Company registration number 12440273 (England and Wales)
ROMACK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024
ROMACK LIMITED
COMPANY INFORMATION
Directors
Mr P S Riley
Mrs A Sandyman
Mr A J G Bristow
Company number
12440273
Registered office
Ground Floor Cooper House
316 Regents Park Road
London
United Kingdom
N3 2JX
Auditor
Richard Anthony
Ground Floor Cooper House
316 Regents Park Road
London
United Kingdom
N3 2JX
ROMACK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Profit and loss account
9
Group statement of comprehensive income
10
Group balance sheet
11
Company balance sheet
12
Group statement of changes in equity
13
Company statement of changes in equity
14
Group statement of cash flows
15
Company statement of cash flows
16
Notes to the financial statements
17 - 33
ROMACK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 1 -

The directors present the strategic report for the year ended 29 February 2024.

Fair review of the business

The Group's principal activity is to provide social care to people in need. We operate both adult services and young peoples supported accommodation services within West Sussex. We are proud to say that we are person centred by design.

 

The directors work within the group ensuring regular contact with management at all levels to understand the complexities of the business and examine our processes ensuring that they remain focussed on quality, safeguarding services, the people they support, and the overarching business itself are of the highest priority. Understanding the risks and mitigating them early using a variety of measures with management and the finance team is a vital element of the business.

 

At the end of the year our services are at maximum capacity.

 

Principal risks and uncertainity

Market risk

Social care is driven by need and whilst local authorities are always seeking best value and reductions in support costs the need for services is not diminishing, rather if anything, there is an increasing need for complex support under the Transforming Care Agenda. The people we support are all eligible for local authority funding of their care and support needs with no income stream from privately funded sources. Therefore we do not expect the wider economic environment to have a material impact on the group’s business activities.

 

Legislative Risk

Social Care is a heavily regulated industry, we have for many years operated our Adult Residential Service under the regulations of the Health and Social Care Act and have worked in partnership with the local Authority and Care Quality Commission to maximise compliance and strive for quality within our services. We are currently in the process of registering our young people’s services with Ofsted under the new regulations assigned to supported accommodation providers. Whilst this is obviously a welcome move, as it provides better outcomes for young people and also a positive step for us as providers in providing us a clear framework to operate by, This change along with the uncertainty surrounding the regulatory approach that Ofsted will take with their new responsibility will need close monitoring.

Inflation Risk

As the “cost of living crisis” continues and the National Living Wage (NLW) are due to increase again, we continue to examine all of our costs to ensure we are achieving best value. The NLW will have a significant effect on labour costs, that if not recognised by the local authorities’ annual discretionary fee uplift will have negative effect on margins.

Development and performance

Quality Assurance

We continue to focus on quality assurance, regularly reviewing and assessing our policies to promote the best outcomes for the people we support and as well as the staff that work with them. We are strengthening our commitment to stakeholder involvement in evolving our services, developing new tools to facilitate feedback and gain quality information clearly capturing the opinions of those at the heart of what we do enabling focused continuous improvement that will be tangible and relevant to those we support.

 

Promoting Wellbeing and investing in our staff team

We recognise the importance of our staff team and that by increasing their wellbeing both in and out of the work environment not only benefits them, but as importantly the people we support by increasing retention of good staff. During this year we have invested in an employee assistance programme which can offer a range of free services such as free advice on many issues as well as counselling and health advice for both staff and their immediate families.

Staff annual development policies are being redesigned to support individuals reach their full potential and promote a skilled workforce.

ROMACK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 2 -

Investment in software

We are market researching digital care planning software which has bespoke capabilities and can meet the requirements of our complex adult services. Implementation of the right software once sourced will improve recording and reporting and allow streamlining of Quality Adult Services.

To continue to examine our processes and procedures focusing on developing KPI’s and other Quality assessment tools.

 

Development of future services

The group is seeking to maximise the revenue potential of our largest site. The site requires work with planning authorities to develop the additional services on site. Creating not only meaningful day activities and much needed supported living accommodation for individuals with complex needs but also career development opportunities for both current and future staff.

 

Key performance indicator

We are developing a set of overarching group financial key performance indicators to ensure that we are able to monitor the group's performance. In addition to these KPI's, as shown below, we also have a contractual agreement with the local authority to meet, as part of contract management and review, specific KPI's, but these are not of a financial nature.

         2024         2023

Turnover                     £3,181,119        £3,058,122

Gross profit margin                26%            31%

Operating expenses                 £3,056,875        £2,649,234

Operating profit before taxation              £124,244        £408,888

Net profit margin                    3.9%            13.4%

 

Turnover has increased by 4% percent due to revised local authority contracts renewed during the year, however, the gross profit has fallen due to the increase in payroll costs of 10.5%.

 

Operating expenses have increased by 15.4%. Again, the biggest impact on these costs was the increased cost of employing staff (11.1%) at a level that meets the contractual agreement with the local authority.

Other information and explanations

The board is satisfied that the current composition provides the required degree of skills, experience, diversity and capabilities appropriate to the needs of the business. Board composition and succession planning are subject to review, taking account of the potential future needs of the business.

 

The board adopts a broad view during its decision making to take meaningful account of the impact of the business on all key stakeholders. The board recognises that the group's long term success is reliant on the efforts of its employees, customers and suppliers and through maintaining relationships with its regulators, in particular the Care Quality Commission. Feedback from stakeholders is actively encouraged.    

The board ensures that it has appropriate controls in place to safeguard group ·assets and protect the business from identified risks including to its reputation; and promotes high ethical and moral standards. The board and all employees expect to be judged by and be held accountable for their actions.

On behalf of the board

Mr P S Riley
Director
26 February 2025
ROMACK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 3 -

The directors present their annual report and financial statements for the year ended 29 February 2024.

Principal activities

The principal activity of the company and group continued to be that of a holding company.

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 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 P S Riley
Mrs A Sandyman
Mr A J G Bristow
Statement of directors' responsibilities

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 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.

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.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

ROMACK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 4 -
On behalf of the board
Mr P S Riley
Mrs A Sandyman
Director
Director
26 February 2025
ROMACK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ROMACK LIMITED
- 5 -
Opinion

We have audited the financial statements of Romack Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 29 February 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, 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 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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.

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:

ROMACK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROMACK LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their 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:

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 parent 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.

 

 

Risk identified:

 

The following risks were identified during the course of audit:

 

 

Audit response:

 

We focussed on those areas that could give rise to a material misstatement in the company financial statements. Our procedures included but were not limited to:

 

 

ROMACK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROMACK LIMITED
- 7 -

The company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant:

 

We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

 

We understood how the company is complying with those legal and regulatory frameworks by making inquiries of management and those responsible for legal and compliance procedures.

 

The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with these laws and regulations. The assessment did not identify any issues in this area.

We assessed the susceptibility of the entity's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:

 

As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential existed within the recording and recognition of revenue.

 

Our procedures in this respect were focused on the origination of revenue and directed towards ensuring the accuracy and completeness of the same by undertaking testing on a sample basis of the revenue items to ensure that sales had been recorded correctly and in the appropriate accounting period. We consider that the work we undertook in this regard was considered capable of detecting irregularities and fraud within the sales cycle.

 

Due to 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 regulations. 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. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach. The risk is also greater regarding irregularities occurring to fraud other than error, as fraud involves intentional concealment, forgery, collusion, omission, or misrepresentation.

ROMACK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROMACK LIMITED
- 8 -

We assessed the susceptibility of the entity's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:

 

As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential existed within the recording and recognition of revenue

 

Our procedures in this respect were focused on the origination of revenue and directed towards ensuring the accuracy and completeness of the same by undertaking testing on a sample basis of the revenue items to ensure that sales had been recorded correctly and in the appropriate accounting period. We consider that the work we undertook in this regard was considered capable of detecting irregularities and fraud within the sales cycle.

 

Due to 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 regulations. 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. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach. The risk is also greater regarding irregularities occurring to fraud other 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.

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.

Michael Barnett BA FCA (Senior Statutory Auditor)
For and on behalf of Richard Anthony, Statutory Auditor
Chartered Accountants
Ground Floor Cooper House
316 Regents Park Road
London
United Kingdom
N3 2JX
26 February 2025
ROMACK LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
3,181,119
3,058,122
Cost of sales
(2,353,546)
(2,122,055)
Gross profit
827,573
936,067
Administrative expenses
(66,702)
37,690
Operating profit
4
760,871
973,757
Interest payable and similar expenses
7
(250,851)
(179,093)
Amounts written off investments
8
1,360,660
97,899
Profit before taxation
1,870,680
892,563
Tax on profit
9
(444,174)
(40,447)
Profit for the financial year
1,426,506
852,116
Profit for the financial year is all attributable to the owners of the parent company.
ROMACK LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 10 -
2024
2023
£
£
Profit for the year
1,426,506
852,116
Other comprehensive income
-
-
Cash flow hedges gain arising in the year
-
0
-
0
Total comprehensive income for the year
1,426,506
852,116
Total comprehensive income for the year is all attributable to the owners of the parent company.
ROMACK LIMITED
GROUP BALANCE SHEET
AS AT
29 FEBRUARY 2024
29 February 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Negative goodwill
10
(1,157,327)
(1,543,103)
Tangible assets
11
87,720
123,672
Investment property
12
6,250,000
4,889,340
5,180,393
3,469,909
Current assets
Debtors
15
944,756
1,613,765
Cash at bank and in hand
220,823
209,756
1,165,579
1,823,521
Creditors: amounts falling due within one year
16
(961,537)
(1,527,673)
Net current assets
204,042
295,848
Total assets less current liabilities
5,384,435
3,765,757
Creditors: amounts falling due after more than one year
17
(2,748,327)
(2,888,072)
Provisions for liabilities
Deferred tax liability
20
357,485
25,568
(357,485)
(25,568)
Net assets
2,278,623
852,117
Capital and reserves
Called up share capital
22
1
1
Non-distributable profits reserve
23
1,020,495
-
0
Distributable profit and loss reserves
1,258,127
852,116
Total equity
2,278,623
852,117

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

The financial statements were approved by the board of directors and authorised for issue on 26 February 2025 and are signed on its behalf by:
26 February 2025
Mr P S Riley
Mrs A Sandyman
Director
Director
Company registration number 12440273 (England and Wales)
ROMACK LIMITED
COMPANY BALANCE SHEET
AS AT 29 FEBRUARY 2024
29 February 2024
- 12 -
2024
2023
Notes
£
£
£
£
Fixed assets
Investments
13
250,032
250,032
Current assets
Debtors
15
100,000
-
0
Cash at bank and in hand
72
45,101
100,072
45,101
Creditors: amounts falling due within one year
16
(349,232)
(325,132)
Net current liabilities
(249,160)
(280,031)
Net assets/(liabilities)
872
(29,999)
Capital and reserves
Called up share capital
22
1
1
Distributable profit and loss reserves
871
(30,000)
Total equity
872
(29,999)

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £30,871 (2023 - £30,000 loss).

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 26 February 2025 and are signed on its behalf by:
26 February 2025
Mr P S Riley
Mrs A Sandyman
Director
Director
Company registration number 12440273 (England and Wales)
ROMACK LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 13 -
Share capital
Non-distri-butable profits
Profit and loss reserves
Total
£
£
£
£
Balance at 1 March 2022
1
-
0
-
0
1
Year ended 28 February 2023:
Profit and total comprehensive income
-
-
852,116
852,116
Balance at 28 February 2023
1
-
0
852,116
852,117
Year ended 29 February 2024:
Profit and total comprehensive income
-
1,020,495
406,011
1,426,506
Balance at 29 February 2024
1
1,020,495
1,258,127
2,278,623
ROMACK LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 14 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 March 2022
1
-
0
1
Year ended 28 February 2023:
Loss and total comprehensive income for the year
-
(30,000)
(30,000)
Balance at 28 February 2023
1
(30,000)
(29,999)
Year ended 29 February 2024:
Profit and total comprehensive income
-
30,871
30,871
Balance at 29 February 2024
1
871
872
ROMACK LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 15 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
172,998
372,295
Interest paid
(250,851)
(179,093)
Income taxes (paid)/refunded
(32,564)
50,621
Net cash (outflow)/inflow from operating activities
(110,417)
243,823
Investing activities
Purchase of intangible assets
-
1,928,879
Purchase of tangible fixed assets
(20,669)
(184,530)
Purchase of investment property
-
(4,889,340)
Proceeds from disposal of subsidiaries, net of cash disposed
-
250,032
Repayment of loans
288,240
(190,341)
Net cash generated from/(used in) investing activities
267,571
(3,085,300)
Financing activities
Repayment of bank loans
(145,558)
2,936,893
Payment of finance leases obligations
-
113,710
Net cash (used in)/generated from financing activities
(145,558)
3,050,603
Net increase in cash and cash equivalents
11,596
209,126
Cash and cash equivalents at beginning of year
209,227
101
Cash and cash equivalents at end of year
220,823
209,227
Relating to:
Cash at bank and in hand
220,823
209,756
Bank overdrafts included in creditors payable within one year
-
(529)
ROMACK LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 16 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
27
(100,029)
45,000
Investing activities
Dividends received
55,000
-
0
Net cash generated from investing activities
55,000
-
Net (decrease)/increase in cash and cash equivalents
(45,029)
45,000
Cash and cash equivalents at beginning of year
45,101
101
Cash and cash equivalents at end of year
72
45,101
ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 17 -
1
Accounting policies
Company information

Romack Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Ground Floor Cooper House, 316 Regents Park Road, London, United Kingdom, N3 2JX.

 

The group consists of Romack 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, investment properties in the group have been revalued to their fair value. The principal accounting policies adopted are set out below.

1.2
Business combinations

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.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Romack Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 29 February 2024. 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.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 18 -

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.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.

1.5
Turnover

The turnover is recognised at the fair value of the consideration received or receivable for 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.

 

The company recognises revenue from residential care, independence skills development, and day centre services when services are provided. Revenue is based on agreed-upon rates and recognised over time as services are rendered.

 

Dividend income from the subsidiary is recognized when the right to receive payment is established, typically on the declaration date.

1.6
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 considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.

 

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.

1.7
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.

ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 19 -

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:

Fixtures and fittings
20% on cost
Motor vehicles
25% on cost

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 profit and loss account.

1.8
Investment property

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.

 

1.9
Fixed asset 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.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 20 -
1.10
Impairment of fixed 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.

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
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.

1.12
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 balance sheet 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 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.

ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 21 -
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.

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

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.

ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 22 -
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.

1.13
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.

1.14
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 profit and loss account 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 profit and loss account, 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.

ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 23 -
1.15
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.

1.16
Retirement benefits

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

1.17
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 balance sheet 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 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.

 

A third-party RICS registered chartered surveyor conducted valuation services for the investment properties in PA Ark Holdings Limited. These valuation services involved a degree of judgment, which has been assessed for reasonableness. The company has made no other significant estimates or judgments in the preparation of the financial statements.

3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Revenue from care services
3,085,519
2,957,477
Rental income
95,600
100,645
3,181,119
3,058,122
ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 24 -
4
Operating profit
2024
2023
£
£
Operating profit for the year is stated after charging/(crediting):
Depreciation of owned tangible fixed assets
66,688
60,858
Amortisation of intangible assets
(385,776)
(385,776)
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
18,000
-
Audit of the financial statements of the company's subsidiaries
34,500
-
52,500
-
6
Employees

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

Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
65
64
3
3

Their aggregate remuneration comprised:

Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
1,816,936
1,623,090
-
0
-
0
Social security costs
162,437
150,375
-
-
Pension costs
38,337
34,441
-
0
-
0
2,017,710
1,807,906
-
0
-
0
ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 25 -
7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
228,051
166,729
Other interest on financial liabilities
4,938
4,004
232,989
170,733
Other finance costs:
Interest on finance leases and hire purchase contracts
7,246
6,749
Other interest
10,616
1,611
Total finance costs
250,851
179,093
8
Amounts written off investments
2024
2023
£
£
Changes in the fair value of investment properties
1,360,660
-
Amounts written back to current loans
-
97,899
1,360,660
97,899
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
38,661
87,202
Adjustments in respect of prior periods
73,596
(44,309)
Total current tax
112,257
42,893
Deferred tax
Origination and reversal of timing differences
331,917
(2,446)
Total tax charge
444,174
40,447
ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
9
Taxation
(Continued)
- 26 -

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
1,870,680
892,563
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
467,670
169,587
Tax effect of expenses that are not deductible in determining taxable profit
13,790
(42,435)
Tax effect of income not taxable in determining taxable profit
(450,359)
(38,000)
Unutilised tax losses carried forward
6,032
5,700
Adjustments in respect of prior years
73,596
(44,309)
Effect of change in corporation tax rate
(812)
-
Permanent capital allowances in excess of depreciation
2,784
(7,650)
Tax at marginal rate
(445)
-
0
Movement on deferred tax
331,918
(2,446)
Taxation charge
444,174
40,447
10
Intangible fixed assets
Group
Negative goodwill
£
Cost
At 1 March 2023 and 29 February 2024
(1,928,879)
Amortisation and impairment
At 1 March 2023
(385,776)
Amortisation charged for the year
(385,776)
At 29 February 2024
(771,552)
Carrying amount
At 29 February 2024
(1,157,327)
At 28 February 2023
(1,543,103)
The company had no intangible fixed assets at 29 February 2024 or 28 February 2023.

 

ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 27 -
11
Tangible fixed assets
Group
Fixtures and fittings
Motor vehicles
Total
£
£
£
Cost
At 1 March 2023
66,203
118,327
184,530
Additions
4,746
25,990
30,736
At 29 February 2024
70,949
144,317
215,266
Depreciation and impairment
At 1 March 2023
20,117
40,741
60,858
Depreciation charged in the year
19,450
47,238
66,688
At 29 February 2024
39,567
87,979
127,546
Carrying amount
At 29 February 2024
31,382
56,338
87,720
At 28 February 2023
46,086
77,586
123,672
The company had no tangible fixed assets at 29 February 2024 or 28 February 2023.
12
Investment property
Group
Company
2024
2024
£
£
Fair value
At 1 March 2023 and 29 February 2024
4,889,340
-
Net gains or losses through fair value adjustments
1,360,660
-
At 29 February 2024
6,250,000
-

Investment property comprises freehold land and buildings. The valuation of the properties were conducted by a RICS registered chartered surveyor who are not connected to the company. The valuation was carried out in accordance with the Royal Institute of Chartered Surveyor Valuation Professional Standards. The value of the properties at the year end presented at the fair value based on expected rent yield obtained from the available market evidence of comparable properties.

 

13
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
250,032
250,032
ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
13
Fixed asset investments
(Continued)
- 28 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 March 2023 and 29 February 2024
250,032
Carrying amount
At 29 February 2024
250,032
At 28 February 2023
250,032
14
Subsidiaries

Details of the company's subsidiaries at 29 February 2024 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
PA Ark Holdings Limited
England & Wales
Ordinary
100.00
-
PA Ark Projects Limited
England & Wales
Ordinary
-
100.00
15
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
374,927
608,708
-
0
-
0
Corporation tax recoverable
103,782
103,782
-
0
-
0
Amounts owed by group undertakings
-
-
55,000
-
Other debtors
420,977
898,919
45,000
-
0
Prepayments and accrued income
45,070
2,356
-
0
-
0
944,756
1,613,765
100,000
-
ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 29 -
16
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans and overdrafts
18
150,020
151,468
-
0
-
0
Obligations under finance leases
19
16,765
11,592
-
0
-
0
Trade creditors
25,878
39,438
-
0
-
0
Gross amounts owed to contract customers
-
0
270,766
-
0
-
0
Amounts owed to group undertakings
-
0
-
0
349,200
325,100
Corporation tax payable
248,975
169,282
-
0
-
0
Other taxation and social security
173,214
370,943
-
-
Other creditors
284,964
399,651
32
32
Accruals and deferred income
61,721
114,533
-
0
-
0
961,537
1,527,673
349,232
325,132
17
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans and overdrafts
18
2,641,315
2,785,954
-
0
-
0
Obligations under finance leases
19
107,012
102,118
-
0
-
0
2,748,327
2,888,072
-
-
18
Loans and overdrafts
Group
Company
2024
2023
2024
2023
£
£
£
£
Bank loans
2,791,335
2,936,893
-
0
-
0
Bank overdrafts
-
0
529
-
0
-
0
2,791,335
2,937,422
-
-
Payable within one year
150,020
151,468
-
0
-
0
Payable after one year
2,641,315
2,785,954
-
0
-
0

The bank loans and overdrafts are secured by way of fixed and floating charges over all the properties held in the PA Ark Holdings Limited, including those from which its subsidiary and associate companies operate. Furthermore, there are cross-guarantee and debenture from the parent entity Romack Limited, subsidiary undertakings including guarantee from an associate entity.

 

ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 30 -
19
Finance lease obligations
Group
Company
2024
2023
2024
2023
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
16,765
11,592
-
0
-
0
In two to five years
107,012
102,118
-
0
-
0
123,777
113,710
-
-

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3-5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

20
Deferred taxation

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

Liabilities
Liabilities
2024
2023
Group
£
£
Accelerated capital allowances
17,320
25,568
Revaluations
340,165
-
357,485
25,568
The company has no deferred tax assets or liabilities.
Group
Company
2024
2024
Movements in the year:
£
£
Liability at 1 March 2023
25,568
-
Credit to profit or loss
(8,248)
-
Other
340,165
-
Liability at 29 February 2024
357,485
-

 

ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 31 -
21
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
38,337
34,441

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.

22
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of 0.01p each
5,333
5,300
1
1
Ordinary B shares of 0.01p each
2,000
2,000
-
-
Ordinary C shares of 0.01p each
2,667
2,700
-
-
23
Non-distributable profits reserve
Group
Company
2024
2023
2024
2023
£
£
£
£
At the beginning of the year
-
-
-
-
Non distributable profits in the year
1,020,495
-
-
-
At the end of the year
1,020,495
-
-
-

The non-distributable reserve included the revaluation balance of the investment properties held in PA Ark Holdings Limited and deferred tax applied thereon. The investment properties have been revalued to their fair market value in the year. Deferred tax on the revaluation of investment properties have been recognised due to difference between the carrying value of the assets and its tax base.

24
Related party transactions

As at balance sheet date following amounts were owed by the companies where directors have beneficial interests.

 

Salisbury Support Services Limited

£93.270

(2023: Cr £170,015)

TPJ Developments Limited

£275,727

(2023 - £480,716)

 

PA Ark Projects Limited, a subsidiary of the group paid rents for the amount of £83,599 and management charges of £75,000 to Salisbury Support Services Limited.

25
Controlling party

As at the balance sheet date, the ultimate controlling party was Mr P Riley due to his directorship and shareholding.

ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 32 -
26
Cash generated from group operations
2024
2023
£
£
Profit after taxation
1,426,506
852,116
Adjustments for:
Taxation charged
444,174
40,447
Finance costs
250,851
179,093
Gain on disposal of tangible fixed assets
-
(1)
Fair value gain on investment properties
(1,360,660)
-
0
Amortisation and impairment of intangible assets
(385,776)
(385,776)
Depreciation and impairment of tangible fixed assets
66,688
60,858
Other gains and losses
-
(97,899)
Movements in working capital:
Decrease/(increase) in debtors
380,769
(1,221,743)
(Decrease)/increase in creditors
(649,554)
945,199
Cash generated from operations
172,998
372,294
Difference
-
1
Per cash flow statement page
172,998
372,295
27
Cash (absorbed by)/generated from operations - company
2024
2023
£
£
Profit/(loss) after taxation
30,871
(30,000)
Adjustments for:
Investment income
(55,000)
-
0
Movements in working capital:
Increase in debtors
(100,000)
-
Increase in creditors
24,100
75,000
Cash (absorbed by)/generated from operations
(100,029)
45,000
ROMACK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 33 -
28
Analysis of changes in net debt - group
1 March 2023
Cash flows
New finance leases
29 February 2024
£
£
£
£
Cash at bank and in hand
209,756
11,067
-
220,823
Bank overdrafts
(529)
529
-
-
0
209,227
11,596
-
220,823
Borrowings excluding overdrafts
(2,936,893)
145,558
-
(2,791,335)
Obligations under finance leases
(113,710)
-
(10,067)
(123,777)
(2,841,376)
157,154
(10,067)
(2,694,289)
29
Analysis of changes in net funds - company
1 March 2023
Cash flows
29 February 2024
£
£
£
Cash at bank and in hand
45,101
(45,029)
72
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