The directors present their strategic report for the year to 30 September 2024.
Zero Topco Limited and its subsidiaries (“the Group”), provide high quality care and support services to adults across the South-East of the UK, including those with learning disabilities, autism and complex care needs. The Group is committed to person-centred care that enables individuals to live independently with dignity and respect.
The Groups services include supported living and residential care homes. The companies providing the care within the Group are regulated by the Care Quality Commission (CQC) and all services are delivered in line with applicable statutory requirements and best practice standards.
Fair review of the business
The results for the year which are set out in the profit and loss account show turnover of £14,629,748 and an operating profit of £943,853. At 30 September 2024 the Group had net current assets of £6,100,430. The directors consider the performance for the year and the financial position at the year-end to be satisfactory.
The management of the business and the execution of the Group's strategy are subject to a number of risks. The adult social care sector continues to face challenges. Key risks identified include:
Workforce Recruitment and Retention:
The availability of qualified care staff remains constrained. The Group has responded with improved recruitment practices and enhanced training. The Group also believes that the political importance of the sector means that the government will ensure that providers retain access to a supply of labour from outside the UK, including post Brexit
Regulatory Risk:
As a regulated provider, compliance with CQC standards is essential. The Group maintains robust quality governance to mitigate this.
Cost Pressures:
Rising wage and wider inflationary pressures present a financial risk. The Group continues to pursue efficiencies and engage with commissioners on fair contract pricing.
Objectives and policies
The Group is exposed to the usual credit and cash flow risks associated with selling on credit and manages this through credit control procedures. The board constantly monitors the Group's trading results and revises projections as appropriate to ensure that the Group can meet its future obligations as they fall due.
Price risk, credit risk, liquidity risk and cash flow risk
The Group is exposed to the usual credit and cash flow risks associated with selling on credit and manages this through credit control procedures. Cash flow, performance and key indicator reporting are measured under agreed covenant means testing and reported at the end of each quarter period.
The Directors believe that they have effectively implemented their duties under section 172 of the Companies Act 2006. The Directors have considered the long-term strategy of the of the Group to generate value for the shareholder by providing high quality residential and supported living care services and consider that this strategy will continue to deliver long term success to the Group and its stakeholders.
The Directors recognise the importance of wider stakeholders in delivering their strategy and achieving sustainability within the Group. The main stakeholders in the Company are considered to be the ultimate shareholders, employees, suppliers and customers. Their importance to the business is considered below.
The Group is committed to maintaining an excellent reputation and strives to achieve high standards. Our relationships with our suppliers, employees and customers are all interlinked in that by treating our suppliers fairly and having the right suppliers ensures that our staff are able to operate in a conducive environment while ensuring customers’ needs are met. By ensuring that we have the correct suppliers supplying the right quality of goods or services, coupled with quality staff working in optimal environments, we can ensure that service offered to our customers is of a high quality and standard resulting in continued support in our business. Each of these combined ultimately aims to result in a sustainable business and continued return for our shareholder.
The Group is regulated by the CQC who perform inspections at least once every 5 years however, the CQC could inspect any provider at any point in time irrespective of rating and inspections are almost always unannounced. In order to maintain acceptable levels and standards of care, we continually monitor our care levels in order to ensure that we maintain a high level of service and care at all times. During the year, the Group had 1 inspection. The Directors recognise the importance of continuous improvements and as such, the company continues its efforts to provide a high level of service and care at all times.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 September 2024.
The results for the year are set out on page 11.
No ordinary dividends were paid. The directors do not recommend payment of any dividends for the reporting period.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
Affinia Limited were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
The group has followed the 2019 HM Government Environmental Reporting Guidelines in reporting for all large entities within the group. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting
The annual reporting period below relates to the year to 30 September 2024.
Where we have not included any data for the previous period these amounts are unquantified as the data was not available at that time. The energy use and associated greenhouse gas emissions are for those assets owned or operated within UK only. This includes 10 care homes and 1 head office.
The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £million, the recommended ratio for the sector.
The group has implemented the policies below for the purpose of increasing the businesses energy efficiency in the current reported financial period:
• Improved video conferencing availability and encouragement of its use;
• Reduced emissions & travel costs by reducing non-essential face to face meetings with customers & suppliers.
Our goal is to actively start implementing projects to improve our energy and carbon efficiency. For the current year, we have collated the data, noted above, and will now look to develop ways to improve energy efficiency by
continuing to research methods to increase our carbon efficiency.
We have audited the financial statements of Zero Topco Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2024 which comprise 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 and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for 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
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
There are inherent limitations in our audit procedures described below. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
We identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the care sector;
We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, environmental and health and safety legislation;
We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
Identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
Making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
Agreeing financial statement disclosures to underlying supporting documentation;
Enquiring of management as to actual and potential litigation and claims; and
Reviewing correspondence with the company’s legal advisors
Reviewing correspondence with regulatory authorities (CQC)
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.
Other matters which we are required to address
The financial statements of the following group companies were not audited for the period ended 17 August 2023:
SAS Homecare Limited
SAS Support & Solutions Limited
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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £3,164,948 (2023 - £1,116,215 loss).
Zero Topco Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Thameside House, Hurst Road, East Molesey, Surrey, United Kingdom, KT8 9AY.
The group consists of Zero Topco Limited and all of its subsidiaries. A listing of all its subsidiaries can be found in note 17 of these financial statements.
The financial statements contain a prior period from 14 June 2022 to the 30 September 2023 due to this being the first period of trade. As such the financial statements presented are not wholly comparable.
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.
The group has taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Zero Topco Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 September 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The group is in a net current asset position of £6,100,430 at the balance sheet date with net liabilities overall being £3,261,435.
At the balance sheet date, £5,801,927 is due to its parents, of which the directors have confirmed in writing will not be recalled to the detriment of the group and for at least 12 months from the date these financial statements are signed.
The group has considered the forecasted future operations and that the ultimate parent undertaking has confirmed to provide continuing financial support to the group, and have concluded that the group will have adequate resources to continue in business for the foreseeable future, being at least 12 months from the date of approval of these financial statements. The directors continue to adopt the going concern basis of accounting in preparing these financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for services in relation to residential care 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.
Revenue from the sale of residential care services is recognised at the point at which those services have been provided to the customer, and invoices are raised in line with the terms of contracts with customers. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
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.
Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in profit or loss or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and loss are recognised in profit or loss.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
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.
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, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, 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.
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.
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.
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, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
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.
The tax expense represents the sum of the tax currently payable and deferred 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.
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.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 profit or loss 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 leased asset are consumed.
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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The group makes estimates using reliable data and minimises judgemental aspects where possible. The group makes judgements annually on the recoverability of its cash generating units where goodwill or investments have been recognised to when testing for impairment.
Freehold property and improvements are stated at cost, and revalued every 4 years against on an open market basis, by independent professional valuers. Reviews for any triggers of impairment are completed annually. The level of uncertainty in the UK property market has increased the degree of judgment involved in the valuations.
Investment properties are valued annually against on an open market basis, by independent professional valuers. Reviews for any triggers of impairment are completed annually. The level of uncertainty in the UK property market has increased the degree of judgment involved in the valuations.
The total turnover of the company has been derived from its principal activity wholly undertaken in the United Kingdom.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
No remuneration was paid to directors from this company, however remuneration was paid by the overseas parent company. The payments are therefore not included in these consolidated financial statements.
During the year the company made an investment of £1,032,972 in Mylife Addiction Rehabilitation Topco Limited, via the issue of preference shares. The directors no longer believe this investment is recoverable and therefore an impairment of £1,032,971 was recognised during the year.
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
Goodwill arising on consolidation is being amortised over the directors’ estimate of its useful life of 10 years.
This estimate is based on a variety of factors such as the expected use of the acquired business, the expected useful life of the cash generating units to which the goodwill is attributed, any legal, regulatory or contractual provisions that can limit useful life and assumptions that market participants would consider in respect of similar businesses.
The carrying value of land and buildings comprises:
During the prior year the group entered into a sale and leaseback transaction, whereby freehold properties held transferred ownership to another party but continued to be held under finance leases.
No impairment was recognised prior to sale due to the subsequent revaluation post year end supporting the historical valuation recognised on these assets.
Consequently these financial assets are held within freehold property and will therefore be revalued every four years in line with the revaluation model chosen for this class of tangible assets
The depreciation charge in respect of such assets amounted to £216,745 (2023: £208,192) for the year.
Property and improvements were valued at an open market basis on 31st March 2021 by Colliers International. No revaluation has taken place in the current year, the next revaluation planned in 2025, in line with the four year revaluation policy.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
Investment property comprises with a historical cost value of £890,000 (2023: £515,000). The fair value of the investment property has been arrived at on the basis of a valuation carried out at 7 December 2023.
Valuations have been carried out by professionally qualified valuer, Knight Frank, in accordance with the Royal Institute of Chartered Surveyors (RCIS) appraisal and valuation manual.
During the year the company made an investment of £1,032,972 in Mylife Addiction Rehabilitation Topco Limited, via the issue of preference shares. The directors no longer believe this investment is recoverable and therefore an impairment of £1,032,971 was recognised during the year, leaving a carrying amount of £1 at year end.
Details of the company's subsidiaries at 30 September 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
Within debtors due within one year include £473,537 (2023: £55,937) related to an intercompany loan due from Montreux Group Overseas Limited.
Debtors due over one year include £5,328,390 (2023: £5,000,000) related to an intercompany loan due from Montreux Fixed Yield Holding Company.
Long term debtors include a £5,000,000 loan with interest accruing at 5% evenly throughout the year, payable on the anniversary of the issue date. Long term loans include £328,390 (2023: £nil) of accrued interest receivable at the balance sheet date.
At the statement of financial position date, Shawbrook Bank Limited held a fixed and floating charge dated 30 January 2024 over all the property or undertaking of the group and the company.
A fixed and floating charge held by Clydesdale Bank PLC dated 1 November 2023 was satisfied on 31 January 2024.
A fixed and floating charge held by National Westminster Bank PLC dated 15 December 2021 was satisfied on 30 August 2023.
A fixed and floating charge held by National Westminster Bank PLC dated 29 January 2016 was satisfied on 30 August 2023.
A fixed and floating charge held by National Westminster Bank PLC dated 2 October 2015 was satisfied on 30 August 2023.
At the statement of financial position date, Shawbrook Bank Limited held a fixed and floating charge dated 30 January 2024 over all the property or undertaking of the group and the company.
A fixed and floating charge held by Clydesdale Bank PLC dated 1 November 2023 was satisfied on 31 January 2024.
A fixed and floating charge held by National Westminster Bank PLC dated 15 December 2021 was satisfied on 30 August 2023.
A fixed and floating charge held by National Westminster Bank PLC dated 29 January 2016 was satisfied on 30 August 2023.
A fixed and floating charge held by National Westminster Bank PLC dated 2 October 2015 was satisfied on 30 August 2023.
Bank borrowings are secured by a debenture over all the assets of the subsidiary company, including first and
legal charges over the freehold properties.
Redeemable preference shares are unsecured with dividends payable at a coupon rate of 12% per annum
compounding annually on the anniversary of issue date. Redeemable preference shares include £2,707,424 (2023: £721,997) of accrued unpaid dividends at the balance sheet date.
Finance lease liabilities are stated after deducting £165,978 of costs associated with the raising of this finance, which are being released to the profit and loss account over the term of the finance leases. The implicit interest rate on the finance lease liabilities is 3.76% at year end, with an adjustable rate between 2% and 5% linked to RPI. Finance lease liabilities are payable in monthly instalments over a 40 year term with a final repayment due in 2063 and are secured against the freehold properties to which they relate.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
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.
The different classes of shares rank pari passu in all respects other than dividend rights.
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:
Within debtors are the following balances due to Zero Topco Limited:
£5,328,390 (2023: £5,000,000) relating to a loan owed by Montreux Fixed Yield Holding Company
£473,537 (2023: £55,937) relating to a loan owed to Montreux Group Overseas Limited.
Montreux Field Yield Holding Company has an ultimate beneficial owner who is also a director of Zero Topco Limited.
During the year Zero Topco Ltd entered into an investment in Mylife Addiction Rehabilitation Topco Limited, a company with directors in Common, which carrying amount at year end of £1,032,972 was written down to £1. Similarly, Zero Topco Ltd was owed £188,748 by Mylife Addiction Rehabilitation Topco Limited, was also fully provided against year end.
Investment properties held within the group were incorrectly classified as freehold property upon consolidation. Consequently the brought forward Tangible asset classes; Freehold Property and Investment Properties have been restated.
No adjustment to the accounts of the parent company or its subsidiary was required to be made.
Intercompany amounts due from parent had been classified as due within one year. Due to the loan agreement in place, this should be considered as long term and has subsequently be classified as over one year.