Company registration number 06899312 (England and Wales)
HENGOED PARK (SWANSEA) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
HENGOED PARK (SWANSEA) LIMITED
COMPANY INFORMATION
Directors
Mr Des Davies
Mr Spencer Davies
Mr Timothy Williams
Mrs N Williams
Company number
06899312
Registered office
5 New Mill Court
Phoenix Way
Enterprise Park
Swansea
SA7 9FG
Auditor
Harris Bassett Limited
5 New Mill Court
Phoenix Way
Enterprise Park
Swansea
SA7 9FG
Bankers
Barclays Bank
HENGOED PARK (SWANSEA) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Income statement
9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Notes to the financial statements
13 - 23
HENGOED PARK (SWANSEA) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 1 -
The directors present the strategic report for the year ended 31 May 2024.
Review of the business
The company operates a residential care home for the elderly, Hengoed Park, and is a subsidiary of Hengoed Holdings Limited.
Turnover of the home has increased by £1.09m (18.7%) to in excess of £6.8m.
Principal risks and uncertainties
The environment is heavily regulated in relation to hospital care and medical procedures. Registration of the care home is overseen by The Care and Social Services Inspectorate Wales (CSSIW), and this body carries out annual arranged inspections and spot checks throughout the year. Any unsatisfactory elements would result in further review of the appropriateness of registration.
Furthermore the care home has to conform to regulations specified by:
-The Local Health Board, generally relating to nursing care
-Social Services depending on the source of funding for residents
-Environmental Health with regards to catering, kitchens, general cleanliness and
waste.
Registration for the ability to continue to trade as a care home can be withdrawn by the CSSIW if they feel the registration should no longer apply. There is an on-going commitment to competence which is reinforced by the need to conform to requirements of CSSIW when reviewed. However, the home continues to receive glowing reports from the CSSIW, and should there be any suggestions or orders from the CSSIW regarding improvements etc, these are immediately acted upon. Hengoed Park and its sister home Hengoed Court have won prestigious awards nationally for the standard of care afforded to residents, and received accolades for the treatment of staff culminating in the Employer of the Year Award.
Care homes in Swansea, especially the smaller sub 40 bed homes have suffered over the last few years as a result of pressures owing to the pandemic. However, support from the Welsh Government has helped ease these pressures, along side fee increases substantiated by the high standard of appointment and care afforded to the residents. Rising costs seen across all sectors continue to be experienced, however it is hoped that fixed rates secured on energy costs and loan interest for the next few years, alongside the increased residential fees will enable the company to continue operating profitably.
Development and performance
The business is sound and is highly profitable, and is constantly striving to improve the experiences for residents. The homes are being continually modernised and updated, and facilities continue to be developed. During the year, two new large lounges were completed in Hengoed Park. Going forward, Hengoed Park is working towards becoming an all residential environment, whilst Hengoed Court Care Home will be an all nursing environment.
Key performance indicators
The key performance indicators used by the business are as follows:
Year ended Year ended Year ended
2024 2023 2022
£ £ £
Turnover 6,883,216 5,796,529 5,493,939
Gross profit 3,004,252 2,098,348 2,483,489
Gross profit % 43.6% 36.2% 45.2%
Profit before tax 1,927,827 1,162,708 1,658,290
Net assets 6,706,592 5,245,842 4,423,676
HENGOED PARK (SWANSEA) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 2 -
Other performance indicators
The main other performance indicators used by the directors to monitor performance are occupancy levels and the ratio of staff costs to turnover.
Mr Des Davies
Director
10 January 2025
HENGOED PARK (SWANSEA) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 May 2024.
Principal activities
The principal activity of the company was that of a nursing home operator.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final 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 Des Davies
Mr Spencer Davies
Mr Timothy Williams
Mrs N Williams
Financial instruments
Treasury operations and financial instruments
The company's principal financial instruments are comprised of bank balances, bank loans, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for the company's operations and expansion.
Due to the nature of the financial instruments used by the company there is little exposure to price risk. The company's approach to managing other risks applicable to the financial instruments concerned is shown below.
Trade debtors are managed by regular monitoring of amounts outstanding.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
Liquidity risk
In respect of bank balances the liquidity risk is managed by ensuring that the company does not exceed any restrictions on borrowings imposed by the bank on overdraft facility.
Interest rate risk
The bank loans are managed by ensuring all repayments are met, and the company's profitability ensures that there is a substantial interest cover and affords protection against the risk of future interest rate rises, the main risk facing the company.
Future developments
An application has been made to register one of the units for EMI nursing care, to enable the company to provide on-going care for those residents whose needs change thus allowing them to stay within the environment they have become accustomed to.
Auditor
In accordance with the company's articles, a resolution proposing that Harris Bassett Limited be reappointed as auditor of the company will be put at a General Meeting.
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.
HENGOED PARK (SWANSEA) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 4 -
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr Des Davies
Director
10 January 2025
HENGOED PARK (SWANSEA) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2024
- 5 -
The directors are responsible for preparing the annual 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HENGOED PARK (SWANSEA) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HENGOED PARK (SWANSEA) LIMITED
- 6 -
Opinion
We have audited the financial statements of Hengoed Park (Swansea) Limited (the 'company') for the year ended 31 May 2024 which comprise the income statement, 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 31 May 2024 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 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 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.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
HENGOED PARK (SWANSEA) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HENGOED PARK (SWANSEA) LIMITED (CONTINUED)
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
Results of our enquiries of management about their own identification and assessment of the risks of irregularities;
The nature of the industry and sector, control environment and business performance;
Any matters we identified having obtained and reviewed the company’s policies and procedures relating to:
Identifying, evaluation and complying with laws and regulations and whether they were aware of any instances of noncompliance;
Detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
The internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
The matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in revenue recognition. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and local tax legislation.
HENGOED PARK (SWANSEA) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HENGOED PARK (SWANSEA) LIMITED (CONTINUED)
- 8 -
Audit response to risks identified
Our procedures to respond to risks identified included the following:
Enquiry of management around potential litigation and claims.
Enquiry of entity staff to identify any instances of non-compliance with laws and regulations.
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness; and assessing whether the judgements made in making accounting estimates are indicative of a potential bias.
Our audit testing typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.
We also communicated relevant laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit.
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 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.
Nicholas Bassett
Senior Statutory Auditor
For and on behalf of Harris Bassett Limited
10 January 2025
Chartered Accountants
Statutory Auditor
5 New Mill Court
Phoenix Way
Enterprise Park
Swansea
SA7 9FG
HENGOED PARK (SWANSEA) LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 MAY 2024
- 9 -
2024
2023
Notes
£
£
Revenue
3
6,883,216
5,796,529
Cost of sales
(3,878,964)
(3,698,181)
Gross profit
3,004,252
2,098,348
Administrative expenses
(984,097)
(841,607)
Operating profit
4
2,020,155
1,256,741
Finance costs
7
(92,326)
(94,033)
Profit before taxation
1,927,829
1,162,708
Tax on profit
8
(467,079)
(340,542)
Profit for the financial year
1,460,750
822,166
The income statement has been prepared on the basis that all operations are continuing operations.
HENGOED PARK (SWANSEA) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024
- 10 -
2024
2023
£
£
Profit for the year
1,460,750
822,166
Other comprehensive income
-
-
Total comprehensive income for the year
1,460,750
822,166
HENGOED PARK (SWANSEA) LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2024
31 May 2024
- 11 -
2024
2023
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
9
6,712,370
6,901,888
Current assets
Inventories
10
2,500
2,500
Trade and other receivables
11
4,075,221
2,573,097
Cash and cash equivalents
410,251
126,963
4,487,972
2,702,560
Current liabilities
12
(1,438,853)
(1,286,157)
Net current assets
3,049,119
1,416,403
Total assets less current liabilities
9,761,489
8,318,291
Non-current liabilities
13
(2,719,897)
(2,732,449)
Provisions for liabilities
Deferred tax liability
16
335,000
340,000
(335,000)
(340,000)
Net assets
6,706,592
5,245,842
Equity
Called up share capital
18
1
1
Retained earnings
6,706,591
5,245,841
Total equity
6,706,592
5,245,842
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 10 January 2025 and are signed on its behalf by:
Mr Des Davies
Director
Company registration number 06899312 (England and Wales)
HENGOED PARK (SWANSEA) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 12 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 June 2022
1
4,423,675
4,423,676
Year ended 31 May 2023:
Profit and total comprehensive income
-
822,166
822,166
Balance at 31 May 2023
1
5,245,841
5,245,842
Year ended 31 May 2024:
Profit and total comprehensive income
-
1,460,750
1,460,750
Balance at 31 May 2024
1
6,706,591
6,706,592
HENGOED PARK (SWANSEA) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 13 -
1
Accounting policies
Company information
Hengoed Park (Swansea) Limited is a private company limited by shares incorporated in England and Wales. The registered office is 5 New Mill Court, Phoenix Way, Enterprise Park, Swansea, SA7 9FG.
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.
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 each category of financial instrument; 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.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Revenue
Revenue, which excludes value added tax, represents amounts receivable for goods and services, excluding discounts and rebates.
Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
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.
HENGOED PARK (SWANSEA) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 14 -
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:
Land and buildings Freehold
2% Straight line
Plant and machinery
15% Straight line
Fixtures, fittings & equipment
10%- 25% Straight line
Computer equipment
10% Straight line
Motor vehicles
25% Straight line
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.
1.5
Impairment of non-current assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
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.
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.
1.6
Inventories
Inventories are stated at the lower of cost and net realisable value.
1.7
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.
HENGOED PARK (SWANSEA) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 15 -
1.8
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 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.
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
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.
HENGOED PARK (SWANSEA) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 16 -
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 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.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
1.10
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.
HENGOED PARK (SWANSEA) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 17 -
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.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
2
Judgements and key sources of estimation uncertainty
In the application of the company’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.
HENGOED PARK (SWANSEA) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 18 -
3
Revenue
An analysis of the company's revenue is as follows:
2024
2023
£
£
Revenue analysed by class of business
Residential fees
6,881,760
5,581,693
Other income
1,456
214,836
6,883,216
5,796,529
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
9,300
8,840
Depreciation of owned property, plant and equipment
201,813
196,665
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Staff
166
155
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
3,153,790
2,855,845
Social security costs
225,859
200,671
Pension costs
53,240
47,545
3,432,889
3,104,061
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
60,360
60,360
HENGOED PARK (SWANSEA) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 19 -
7
Finance costs
2024
2023
£
£
Interest on bank overdrafts and loans
90,431
93,913
Interest on finance leases and hire purchase contracts
1,895
120
92,326
94,033
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
523,784
257,542
Adjustments in respect of prior periods
(51,705)
Total current tax
472,079
257,542
Deferred tax
Origination and reversal of timing differences
(5,000)
83,000
Total tax charge
467,079
340,542
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:
2024
2023
£
£
Profit before taxation
1,927,829
1,162,708
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
481,957
290,677
Tax effect of expenses that are not deductible in determining taxable profit
1,215
120
Adjustments in respect of prior years
(51,705)
Effect of change in corporation tax rate
(57,817)
Permanent capital allowances in excess of depreciation
(9,841)
(24,605)
Depreciation on assets not qualifying for tax allowances
50,453
49,167
Deferred tax adjustments in respect of prior years
(5,000)
83,000
Taxation charge for the year
467,079
340,542
HENGOED PARK (SWANSEA) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 20 -
9
Property, plant and equipment
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 June 2023
7,880,609
162,655
571,073
33,979
26,000
8,674,316
Additions
12,295
12,295
At 31 May 2024
7,880,609
174,950
571,073
33,979
26,000
8,686,611
Depreciation and impairment
At 1 June 2023
1,142,583
79,361
528,970
21,514
1,772,428
Depreciation charged in the year
157,613
18,910
15,477
3,313
6,500
201,813
At 31 May 2024
1,300,196
98,271
544,447
24,827
6,500
1,974,241
Carrying amount
At 31 May 2024
6,580,413
76,679
26,626
9,152
19,500
6,712,370
At 31 May 2023
6,738,026
83,294
42,103
12,465
26,000
6,901,888
10
Inventories
2024
2023
£
£
Finished goods and goods for resale
2,500
2,500
11
Trade and other receivables
2024
2023
Amounts falling due within one year:
£
£
Trade receivables
165,756
192,733
Other receivables
3,868,748
2,340,135
Prepayments and accrued income
40,717
40,229
4,075,221
2,573,097
Amounts owed from group undertakings included in other receivables are unsecured, interest-free and repayable on demand.
HENGOED PARK (SWANSEA) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 21 -
12
Current liabilities
2024
2023
Notes
£
£
Bank loans
14
296,957
296,957
Obligations under finance leases
15
18,810
11,105
Payments received on account
489,790
92,048
Trade payables
100,598
42,230
Corporation tax
275,925
240,732
Other taxation and social security
70,858
41,074
Other payables
76,803
425,849
Accruals and deferred income
109,112
136,162
1,438,853
1,286,157
Amounts owed to group undertakings included in Other payables are unsecured, interest-free and repayable on demand.
13
Non-current liabilities
2024
2023
Notes
£
£
Bank loans and overdrafts
14
2,713,644
2,713,644
Obligations under finance leases
15
6,253
18,805
2,719,897
2,732,449
14
Borrowings
2024
2023
£
£
Bank loans
3,010,601
3,010,601
Payable within one year
296,957
296,957
Payable after one year
2,713,644
2,713,644
The long-term loans are secured by a Composite Accounting Agreement dated 18 November 2014 comprising a cross guarantee and debenture between Hengoed Holdings Limited and Hengoed Court Care Home Limited, an unlimited guarantee given by Hengoed Holdings Limited and Hengoed Court Care Home Limited and a fixed charge over the property known as Hengoed Park Care Home.
The long term loans are repayable by monthly instalments over a period of 5 years at a margin of 2.0% above Barclays Bank Plc base rate.
HENGOED PARK (SWANSEA) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 22 -
15
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
18,810
11,105
In two to five years
6,253
18,805
25,063
29,910
16
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2024
2023
Balances:
£
£
ACAs
335,000
340,000
2024
Movements in the year:
£
Liability at 1 June 2023
340,000
Credit to profit or loss
(5,000)
Liability at 31 May 2024
335,000
The deferred tax liability set out above is expected to reverse in the medium term and relates to accelerated capital allowances that are expected to mature within the same period.
17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
53,240
47,545
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.
18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
HENGOED PARK (SWANSEA) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 23 -
19
Reserves
Called up share capital - represents the nominal value of shares that have been used.
Retained earnings - represents the accumulated profits, losses and distributions of the company.
20
Related party transactions
Transactions with related parties
At the year end, a creditor of £76,709 (2023: £76,889) was owed to Inkwall Limited, a company owned by Des Davies. There are no fixed terms for the repayment of the amounts outstanding, all are repayable on demand and are interest-free.
At the year end, a debtor of £186,755 (2023: £3,660) was owed from Hengoed Davies Limited, a company owned by Des Davies. There are no fixed terms for the repayment of the amounts outstanding, all are repayable on demand and are interest-free.
21
Directors' transactions
Description
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Directors loan account
16,062
11,297
(27,359)
-
16,062
11,297
(27,359)
-
22
Ultimate controlling party
The company's parent company is Hengoed Holdings Limited in which company's accounts these accounts are consolidated. Copies of the consolidated accounts can be obtained from the registered office.
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