Company Registration No. 03852183 (England and Wales)
ROYAL BAY CARE HOMES LTD
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
ROYAL BAY CARE HOMES LTD
COMPANY INFORMATION
Directors
Mr A Wilson
Ms J Dove
Mr T Wilson
Mrs C Wilson
Mr J Wilson
Secretary
Mr A Wilson
Company number
03852183
Registered office
31/33 Commercial Road
Poole
Dorset
BH14 0HU
Auditor
Morris Lane
31/33 Commercial Road
Poole
Dorset
BH14 0HU
Business address
Castle Farm
Castle Farm Road
Lytchett Matravers
Poole
Dorset
BH16 6BZ
Bankers
Metro Bank PLC
One Southampton Row
London
WC1B 5HA
ROYAL BAY CARE HOMES LTD
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 7
Independent auditor's report
8 - 12
Group income statement
13
Group statement of comprehensive income
14
Group statement of financial position
15
Company statement of financial position
16
Group statement of changes in equity
17
Company statement of changes in equity
18
Group statement of cash flows
19
Company statement of cash flows
20
Notes to the financial statements
21 - 46
ROYAL BAY CARE HOMES LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 1 -

The directors present the strategic report for the year ended 31 October 2023.

Fair review of the business

Our objectives are to maintain the principal activity of the group, which consists of the running of nursing and residential homes and includes landlord duties to our private close care properties. We will achieve this by maintaining our continued improvement of quality care standards and the care homes’ environments, our commitment to high levels of training for our staff. We continue to introduce a number of technological solutions in order to improve our efficiency and compliance such as a computerised care planning system and digital document signing.

Royal Bay Care Homes Ltd also acts as a holding company for the Royal Bay group of companies.

During the previous 12 months, the Group’s seven care homes performed ok with the overall combined group average occupancy increased to 83.83% (2022 yearly average 86.17%). Also on top of this, our group average fee levels have increased by 9.7% across the year.

Throughout the whole trading year, the directors have continued to authorise expenditure on accommodation and equipment upgrades in all the homes in line with normal group policy. The continued commitment to providing the best quality care and accommodation and customer services is integral to the Group’s appeal to premium customers.

We also consider:

The care and welfare of our staff; promoting self-development and career opportunities including training and promotion and supplying access to a counselling service and other healthcare support.

Diversity and equal opportunity and all newly introduced Employment Law legislation.

The Group turnover has increased by 7.0% to £12,737,437 in comparison with the 2022 level of £11,915,983. Operating profit for the year, excluding developments (care only), was £1,222,758 in comparison with 2022’s figure of £1,118,349. The group saw a profit before tax decrease from 2022 of £850,883 to 2023 of £706,058.

In the future we will endeavour to improve all aspects of quality at all levels. The marketing activity will be actively expanded and targeted to improve occupancy and fee income. The group's particular expertise in designing, developing, marketing, and operating care villages gives an opportunity to undertake further ventures. Care home acquisitions could be contemplated based on affordability, ‘cluster’ location, and improvement potential.

ROYAL BAY CARE HOMES LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -
Principal Risks and Uncertainties

The care industry is to face fundamental changes to the public funding framework commencing April 2022, yet must also deal with external economic pressures such as inflation, cost increases and interest rate rises. Inflation across the year up to 31 October 2023 was approximately 6%, as well the rise in National Living Wage. We have had to counteract this by covering costs via fee increases, good occupancy and cost reductions.

Due to external global pressures, energy costs have risen considerably and continue to contribute to a rising cost of living. Care Homes are particularly susceptible due to their costs being largely made up of energy, wages as well as consumables such as food. Fortunately a large proportion of our energy costs can be mitigated by longer term energy contracts and in conjunction we continue to seek cost savings elsewhere.

There has also been a continuing effort in recent years to improve our cash flow by streamlining operations, reducing costs in turn increasing profitability, all of which will be carried forward for the next 12 months and beyond. Notable instances include finding efficiencies, negotiating supplier contracts, taking advantage of group purchasing power, reducing out dated marketing expenses (traditional print) and maintaining our internet-based Payment Authorisation System for any purchase over £100.

Local Authority and CCGs continue to have more pragmatic approach to fee increases, although there is still room for improvement in order to meet a more realistic market average. This, together with the company’s attention to both improving average fees whilst controlling costs and overheads, will allow the group to enhance its profitability.

There is a continuing drive to provide community care services to keep the elderly at home for as long as possible but it was not meeting all of the needs of the elderly in the U.K. and sheer numbers created by demographics meant that residential care was still in demand and would continue to increase. Estimates quote that the number of over 85 year olds with high needs will almost double (2.5% of the UK population to 4.3%) in the next 20 years (ONS).

Ultimately it is an objective of the group to move toward a higher ratio of private to Local Authority clients, thus reducing some of the complications involved with dealing with a third party.

Work place pensions have now been in place for a number of years and all Homes now make the 3% contribution and are able to manage the increased financial pressure. In recent years the rise of National Living Wage has been a significant cost that we have been required to budget for, however as a group we always aim to pay slightly more than the National Living Wage. National labour shortages and industry specific labour shortages continues to be the main significant hurdle to overcome, with recruitment becoming a bigger challenge than ever before. This continues to also push up wages in the industry and all care homes compete to retain and recruit care staff. This pressure can be reduced by accelerating fee increases and relying more on ‘costed care plans’ as the basis for fee determination with local authorities and the NHS. All homes are now required to pay a 0.5% Apprenticeship Levy.

The company is adjusting its budget expenditures and fee income decisions to make realistic forward plans to meet all of the pressure from the points outlined above and the directors are hopeful that the trading performance will improve over the next 12 months.

ROYAL BAY CARE HOMES LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 3 -
Section 172 statement - Promoting the success of the company

All of our decisions are made with conscientious attitude as to how our choices will benefit the business in the long term in order to maintain and improve stability, profitability and on going success. At the forefront, the Directors have been actively looking to:

 

 

 

Our staff are integral to our business model being our largest cost to our service. Maintaining their morale and keeping turnover to an acceptable level is always our aim whilst dealing with more macro business decisions. On a personal basis the company always remains flexible and understanding to individual’s circumstances. We have maintained a good reputation as being kind employers for years by:

 

 

 

As part of our aims to reduce costs it has meant choosing new suppliers or renewing contracts with existing suppliers. Over the years we have garnered great, long lasting relationships with almost all of our suppliers and so continue to foster these. When signing new contracts we also take reliability, professionalism and personability on board as well as price. We continue to include customers (service users and their relatives) where we can and as much as we can. We also try to support local communities and charities, which can often be mutually beneficial. Actions the directors have taken include:

 

 

 

In the care industry reputation is everything, therefore it is of our utmost desirability to maintain our already well-groomed reputation in our local areas. We have always conducted ourselves with the highest of standards and continue to do so through day to day business dealings, b2b relationships and with our clients. This is evidenced by:

 

 

We intentionally put emphasis on the need to act fairly between all members of staff or service users. Our company has a culture of understanding and impartiality as well as focusing on carrying out all duties accordingly and within the confines of law and regulation. This is achieved by:

 

 

ROYAL BAY CARE HOMES LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 4 -

On behalf of the board

Mr T Wilson
Director
31 October 2024
ROYAL BAY CARE HOMES LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 5 -

The directors present their annual report and financial statements for the company and its subsidiaries for the year ended 31 October 2023.

Principal activities

The principal activity of the company and group continued to be that of the investment in and operation of facilities for the care of elderly people in the United Kingdom.

Results and dividends

The results for the year are set out on page 13.

Ordinary dividends were paid amounting to £87,500. The directors do not recommend payment of a further dividend.

Directors

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

Mr A Wilson
Ms J Dove
Mr T Wilson
Mrs C Wilson
Mr J Wilson
Financial instruments
Treasury operations and financial instruments

The group's activities expose it to a variety of financial risks. The Board reviews and agrees policies for managing these risks at regular intervals dependant on circumstances. The group’s principal financial instruments include assets and liabilities such as trade receivables and trade payables arising directly from its operations. In accordance with group’s treasury policy, derivative instruments are not entered into for speculative purposes.

Liquidity risk

The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.

Interest rate risk

The group is exposed to fair value interest rate risk on floating rate deposits, bank overdrafts and loans. The cash flow interest rate risk is managed within the group's business projections and planning, in the monitoring of financial covenants and through negotiation of facility terms with the provider of the borrowing facility at specified intervals.

Foreign currency risk

The group’s principal foreign currency exposures arise from investments in overseas companies.

Credit risk

Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board. All residents who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary. The group is not exposed to commodity price risk.

ROYAL BAY CARE HOMES LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 6 -
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

 

There is no employee share scheme at present.

Future developments

Further information in respect of future developments is given in the Strategic Report and above.

Auditor

The auditor, Morris Lane, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Energy and carbon report
Energy consumption
kWh
Aggregate of energy consumption in the year
2,719,587
Emissions of CO2 equivalent
Metric tonnes
Metric tonnes
Scope 1 - direct emissions
- Gas combustion
394.38
- Fuel consumed for owned transport
4.44
398.82
Scope 2 - indirect emissions
- Electricity purchased
109.46
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
-
Total gross emissions
508.28
Intensity ratio
Tonnes CO2e per bed
1.92
Quantification and reporting methodology
Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per bed, the recommended ratio for the sector.

ROYAL BAY CARE HOMES LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 7 -
Measures taken to improve energy efficiency

The group continues to take measures to increase energy efficiency, with the main focus being the replacement of single pane windows with double glazing.

Statement of directors' responsibilities

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

 

 

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

The directors are responsible for the maintenance and integrity of the company website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Statement of disclosure to auditor

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

On behalf of the board
Mr T Wilson
Director
31 October 2024
ROYAL BAY CARE HOMES LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ROYAL BAY CARE HOMES LTD
- 8 -

Qualified Opinion

We have audited the financial statements of Royal Bay Care Homes Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 October 2023 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph the financial statements:

Basis for qualified opinion

As at 31 October 2023, the company and group had made loans totalling £2,705,340 (2022: £2,339,023) and, due to the nature of these loans, we were unable to satisfy ourselves as to their recoverability as the audit evidence in this respect was limited in its availability.

 

The evidence available to us in respect of the valuation of freehold land and buildings held in the 75% owned subsidiary company RW Royal Bay Care Homes Limited, at a valuation of £905,285, was limited because we were unable to obtain reliable expert confirmation of the market valuation of these assets due to current market conditions.

 

Included in amounts due from group undertakings on the company balance sheet, is an intercompany loan balance of £943,258 (2022: £905,398) owed by the 75% subsidiary company RW Royal Bay Care Homes Limited. We were unable to satisfy ourselves as to its recoverability at 31 October 2023 because we were unable to obtain reliable expert confirmation of the market valuation of the freehold land and buildings held in RW Royal Bay Care Homes Limited, the only assets held by the company, as noted above.

 

In addition to the above, we were unable to obtain access to appropriate accounting records to be able to verify a number of balances contained within the financial statements including but not limited to bank transactions.

 

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

Conclusions relating to going concern

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

 

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

 

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

ROYAL BAY CARE HOMES LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROYAL BAY CARE HOMES LTD
- 9 -

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In respect solely of the limitation on our work relating to the 75% owned subsidiary company RW Royal Bay Care Homes Limited and the recoverability of the loans described above:

 

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

 

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

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

ROYAL BAY CARE HOMES LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROYAL BAY CARE HOMES LTD
- 10 -
Auditor's responsibilities for the audit of the financial statements

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

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

Identifying and assessing the risks of material misstatement due to irregularities, including fraud

We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and company through discussion with the directors and from our general commercial experience. The identified laws and regulations were communicated to the audit team in order that they remained alert to any non-compliance throughout the audit.

 

The group and company are subject to laws and regulations which have a direct effect on the financial statements and the disclosures contained therein. These have been identified as: the financial reporting framework under which the group and company operates - Financial Reporting Standard 102; Statutory Instrument 2008/410 – The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008; the Companies Act 2006; taxation legislation including pay as you earn and corporation tax and pensions legislation.

In addition to the above, the group and company are subject to other operational laws and regulations where non-compliance may have a material effect on the financial statements. Non-compliance of such laws and regulations may result in litigation, the imposition of fines or the closure of the business which could have a material impact on amounts or disclosures in the financial statements. We have identified the following laws and regulations which are more likely to have significant effect as: compliance with the Care Quality Commission regulations; food hygiene laws; health and safety laws; General Data Protection Regulation (GDPR) and employment law.

 

In order to identify risks of material misstatement due to fraud, we assessed events and conditions where opportunities and incentives may exist within the group and company for fraud to occur. Our risk assessment procedures included enquiring of directors as to any instances of fraud, their procedures to identify fraud and by using analytical procedures to identify any unusual or unexpected relationships. We identified the greatest potential for fraud in the following areas: recognition of income; ghost employees and grant income. As required by auditing standards, we are also required to perform specific procedures to respond to the risk of management override.

 

The identified risks of material misstatement due to fraud were communicated to the audit team in order that they remained alert to any non-compliance throughout the audit.

ROYAL BAY CARE HOMES LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROYAL BAY CARE HOMES LTD
- 11 -
Audit procedures designed to respond to the risks of material misstatement due to irregularities, including fraud

As a result of performing our risk assessments as detailed above, we planned and performed our audit so as to identify non-compliance with such laws and regulations, including fraud by undertaking the following:

 

 

Due to the inherent limitations of an audit, there is an unavoidable risk that, despite properly planning and performing our audit in accordance with accounting standards, some material misstatements may not have been detected.

 

Auditing standards limit the audit procedures required to identify non-compliance with other operational laws and regulations to enquiry of directors and management and inspection of any correspondence. If a breach of operational regulations is not evident from relevant correspondence or disclosed to us, an audit is unlikely to detect that breach. In addition, the further removed non-compliance with laws and regulations is from the events and transactions included in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

 

In addition, the risk of not detecting material misstatement from due to fraud is higher than the risk of one not being detected through error as fraud may involve deliberate concealment through collusion, forgery, misrepresentations and intentional omissions.

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

ROYAL BAY CARE HOMES LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROYAL BAY CARE HOMES LTD
- 12 -

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Michelle Pettifer (Senior Statutory Auditor)
For and on behalf of Morris Lane
31 October 2024
Chartered Accountants
Statutory Auditor
31/33 Commercial Road
Poole
Dorset
BH14 0HU
ROYAL BAY CARE HOMES LTD
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 13 -
2023
2022
Notes
£
£
Revenue
3
12,737,437
11,915,983
Administrative expenses
(11,575,931)
(11,041,284)
Other operating income
61,252
243,650
Operating profit
4
1,222,758
1,118,349
Investment income
8
38,690
29,780
Finance costs
9
(555,390)
(297,246)
Profit before taxation
706,058
850,883
Tax on profit
10
(267,452)
(500,870)
Profit for the financial year
27
438,606
350,013
Profit for the financial year is attributable to:
- Owners of the parent company
437,959
347,474
- Non-controlling interests
647
2,539
438,606
350,013

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

ROYAL BAY CARE HOMES LTD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023
- 14 -
2023
2022
£
£
Profit for the year
438,606
350,013
Other comprehensive income
Revaluation of property, plant and equipment
1,576,693
-
0
Currency translation differences
(14,182)
(20,703)
Tax relating to other comprehensive income
(320,493)
-
0
Other comprehensive income for the year
1,242,018
(20,703)
Total comprehensive income for the year
1,680,624
329,310
Total comprehensive income for the year is attributable to:
- Owners of the parent company
1,679,977
326,771
- Non-controlling interests
647
2,539
1,680,624
329,310
ROYAL BAY CARE HOMES LTD
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 31 OCTOBER 2023
31 October 2023
- 15 -
2023
2022
Notes
£
£
£
£
Non-current assets
Intangible assets
12
6,429
7,630
Property, plant and equipment
13
19,003,267
17,912,544
Investment properties
14
1,157,285
1,145,518
20,166,981
19,065,692
Current assets
Inventories
18
22,577
19,233
Trade and other receivables
19
3,178,964
2,818,676
Cash and cash equivalents
2,259,895
1,983,730
5,461,436
4,821,639
Current liabilities
20
(1,684,400)
(2,502,775)
Net current assets
3,777,036
2,318,864
Total assets less current liabilities
23,944,017
21,384,556
Non-current liabilities
21
(7,094,564)
(6,435,452)
Provisions for liabilities
Deferred tax liability
24
3,323,467
3,016,242
(3,323,467)
(3,016,242)
Net assets
13,525,986
11,932,862
Equity
Called up share capital
26
8,366
8,366
Revaluation reserve
27
7,556,882
6,488,517
Capital redemption reserve
27
1,634
1,634
Retained earnings
27
6,161,516
5,637,404
Equity attributable to owners of the parent company
13,728,398
12,135,921
Non-controlling interests
(202,412)
(203,059)
13,525,986
11,932,862
The financial statements were approved by the board of directors and authorised for issue on 31 October 2024 and are signed on its behalf by:
31 October 2024
Mr T Wilson
Director
ROYAL BAY CARE HOMES LTD
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 OCTOBER 2023
31 October 2023
- 16 -
2023
2022
Notes
£
£
£
£
Non-current assets
Intangible assets
12
1,646
2,195
Property, plant and equipment
13
4,414,494
3,640,191
Investments
15
2,741,947
2,741,977
7,158,087
6,384,363
Current assets
Inventories
18
5,323
6,012
Trade and other receivables
19
3,800,802
3,581,114
Cash and cash equivalents
2,102,400
1,741,796
5,908,525
5,328,922
Current liabilities
20
(3,414,533)
(3,324,305)
Net current assets
2,493,992
2,004,617
Total assets less current liabilities
9,652,079
8,388,980
Non-current liabilities
21
(7,094,564)
(6,435,452)
Provisions for liabilities
Deferred tax liability
24
765,971
559,284
(765,971)
(559,284)
Net assets
1,791,544
1,394,244
Equity
Called up share capital
26
8,366
8,366
Revaluation reserve
27
1,718,307
1,077,755
Capital redemption reserve
27
1,634
1,634
Retained earnings
27
63,237
306,489
Total equity
1,791,544
1,394,244

As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s loss for the year was £179,322 (2022: £375,626 ).

The financial statements were approved by the board of directors and authorised for issue on 31 October 2024 and are signed on its behalf by:
31 October 2024
Mr T Wilson
Director
Company Registration No. 03852183
ROYAL BAY CARE HOMES LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 17 -
Share capital
Revaluation reserve
Capital redemption reserve
Retained earnings
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
£
Balance at 1 November 2021
8,366
6,702,689
1,634
5,185,961
11,898,650
(205,598)
11,693,052
Year ended 31 October 2022:
Profit for the year
-
-
-
347,474
347,474
2,539
350,013
Other comprehensive income:
Currency translation differences
-
-
-
(20,703)
(20,703)
-
(20,703)
Total comprehensive income for the year
-
-
-
326,771
326,771
2,539
329,310
Dividends
11
-
-
-
(89,500)
(89,500)
-
(89,500)
Transfers
-
(214,172)
-
214,172
-
-
-
Balance at 31 October 2022
8,366
6,488,517
1,634
5,637,404
12,135,921
(203,059)
11,932,862
Year ended 31 October 2023:
Profit for the year
-
-
-
437,959
437,959
647
438,606
Other comprehensive income:
Revaluation of property, plant and equipment
-
1,576,693
-
-
1,576,693
-
1,576,693
Currency translation differences
-
-
-
(14,182)
(14,182)
-
(14,182)
Tax relating to other comprehensive income
-
(320,493)
-
-
0
(320,493)
-
(320,493)
Total comprehensive income for the year
-
1,256,200
-
423,777
1,679,977
647
1,680,624
Dividends
11
-
-
-
(87,500)
(87,500)
-
(87,500)
Transfers
-
(187,835)
-
187,835
-
-
-
Balance at 31 October 2023
8,366
7,556,882
1,634
6,161,516
13,728,398
(202,412)
13,525,986
ROYAL BAY CARE HOMES LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 18 -
Share capital
Revaluation reserve
Capital redemption reserve
Retained earnings
Total
Notes
£
£
£
£
£
Balance at 1 November 2021
8,366
1,174,224
1,634
675,146
1,859,370
Year ended 31 October 2022:
Loss and total comprehensive income for the year
-
-
-
(375,626)
(375,626)
Dividends
11
-
-
-
(89,500)
(89,500)
Transfers
-
(96,469)
-
96,469
-
Balance at 31 October 2022
8,366
1,077,755
1,634
306,489
1,394,244
Year ended 31 October 2023:
Loss for the year
-
-
-
(179,322)
(179,322)
Other comprehensive income:
Revaluation of property, plant and equipment
-
877,640
-
-
877,640
Tax relating to other comprehensive income
-
(213,518)
-
-
0
(213,518)
Total comprehensive income for the year
-
664,122
-
(179,322)
484,800
Dividends
11
-
-
-
(87,500)
(87,500)
Transfers
-
(23,570)
-
23,570
-
Balance at 31 October 2023
8,366
1,718,307
1,634
63,237
1,791,544
ROYAL BAY CARE HOMES LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 19 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
33
1,910,679
1,457,234
Interest paid
(555,390)
(297,246)
Income taxes paid
(459,437)
(235,036)
Net cash inflow from operating activities
895,852
924,952
Investing activities
Purchase of property, plant and equipment
(131,466)
(203,449)
Loans made
(273,881)
-
Receipts arising from loans made
-
583,545
Interest received
38,690
29,780
Net cash (used in) generated from investing activities
(366,657)
409,876
Financing activities
Repayment of bank loans
(151,175)
(224,085)
Dividends paid to equity shareholders
(87,500)
(89,500)
Net cash used in financing activities
(238,675)
(313,585)
Net increase in cash and cash equivalents
290,520
1,021,243
Cash and cash equivalents at beginning of year
1,983,730
961,785
Effect of foreign exchange rates
(14,355)
702
Cash and cash equivalents at end of year
2,259,895
1,983,730
ROYAL BAY CARE HOMES LTD
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 20 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
34
983,792
610,270
Interest paid
(543,054)
(296,780)
Income taxes paid
(44,079)
(30,901)
Net cash inflow from operating activities
396,659
282,589
Investing activities
Purchase of property, plant and equipment
(59,627)
(77,967)
Loans made
(273,881)
-
0
Receipts arising from loans made
-
583,545
Interest received
36,128
29,780
Dividends received
500,000
500,000
Net cash generated from investing activities
202,620
1,035,358
Financing activities
Repayment of bank loans
(151,175)
(224,085)
Dividends paid to equity shareholders
(87,500)
(89,500)
Net cash used in financing activities
(238,675)
(313,585)
Net increase in cash and cash equivalents
360,604
1,004,362
Cash and cash equivalents at beginning of year
1,741,796
737,434
Cash and cash equivalents at end of year
2,102,400
1,741,796
ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 21 -
1
Accounting policies
Company information

Royal Bay Care Homes Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 31/33 Commercial Road, Poole, Dorset, BH14 0HU.

 

The group consists of Royal Bay Care Homes Limited and all of its subsidiaries.

1.1
Accounting convention

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

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

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

As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s loss for the year was £179,322 (2022: £375,626 loss).

1.2
Basis of consolidation

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 22 -

The consolidated financial statements incorporate those of Royal Bay Care Homes Ltd and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

 

All financial statements are made up to 31 October 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

 

For the purpose of presenting consolidated financial statements, the assets and liabilities of the group's foreign operations are translated from their functional currency to sterling using the closing exchange rate. Income and expenses are translated using the average rate for the period. Exchange differences arising on the translation of group companies are recognised in other comprehensive income.

 

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

1.3
Going concern

The directors have adopted the going concern basis in preparing these financial statements after assessing the principal risks applicable to the company. These include rising inflation, staff shortages as a result of Brexit, the 9.8% increase in the National Living Wage from 1 April 2024 for employees over the age of 21, the cost of living crisis and higher insurance premiums. They are satisfied that the company, with the support of other group companies, can meet its liabilities as they fall due, being a period of not less than 12 months from the date of approval of these financial statements, and to be well placed to manage its financing and business risks satisfactorily. Overall, the directors do not consider there to be a cause for material uncertainty regarding the company's going concern status as at the date of signing these financial statements.

 

1.4
Revenue

Revenue is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the supply of care services represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the fair value of the consideration received or receivable. Where payments are received from customers in advance of services provided the amounts are recorded as deferred income and included as part of payables due within one year.

Interest income is recognised when it is probable that the economic benefits will flow to the group and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.

ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 23 -
1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised over the FRS 102 default period of 10 years on a straight line basis, as the directors consider that it is not possible to make a reliable estimate of the useful life of the assets.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.6
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

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

Software
10% straight line
1.7
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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

Freehold land and buildings
25 to 40 years straight line
Plant and equipment
25% on reducing balance
Fixtures and fittings
25% on reducing balance
Motor vehicles
25% on reducing balance

Freehold land is not depreciated.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

1.8
Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

 

Where fair value cannot be achieved without undue cost or effort, investment property is accounted for as property, plant and equipment.

ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 24 -
1.9
Non-current investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

1.10
Impairment of non-current assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 25 -

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.11
Inventories

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell.

Cost is calculated using the weighted average method.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventories over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.12
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.13
Financial instruments

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

 

Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

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

Other financial assets

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

ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 26 -
Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

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

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

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

ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 27 -
1.14
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.15
Taxation

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

Current tax

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

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.16
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.17
Retirement benefits

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

1.18
Leases

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 28 -
1.19
Government grants

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

 

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

1.20
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

1.21

Credit risk

The group implements appropriate credit checks on residents and service users prior to providing services. This reduces the exposure of the group in respect of credit risk.

1.22

Liquidity risk

The policy of the Group is to maintain a mix of short and long term borrowings to effectively manage

liquidity risk.

1.23

Cash flow and interest rate risk

The Group’s interest rate risk arises primarily from long-term borrowings issued at variable rates which exposes the Group to cash flow interest rate risk. The cash flow interest rate risk is managed within the Group’s business projections and planning, in the monitoring of financial covenants and through negotiation of facility terms with the provider of the borrowing facility at specified intervals.

2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

3
Revenue

An analysis of the group's revenue is as follows:

2023
2022
£
£
Revenue analysed by class of business
Care services
12,737,437
11,915,983
ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
3
Revenue
(Continued)
- 29 -
2023
2022
£
£
Other significant revenue
Interest income
38,690
29,780
Commissions received
3,305
8,546
Grants received
10,561
175,849
Rental income arising from investment properties
38,766
47,255
Management fee
8,500
12,000
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging (crediting):
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(26,339)
(37,926)
Government grants
(10,561)
(175,849)
Depreciation of owned property, plant and equipment
617,438
429,568
Amortisation of intangible assets
1,201
1,198
Operating lease charges
42,562
24,863

Amortisation of intangible assets is included in administrative expenses.

Government grants received in the year relate to various Covid-19 support schemes.

5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
63,430
12,100
Audit of the financial statements of the company's subsidiaries
33,480
45,900
96,910
58,000
For other services
Taxation compliance services
3,929
439
All other non-audit services
83,362
80,026
87,291
80,465
ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 30 -
6
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Directors
5
5
5
5
Care and nursing
319
324
88
94
Total
324
329
93
99

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
6,423,671
6,042,910
1,926,649
1,851,156
Social security costs
515,186
487,783
164,032
148,574
Pension costs
124,559
114,458
32,756
31,063
7,063,416
6,645,151
2,123,437
2,030,793
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
179,120
207,943
Company pension contributions to defined contribution schemes
2,642
2,642
181,762
210,585

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022: 2).

8
Investment income
2023
2022
£
£
Interest income
Other interest income
38,690
29,780
ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 31 -
9
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
518,652
283,768
Other interest on financial liabilities
11,632
13,436
530,284
297,204
Other finance costs:
Other interest
25,106
42
Total finance costs
555,390
297,246
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
275,084
327,034
Adjustments in respect of prior periods
5,636
(47)
Total current tax
280,720
326,987
Deferred tax
Origination and reversal of timing differences
(13,268)
(12,263)
Changes in tax rates
-
0
186,146
Total deferred tax
(13,268)
173,883
Total tax charge
267,452
500,870
ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
10
Taxation
(Continued)
- 32 -

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

2023
2022
£
£
Profit before taxation
706,058
850,883
Expected tax charge based on the standard rate of corporation tax in the UK of 22.52% (2022: 19.00%)
158,989
161,668
Tax effect of expenses that are not deductible in determining taxable profit
20,194
143,865
Tax effect of income not taxable in determining taxable profit
(7,591)
(11,046)
Adjustments in respect of prior years
5,636
(47)
Effect of change in corporation tax rate
-
186,146
Tax at marginal rate
(254)
-
0
Depreciation in excess of capital allowances
103,746
32,547
Deferred tax on accelerated capital allowances
(13,268)
4,861
Deferred tax on revaluations
-
0
(17,124)
Taxation charge
267,452
500,870

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

2023
2022
£
£
Deferred tax arising on:
Revaluation of property
320,493
-

Shown in the tax charge for the year is an amount of £nil (2022: £186,146) in connection with the change in relevant tax rate on the deferred tax liabilities of the company. This is due to the substantial enactment of Finance Act 2021 which increases the rate of UK corporation tax from 19% to 25% from 1 April 2023.

11
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
87,500
89,500
ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 33 -
12
Intangible fixed assets
Group
Goodwill
Software
Total
£
£
£
Cost
At 1 November 2022 and 31 October 2023
1,744,534
16,045
1,760,579
Amortisation and impairment
At 1 November 2022
1,744,534
8,415
1,752,949
Amortisation charged for the year
-
0
1,201
1,201
At 31 October 2023
1,744,534
9,616
1,754,150
Carrying amount
At 31 October 2023
-
0
6,429
6,429
At 31 October 2022
-
0
7,630
7,630

Intangible fixed assets with a carrying amount of £6,429 (2022: £7,630) have been pledged to secure liabilities of the group. Further information is provided in note 22.

Company
Goodwill
Software
Total
£
£
£
Cost
At 1 November 2022 and 31 October 2023
410,001
5,487
415,488
Amortisation and impairment
At 1 November 2022
410,001
3,292
413,293
Amortisation charged for the year
-
0
549
549
At 31 October 2023
410,001
3,841
413,842
Carrying amount
At 31 October 2023
-
0
1,646
1,646
At 31 October 2022
-
0
2,195
2,195
ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 34 -
13
Property, plant and equipment
Group
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 November 2022
17,712,213
23,556
2,379,651
41,582
20,157,002
Additions
17,858
-
0
113,608
-
0
131,466
Revaluation
831,511
-
0
-
0
-
0
831,511
At 31 October 2023
18,561,582
23,556
2,493,259
41,582
21,119,979
Depreciation and impairment
At 1 November 2022
272,684
18,221
1,922,818
30,735
2,244,458
Depreciation charged in the year
472,500
1,313
140,911
2,714
617,438
Revaluation
(745,184)
-
0
-
0
-
0
(745,184)
At 31 October 2023
-
0
19,534
2,063,729
33,449
2,116,712
Carrying amount
At 31 October 2023
18,561,582
4,022
429,530
8,133
19,003,267
At 31 October 2022
17,439,529
5,335
456,833
10,847
17,912,544
Company
Freehold land and buildings
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost or valuation
At 1 November 2022
3,538,076
759,636
18,240
4,315,952
Additions
17,858
41,769
-
0
59,627
Revaluation
702,521
-
0
-
0
702,521
At 31 October 2023
4,258,455
801,405
18,240
5,078,100
Depreciation and impairment
At 1 November 2022
64,171
597,861
13,729
675,761
Depreciation charged in the year
110,948
50,887
1,129
162,964
Revaluation
(175,119)
-
0
-
0
(175,119)
At 31 October 2023
-
0
648,748
14,858
663,606
Carrying amount
At 31 October 2023
4,258,455
152,657
3,382
4,414,494
At 31 October 2022
3,473,905
161,775
4,511
3,640,191
ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
13
Property, plant and equipment
(Continued)
- 35 -

The carrying value of land, included in land and buildings above, comprises:

Group
Company
2023
2022
2023
2022
£
£
£
£
Freehold
2,026,945
4,514,404
1,136,492
1,136,492

Freehold land and buildings were revalued at October 2023 based on the expected market value of the business as determined by the directors of the company. No formal valuation has been prepared in regards to this valuation, but the directors have concluded that they have sufficient and reliable market data to back up this value.

 

If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Cost
10,164,714
10,103,911
2,874,331
2,856,473
Accumulated depreciation
(2,904,997)
(2,433,712)
(655,299)
(616,040)
Carrying value
7,259,717
7,670,199
2,219,032
2,240,433

Property, plant and equipment with a carrying amount of £19,003,267 (2022: £17,912,544) have been pledged to secure liabilities of the group. Further information is provided in note 22.

Group
The fair value of the cost of property as at 31 October 2023 is represented by:
Freehold
£
Cost
10,173,715
Valuation in 2014
7,075,825
Valuation in 2017
908,450
Valuation in 2018
(1,252,780)
Valuation in 2020
1,023,673
Transfer to investment property 2020
(109,000)
Valuation in 2021
(89,812)
Valuation in 2023
831,511
18,561,582
ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
13
Property, plant and equipment
(Continued)
- 36 -
Company
The fair value of the cost of property as at 31 October 2023 is represented by:
Freehold
£
Cost
2,874,332
Valuation in 2014
628,475
Valuation in 2017
420,095
Valuation in 2018
(2,569)
Valuation in 2021
(364,399)
Valuation in 2023
702,521
4,258,455
14
Investment property
Group
Company
2023
2023
£
£
Fair value
At 1 November 2022
1,145,518
-
Foreign currency adjustments
11,767
-
At 31 October 2023
1,157,285
-

The fair value of the investment property excluding the investment property held by RW Royal Bay Care Homes Limited was revalued in October 2018 by Savills (UK) Limited, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.

 

Investment properties held in subsidiary company RW Royal Bay Care Homes Limited were revalued in August 2020 by Christiana Zaloumi, independent valuers not connected with the company, on the basis of market value.

 

The directors have reviewed the fair value of the investment properties as at 31 October 2023 based on existing market evidence available to them in respect of yields and transaction prices. They consider that the values have not materially changed.

Investment properties with a carrying amount of £1,157,285 (2022: £1,145,518) have been pledged to secure liabilities of the group. Further information is provided in note 22.

 

 

The carrying value of land, included in land and buildings above, comprises:

 

 

 

Group
Company
2023
2022
2023
2022
£
£
£
£
Freehold
336,712
336,712
-
-
ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
14
Investment property
(Continued)
- 37 -
Group
The fair value of the cost of investment property as at 31 October 2023 is represented by:
£
Cost
1,117,318
Valuation in 2014
119,000
Valuation in 2018
24,000
Valuation in 2019
(223,339)
Transfer in 2020
109,000
Foreign exchange movement
11,306
1,157,285
15
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
16
-
0
-
0
2,741,947
2,741,947
Investments in associates
-
0
-
0
-
0
30
-
0
-
0
2,741,947
2,741,977
Financial assets pledged as collateral

Fixed asset investments with a carrying amount of £2,741,947 (2022: £2,741,977) have been pledged to secure liabilities of the company. Further information is provided in note 22.

 

 

Movements in non-current investments
Company
Shares in subsidiaries and associates
£
Cost or valuation
At 1 November 2022
2,741,977
Disposals
(30)
At 31 October 2023
2,741,947
Carrying amount
At 31 October 2023
2,741,947
At 31 October 2022
2,741,977
ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 38 -
16
Subsidiaries

Details of the company's subsidiaries at 31 October 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Indirect
Castle Farm Care Limited
England and Wales
Care home operation
Ordinary
100.00
-
Claremont Gardens Management (Fontwell) Limited
England and Wales
Dormant company
Ordinary
0
100.00
RB Court Management (Aldwick) Limited
England and Wales
Dormant company
Ordinary
100.00
-
Regency Oldhomes Limited
England and Wales
Care home operation
Ordinary
100.00
-
Claremont Lodge Care Home Limited
England and Wales
Care home operation
Ordinary
100.00
-
RW Royal Bay Care Homes Limited
Cyprus
Property holding company
Ordinary
75.00
-
Apsley House Care Home Limited
England and Wales
Care home operation
Ordinary
100.00
-

The investments in subsidiaries are all stated at cost, less provision for impairment.

 

The registered office of each of the above subsidiaries is 31/33 Commercial Road, Poole, Dorset BH14 0HU, with the exception of RW Royal Bay Care Homes Limited whose registered office is Gladstonos 1, Panayiotio Building, Floor 2, Flat 205, 6023, Larnaca, Cyprus.

17
Financial instruments
Group
Company
2023
2022
2023
2022
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
3,116,298
2,754,258
3,774,717
3,553,064
Carrying amount of financial liabilities
Measured at amortised cost
8,339,320
8,416,933
10,320,268
9,620,858

Further information relating to financial assets and liabilities can be found in notes 19, 20 and 21.

18
Inventories
Group
Company
2023
2022
2023
2022
£
£
£
£
Patient requisites
22,577
19,233
5,323
6,012

Inventories with a carrying amount of £22,577 (2022: £19,233) have been pledged to secure liabilities of the group. Further information is provided in note 22.

 

ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 39 -
19
Trade and other receivables
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade receivables
397,951
399,955
125,118
171,774
Amounts owed by group undertakings
-
-
943,258
1,042,267
Other receivables
2,713,648
2,350,426
2,706,341
2,339,023
Prepayments and accrued income
67,365
68,295
26,085
28,050
3,178,964
2,818,676
3,800,802
3,581,114

Trade debtors and other receivables with a carrying amount of £3,178,964 (2022: £2,818,676) have been pledged to secure liabilities of the group. Further information is provided in note 22.

20
Current liabilities
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
22
149,936
960,223
149,936
960,223
Trade payables
195,605
183,690
52,973
49,533
Amounts owed to group undertakings
-
0
-
0
2,754,665
1,905,609
Corporation tax payable
233,452
324,011
91,167
44,626
Other taxation and social security
206,192
197,283
97,662
94,273
Other payables
123,936
149,973
31,388
66,281
Accruals and deferred income
775,279
687,595
236,742
203,760
1,684,400
2,502,775
3,414,533
3,324,305
21
Non-current liabilities
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
22
7,094,564
6,435,452
7,094,564
6,435,452
Amounts included above which fall due after five years are as follows:
Payable by instalments
-
5,566,156
-
5,566,156
ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 40 -
22
Borrowings
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
7,244,500
7,395,675
7,244,500
7,395,675
Payable within one year
149,936
960,223
149,936
960,223
Payable after one year
7,094,564
6,435,452
7,094,564
6,435,452

Bank loans included above totalling £6,498,218 (2022: £6,630,832) are secured by way of a first legal charge over the properties excluding those held by RW Royal Bay Care Homes Limited and a cross guarantee and first debenture over all assets and undertakings of the group excluding RW Royal Bay Care Homes Limited. Interest on bank loans is charged at 2.85% over the bank base rate per annum and the loan matures in October 2028.

 

Bank loans included above totalling £746,282 (2022: £764,843) are secured by a joint and several personal guarantee from directors of the company limited to £800,000 and by way of a first legal charge over the properties excluding those held by RW Royal Bay Care Homes Limited and a cross guarantee and first debenture over all assets and undertakings of the group excluding RW Royal Bay Care Homes Limited. A new loan agreement has been signed during the year. Interest is charged at 3.5% (2022: 4.5%) over the bank base rate per annum and the loan matures in October 2028 (2022: May 2023).

 

The directors have given a personal joint and several guarantee in respect of the above borrowings, limited to £2,450,000. In addition, a director has given a personal guarantee in respect of the above borrowings.

23
Deferred grant income

For the group, government grants totalling £692 (2022: £228,486) were received in the year. An amount of £165,659 (2022: £238,030) has not yet been fully utilised as at 31 October 2023 and so is recognised in accruals and deferred income.  In addition, as at 31 October 2023 an amount of £26,777 (2022: £34,265) remains in accruals and deferred income to be released in line with the accounting policy for capital grants.

 

For the company, government grants totalling £nil (2022: £77,878) were received in the year in connection with coronavirus funding. An amount of £40,454 (2022: £42,737) has not yet been fully utilised as at 31 October 2023 and so is recognised in accruals and deferred income.  In addition, as at 31 October 2023 an amount of £6,586 (2022: £9,003) remains in accruals and deferred income to be released in line with the accounting policy for capital grants.

ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 41 -
24
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
373,030
386,298
Revaluations
2,887,437
2,566,944
Investment property
63,000
63,000
3,323,467
3,016,242
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
193,202
200,033
Revaluations
572,769
359,251
765,971
559,284
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 November 2022
3,016,242
559,284
Credit to profit or loss
(13,268)
(6,831)
Charge to other comprehensive income
320,493
213,518
Liability at 31 October 2023
3,323,467
765,971

Of the deferred tax liability set out above, an amount of £34,438 (2022: £35,197) is expected to reverse within 12 months and relates to accelerated capital allowances.

 

Of the deferred tax liability set out above, an amount of £69,988 (2022: £50,862) is expected to reverse within 12 months and relates to revaluation of freehold property.

25
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
124,559
114,458
ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
25
Retirement benefit schemes
(Continued)
- 42 -

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund. At the balance sheet date, unpaid contributions of £30,884 (2022: £24,296) were due to the fund. They are included in other creditors and in accruals.

26
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
4,736
4,736
4,736
4,736
Ordinary B shares of £1 each
860
860
860
860
Ordinary C shares of £1 each
1,825
1,825
1,825
1,825
Ordinary D shares of £1 each
406
406
406
406
Ordinary F shares of £1 each
176
176
176
176
Ordinary G shares of £1 each
363
363
363
363
8,366
8,366
8,366
8,366

All shares carry voting rights but have no right to fixed income or fixed repayment of capital.

27
Reserves
Revaluation reserve

The revaluation reserve represents the cumulative effect of revaluations of freehold land and buildings which are revalued to fair value. At the end of each reporting period a transfer is made to retained earnings to transfer the excess depreciation that has been charged in the income statement which relates to the revalued portion of the assets. In respect of revaluation gains, deferred tax is recognised and is initially debited to the revaluation reserve. The amount of deferred tax recognised is adjusted on an annual basis for any movement in amounts debited or credited to the revaluation reserve in the year. Current year corporation tax is not required to be recognised in respect of any amounts debited or credited to the revaluation reserve.

Capital redemption reserve

The capital redemption reserve represents the nominal value of share capital previously cancelled by the group.

Retained earnings

Retained earnings represents cumulative profits or losses, including unrealised profit on the remeasurement of investment properties, net of dividends paid and other adjustments.

28
Financial commitments, guarantees and contingent liabilities

As at the 31 October 2023, the group had committed to repairs and renewals costs of £nil (2022: £15,740).

ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 43 -
29
Operating lease commitments

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
65,795
21,401
46,650
6,386
Between two and five years
171,947
49,123
108,158
6,034
In over five years
1,483
4,860
-
-
239,225
75,384
154,808
12,420
30
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2023
2022
£
£
Aggregate compensation
179,120
207,943

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
2022
£
£
Company
Entities over which the company has control, joint control or significant influence
2,754,665
1,905,609

 

 

ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
30
Related party transactions
(Continued)
- 44 -

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2023
2023
2023
2022
2022
2022
Balance
Provision
Net
Balance
Provision
Net
£
£
£
£
£
£
Group
Entities over which the group has control, joint control or significant influence
-
-
-
-
62,039
(62,039)
Key management personnel
2,851,851
1,011,087
1,840,764
2,578,023
1,011,087
1,566,936
Other related parties
1,807,026
1,807,026
-
1,807,026
1,807,026
-
Company
Entities over which the company has control, joint control or significant influence
2,032,220
1,088,962
943,258
2,181,673
1,139,406
1,042,267
Key management personnel
2,853,511
1,011,087
1,842,424
2,579,630
1,011,087
1,568,543
Other related parties
1,807,026
1,807,026
-
1,807,026
1,807,026
-

 

 

ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 45 -
Other information

The directors have given personal joint and several guarantee in respect of borrowings from Metro Bank PLC, limited to £2,450,000. In addition, a director has given a personal guarantee in respect of the above borrowings.

 

The key management personnel loan is unsecured, repayable on demand and interest is charged at the official rate.

 

The loans from other entities and related parties are unsecured, repayable on demand and no interest is charged.

31
Directors' transactions

Dividends totalling £87,500 (2022: £89,500) were paid in the year in respect of shares held by the company's directors.

As at 31 October 2023 the group was owed amounts totalling £2,852,310 (2022: £2,579,630) from its directors. These loans are repayable on demand and interest is charged at the official rate.

 

Of the amount owed by directors above, a provision for doubtful debt was included in the year of £1,011,087 (2022: £1,011,087) in relation to a directors loan account for which the directors believe may not be fully recoverable.

 

A director has given a personal guarantee in respect of borrowings from Metro Bank PLC, limited to £800,000. In addition, the directors have given a personal joint and several guarantee in respect of the Metro Bank PLC borrowings, limited to £2,450,000.

32
Controlling party

The ultimate controlling party is Mrs C Wilson by virtue of her 64.021% shareholding of the issued share capital of the company.

 

33
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
438,606
350,013
Adjustments for:
Taxation charged
267,452
500,870
Finance costs
555,390
297,246
Investment income
(38,690)
(29,780)
Amortisation and impairment of intangible assets
1,201
1,198
Depreciation and impairment of property, plant and equipment
617,438
429,568
Movements in working capital:
Increase in inventories
(3,344)
(3,699)
Increase in trade and other receivables
(86,403)
(18,709)
Increase (decrease) in trade and other payables
159,029
(69,473)
Cash generated from operations
1,910,679
1,457,234
ROYAL BAY CARE HOMES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 46 -
34
Cash generated from operations - company
2023
2022
£
£
Loss for the year after tax
(179,322)
(375,626)
Adjustments for:
Taxation (credited) charged
(4,369)
128,973
Finance costs
543,054
296,780
Investment income
(536,128)
(529,780)
Amortisation and impairment of intangible assets
549
548
Depreciation and impairment of property, plant and equipment
162,964
119,598
Other gains and losses
30
-
Movements in working capital:
Decrease in inventories
689
1,403
Decrease in trade and other receivables
54,194
575,385
Increase in trade and other payables
942,132
392,989
Cash generated from operations
983,793
610,270
35
Analysis of changes in net debt - group
1 November 2022
Cash flows
Exchange rate movements
31 October 2023
£
£
£
£
Cash at bank and in hand
1,983,730
290,519
(14,354)
2,259,895
Borrowings excluding overdrafts
(7,395,675)
151,175
-
(7,244,500)
(5,411,945)
441,694
(14,354)
(4,984,605)
36
Analysis of changes in net debt - company
1 November 2022
Cash flows
31 October 2023
£
£
£
Cash at bank and in hand
1,741,796
360,604
2,102,400
Borrowings excluding overdrafts
(7,395,675)
151,175
(7,244,500)
(5,653,879)
511,779
(5,142,100)
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