Company registration number 13709372 (England and Wales)
EPINAL WAY CARE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
EPINAL WAY CARE LIMITED
COMPANY INFORMATION
Director
Mr S Rai
Secretary
Mr D Kaplan
Company number
13709372
Registered office
3rd Floor
Butt Dyke House
33 Park Row
Nottingham
NG1 6EE
Auditor
HSKSG Audit Limited
3rd Floor
Butt Dyke House
33 Park Row
Nottingham
NG1 6EE
Business address
Epinal Way Care Centre
Hospital Way
Loughborough
Leicestershire
LE11 3GD
EPINAL WAY CARE LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Notes to the financial statements
10 - 20
EPINAL WAY CARE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 1 -
The director presents the strategic report for the year ended 30 November 2023.
Review of the business
During the year ended 30 November 2023 the company results show net profit after tax of £1,871k (2022: £645k).
Principal risks and uncertainties
The market for the provision of care remains highly competitive, but occupancy levels across the home remained high during the period.
The company has interest free loans from group companies and needs to generate funds to repay these debts or rely on these being uncalled. The company does continue to make profits and the parent company is able to provide finance through its credit facility.
Key performance indicators
The company has adopted a monthly reporting package used throughout the group to monitor wages, occupancy and EBITDA. Gross profit % for the period is 42.94% (2022: 44.63%).
Other performance indicators
The company closely monitors its performance against CQC guidelines. The latest rating for the company was Good. Internal reviews are carried out against key criteria to ensure that the home is meeting the necessary standards when inspections take place.
Mr S Rai
Director
22 November 2024
EPINAL WAY CARE LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 2 -
The director presents his annual report and financial statements for the year ended 30 November 2023.
Principal activities
The principal activity of the company is that of the provision of nursing and residential care.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr S Rai
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the 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 company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
EPINAL WAY CARE LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 3 -
On behalf of the board
Mr S Rai
Director
22 November 2024
EPINAL WAY CARE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF EPINAL WAY CARE LIMITED
- 4 -
Opinion
We have audited the financial statements of Epinal Way Care Limited (the 'company') for the year ended 30 November 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 November 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
EPINAL WAY CARE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF EPINAL WAY CARE LIMITED (CONTINUED)
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We considered the nature of the company's business and its control environment. We also enquired of management about their identification and assessment of the risks of irregularities.
We obtained an understanding of the legal and regulatory framework in which the company operates and identified key laws and regulations that:
- Had a direct effect on the determination of material amounts and disclosures in the financial statements, which included the Companies Act 2006, tax legislation and payroll legislation; and
- Did not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate.
We discussed among the audit engagement team the opportunities and incentives that may exist within the organisation for fraud and how / where fraud might occur in the financial statements.
EPINAL WAY CARE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF EPINAL WAY CARE LIMITED (CONTINUED)
- 6 -
In common with all audits under ISA's (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of accounting adjustments and journal entries, assessed whether accounting estimates were reasonable and accurate and reviewed the accounting records for any significant or unusual transactions.
In addition, our procedures to respond to the risks identified included:
- Reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provision of relevant laws and regulations described as having a direct effect on the financial statements;
- Performing analytical procedures to identify any unusual or unexpected variances that may indicate risks of material misstatement due to fraud;
- Enquiring of management about any instances of non-compliance with laws and regulations and any instances of known or suspected fraud; and
- Reviewing the latest available Care Quality Commission inspection reports for all registered homes operated by the company.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment forgery, collusion, omission or misrepresentation.
A further description of our responsibilities 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.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Philip Handley FCA
Senior Statutory Auditor
For and on behalf of HSKSG Audit Limited
26 November 2024
Chartered Accountants
Statutory Auditor
3rd Floor
Butt Dyke House
33 Park Row
Nottingham
NG1 6EE
EPINAL WAY CARE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 7 -
Year
Period
ended
ended
30 November
30 November
2023
2022
Notes
£
£
Turnover
3
11,896,698
3,797,511
Cost of sales
(6,788,030)
(2,102,868)
Gross profit
5,108,668
1,694,643
Administrative expenses
(2,499,148)
(821,158)
Other operating income
18,599
3,177
Operating profit
4
2,628,119
876,662
Interest receivable and similar income
6
4,301
Interest payable and similar expenses
7
(10,277)
Profit before taxation
2,622,143
876,662
Tax on profit
8
(751,392)
(231,181)
Profit for the financial year
1,870,751
645,481
The income statement has been prepared on the basis that all operations are continuing operations.
EPINAL WAY CARE LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
30 NOVEMBER 2023
30 November 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
9
7,282,594
8,122,894
Other intangible assets
9
5
5
Total intangible assets
7,282,599
8,122,899
Tangible assets
10
8,890,629
9,072,256
16,173,228
17,195,155
Current assets
Stocks
12
838
838
Debtors
11
853,102
740,129
Cash at bank and in hand
671
1,277
854,611
742,244
Creditors: amounts falling due within one year
13
(14,497,198)
(17,290,834)
Net current liabilities
(13,642,587)
(16,548,590)
Total assets less current liabilities
2,530,641
646,565
Provisions for liabilities
Deferred tax liability
17
14,408
1,083
(14,408)
(1,083)
Net assets
2,516,233
645,482
Capital and reserves
Called up share capital
16
1
1
Profit and loss reserves
2,516,232
645,481
Total equity
2,516,233
645,482
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved and signed by the director and authorised for issue on 22 November 2024
Mr S Rai
Director
Company registration number 13709372 (England and Wales)
EPINAL WAY CARE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 28 October 2021
-
Period ended 30 November 2022:
Profit and total comprehensive income
-
645,481
645,481
Issue of share capital
16
1
-
1
Balance at 30 November 2022
1
645,481
645,482
Year ended 30 November 2023:
Profit and total comprehensive income
-
1,870,751
1,870,751
Balance at 30 November 2023
1
2,516,232
2,516,233
EPINAL WAY CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 10 -
1
Accounting policies
Company information
Epinal Way Care Limited is a private company limited by shares incorporated in England and Wales. The registered office is 3rd Floor, Butt Dyke House, 33 Park Row, Nottingham, NG1 6EE.
1.1
Reporting period
The company was incorporated on 28 October 2021 and the comparative period shows the results from this date to 30 November 2022, therefore the comparative values presented in the financial statements are not comparable. The period end was extended in order to align with the parent and other group companies.
1.2
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. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
Epinal Way Care Limited is a wholly owned subsidiary of Rushcliffe Care Group Limited and the results of Epinal Way Care Limited are included in the consolidated financial statements of ultimate parent, Rushcliffe Care Holdings Limited, which are available from Companies House.
EPINAL WAY CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.3
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
The company has made a profit on ordinary activities before taxation of £2,622,143 (2022: £876,662). The statement of financial position details net current liabilities of £13,642,587 (2022: £16,548,590) and net assets of £2,516,233 (2022: £645,482). An associate company, Rushcliffe Care Limited, has confirmed that it will provide the company with adequate cash resources to fund its trading and other obligations during the course of the twelve months from the date of approval of the financial statements.
The parent company meets its day to day working capital requirements through the overdraft facility, which is repayable on demand, and support from its subsidiary companies. The parent company forecasts to operate well within the new facilities.
Given the above and that the associated group company continues to make significant profits, it is on this basis that the director considers that the company will have sufficient cash resources available to fund its activities and other obligations during the course of the twelve months from the date of approval of the financial statements and it is therefore appropriate for the financial statements to be prepared on the going concern basis.
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for nursing and residential care services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of businesses 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 considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
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:
Other intangibles
10% straight line
1.7
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
EPINAL WAY CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 12 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
2% straight line
Fixtures and fittings
15% reducing balance
Office and computer equipment
15% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.8
Stocks
Stock is valued at the lower of cost and net realisable value, after making due allowances for obsolete and slow moving items.able for any loss of service potential.
1.9
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.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
EPINAL WAY CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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 company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, 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 creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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.
EPINAL WAY CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the company 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 company.
1.12
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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax 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 when the company has 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.
1.13
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 fixed 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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
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.
EPINAL WAY CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.16
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Services provided
11,896,698
3,797,511
2023
2022
£
£
Other revenue
Interest income
4,301
-
Grants received
-
1,377
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(1,377)
Fees payable to the company's auditor for the audit of the company's financial statements
5,630
2,800
Depreciation of owned tangible fixed assets
233,280
76,464
Amortisation of intangible assets
840,300
280,100
EPINAL WAY CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 16 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Carers and administrative staff
211
63
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
5,853,738
1,845,759
Social security costs
459,082
119,712
Pension costs
80,041
19,617
6,392,861
1,985,088
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
4,301
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
9,542
-
Other interest
735
10,277
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
826,042
230,098
Adjustments in respect of prior periods
(87,975)
Total current tax
738,067
230,098
Deferred tax
Origination and reversal of timing differences
13,325
1,083
Total tax charge
751,392
231,181
EPINAL WAY CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
8
Taxation
(Continued)
- 17 -
The main rate of corporation tax was 19% up to 31 March 2023 and 25% thereafter, which has resulted in an effective tax rate of 23.01% for the year ended 30 November 2023.
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
2,622,143
876,662
Expected tax charge based on the standard rate of corporation tax in the UK of 23.01% (2022: 19.00%)
603,355
166,566
Tax effect of expenses that are not deductible in determining taxable profit
1,375
Adjustments in respect of prior years
(87,975)
Permanent capital allowances in excess of depreciation
181,123
63,532
Depreciation on assets not qualifying for tax allowances
40,189
Short term timing differences
13,325
1,083
Taxation charge for the year
751,392
231,181
9
Intangible fixed assets
Goodwill
Other intangibles
Total
£
£
£
Cost
At 1 December 2022 and 30 November 2023
8,402,994
5
8,402,999
Amortisation and impairment
At 1 December 2022
280,100
280,100
Amortisation charged for the year
840,300
840,300
At 30 November 2023
1,120,400
1,120,400
Carrying amount
At 30 November 2023
7,282,594
5
7,282,599
At 30 November 2022
8,122,894
5
8,122,899
EPINAL WAY CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 18 -
10
Tangible fixed assets
Freehold land and buildings
Fixtures and fittings
Office and computer equipment
Total
£
£
£
£
Cost
At 1 December 2022
8,791,720
300,000
57,000
9,148,720
Additions
51,653
51,653
At 30 November 2023
8,791,720
351,653
57,000
9,200,373
Depreciation and impairment
At 1 December 2022
58,612
15,000
2,852
76,464
Depreciation charged in the year
174,660
50,496
8,124
233,280
At 30 November 2023
233,272
65,496
10,976
309,744
Carrying amount
At 30 November 2023
8,558,448
286,157
46,024
8,890,629
At 30 November 2022
8,733,108
285,000
54,148
9,072,256
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
720,876
670,557
Corporation tax recoverable
7,866
Amounts owed by group undertakings
1
1
Other debtors
19,715
Prepayments and accrued income
104,644
69,571
853,102
740,129
12
Stocks
2023
2022
£
£
Foodstuffs
838
838
EPINAL WAY CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 19 -
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
14
140,525
678,075
Trade creditors
746,311
745,020
Amounts owed to group undertakings
12,603,023
14,743,132
Corporation tax
230,098
Other taxation and social security
185,906
79,105
Other creditors
496,423
123,680
Accruals and deferred income
325,010
691,724
14,497,198
17,290,834
The company's bank reserve a right to set off and holds first legal mortgages, life policies, mortgage debentures and guarantees over land and buildings.
Lloyds Bank plc holds a debenture and an omnibus guarantee and set off agreement for Rushcliffe Care Group Limited and its subsidiaries.
14
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
140,525
678,075
Payable within one year
140,525
678,075
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
80,041
19,617
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
EPINAL WAY CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 20 -
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
14,408
1,083
2023
Movements in the year:
£
Liability at 1 December 2022
1,083
Charge to profit or loss
13,325
Liability at 30 November 2023
14,408
18
Ultimate controlling party
The immediate parent undertaking is Rushcliffe Care Group Limited by virtue of its majority shareholding of the issued ordinary share capital. The registered office is 3rd Floor, Butt Dyke House, 33 Park Row, Nottingham, NG1 6EE.
The ultimate controlling party is the director, S Rai, by virtue of his majority shareholding in the ultimate parent company Rushcliffe Care Holdings Limited.
Copies of the group accounts for Rushcliffe Care Holdings Limited are available from Companies House. This is the only group that the company is consolidated into for the year.
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