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Registered number:
FOR THE PERIOD ENDED 31 AUGUST 2024
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BIRTLEY HOUSE GROUP LIMITED
COMPANY INFORMATION
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BIRTLEY HOUSE GROUP LIMITED
CONTENTS
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BIRTLEY HOUSE GROUP LIMITED
GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 31 AUGUST 2024
Introduction
The directors present the strategic report for the year ended 31 August 2024. The Group's principal trading subsidiaries are involved in the management of a nursing home, Birtley House, and the development and management of close care apartments. The parent company's principal activity is that of a holding company.
Celebrating its 92nd Birthday in July 2024, Birtley House continues in the tradition of remaining an independent, wholly family-owned nursing home business. At the same time, it has maintained its reputation for leading, innovating and championing the sector, playing a significant role by working alongside Local Government groups, Care England and Surrey Care Association.
Birtley House is forward-thinking in its commitment to the environment and is well advanced in its green credentials with its wood fueled boiler, home grown produce and many other environmentally friendly initiatives. It prides itself on a strong community engagement, with several charitable and/or community organisations accessing the grounds and its facilities including a preschool. The combination of these factors creates an environment of continuity, integrity, and a market leading caring ethos, quite unlike any other nursing home. This gives the residents not only the best care but also a quality of life that embraces the peacefulness of beautiful surroundings as well as a thriving community to be part of. The economy has been through a great deal of uncertainty in recent years with changes of government leadership, the enormous rise of inflation and interest rates, all of which has affected the housing marketing and in turn the sales of our West Wing Apartments and Mews Flats. As well as a cost of living crisis affecting our workforce and our own costs. The Board of Directors have recognised the long term change in the market with people staying in their own homes longer. They have identified a number of ways in which to tweak the current business model for the West Wing Apartments to make profitability, income and long term security greater, and will be working towards those goals. The year 2023-24 continued its upward trend following the Covid 19 pandemic with occupancy back to pre pandemic levels. In order to keep occupancy high and consistent, we have a number of online marketing strategies including Internet search engine optimisation bringing traffic into our website, which continues to be a reliable source of enquiries. We also have an extremely high review score on the carehome.co.uk platform in comparison to other care homes (9.7 out of 10). As well as our significant online presence, we have close links with community and charity groups and continue our PR and print format adverts in our surrounding villages which is where a majority of our residents come from. Other challenges remain including cyber vigilance and the maintaining and upgrading of an historic building, including the newly introduced fire regulations following the Grenfell inquiry. The group continues to invest substantially in its property and facilities for the clients (residents) of its subsidiary businesses to maximise asset value and reinforce the quality and ambience of the property and its grounds, which has always been the unique selling point for the businesses. The building has been re-painted and an order placed for new windows for installation in the Autumn 2024. Staffing of the home is managed and monitored by the Group Finance Manager to ensure most cost-effective quality resourcing. Relationships with local staffing agencies are also well maintained with preferable rates and consistent staffing. Meanwhile Birtley House continues to be a nurturing and supportive employer and provides an outstanding working environment, a robust training and induction program, and a market-leading employee benefits package. Being independent and owner managed gives greater flexibility when dealing with employee requests. To recognise and validate this, Birtley House won the Surrey Care Awards 2023 in the category of ‘Innovation in Workforce Recruitment and Retention’.
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BIRTLEY HOUSE GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024
The key performance indicators used by the Board in monitoring the performance of the business are the valuation of the company's properties in relation to the level of bank borrowing; the return on these investments and the level of administrative and financing costs incurred.
The Group showed a pre-tax profit for the year of £543,493 (2023 - £173,259). The Group’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) is £848,092 (2023 - £418,603). During the year the company incurred administrative expenses of £800,253 (2023 - £721,829) in connection with the management of the group and the Birtley House property. In addition, the company paid interest of £228,370 (2023 - £188,803) in respect of its borrowings. Investment income of £nil (2023 - £850,000) was received from the company's shares in group undertakings. Overall the company showed a pre-tax loss of £748,386 (2023 - profit of £188,803).
The nursing home business, operated by Eyhurst Court Limited, continued to perform well in the year, producing income of £4,549,970 (2023 - £4,058,397) and a pre-tax profit of £1,317,952 (2023 - £884,562).
The company involved in the management of the close care apartments, Birtley Mews Limited, traded in-line with expectations. Turnover was £633,557 (2023 - £638,271) as a result of the sale of one apartment during the year (one in 2023), and the company generated a pre-tax loss of £25,579 (2023 - pre-tax loss of £116,645).
The Board has been mindful of the potential impact of the recent economic climate on its business and on the financial status of its customers and suppliers. The Board considers that appropriate processes are in place to manage the Group’s relationships with all third parties to ensure the Group's exposure to potential losses is minimised. Specific financial risks and how these are mitigated are discussed further below in this report.
Competition Competition comes from the growing number of new build care homes in the area. However these developments are designed to maximise profits by not employing Registered Nurses as well as utilising the entire foot map as income generating accommodation leaving very little or no outside space. It is widely acknowledged that spending time outside in nature has many benefits and therefore our 48 acres of formal gardens, ponds, lakes, an orchard as well as the woodland area (home to various local crafts people and a forest preschool), provide a sense of community and opportunities for interaction for the residents of Birtley House and the Mews and their families and friends; all of which undoubtably sets us apart from the competition. Regulatory The groups’s activities are subject to a high level of regulation and inspection by the Care Quality Commission. The risk from the negative effects of any non-compliance is the impact which it may have on the company’s reputation and profits. The risks are mitigated by a strict management reporting regime that is part of a rigorous process of internal control over quality and compliance, along with investment in evolving policies and practices that take into account any changes in regulatory obligations. This is overseen by all Board members who are on site and involved in the business daily. Cyber Security With increased reliance on IT infrastructure the business will invest in ensuring it protects data and systems from external threats. The Directors remain committed to achieving and upholding the very highest standards for clients, their families and staff.
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BIRTLEY HOUSE GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024
Financial instruments
The Group's significant financial instruments at the balance sheet date comprised bank loans and overdrafts, debentures and loans from Group undertakings. Operations are financed by a mixture or retained profits, bank borrowings and long-term loans. Long-term loans are at a fixed rate plus base rate and are used to finance capital investment. Working capital requirements are met principally out of floating rate overdrafts and retained profits. It is, and has been throughout the year under review, the Group's policy that no trading in financial instruments shall be undertaken. The main risks arising from the Group's financial instruments are interest rate risk and liquidity risk. Interest rate risk The Group has a policy to manage any exposure to interest rate fluctuations so as to finance its operations through retained profits . Liquidity risk The Group's objectives are to maintain a balance between continuity of funding and the flexible use of funding by way of overdrafts, loans and similar financial arrangements. Short-term flexibility is achieved by overdraft facilities. Financial assets The Group has no financial assets other than short term debtors and cash at bank. Borrowing facilities The Group has no undrawn committed borrowing facilities.
This report was approved by the board on 28 August 2025 and signed on its behalf.
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BIRTLEY HOUSE GROUP LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 AUGUST 2024
The directors present their report and the financial statements for the period ended 31 August 2024.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the period, after taxation, amounted to £395,569 (2023 - £202,948).
No dividends will be declared for the period.
The directors who served during the period were:
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BIRTLEY HOUSE GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024
There have been no significant events affecting the Group since the year end.
The auditor, TWP Accounting LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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BIRTLEY HOUSE GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BIRTLEY HOUSE GROUP LIMITED
We have audited the financial statements of Birtley House Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 August 2024, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of 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).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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 or the 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.
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BIRTLEY HOUSE GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BIRTLEY HOUSE GROUP LIMITED (CONTINUED)
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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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BIRTLEY HOUSE GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BIRTLEY HOUSE GROUP LIMITED (CONTINUED)
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 Group 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:
∙Obtain an understanding of the policies and procedures management has in place to detect and prevent
fraud and non-compliance with laws and regulations.
∙Enquire of management any cases of actual or suspected fraud and non-compliance with laws and
regulations.
∙Enquire of management and those charged with governance around actual and potential litigation and
claims.
∙Reviewing minutes of meetings of those charged with governance.
∙Reviewing financial statement disclosures and testing to supporting documentation to assess compliance
with applicable laws and regulations.
∙Assess the key risk areas within the financial statements which are susceptible to fraud or error and design
our audit approach thereon.
∙Perform substantive tests on a sample of transactions throughout the financial statements to ensure that no
material errors have been identified.
∙Perform cut off tests on a sample of transactions to ensure income has been accounted for in the correct
period.
∙Review of after year end information to ensure expenditure have been accounted for in the correct period.
∙Perform analytical review procedures to identify any irregularities and investigation thereon.
∙Auditing the risk of management override of controls, including through testing journal entries and other
adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.
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BIRTLEY HOUSE GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BIRTLEY HOUSE GROUP LIMITED (CONTINUED)
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.
for and on behalf of
Chartered Accountants & Statutory Auditors
The Old Rectory
Church Street
Surrey
KT13 8DE
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BIRTLEY HOUSE GROUP LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 AUGUST 2024
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BIRTLEY HOUSE GROUP LIMITED
REGISTERED NUMBER: 05814316
CONSOLIDATED BALANCE SHEET
AS AT 31 AUGUST 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 16 to 39 form part of these financial statements.
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BIRTLEY HOUSE GROUP LIMITED
REGISTERED NUMBER: 05814316
COMPANY BALANCE SHEET
AS AT 31 AUGUST 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 16 to 39 form part of these financial statements.
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BIRTLEY HOUSE GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 AUGUST 2024
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BIRTLEY HOUSE GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 AUGUST 2024
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BIRTLEY HOUSE GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 AUGUST 2024
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Birtley House Group Ltd ("the company'') is a private limited company domiciled and incorporated in England and Wales. The registered office is Birtley House, Birtley Road, Bramley, Guildford, Surrey GU5 OLB.
The group consists of Birtley House Group Ltd and all of its subsidiaries.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
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 at fair value. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Birtley House Group Ltd together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 August 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.
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
After reviewing the Company's and the group's forecasts and projections and taking into account the economic conditions and possible changes in trading performance, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.
In arriving at this assessment, the Directors have prepared detailed financial projections to July 2026 factoring in the recent reduced Bank of England interest rate, however have taken a precautionary view. The Directors have a good working relationship with their bank and have no reason to believe the bank's future support will change. Bank covenants are reviewed regularly to ensure these are not breached and at the date of signing these accounts no such instance has been noted. The Board work with our local Care Association to build on the increasing awareness of the importance of care for the future and to identify and implement new models of care to meet the need for better integration with the NHS. After considering the above matters and current trading, the Directors believe that the company will continue to have adequate resources to meets its liabilities as they fall due and so to operate as a going concern for at least twelve months following the date of approval of these financial statements. The Directors therefore consider it appropriate to continue to apply the going concern basis for preparing the financial statements. Licence fees received on assignment of the West Wing apartments had been held as returnable debentures within liabilities until the year ended 31 August 2009. Following an alteration to the legal contracts agreed with the resident on commencement of occupancy, the directors consider that recognition as income more accurately reflects the nature of the transaction and have treated such fees on this basis within the financial statements for all agreements under the new form of contract. Any sales completed under the old format of legal agreement have continued to be treated on a returnable debenture basis. Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability. 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.
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
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 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 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.
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Revaluation of fixed assets
Individual freehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date. Fair values are determined from market based evidence normally undertaken by professionally qualified valuers. Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss. The freehold properties used by it's subsidiaries are recognised in the company as investment properties and any associated gains and losses and deferred taxation thereon are recognised in the profit and loss reserve. The freehold properties used by it's subsidiaries are recognised in the group as tangible fixed assets and any associated gains and losses and deferred taxation thereon are recognised in the revaluation reserve.
Page 19
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Current tax The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date. Deferred tax Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
Page 20
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
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. In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
The group has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. Basic financial assets Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised. 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.
Page 21
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss. Derecognition of financial assets Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party. Classification of financial liabilities Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group, 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. Derecognition of financial liabilities Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Page 22
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
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.
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. Critical judgements/estimates The following judgements/estimates have had the most significant effect on amounts recognised in the financial statements: - Revaluing the properties and the calculation of deferred taxation in this respect. The directors do not believe there are any other key judgements or estimations used in preparing these financial statements.
Page 23
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 24
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 25
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 26
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
11.Taxation (continued)
Page 27
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 28
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
13.Tangible fixed assets (continued)
Page 29
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
13.Tangible fixed assets (continued)
If the land and buildings had not been included at valuation they would have been included under the historical cost convention in line with the amounts disclosed at group level.
Page 30
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 31
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 32
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 33
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
The debenture loans are interest free and repayable on demand, subject to the grant of a new debenture and a new licence by the company to a new resident on substantially the same terms as the original debenture and for a loan amount at least equal to the debenture sum repaid. The directors expect the debenture to be repaid within one year of the balance sheet date and as such has been reclassified as a current liability at year end.
Secured Debts Debenture loans are secured by the group and company by way of floating charge over the group's and company's assets. The bank loans are secured by the bank on the freehold property, together with a fixed and floating charge over the group's and company's assets. The obligations under finance leases are secured on the assets to which they relate.
Page 34
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 35
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Page 36
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
23.Share capital (continued)
Revaluation reserve
Capital redemption reserve
Profit and loss account
Page 37
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
Company
A prior year adjustment has been made to reclassify the element of land and buildings which was rented to group entities as investment property. This has resulted in the removal of the prior year depreciation of £178,255 charged on the property as it is now held under investment property. The remainder of the property classified as land and buildings represents the element not rented to group entities. A further prior year adjustment has been made to deferred tax to represent the change in valuation used, this has resulted in a decrease to the deferred tax liability position of £25,344. As a result, this has reduced the profit and loss reserve brought forward in the current year by £203,599. There is no tax impact on this adjustment as it relates to depreciation and deferred tax. Group A prior year adjustment has been made to land and buildings to reflect the fair value as at the respective year end, which has resulted in the removal of the prior year depreciation charge to the property of £178,255. A further prior year adjustment has been made to deferred tax to represent the change in valuation used when calculating the estimate, this has resulted in an increase to the deferred tax liability position of £80,657. There is no tax impact on this adjustment as it relates to depreciation and deferred tax. These prior year adjustments has increased the current year profit and loss reserve brought forward in the amount of £97,598. As the property is held as a freehold property within the group financial statements, any revaluation on the properties and deferred tax thereon should be reflected within the revaluation reserve and not the profit and loss reserve. As a result, a prior year reclassification from the profit and loss reserve to the revaluation reserve in the amount of £4,948,310 has been made. Such adjustment has been correctly reflected in the current year financial statements as shown within the consolidated statement of changes in equity.
Birtley Mews Limited ("BML") has given security to Stevens & Bolton Trustees Limited over the proceeds of future sales of apartments by BML up to the value of the amounts received from the sales of apartments by BML to the current residents. The aggregate of these amounts at 31 August 2024 was £3,390,000 (2023 : £3,425,000). The security given to Stevens & Bolton Trustees Limited by BML shall be in priority to any other security given by BML to its bankers.
Birtley House Group Limited ("BHGL") has given security in the form of individually registered legal charges over the West Wing apartments sold, excluding amounts held as returnable debentures (within creditors due in more than one year). The potential additional liability to BHGL is limited to the lower of the sum paid by the existing resident, the aggregate of which, at 31 August 2024, amounted to £4,540,000 (2023: £4,540,000), and the sum obtained on resale. However, this is contingent upon the apartment concerned being resold and an equivalent payment received from the purchaser, otherwise no liability to the current resident will arise.
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £41,154 (2023 - £30,690). Contributions totalling £17,958 (2023 - £8,267) were payable to the fund at the balance sheet date and are included in group other creditors.
Page 38
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BIRTLEY HOUSE GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
At 31 August 2024, included within debtors is an amount due from Mr F Whalley of £10,400 (2023 : £10,400). The loan accrues interest at a rate of 4% per annum until such time as the loan is repaid in full. During the year the company received £400 (2023 : £400) in interest in respect of the loan outstanding.
At 31 August 2024, included within debtors is an amount due from Mrs M Whalley of £11,656 (2023 : £11,422). The loan accrues interest at a rate of 4% per annum until such time as the loan is repaid in full. During the year, the company received £400 (2023 : £423) in interest in respect of the loan outstanding.
Page 39
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