Company Registration No. 07160239 (England and Wales)
SOVEREIGN CARE LIMITED
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
SOVEREIGN CARE LIMITED
COMPANY INFORMATION
Directors
Mr T Ravichandran
Mrs R Ravichandran
Company number
07160239
Registered office
31/33 Commercial Road
Poole
Dorset
BH14 0HU
Auditor
Morris Lane
31/33 Commercial Road
Poole
Dorset
BH14 0HU
SOVEREIGN CARE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 9
Income statement
10
Statement of comprehensive income
11
Statement of financial position
12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 30
Non statutory information
Detailed trading, profit and loss account
SOVEREIGN CARE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present the strategic report for the year ended 31 March 2024.
Fair review of the business
Sovereign Care provides residential and specialised nursing care in the South East of England - consisting of 2 nursing homes, and one residential home providing essential care and support to over 120 residents. Our mission is to deliver person-centred care that enhances quality of life while ensuring safety, dignity, and respect for all our residents.
Principal risks and uncertainties
Industry Trends:
Growing demand for specialised dementia care services due to the ageing population.
Increased emphasis on sustainability and energy-efficient facilities within the care sector.
Workforce challenges, including recruitment and retention, exacerbated by sector-wide shortages.
Competitive Position:
Our company holds a strong market position, supported by high occupancy rates (average 92%) and robust community partnerships. Investments in staff training and innovative care models have strengthened our competitive edge.
Future developments and performance
Core Goals:
Achieve high standards of care and compliance with the Care Quality Commission (CQC) regulations.
Improve operational efficiency to enhance financial sustainability.
Invest in staff development and retention to drive excellence in the quality of care.
2024 Achievements:
Resident Satisfaction: Achieved a 90% satisfaction rate from resident surveys, reflecting improved engagement and quality of services.
Filsham Lodge received a carehome.co.uk average rating of 8.8 from next of kin, reflecting their feedback on the quality of care and services provided.
Technology Integration: Rolled out and improved electronic care management system in all homes, improving care planning and regulatory compliance.
Key performance indicators
Key Metrics:
Revenue: £5.8m reflecting an 17% year-on-year growth.
Net Profit: £0.3m , with a profit margin of 4.7% down from 7.2% last year.
Operational Costs: £0.9m increase due to increases in staffing costs and interest rates.
Financial Outlook:
The outlook remains positive, with anticipated revenue growth of 8% in 2025, driven by increased bed capacity and enhanced service offerings.
SOVEREIGN CARE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Other performance indicators
Workforce:
Hired over 50 new staff members, including specialised nurses and care assistants .
Reduced staff turnover to 15%, outperforming the industry average of 28%.
Compliance and Safety:
Zero major compliance breaches reported.
Enhanced infection control protocols, maintaining resident safety amidst seasonal flu outbreaks.
Strategic Priorities for 1st April 2024 – 31st March 2025 Service Expansion:
Workforce Development:
Conclusion
The past year has demonstrated our resilience and commitment to excellence in care delivery. With a clear strategy for growth and a focus on innovation and quality, we are well-positioned to continue meeting the needs of our residents, families, and stakeholders in the coming year.
Mrs R Ravichandran
Director
10 April 2025
SOVEREIGN CARE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
The principal activity of Sovereign Care Limited continued to be owning and operating two residential homes for the elderly and one nursing and residential home for the elderly.
The directors' strategic analysis of the company can be found on page 1.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £88,150. 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 T Ravichandran
Mrs R Ravichandran
Financial instruments
The company’s principal financial instruments include bank overdrafts and loans, the main purpose of which is to raise finance for the company’s operations and future development works. In addition, the company has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations.
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Interest rate risk
The company 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. The company used interest rate derivatives to manage the mix of fixed and variable rate debt so as to reduce its exposure to changes in interest rates.
Credit risk
Investments of any cash surpluses and borrowings are made through the banks. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Future developments
Further information in respect of future developments is given in the Strategic Report and above.
Auditor
The auditor, Morris Lane, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
SOVEREIGN CARE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
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) including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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 company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company'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 company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mrs R Ravichandran
Director
10 April 2025
SOVEREIGN CARE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SOVEREIGN CARE LIMITED
- 5 -
Opinion
We have audited the financial statements of Sovereign Care Limited (the 'company') for the year ended 31 March 2024 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the 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:
give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
SOVEREIGN CARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOVEREIGN CARE LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
SOVEREIGN CARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOVEREIGN CARE LIMITED
- 7 -
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 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 company is 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 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; and corporation tax and pensions.
In addition to the above, the company is subject to other operational laws and regulations where non-compliance may have a material effect on the financial statements. Non-compliance of such laws and regulations may result in litigation, the imposition of fines or the closure of the business which could have a material impact on amounts or disclosures in the financial statements. We have identified the following laws and regulations which are more likely to have significant effect as: compliance with the Care Quality Commission regulations; food hygiene laws; health and safety laws; General Data Protection Regulation (GDPR); employment law and pension regulations.
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 and ghost employees. 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.
SOVEREIGN CARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOVEREIGN CARE LIMITED
- 8 -
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:
Reviewing the disclosures contained within the financial statements and testing to supporting documentation in order to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements.
Enquiring of the directors concerning actual and potential non-compliance of laws and regulations.
Reviewing Care Quality Commission inspection reports in order to identify any potential non-compliance of laws and regulations.
Performing substantive testing with regard to employees to ensure that identification and employment contracts are on file, the Pay As You Earn system is operating correctly, pension deductions are made where appropriate and valid right to work documentation is available where required.
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.
Revenue recognition was addressed by obtaining an understanding of relevant controls with regard to revenue recognition and undertaking substantive testing to ensure that revenue is recognised in line with the company’s accounting policy and in line with accounting standards.
In order to address the risks arising from the diversion of income, contracts with 3rd party service users and local authorities were agreed to the amounts charged and therefore reflected in the financial statements of the company.
The risk relating to management override of controls was addressed by testing the appropriateness of journal entries and other adjustments, assessing whether accounting estimates are indicative of potential bias and evaluating the business rationale of any significant transactions that are considered unusual or outside the normal course of business.
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 for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
SOVEREIGN CARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOVEREIGN CARE LIMITED
- 9 -
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
22 April 2025
Chartered Accountants
Statutory Auditor
31/33 Commercial Road
Poole
Dorset
BH14 0HU
SOVEREIGN CARE LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
2024
2023
Notes
£
£
Revenue
3
5,816,296
4,973,285
Administrative expenses
(5,249,451)
(4,396,503)
Other operating income
11,224
6,796
Operating profit
4
578,069
583,578
Investment income
8
136
Finance costs
9
(188,618)
(128,096)
Profit before taxation
389,587
455,482
Tax on profit
10
(116,387)
(95,022)
Profit for the financial year
273,200
360,460
The income statement has been prepared on the basis that all operations are continuing operations.
SOVEREIGN CARE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
2024
2023
£
£
Profit for the year
273,200
360,460
Other comprehensive income
Tax relating to other comprehensive income
9,721
3,437
Total comprehensive income for the year
282,921
363,897
SOVEREIGN CARE LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2024
31 March 2024
- 12 -
2024
2023
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
13
5,259,697
5,331,451
Current assets
Inventories
14
7,365
7,155
Trade and other receivables
15
1,279,838
1,434,484
Cash and cash equivalents
552,483
287,470
1,839,686
1,729,109
Current liabilities
16
(3,582,618)
(1,500,160)
Net current assets (liabilities).
(1,742,932)
228,949
Total assets less current liabilities
3,516,765
5,560,400
Non-current liabilities
17
(223,432)
(2,453,435)
Provisions for liabilities
Deferred tax liability
19
120,795
129,198
(120,795)
(129,198)
Net assets
3,172,538
2,977,767
Equity
Called up share capital
22
100
100
Revaluation reserve
23
367,479
361,916
Retained earnings
24
2,804,959
2,615,751
Total equity
3,172,538
2,977,767
The financial statements were approved by the board of directors and authorised for issue on 10 April 2025 and are signed on its behalf by:
Mrs R Ravichandran
Director
Company Registration No. 07160239
SOVEREIGN CARE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
Share capital
Revaluation reserve
Retained earnings
Total
Notes
£
£
£
£
Balance at 1 April 2022
100
362,637
2,353,133
2,715,870
Year ended 31 March 2023:
Profit for the year
-
-
360,460
360,460
Other comprehensive income:
Tax relating to other comprehensive income
-
3,437
3,437
Total comprehensive income for the year
3,437
360,460
363,897
Dividends
11
-
-
(102,000)
(102,000)
Transfers
-
(4,158)
4,158
-
Balance at 31 March 2023
100
361,916
2,615,751
2,977,767
Year ended 31 March 2024:
Profit for the year
-
-
273,200
273,200
Other comprehensive income:
Tax relating to other comprehensive income
-
9,721
9,721
Total comprehensive income for the year
9,721
273,200
282,921
Dividends
11
-
-
(88,150)
(88,150)
Transfers
-
(4,158)
4,158
-
Balance at 31 March 2024
100
367,479
2,804,959
3,172,538
SOVEREIGN CARE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 14 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
30
850,633
501,884
Interest paid
(188,618)
(128,096)
Income taxes paid
(61,272)
(176,139)
Net cash inflow from operating activities
600,743
197,649
Investing activities
Purchase of property, plant and equipment
(53,331)
(68,562)
Interest received
136
Net cash used in investing activities
(53,195)
(68,562)
Financing activities
Repayment of bank loans
(194,385)
(260,341)
Dividends paid
(88,150)
(102,000)
Net cash used in financing activities
(282,535)
(362,341)
Net increase (decrease) in cash and cash equivalents
265,013
(233,254)
Cash and cash equivalents at beginning of year
287,470
520,724
Cash and cash equivalents at end of year
552,483
287,470
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 15 -
1
Accounting policies
Company information
Sovereign Care Limited is a private company limited by shares incorporated in England and Wales. The registered office is 31/33 Commercial Road, Poole, Dorset, BH14 0HU. The principal business addresses are Filsham Lodge, 137-141 South Road, Hailsham, East Sussex, BN27 3NN; Ampersand House, Parsonage Lane, Rochester, Kent, ME2 4HP and Caroline House, 7-9 Ersham Road, Hailsham, East Sussex, BN27 3LG.
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. The principal accounting policies adopted are set out below.
1.2
Business combinations
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.
The company has taken advantage of the transitional exemption in section 35.10(a) of FRS 102 not to restate any business combinations effected prior to the date of transition.
1.3
Going concern
The directors have adopted the going concern basis in preparing these accounts after assessing the principaltrue risks applicable to the company. These include rising inflation, rising interest rates, staff shortages as a result of Brexit, the increase in the National Living Wage for employees over the age of 21, the cost of living crisis and higher insurance premiums, together with the group's compliance with loan covenants. The directors consider the company to be able to meet its obligations as they fall due for a period of at least 12 months from the date of signing these financial statements, and to be well placed to manage its financing and business risks satisfactorily. Overall, the directors do not consider there to be a cause for material uncertainty regarding the company’s going concern status as at the date of signing these financial statements.
1.4
Revenue
Revenue is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
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.
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised over the FRS 102 default period of 10 years on a straight line basis, as the directors consider that it is not possible to make a reliable estimate of the useful life of the assets.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.6
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Freehold property
2% straight line
Fixtures, fittings and equipment
20% 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 credited or charged to profit or loss.
1.7
Impairment of non-current assets
At each reporting period end date, the company 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.
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.
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
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.
1.8
Inventories
Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell.
Cost is calculated using the weighted average method.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventories over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include 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.
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 18 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including 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.
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 19 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or 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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 20 -
1.15
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.
Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
1.16
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
1.17
The company implements appropriate credit checks on residents and service users prior to providing services. This reduces the exposure of the company in respect of credit risk.
1.18
The policy of the company is to maintain a mix of short and long term borrowings to effectively manage liquidity risk.
1.19
Cash flow and interest rate risk
The company's interest rate risk arises primarily from long-term borrowings issued at variable rates which exposes the company to cash flow interest rate risk. The cash flow interest rate risk is managed within the company's business 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 company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
3
Revenue
An analysis of the company's revenue is as follows:
2024
2023
£
£
Revenue analysed by class of business
Care services
5,816,296
4,973,285
2024
2023
£
£
Other significant revenue
Interest income
136
-
Grants received
11,224
6,110
4
Operating profit
2024
2023
Operating profit for the year is stated after charging (crediting):
£
£
Government grants
(11,224)
(6,110)
Fees payable to the company's auditor for the audit of the company's financial statements
9,084
8,646
Depreciation of owned property, plant and equipment
125,085
125,107
Operating lease charges
28,293
30,007
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 company
9,084
8,646
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Management and senior team
6
6
Care, domestic, maintenance and activities team
81
86
Nursing staff
12
7
Administration
8
3
Domestic, maintenance and activities
31
28
Maintenance
5
-
Total
143
130
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
6
Employees
(Continued)
- 22 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
3,266,667
2,628,720
Social security costs
286,254
219,821
Pension costs
41,871
43,881
3,594,792
2,892,422
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
16,320
16,320
8
Investment income
2024
2023
£
£
Interest income
Other interest income
136
9
Finance costs
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
188,168
123,984
Other interest on financial liabilities
450
250
188,618
124,234
Other finance costs:
Other interest
3,862
188,618
128,096
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
115,069
95,644
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
10
Taxation
2024
2023
£
£
(Continued)
- 23 -
Deferred tax
Origination and reversal of timing differences
1,318
(622)
Total tax charge
116,387
95,022
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
389,587
455,482
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
97,397
86,542
Tax effect of expenses that are not deductible in determining taxable profit
3,276
4,744
Tax effect of income not taxable in determining taxable profit
(491)
(467)
Depreciation in excess of capital allowances
14,887
4,825
Deferred tax on accelerated (decelerated) capital allowances
1,318
(622)
Taxation charge for the year
116,387
95,022
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
(9,721)
(3,437)
11
Dividends
2024
2023
£
£
Final paid
88,150
102,000
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
12
Intangible fixed assets
Goodwill
£
Cost
At 1 April 2023 and 31 March 2024
2,055,000
Amortisation and impairment
At 1 April 2023 and 31 March 2024
2,055,000
Carrying amount
At 31 March 2024
At 31 March 2023
13
Property, plant and equipment
Freehold property
Fixtures, fittings and equipment
Total
£
£
£
Cost or valuation
At 1 April 2023
5,690,444
845,131
6,535,575
Additions
3,638
49,693
53,331
At 31 March 2024
5,694,082
894,824
6,588,906
Depreciation and impairment
At 1 April 2023
559,592
644,532
1,204,124
Depreciation charged in the year
74,998
50,087
125,085
At 31 March 2024
634,590
694,619
1,329,209
Carrying amount
At 31 March 2024
5,059,492
200,205
5,259,697
At 31 March 2023
5,130,852
200,599
5,331,451
Property, plant and equipment with a carrying value of £5,259,697 (2023: £5,331,451) have been pledged to secure borrowings of the company.
At the transition date of 1 April 2014, the company took advantage of the transitional exemption in Section 35.10(c) of FRS 102 to treat the fair value of the freehold property at the date of transition as deemed cost.
The revaluation surplus is disclosed in note 23.
The freehold land and buildings were revalued as at 1 April 2014 to £3.89m based on the directors' knowledge of the industry. The company has taken advantage of the transitional provisions available on the introduction of FRS 102 to carry those assets at that value less depreciation in subsequent years. Subsequent additions to freehold land and buildings are included at cost.
The comparable amounts for land and buildings under the historical cost convention were:
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
13
Property, plant and equipment
(Continued)
- 25 -
2024
2023
£
£
Cost
5,278,280
5,274,642
Accumulated depreciation
(592,449)
(521,609)
Carrying value
4,685,831
4,753,033
14
Inventories
2024
2023
£
£
Consumables
7,365
7,155
The carrying amount of inventories includes £7,365 (2023: £7,155) pledged as security for liabilities.
15
Trade and other receivables
2024
2023
Amounts falling due within one year:
£
£
Trade receivables
636,980
732,077
Other receivables
532,188
547,030
Prepayments and accrued income
110,670
155,377
1,279,838
1,434,484
The carrying amount of trade and other receivables include £1,279,838 (2023: £1,434,484) pledged as security for liabilities.
16
Current liabilities
2024
2023
Notes
£
£
Bank loans
18
2,419,279
383,661
Trade payables
192,739
177,519
Corporation tax
130,629
76,832
Other taxation and social security
88,465
72,794
Deferred income
20
190,224
310,405
Other payables
341,160
330,641
Accruals
220,122
148,308
3,582,618
1,500,160
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 26 -
17
Non-current liabilities
2024
2023
Notes
£
£
Bank loans and overdrafts
18
223,432
2,453,435
Amounts included above which fall due after five years are as follows:
Payable by instalments
34,444
1,841,264
18
Borrowings
2024
2023
£
£
Bank loans
2,642,711
2,837,096
Payable within one year
2,419,279
383,661
Payable after one year
223,432
2,453,435
The bank loans are secured by way of fixed and floating charges over all the assets of the company and a personal guarantee from the directors as detailed in note 28.
As at 31 March 2024 the company owed £2,366,335 (2023: £2,509,216) at a floating interest rate of 1.75% above the Bank of England base rate, £88,048 (2023: £95,667) at a floating interest rate of 2.5% above the Bank of England base rate and £188,328 (2023: £232,213) at a floating interest rate of 2.85% above the Bank of England base rate. These loans were originally due to mature in 2034, 2031 and 2027 respectively. The bank have, however, extended the original term after granting a 6 month capital repayment holiday due to COVID-19.
During the financial year, the company was in breach of the covenants laid down by its bankers in respect of its bank loan totalling £2,366,355 (2023: £nil). As a result, the liability becomes payable on demand and the loan has therefore been included in the financial statements as being due within one year on the basis that the company had no unconditional right to defer its settlement for at least 12 months after that date.
In the year ended 31 March 2023, the bank loan totalling £232,213 was in breach of the covenants laid down by its bankers and as a result the liability became payable on demand. The loan was included in the financial statements as being due within one year on the basis that the company had no unconditional right to defer its settlement for at least 12 months after that date.
The company's relationship with its bankers is excellent and the facilities have been conducted on the basis that there have been no breaches.
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 27 -
19
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
114,053
112,735
Revaluations
6,742
16,463
120,795
129,198
2024
Movements in the year:
£
Liability at 1 April 2023
129,198
Credit to profit or loss
(8,403)
Liability at 31 March 2024
120,795
Of the deferred tax liability set out above, an amount of £4,488 is expected to reverse within 12 months and relates to accelerated capital allowances and the revaluation of freehold property.
20
Deferred income
2024
2023
£
£
Other deferred income
190,224
310,405
As at 31 March 2024, an amount of £7,858 (2023: £9,822) remains in accruals and deferred income to be released in line with the accounting policy for capital grants.
21
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
41,871
43,881
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions outstanding at the end of the period and included within other creditors amounted to £22,337 (2023: £11,101).
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 28 -
22
Share capital
2024
2023
£
£
Ordinary share capital
Issued and fully paid
100 Ordinary shares of £1 each
100
100
The Ordinary shares carry voting rights but no right to fixed income or fixed capital repayment.
23
Revaluation reserve
The revaluation reserve represents the effect of the Section 35.10(c) FRS 102 revaluation of freehold land and buildings which were revalued to fair value at transition date and subsequently treated as deemed cost. Deferred tax is applied to the reserve along with an annual transfer to retained earning of the excess depreciation.
24
Retained earnings
Retained earnings represents cumulative profits or losses, net of dividends paid and other adjustments.
25
Financial commitments, guarantees and contingent liabilities
At 31 March 2024 the company had contingent liabilities amounting to £354,759, excluding potential interest and penalties, in respect of possible additional charge to corporation tax resulting from the initial apportionment on purchase of the values attributable to freehold property and goodwill. The determination of any liability to charge remains under assessment as at the financial year end.
26
Operating lease commitments
The operating lease payments include rentals payable by the company for the use of large domestic appliances within the care homes. The terms are under 5 years.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
26,306
27,564
Between two and five years
39,476
62,313
65,782
89,877
27
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
27
Related party transactions
(Continued)
- 29 -
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due to related parties
£
£
Entities over which the shareholders have control, joint control or significant influence
21,825
24,371
21,825
24,371
The loans are interest free, not secured and repayable on demand.
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due from related parties
£
£
Entities over which the shareholders have control, joint control or significant influence
526,510
526,510
526,510
526,510
The loans are interest free, not secured and repayable on demand.
28
Directors' transactions
Dividends totalling £88,150 (2023 - £98,000) were paid in the year in respect of shares held by the company's directors.
As at the year end 31 March 2024 £5 (2023: £63,865) was owed to the directors by the company. The loan is interest free and repayable on demand.
As part of the security for the bank borrowing, the directors have provided a personal guarantee totalling £600,000.
29
Ultimate controlling party
The company is controlled by Mr and Mrs T Ravichandran by virtue of their combined 100% shareholding of the issued ordinary share capital.
SOVEREIGN CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 30 -
30
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
273,200
360,460
Adjustments for:
Taxation charged
116,387
95,022
Finance costs
188,618
128,096
Investment income
(136)
Depreciation and impairment of property, plant and equipment
125,085
125,107
Movements in working capital:
Increase in inventories
(210)
(405)
Decrease (increase) in trade and other receivables
154,646
(174,801)
Increase (decrease) in trade and other payables
113,224
(138,723)
(Decrease) increase in deferred income
(120,181)
107,128
Cash generated from operations
850,633
501,884
31
Analysis of changes in net debt
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
287,470
265,013
552,483
Borrowings excluding overdrafts
(2,837,096)
194,385
(2,642,711)
(2,549,626)
459,398
(2,090,228)
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