EQUIVALENTS

2023
2022
£
£

Cash at bank and in hand
1,424,636
331,048

1,424,636
331,048



17.


CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2023
2022
restated
£
£

Other loans
106,853
-

Trade creditors
624,440
455,840

Amounts owed to group undertakings
5,817,089
6,120,048

Other taxation and social security
1,319,189
1,124,112

Other creditors
385,975
383,302

Accruals and deferred income
2,300,679
1,985,413

10,554,225
10,068,715


Amounts owed to group undertakings are unsecured, repayable on demand and bear no interest.


18.


CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2023
2022
£
£

Other loans
195,762
-

195,762
-




FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

19.


LOANS


Analysis of the maturity of loans is given below:


2023
2022
£
£

AMOUNTS FALLING DUE WITHIN ONE YEAR

Other loans
106,853
-


106,853
-

AMOUNTS FALLING DUE 1-2 YEARS

Other loans
125,259
-


125,259
-

AMOUNTS FALLING DUE 2-5 YEARS

Other loans
70,503
-


70,503
-


302,615
-


Loans totalling £302,615 from Funding Circle are unsecured and repayable by instalments by December 2025. 


20.


DEFERRED TAXATION




2023
2022


£

£






At beginning of year
1,116
(13,173)


Charged to profit or loss
2,813
14,289



AT END OF YEAR
3,929
1,116

The deferred tax asset is made up as follows:

2023
2022
£
£


Accelerated capital allowances
1,116
(9,520)

Short term timing differences
2,813
10,636

3,929
1,116



FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

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 includes all current and prior period retained profit and losses. All are considered distributable.


23.


PRIOR YEAR ADJUSTMENT

During the year the directors identified expenditure that was not recorded in prior periods. The effect of these adjustments is a reduction in the opening profit and loss account at 1 July 2021 of £213,958 and a reduction in profit in the year ended 30 June 2022 of £113,596 and corresponding increases in other creditors. The cumulative effect of these adjustments in the years ended 30 June 2022 and 30 June 2023 is a reduction in profit and loss account of £327,554 and an increase in other creditors of £327,554.


24.


CONTINGENT LIABILITIES

The company is subject to a fixed charge over its assets via a cross guarantee in favour of Barclays Bank plc with Fairlie Properties Limited, a fellow group company, on a loan totalling £7,214,947 (2022: £7,520,128). This facility was replaced by a facility of £9,000,000 with Cynergy Bank in March 2024 with a similar cross charge arrangement.


25.


PENSION COMMITMENTS

The company operates a defined contributions 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 £223,696 (2022: £163,178). Contributions totalling £42,778 (2022: £42,543) were payable to the fund at the reporting date.


26.


COMMITMENTS UNDER OPERATING LEASES

At 30 June 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
580,000
585,022

580,000
585,022



FAIRLIE HEALTHCARE LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

27.


RELATED PARTY TRANSACTIONS

The company has taken advantage of the exemption in Financial Reporting Standard 102 Section 33 from the requirement to disclose transactions with group companies. 
The company is owed £46,603 (2022: £46,603) included in other debtors by a company over which the controlling party has significant influence. The amount is interest free and repayable on demand.
Key management personnel
All individuals who have authority and responsibility for planning, directing and controlling the activities of the company are considered to be key management personnel. Total compensation (including remuneration and social security contributions) in respect of these individuals (including the directors) is £291,251 (2022: £266,466).


28.


ULTIMATE PARENT UNDERTAKING AND CONTROLLING PARTY

The immediate and ultimate parent undertaking is Fairlie Holdings Limited, a company incorporated in the UK. The consolidated accounts are available from Companies House and the registered office of Fairlie Holdings Limited is 10 Temple Back, Bristol, BS1 6FL.
The ultimate controlling party is J Whelan by virtue of his majority shareholding in Fairlie Holdings Limited.