Company Registration No. 10998058 (England and Wales)
FRANKLYN CARE LTD
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
FRANKLYN CARE LTD
COMPANY INFORMATION
Directors
Ms J C McKenna
Mr A J MacArthur
Mr R A Fleming
Company number
10998058
Registered office
The Gatehouse
9 Manor Road
Harrogate
North Yorkshire
HG2 0HP
Auditor
Morris Lane
31/33 Commercial Road
Poole
Dorset
BH14 0HU
FRANKLYN CARE LTD
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 7
Group income statement
8
Group statement of comprehensive income
9
Group statement of financial position
10
Company statement of financial position
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Company statement of cash flows
15
Notes to the financial statements
16 - 36
FRANKLYN CARE LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 1 -

The directors present the strategic report for the year ended 30 June 2024.

Fair review of the business

The directors are pleased with the performance in this year, particularly in light of the decision to close the smallest home – Kirkwood. The remaining 3 homes have shown an increased revenue and good profitability. The reduction in profit in this year is mainly due to a significant increase in Bank Interest; a situation which has been significantly improved at start of the new financial year with a new 5 year loan facility.

 

Occupancy remains good with a good percentage of private clients and average fee levels have increased again this year. Additional head office staff have provided more resources for our continual improvement program and agency usage has been very low.

 

A recent valuation of the 3 homes clearly indicates the success of the business and of the improvements made over recent years. The increase in value has been reflected in the group's financial statements. The group balance sheet continues to strengthen with net assets increasing from £2,760,166 at 30 June 2023 to £4,454,357 at 30 June 2024.

Principal risks and uncertainties

The high cost of living and interest rises continue to pose a significant challenge for the business over the coming year. The changes proposed by the new Government both in terms of Employment Law and taxation, coupled with a bigger push from Local Authorities to keep people in their own homes rather than funding care home placements pose further uncertainty for our sector.

 

The ongoing review of the CQC inspection process and rating system continues to put pressure on our business and the staff team, but we continue to work tirelessly to minimise the financial impact on the business.

Looking forward

We remain committed to recruitment, staff retention and continual professional development. We continue to strive toward reaching Outstanding in the eyes of the regulator and intend to add further technology, including eMAR, in the coming year to assist in this goal. We are considering options for developing the Kirkwood site to increase the value prior to sale and are considering acquisition options for further growth in the future.

Key performance indicators

 

2024

2023

Turnover

£5.09m

£5.04m

Profit before tax

£0.76m

£1.18m

Net profit margin

11.3%

18.8%

On behalf of the board

Ms J C McKenna
Director
20 March 2025
FRANKLYN CARE LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -

The directors present their annual report and financial statements for the company and its subsidiaries for the year ended year ended 30 June 2024.

Principal activities

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

Results and dividends

The results for the year are set out on page 8.

Dividends were paid on ordinary shares amounting to £161,900. 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:

Ms J C McKenna
Mr A J MacArthur
Mr R A Fleming
Financial instruments
Treasury operations and financial instruments

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

Liquidity risk

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

Interest rate risk

The group is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans.

Credit risk

Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.

 

All residents who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

 

The group is not exposed to commodity price risk.

Post reporting date events

Subsequent to the year end, Franklyn Care Limited refinanced its borrowings of £3,803,470 and in doing so repaid circa £742,000. The new loan totals £3,040,000 with a loan term of 5 years from drawdown at a margin of 2.55% above the Bank of England Bank Rate.

Auditor

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

FRANKLYN CARE LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 3 -
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.

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

Strategic report

The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the fair review of the business, and likely future developments.

Statement of disclosure to auditor

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

On behalf of the board
Ms J C McKenna
Director
20 March 2025
FRANKLYN CARE LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FRANKLYN CARE LTD
- 4 -
Opinion

We have audited the financial statements of Franklyn Care Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2024 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion 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 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:

FRANKLYN CARE LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FRANKLYN CARE LTD
- 5 -
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 its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

 

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

 

Responsibilities of directors

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

Auditor's responsibilities for the audit of the financial statements

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

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

 

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

 

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

 

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

 

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

FRANKLYN CARE LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FRANKLYN CARE LTD
- 6 -

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

 

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

Audit procedures designed to respond to the risks of material misstatement due to irregularities, including fraud

 

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

 

 

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

 

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

 

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

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

FRANKLYN CARE LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FRANKLYN CARE LTD
- 7 -

Use of our report

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

Michelle Pettifer (Senior Statutory Auditor)
For and on behalf of Morris Lane
24 March 2025
Chartered Accountants
Statutory Auditor
31/33 Commercial Road
Poole
Dorset
BH14 0HU
FRANKLYN CARE LTD
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
- 8 -
Continuing
Discontinued
30 June
Continuing
Discontinued
30 June
operations
operations
2024
operations
operations
2023
Notes
£
£
£
£
£
£
Revenue
3
4,540,413
551,310
5,091,723
4,250,963
789,438
5,040,401
Administrative expenses
(3,465,043)
(566,879)
(4,031,922)
(2,967,006)
(675,198)
(3,642,204)
Other operating income
45,037
13,223
58,260
37,788
5,112
42,900
Operating profit
4
1,120,407
(2,346)
1,118,061
1,321,745
119,352
1,441,097
Investment income
8
60,088
6,364
66,452
10,634
1,292
11,926
Finance costs
9
(419,063)
-
(419,063)
(275,005)
-
(275,005)
Profit before taxation
761,432
4,018
765,450
1,057,374
120,644
1,178,018
Tax on profit
10
(190,342)
(678)
(191,020)
(215,259)
(14,671)
(229,930)
Profit for the financial year
28
571,090
3,340
574,430
842,115
105,973
948,088
Profit for the financial year is all attributable to the owners of the parent company.
FRANKLYN CARE LTD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
- 9 -
2024
2023
£
£
Profit for the year
574,430
948,088
Other comprehensive income
Revaluation of property, plant and equipment
1,673,188
(386,721)
Tax relating to other comprehensive income
(391,527)
95,190
Other comprehensive income for the year
1,281,661
(291,531)
Total comprehensive income for the year
1,856,091
656,557
Total comprehensive income for the year is all attributable to the owners of the parent company.
FRANKLYN CARE LTD
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
30 JUNE 2024
30 June 2024
- 10 -
2024
2023
Notes
£
£
£
£
Non-current assets
Negative goodwill
13
(438,242)
(551,392)
Property, plant and equipment
14
8,358,363
7,792,717
Current assets
Inventories
18
910,705
6,200
Trade and other receivables
19
801,547
603,298
Cash and cash equivalents
1,259,557
1,361,069
2,971,809
1,970,567
Current liabilities
20
(4,776,847)
(5,057,487)
Net current liabilities
(1,805,038)
(3,086,920)
Total assets less current liabilities
6,115,083
4,154,405
Non-current liabilities
21
(541,135)
(645,435)
Provisions for liabilities
Deferred tax liability
24
1,119,591
748,804
(1,119,591)
(748,804)
Net assets
4,454,357
2,760,166
Equity
Called up share capital
27
200
200
Revaluation reserve
28
1,174,583
-
0
Retained earnings
28
3,279,574
2,759,966
Total equity
4,454,357
2,760,166
The financial statements were approved by the board of directors and authorised for issue on 20 March 2025 and are signed on its behalf by:
20 March 2025
Ms J C McKenna
Director
FRANKLYN CARE LTD
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
30 June 2024
- 11 -
2024
2023
Notes
£
£
£
£
Non-current assets
Investments
15
5,163,025
5,163,025
Current assets
Trade and other receivables
19
622,814
452,656
Cash and cash equivalents
166,538
223,586
789,352
676,242
Current liabilities
20
(5,307,491)
(5,153,260)
Net current liabilities
(4,518,139)
(4,477,018)
Total assets less current liabilities
644,886
686,007
Non-current liabilities
21
(500,000)
(600,000)
Net assets
144,886
86,007
Equity
Called up share capital
27
200
200
Retained earnings
28
144,686
85,807
Total equity
144,886
86,007

As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s profit for the year was £220,779 (2023: £81,839 profit).

The financial statements were approved by the board of directors and authorised for issue on 20 March 2025 and are signed on its behalf by:
20 March 2025
Ms J C McKenna
Director
Company Registration No. 10998058
FRANKLYN CARE LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 12 -
Share capital
Revaluation reserve
Retained earnings
Total
Notes
£
£
£
£
Balance at 1 July 2022
200
254,178
2,177,231
2,431,609
Year ended 30 June 2023:
Profit for the year
-
-
948,088
948,088
Other comprehensive income:
Revaluation of property, plant and equipment
-
(386,721)
-
(386,721)
Tax relating to other comprehensive income
-
95,190
-
0
95,190
Total comprehensive income for the year
-
(291,531)
948,088
656,557
Dividends
12
-
-
(328,000)
(328,000)
Transfers
-
37,353
(37,353)
-
Balance at 30 June 2023
200
-
0
2,759,966
2,760,166
Year ended 30 June 2024:
Profit for the year
-
-
574,430
574,430
Other comprehensive income:
Revaluation of property, plant and equipment
-
1,673,188
-
1,673,188
Tax relating to other comprehensive income
-
(391,527)
-
0
(391,527)
Total comprehensive income for the year
-
1,281,661
574,430
1,856,091
Dividends
12
-
-
(161,900)
(161,900)
Transfers
-
(107,078)
107,078
-
Balance at 30 June 2024
200
1,174,583
3,279,574
4,454,357
FRANKLYN CARE LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 13 -
Share capital
Retained earnings
Total
Notes
£
£
£
Balance at 1 July 2022
200
331,968
332,168
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
81,839
81,839
Dividends
12
-
(328,000)
(328,000)
Balance at 30 June 2023
200
85,807
86,007
Year ended 30 June 2024:
Profit and total comprehensive income for the year
-
220,779
220,779
Dividends
12
-
(161,900)
(161,900)
Balance at 30 June 2024
200
144,686
144,886
FRANKLYN CARE LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
- 14 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
34
1,246,506
1,445,885
Interest paid
(419,063)
(275,005)
Income taxes paid
(361,807)
(217,341)
Net cash inflow from operating activities
465,636
953,539
Investing activities
Purchase of property, plant and equipment
(44,890)
(115,696)
Proceeds on disposal of property, plant and equipment
3,001
25,040
Loans made
(127,091)
(42,607)
Interest received
66,452
11,926
Net cash used in investing activities
(102,528)
(121,337)
Financing activities
Repayment of borrowings
(100,000)
(100,000)
Repayment of bank loans
(166,530)
(70,381)
Payment of finance leases obligations
(36,190)
(56,046)
Dividends paid to equity shareholders
(161,900)
(328,000)
Net cash used in financing activities
(464,620)
(554,427)
Net (decrease) increase in cash and cash equivalents
(101,512)
277,775
Cash and cash equivalents at beginning of year
1,361,069
1,083,294
Cash and cash equivalents at end of year
1,259,557
1,361,069
FRANKLYN CARE LTD
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
- 15 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
35
310,127
616,135
Interest paid
(410,939)
(270,194)
Income taxes paid
(49,705)
-
Net cash (outflow) inflow from operating activities
(150,517)
345,941
Investing activities
Loans made
331,379
(373,986)
Receipts arising from loans made
(458,470)
331,379
Interest received
8,990
6,509
Dividends received
640,000
400,000
Net cash generated from investing activities
521,899
363,902
Financing activities
Repayment of borrowings
(100,000)
(100,000)
Repayment of bank loans
(166,530)
(70,381)
Dividends paid to equity shareholders
(161,900)
(328,000)
Net cash used in financing activities
(428,430)
(498,381)
Net (decrease) increase in cash and cash equivalents
(57,048)
211,462
Cash and cash equivalents at beginning of year
223,586
12,124
Cash and cash equivalents at end of year
166,538
223,586
FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
- 16 -
1
Accounting policies
Company information

Franklyn Care Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is The Gatehouse, 9 Manor Road, Harrogate, North Yorkshire, HG2 0HP.

 

The group consists of Franklyn Care Ltd and all of its subsidiaries.

1.1
Accounting convention

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

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

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

As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s profit for the year was £220,779 (2023: £81,839 profit).

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 Franklyn Care Ltd 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 30 June 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.

FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 17 -
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
Revenue

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

 

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

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

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

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 10 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
Property, plant and equipment

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

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

Freehold land and buildings
2% straight line
Fixtures and fittings
15% straight line
Computers
15% straight line
Motor vehicles
25% reducing balance

Freehold land is not depreciated.

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

FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 18 -
1.8
Non-current investments

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

 

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

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

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

1.9
Impairment of non-current assets

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

 

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

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

 

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

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.

1.10
Inventories

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

Cost is calculated using the weighted average method.

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

FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 19 -
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 statement of financial position when the group becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

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

Other financial assets

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

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.

FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 20 -
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 trade and other payables, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

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

Other financial liabilities

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

 

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

Derecognition of financial liabilities

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

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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 21 -
Deferred tax

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

 

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

1.15
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 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.

1.16
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 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.

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

1.18
Government grants

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

 

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

FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 22 -
1.19

Credit risk

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

1.20

Liquidity risk

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

1.21

Cash flow and interest rate risk

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

2
Judgements and key sources of estimation uncertainty

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

 

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

3
Revenue

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

2024
2023
£
£
Revenue analysed by class of business
Care services
5,091,723
5,040,401
2024
2023
£
£
Other significant revenue
Interest income
66,452
11,926
Grants received
46,796
35,206
Rent received
11,464
7,694
FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 23 -
4
Operating profit
2024
2023
£
£
Operating profit for the year is stated after charging (crediting):
Government grants
(46,796)
(35,206)
Depreciation of owned property, plant and equipment
228,078
133,720
Depreciation of property, plant and equipment held under finance leases
32,998
2,287
Loss on disposal of property, plant and equipment
28,353
2,665
Release of negative goodwill
(113,151)
(113,151)
Operating lease charges
52,648
57,786

Amortisation of intangible assets is included in administrative expenses.

 

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

5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
4,728
3,510
Audit of the financial statements of the company's subsidiaries
28,956
17,920
33,684
21,430
For other services
Taxation compliance services
4,716
1,119
All other non-audit services
9,492
21,547
14,208
22,666
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
Directors
2
2
3
3
Care home staff
120
120
-
-
Total
122
122
3
3
FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
6
Employees
(Continued)
- 24 -

Their aggregate remuneration comprised:

Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
2,441,237
2,153,070
-
-
Social security costs
188,007
157,816
-
-
Pension costs
42,675
38,695
-
0
-
0
2,671,919
2,349,581
-
-
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
25,200
21,325
Company pension contributions to defined contribution schemes
382
271
25,582
21,596

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023: 2).

8
Investment income
2024
2023
£
£
Interest income
Interest on bank deposits
52,273
5,417
Other interest income
14,179
6,509
Total income
66,452
11,926

Investment income includes the following:

Interest on financial assets not measured at fair value through profit or loss
52,273
5,417
FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 25 -
9
Finance costs
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
312,777
214,582
Other interest on financial liabilities
36,646
-
349,423
214,582
Other finance costs:
Interest on finance leases and hire purchase contracts
6,781
2,034
Other interest
62,859
58,389
Total finance costs
419,063
275,005
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
211,760
197,939
Deferred tax
Origination and reversal of timing differences
(20,740)
31,991
Total tax charge
191,020
229,930

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
765,450
1,178,018
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.50%)
191,363
241,447
Tax effect of expenses that are not deductible in determining taxable profit
(140)
8,003
Tax effect of income not taxable in determining taxable profit
(10,579)
(7,011)
Amortisation on assets not qualifying for tax allowances
(28,288)
(23,192)
Capital allowances in excess of depreciation
52,316
(21,854)
Deferred tax on accelerated capital allowances
(20,740)
31,991
(Profit)/Loss on disposal
7,088
546
Taxation charge
191,020
229,930
FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
10
Taxation
(Continued)
- 26 -

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

2024
2023
£
£
Deferred tax arising on:
Revaluation of property
391,527
(95,190)
11
Discontinued operations

In March 2024, the smallest of the homes closed and ceased to trade. The directors took the decision as they considered this to be an underperforming home and, by closing the business, this has allowed the directors to focus on the other homes within the group and other business opportunities. The directors are considering options for developing the site and its carrying value of £900,000 has been moved from Property, Plant and Equipment to Inventories in the financial statements.

12
Dividends
2024
2023
Recognised as distributions to equity holders:
£
£
Final paid
161,900
328,000
13
Intangible fixed assets
Group
Goodwill
Negative goodwill
Total
£
£
£
Cost
At 1 July 2023 and 30 June 2024
5,000
(1,131,506)
(1,126,506)
Amortisation and impairment
At 1 July 2023
5,000
(580,114)
(575,114)
Amortisation charged for the year
-
0
(113,150)
(113,150)
At 30 June 2024
5,000
(693,264)
(688,264)
Carrying amount
At 30 June 2024
-
0
(438,242)
(438,242)
At 30 June 2023
-
0
(551,392)
(551,392)
The company had no intangible fixed assets at 30 June 2024 or 30 June 2023.
FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 27 -
14
Property, plant and equipment
Group
Freehold land and buildings
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 July 2023
7,227,815
1,222,025
3,035
149,976
8,602,851
Additions
-
0
35,890
-
0
48,998
84,888
Disposals
-
0
(127,219)
(487)
(11,890)
(139,596)
Revaluation
1,566,110
-
0
-
0
-
0
1,566,110
Transfers
(900,000)
-
0
-
0
-
0
(900,000)
At 30 June 2024
7,893,925
1,130,696
2,548
187,084
9,214,253
Depreciation and impairment
At 1 July 2023
-
0
775,821
2,053
32,260
810,134
Depreciation charged in the year
107,078
118,371
234
35,393
261,076
Eliminated in respect of disposals
-
0
(99,200)
(213)
(8,829)
(108,242)
Revaluation
(107,078)
-
0
-
0
-
0
(107,078)
At 30 June 2024
-
0
794,992
2,074
58,824
855,890
Carrying amount
At 30 June 2024
7,893,925
335,704
474
128,260
8,358,363
At 30 June 2023
7,227,815
446,204
982
117,716
7,792,717
The company had no property, plant and equipment at 30 June 2024 or 30 June 2023.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2024
2023
2024
2023
£
£
£
£
Motor vehicles
123,493
82,335
-
0
-
0

Property, plant and equipment with a carrying amount of £8,358,363 (2023: £7,792,717) have been pledged to secure liabilities of the group. Further information is provided in note 22.

Land and buildings with a carrying amount of £7,893,925 were revalued in August 2024 by Colliers International Property Consultants, independent valuers not connected with the company, on the basis of market value. The valuation was based on recent marker transactions on arm's length terms for similar properties. The directors consider that the market value of land and buildings as at 30 June 2024 to not be materially different from the valuation obtained in August 2024.

Land and buildings with a carrying amount of £7,227,815 were valued in June 2023 based on the expected market value of the business as determined by the directors of the company. No formal valuation was prepared in regards to this valuation at that date, but the directors have concluded that they have sufficient and reliable market data to substantiate this value.

FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
14
Property, plant and equipment
(Continued)
- 28 -

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

2024
2023
£
£
Group
Cost
3,854,473
4,617,657
Accumulated depreciation
(333,127)
(328,376)
Carrying value
3,521,346
4,289,281
15
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
16
-
0
-
0
5,163,025
5,163,025
Movements in non-current investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 July 2023 and 30 June 2024
5,163,025
Carrying amount
At 30 June 2024
5,163,025
At 30 June 2023
5,163,025
16
Subsidiaries

Details of the company's subsidiaries at 30 June 2024 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
The Franklyn Group Limited
England and Wales
Care home operation
Ordinary
100.00
Sirtin Limited
England and Wales
Care home operation
Ordinary
100.00

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

 

The registered office of both subsidiaries is The Gatehouse, 9 Manor Road, Harrogate, England, HG2 0HP.

FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 29 -
17
Financial instruments
Group
Company
2024
2023
2024
2023
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
700,879
566,396
622,640
452,656
Carrying amount of financial liabilities
Measured at amortised cost
5,063,663
5,283,175
5,749,917
5,645,981

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

18
Inventories
Group
Company
2024
2023
2024
2023
£
£
£
£
Work in progress
905,805
-
-
-
Finished goods and goods for resale
4,900
6,200
-
0
-
0
910,705
6,200
-
-

Inventories with a carrying amount of £910,705 (2023: £6,200) have been pledged to secure liabilities of the group. Further information is provided in note 22.

19
Trade and other receivables
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade receivables
66,641
71,211
-
0
-
0
Other receivables
634,238
495,185
622,640
452,656
Prepayments and accrued income
100,668
36,902
174
-
0
801,547
603,298
622,814
452,656

Trade debtors and other receivables with a carrying amount of £801,547 (2023: £603,298) have been pledged to secure liabilities of the group. Further information is provided in note 22.

FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 30 -
20
Current liabilities
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans
22
3,803,470
3,970,000
3,803,470
3,970,000
Obligations under finance leases
23
41,827
33,719
-
0
-
0
Trade payables
127,864
108,705
-
0
27,680
Amounts owed to group undertakings
-
0
-
0
1,246,665
921,355
Corporation tax payable
217,620
367,667
57,574
107,279
Other taxation and social security
36,699
52,080
-
-
Other payables
267,589
303,189
100,000
100,000
Accruals and deferred income
281,778
222,127
99,782
26,946
4,776,847
5,057,487
5,307,491
5,153,260
21
Non-current liabilities
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Obligations under finance leases
23
41,135
45,435
-
0
-
0
Other payables
500,000
600,000
500,000
600,000
541,135
645,435
500,000
600,000

Further information of other payables is provided in note 32.

22
Borrowings
Group
Company
2024
2023
2024
2023
£
£
£
£
Bank loans
3,803,470
3,970,000
3,803,470
3,970,000
Payable within one year
3,803,470
3,970,000
3,803,470
3,970,000

Bank loans included above totalling £3,803,470 (2023: £3,970,000) are secured by way of a legal mortgage over freehold properties held as fixed assets owned by the subsidiary group companies and by way of a fixed and floating charge over the assets and undertakings of the group. Interest on bank loans is under a floating rate basis, under which the interest rate will never be less than 2.75% per annum. The loan matured in June 2024 and was subsequently refinanced in August 2024. See note 30 for additional information.

FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 31 -
23
Finance lease obligations
Group
Company
2024
2023
2024
2023
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
41,827
33,719
-
0
-
0
In two to five years
41,135
45,435
-
0
-
0
82,962
79,154
-
-

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 2.6 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

24
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
75,524
96,266
Revaluations
1,044,067
652,538
1,119,591
748,804
The company has no deferred tax assets or liabilities.
Group
Company
2024
2024
Movements in the year:
£
£
Liability at 1 July 2023
748,804
-
Credit to profit or loss
(20,740)
-
Charge to other comprehensive income
391,527
-
Liability at 30 June 2024
1,119,591
-

Of the deferred tax liability set out above, an amount of £20,672 is expected to reverse within 12 months and relates to accelerated capital allowances.

 

Of the deferred tax liability set out above, an amount of £15,301 is expected to reverse within 12 months and relates to revaluation of freehold property.

FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 32 -
25
Deferred grants

Government grants totalling £42,317 (2023: £35,206) were released in the year in connection with coronavirus funding. As at 30 June 2024, an amount of £90,128 (2023: £132,445) remains in other creditors to be released in line with the accounting policy for capital grants.

26
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
42,675
38,695

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.

Contributions outstanding at the end of the year and included within other creditors amounted to £7,289 (2023: £9,195).

27
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
170
170
170
170
Ordinary B shares of £1 each
30
30
30
30
200
200
200
200

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

28
Reserves
Revaluation reserve

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

Retained earnings

Retained earnings represents cumulative profits or losses, net of dividends paid and other adjustments.

FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 33 -
29
Operating lease commitments

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

Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
50,473
46,285
-
-
Between two and five years
107,870
143,291
-
-
158,343
189,576
-
-
30
Events after the reporting date

Subsequent to the year end, Franklyn Care Limited refinanced its borrowings of £3,803,470 and in doing so repaid circa £742,000. The new loan totals £3,040,000 with a loan term of 5 years from drawdown at a margin of 2.55% above the Bank of England Bank Rate.

31
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2024
2023
£
£
Aggregate compensation
30,344
25,259
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Services provided
2024
2023
£
£
Group
Other related parties
-
7,606

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2024
2023
£
£
Group
Key management personnel
600,000
700,000
FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
31
Related party transactions
(Continued)
- 34 -
Company
Entities over which the company has control, joint control or significant influence
1,246,665
921,355
Key management personnel
600,000
700,000
1,846,665
1,621,355

Details of transactions with directors are shown in note 32.

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2024
2023
Balance
Balance
£
£
Group
Key management personnel
467,616
340,525
467,616
340,525
Company
Key management personnel
467,616
340,525
467,616
340,525
FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 35 -
32
Directors' transactions

Dividends totalling £161,900 (2023: £326,000) were paid in the year in respect of shares held by the company's directors.

Description
% Rate
Opening balance
Amounts advanced
Interest charged
Closing balance
£
£
£
£
Mr MacArthur and Ms McKenna
2.25
340,525
118,101
8,990
467,616
340,525
118,101
8,990
467,616

As at 30 June 2024 the group was owed amounts totalling £467,616 (2023: £340,525) from directors of the company. The loan is repayable on demand and interest is charged at the official rate.

 

As at 30 June 2024 the group owed amounts totalling £600,000 (2023: £700,000) to directors of the company. Of this amount, £600,000 (2023: £700,000) was loaned to the company in May 2018 by a director of the company and is repayable by annual repayments of £100,000 commencing on the second anniversary of the drawdown. Interest is charged from the first anniversary at 4% above the Bank of England base rate and is payable quarterly. The loan matures in May 2028.

 

The above loans are unsecured.

 

33
Controlling party

The ultimate controlling parties are Mr A MacArthur and Ms J McKenna by virtue of their 85% shareholdings of the issued share capital of the company.

 

 

34
Cash generated from group operations
2024
2023
£
£
Profit for the year after tax
574,430
948,451
Adjustments for:
Taxation charged
191,020
229,930
Finance costs
419,063
275,005
Investment income
(66,452)
(11,926)
Loss on disposal of property, plant and equipment
28,353
2,665
Amortisation and impairment of intangible assets
(113,150)
(113,151)
Depreciation and impairment of property, plant and equipment
261,076
136,007
Movements in working capital:
Increase in inventories
(4,505)
(710)
Increase in trade and other receivables
(71,159)
(72,965)
Increase in trade and other payables
27,830
52,579
Cash generated from operations
1,246,506
1,445,885
FRANKLYN CARE LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 36 -
35
Cash generated from operations - company
2024
2023
£
£
Profit for the year after tax
220,779
81,839
Adjustments for:
Finance costs
410,939
270,194
Investment income
(648,990)
(406,509)
Movements in working capital:
Increase in trade and other receivables
(43,067)
(15,308)
Increase in trade and other payables
370,466
685,919
Cash generated from operations
310,127
616,135
36
Analysis of changes in net debt - group
1 July 2023
Cash flows
New finance leases
30 June 2024
£
£
£
£
Cash at bank and in hand
1,361,069
(101,512)
-
1,259,557
Borrowings excluding overdrafts
(3,970,000)
166,530
-
(3,803,470)
Obligations under finance leases
(79,154)
36,190
(39,998)
(82,962)
(2,688,085)
101,208
(39,998)
(2,626,875)
37
Analysis of changes in net debt - company
1 July 2023
Cash flows
30 June 2024
£
£
£
Cash at bank and in hand
223,586
(57,048)
166,538
Borrowings excluding overdrafts
(3,970,000)
166,530
(3,803,470)
(3,746,414)
109,482
(3,636,932)
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