The directors present the strategic report for the year ended 31 August 2021.
Brexit
The UK left the EU on the 31st of January 2020 and the subsequent transition period, which ran to the 31st of December 2020, has now ended. This adversely impacted our ability to recruit professional carers from the European Union, as they now require work permits, unless they qualify for the EU settlement scheme.
Covid-19
Covid-19 also proved a challenge with extended social distancing measures such as the rule of six being introduced in September 2020; a second national lock taking effect in November 2020; additional Tier 4 restrictions coming in to force in December 2020; a third national lockdown being introduced in January 2021; followed by various testing and quarantine regimes; and the gradual easing of restrictions as we moved into summer.
Recruitment
The recruitment market in the UK has become increasingly difficult due to both Brexit (making it more difficult for EU nationals to live and work in the UK) and Covid-19 (with increased testing and quarantine at the borders). Retention has also become more difficult with care providers competing in an increasingly tight labour market alongside other sectors such as retail and hospitality which are also finding it increasingly difficult to recruit and retain workers.
Client Needs
We have continued to satisfy our clients care needs and our team has shown huge resilience in managing the daily challenges but given the recruitment and retention issues discussed above, it has proven difficult to continue to take on new clients at pre-pandemic rates.
KPIs
As a consequence, revenue fell by 1.7 % whilst Operating losses increased to £1,063,880 (2020: £57,367) as a result of the increased costs of attraction, recruitment, retention and compliance.
|
2020-21 |
2019-20 |
Change |
Revenue |
36,742,607 |
37,360,922 |
-1.7% |
Operating Loss |
1,063,880 |
57,367 |
+1,754.5% |
Covid-19
We will continue to put the health, safety and wellbeing of our clients and professional carers first, and we will continue to comply with all applicable Covid-19 guidelines to ensure we keep our clients and professional carers safe.
Recruitment
In 2021-22 we will continue to invest in carer pay to ensure that our professional carers are fairly rewarded for the outstanding job that they do, as we will scale up our recruitment activity in order to return the business to growth.
We describe in this section of the report how the directors have had regard to the matters set out in section 172(1)(a) to (f) of the Companies Act 2006. In particular, the section outlines how the directors have acted in a way which is most likely to promote the success of the Company for the benefit of the members as a whole and in doing so having regard for stakeholders’ interests.
The Company is part of the Sodexo SA group of companies and falls under the stewardship of the Sodexo’s UK Regional Leadership Committee (RLC). The board of directors of the Company also includes members of the UK RLC.
The following paragraphs summarise how the Directors fulfil their duties and engage with each of the key stakeholder groups:
We take the opportunity here to explain how both:
The directors have regard to section 172(1) of the Companies Act 2006 in respect of the interests of the Company’s employees; and
The directors have engaged with employees and the effect of this engagement on principal decisions of the Company.
Employees
The Board recognises that, as leading provider of care services, its professional carers and support teams are key to the Company´s strength and success. The Board and the RLC are committed to ensuring:
Health & Safety
Support during Covid-19
High levels of employee engagement and communications
A diverse and inclusive workforce and culture.
Health & Safety
The Company is committed to ensuring a safe and healthy working environment for all its employees, contractors and visitors. Through suitable and sufficient risk assessment and the creation of resulting safe systems of work, Sodexo provides employees with information, training and instruction to enable them to work safely and to protect the safety and health of those who may be affected by its activities. Compliance with legislative requirements underpins its purpose. The Company tests and challenges itself to continually improve and to engage with its people to ensure everyone has a voice and is properly informed.
The Company believes that health and safety is everyone’s responsibility and through strong leadership, supervision and holding each other to account, health and safety can become a way of life that adds value and drives improved performance. Management and monitoring of performance are achieved through robust reporting, strong audit and monitoring regimes.
Employee support during Covid-19
Measures were put in place during the Covid‑19 pandemic to look after employees and where appropriate give them the opportunity to work from home. Where necessary, we utilised the government’s Coronavirus Job Retention Scheme (CJRS) to protect the jobs, skills and expertise of colleagues who could not safely continue in their front-line roles and could not be redeployed to other parts of the organisation. The Company is proud of all its teams and their dedication and agility during the pandemic.
Employee engagement
Regular employee engagement surveys are conducted and results are carefully scrutinised by our local management team and the RLC to identify and implement actions for improvement. We monitor attrition rates, feedback from exit interviews, and absenteeism levels to identify emerging people risks, trends, and to ensure appropriate action is taken to address these. Emerging people risks and trends are highlighted to the Board together with proposed action plans.
Sodexo conducted a “voice survey” in 2021 as part of its engagement programme. Colleagues’ opinions are valuable to help guide strategy and business planning. 62.4% of colleagues from the UK and Ireland Home Care businesses responded to the survey. The engagement score was 69.5% versus 65.5% for Sodexo’s On-Site Services businesses in the UK and Ireland and 67.5% for Sodexo’s Home Care business worldwide.
Diversity, Equity & Inclusion
Inclusivity is a key commitment to ensure colleagues ‘can bring their whole selves to work’.
“For Sodexo UK and Ireland, it is a strategic priority to foster diversity and inclusion across the organisation. It is not only the right thing to do, it helps drive our business performance too. We are committed to creating a workplace culture that is truly inclusive and where everyone can flourish.”
Sean Haley, Region Chair Sodexo UK & Ireland
Our DE&I strategy focuses on five dimensions: Gender, Culture & Origins, Disability, Sexual Orientation & Gender Identity, and Generations. Each of these focus areas has an executive sponsor who is a member of the RLC. They play a key role at championing the agenda, driving progress and embedding accountability at a senior level.
Sodexo have made a number of commitments to support our aspirations to be a diverse and inclusive organisation across our identified four social impact pathways – people, partners, places and planet. This includes aspirational targets for the representation of women and those from under-represented ethnic groups in management and senior leadership positions; commitment to closing the gender pay gap across our legal entities in the UK to 10% by 2025 and initiatives to support women in the community to drive societal change.
In July 2021 Sodexo was successfully re-accredited as a Disability Confident leader, the highest level of accreditation achievable. This is testament to our long-standing programme of work to support the attraction, retention and development of disabled people into work and play our part in closing the disability employment gap.
Clients
The company recognises that client retention is the first step to growth. It operates, and carefully monitors and manages, all of its contracts.
Members of the RLC and our local management team meet with our corporate clients at regular intervals to discuss and collaboratively agree the key strategic priorities that both organisations will invest effort and resources in that drive’s continuous progression of both the strategic partnership and enhances service performance.
Suppliers
Sodexo manages its end-to end-supply chain to meet legislative requirements, mitigate risks and satisfy customer demands for supply chain transparency. All suppliers of goods and services to Sodexo are prequalified to ensure they are capable and competent to deliver the goods or carry out the work they are being contracted to supply. Vendors are assessed against Sodexo’s Supplier Code of Conduct and the level of initial assessment and on-going monitoring relates directly to the services/products provided to be performed and the associated risk.
The Company is committed to ensuring that slavery and human trafficking is not taking place in any of its supply chains or any part of its business and has in place measures to manage this risk.
Community
Sodexo’s approach to creating Social Value and measuring its impact within local communities forms an integral part of the Company’s regional strategy. The Company is undergoing a comprehensive programme to fully embed and coordinate its impact on local communities and the environment. This is led by our Regional Leadership Committee.
Our focus is based around four social value impact pathways:
Our People – by enabling our employees, customers and community citizens to thrive
Our Planet – by fostering a culture of environmental responsibility through protecting and enhancing our planet
Our Places - by adopting a needs-led approach to creating equity for all across our communities
Our Partners –by taking an inclusive approach to creating resilience and growth amongst our partner network.
Further information is set out in the Company’s Social Impact Report 2020/21
https://uk.sodexo.com/social-impact.html
Shareholder
The Board of the Company duly considers the views of its ultimate shareholder, Sodexo SA, and the interests of the Group as a whole, when making any major decisions and transactions on behalf of the Company. The Chair, the Board and the RLC members provide the channel of communication between the Company and its shareholder.
Long‑term decision making
The directors continue to review the Company’s organisational structure, cost base, service offers, investments and other business plans in light of the impact of the Covid-19 pandemic and other major economic, governmental, social and environmental factors.
Standards of business conduct
Sodexo’s Code of Ethics applies to all Directors and employees of the Company and it embodies the Group´s commitment to maintaining the highest standards of ethical business conduct and integrity. The Company has implemented a whistle-blower facility whereby staff can raise issues that could be misconduct. Regular mandatory training for staff on the principles of Responsible Business Conduct is in place and completion rates are monitored.
The Ethics & Compliance Committee receives, considers, and manages concerns raised under the Code of Ethics, Anti-Bribery Policy, Gifts & Hospitality Policy and Whistle-blower Policy, including any allegations of bribery and corruption. The committee conducts investigations, takes appropriate action, monitors and reviews incidents and training, measures trends and reports appropriately to the Board. The Committee maintains a confidential incident log.
Sodexo shares the same ethical principles as those set out in the Modern Slavery Act, 2015. We believe in the elimination of all forms of compulsory labour and work to ensure slavery and human trafficking do not take place within any part of our business supply chain.
Further details are set out in the Company’s Modern Slavery Act Statement:
https://uk.sodexo.com/files/live/sites/com-uk/files/Legal%20and%20Privacy/modern-slavery-report.pdf
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 August 2021.
The results for the year are set out on page 13. The company's profit after tax for the year was £66,480 ( 2020 : £494,119) and net assets as 31 August were £3,797,232 ( 2020 : £3,697,446).
No ordinary dividends were paid (2020: £nil). The directors do not recommend payment of a final dividend.
No preference dividends were paid (2020: £nil). The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The company's current policy concerning the payment of trade creditors is to:
settle the terms of payment with suppliers when agreeing the terms of each transaction;
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
pay in accordance with the company's contractual and other legal obligations.
Trade creditors of the company at the year end were equivalent to 9 day's purchases, based on the average daily amount invoiced by suppliers during the year.
Pursuant to Section 487 of the Companies Act 2006, the auditor will be deemed to be reappointed and KPMG LLP will therefore continue in office .
Greenhouse gas emissions, energy consumption and energy efficiency action
In compliance with “The Companies Act 2006” (Strategic Report and Directors’ Report) and in particular Part 7A to Schedule 7 “Dealing with energy and carbon disclosures by large unquoted companies”, please find the disclosure of energy and CO 2 information for Prestige Nursing Limited covering the 2020-21 financial year.
The information includes the reporting of greenhouse gas emissions (scope 1 and 2), energy consumption data for fuels, electricity and transport, and associated energy intensity ratio.
The declaration identifies some of the energy saving measures implemented during the financial year.
GHG Emissions
For financial year ending August 2021, Prestige Nursing Limited’s greenhouse gas emissions were calculated to be:
Natural gas 45,317 kWh
Electricity 82,712 kWh
Other fuels 0 kWh
Transport 247,474 kWh
Total carbon emissions 82.73 tonnes CO 2 e
GHG Emissions (previous financial year)
For financial year ending August 2020, Prestige Nursing Limited’s greenhouse gas emissions were calculated to be:
Natural gas 53,004 kWh
Electricity 108,629 kWh
Other fuels 0 kWh
Transport 372,487 kWh
Total carbon emissions 121.50 tonnes CO 2 e
Underlying Global Energy Use
All of Prestige Nursing Limited’s energy use comes from operations within the UK, and therefore, global energy use is the same as stated in GHG Emissions (as shown above).
Energy Intensity Ratio
Total building energy (natural gas, electricity, other fuels) has been assessed to correlate with building floor area (square metres). Using energy consumed per square metre as an energy performance indicator (EnPI) allows for a more accurate monitoring of energy consumption each year as the estate portfolio changes.
For financial year ending August 2021:
Total building energy 128,029 kWh pro-rata
Gross floor area 2,588 m 2
EnPI total building energy per square metre 49 kWh/m 2
Energy Efficiency Measures
Sodexo completed ESOS compliance December 2019 and produced a list of key energy saving initiatives for the estate that was received by directors. Over the current financial year Sodexo has continued to switch commercial diesel vehicles to electric or hybrid models and reduced carbon emissions through LED lighting upgrade projects. Further LED upgrade projects are planned. In addition, ongoing efforts are aimed at improving meal production processes and reducing food waste along with the energy and water used to produce the food.
Methodology
To calculate the disclosure, similar methodology to ESOS, CRC, and ISO 50001 compliance has been used where applicable for consistency in reporting. Building operation energy use has been captured, in order of preference, using invoiced consumption figures were available; meter readings supplied by facilities management teams; or pro-rata estimations. Transport data has been extracted from internal employee expense returns, and fuel card database. Carbon emissions conversion factors have been taken from ‘UK Government GHG Conversion Factors for Company Reporting 2021’. Energy intensity relevant variable building floor area has been provided by Sodexo Estates team.
The directors continue to adopt the going concern basis in the preparation of the financial statements.
The business has remained resilient to the impact of the UK wide Covid 19 lockdowns due to the essential nature of the service it provides and the high proportion local government and health service clients. In addition, the Company continues to see opportunities for organic growth provided that we can continue to attract, recruit and retain care workers. We remain prepared for further lockdowns and other macro impacts such as rising inflation. Agility, good commercial management, and careful cost control continue to be critical.
To inform the basis of preparation of these accounts, the directors have considered cash and profit scenarios for forward trade over the next 13 months. These include a further two lockdown periods of one month each with trade impacted in a similar way to financial year 2021. The forecasts indicate that the Company will continue to be resilient in the current macro environment.
Routine peaks in cash requirements during the trading cycle, can be funded from the significant cash balance the company has on hand at the end of the 2021 financial year. In a worst case scenario, the Company could draw upon funding indicated by a letter of support received from Sodexo SA, our French domiciled parent company, which currently has a strong credit rating of Baa1 from Moody’s Investors Service. As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.
Based on these analyses and facts, the directors believe that the Company will be able to continue to meet its liabilities as they fall due for at least the next 12 months and therefore have prepared the financial statements on a going concern basis.
We have audited the financial statements of Prestige Nursing Ltd (the 'company') for the year ended 31 August 2021 which comprise comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and related notes, including the accounting policies in note 1.
Basis for opinion
Going concern
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its operations, and as they have concluded that the Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).
In our evaluation of the directors’ conclusions, we considered the inherent risks to the Company’s business model and analysed how those risks might affect the Company’s financial resources or ability to continue operations over the going concern period.
Our conclusions based on this work:
we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;
we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for the going concern period.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Company will continue in operation.
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
Enquiring of directors, the audit committee, internal audit and inspection of policy documentation as to the Company’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Company’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.
Reading Board minutes.
Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.
As required by auditing standards, we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition, in particular:
the risk that Company management may be in a position to make inappropriate accounting entries; and
the risk of bias in accounting estimates; and
the risk that revenue is overstated through recording revenues in the wrong period.
Identifying and responding to risks of material misstatement related to compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: health and safety, data protection laws, anti-bribery and employment law. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
Strategic report and directors' report
The directors are responsible for the strategic report and the directors’ report. Our opinion on the financial statements does not cover those reports and we do not express an audit opinion thereon.
Our responsibility is to read the strategic report and the directors’ report and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:
we have not identified material misstatements in the strategic report and the directors’ report;
in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
in our opinion those reports have been prepared in accordance with the Companies Act 2006
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The purpose of our audit work and to whom we owe our responsibilities
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.
All amounts above relate to continuing operations. The notes on pages pages 16 to 31 form part of these financial statements.
Prestige Nursing Ltd is a private company limited by shares incorporated and domiciled in England and Wales. The registered number is 01006953 and the registered office is 1st Floor, Kirkgate, 19-31 Church Street, Epsom, Surrey, KT17 4PF. The company's principal activities and nature of its operations are disclosed in the directors' report.
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 company has taken advantage of the following disclosure exemptions under FRS 101:
the requirements of paragraphs 45(b) and 46-52 of IFRS 2 Share based Payment;
the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64 (o)(ii), B64(p), B64(q)(ii), B66 and B67of IFRS 3 Business Combinations. Equivalent disclosures are included in the consolidated financial statements of Sodexo S.A in which the entity is consolidated;
the requirements of paragraph 33 (c) of IFRS 5 Non current Assets Held for Sale and Discontinued Operations;
the requirements of IFRS 7 Financial Instruments: Disclosures;
the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement;
the requirement in paragraph 38 of IAS 1 ‘Presentation of Financial Statements’ to present comparative information in respect of: (i) paragraph 79(a) (iv) of IAS 1, (ii) paragraph 73(e) of IAS 16 Property Plant and Equipment (iii) paragraph 118 (e) of IAS 38 Intangibles Assets, (iv) paragraphs 76 and 79(d) of IAS 40 Investment Property and (v) paragraph 50 of IAS 41 Agriculture;
the requirements of paragraphs 10(d), 10(f), 16, 38A to 38D, 39 to 40 ,111 and 134-136 of IAS 1 Presentation of Financial Statements;
the requirements of IAS 7 Statement of Cash Flows;
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
the requirements of paragraph 17 of IAS 24 Related Party Disclosures;
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member ; and
the requirements of paragraphs 134(d)-134(f) and 135(c)-135(e) of IAS 36 Impairment of Assets.
As permitted by FRS 101, the company has taken advantage of the disclosure exemptions available under that standard in relation to share based payments, financial instruments, capital management, presentation of a cash flow statement, presentation of comparative information in respect of certain assets, standards not yet effective, impairment of assets, business combinations, discontinued operations and related party transactions.
The Company’s ultimate parent undertaking, Sodexo S.A. includes the Company in its consolidated financial statements. The consolidated financial statements of Sodexo S.A. are prepared in accordance with International Financial Reporting Standards and are available to the public and are published on the company's website at www.sodexo.com.
Judgements made by the directors, in the application of these accounting policies that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 2.
Revenue from contracts for the provision of care services are recognised when the service has been provided and is based on time spent by staff during the period.
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 reviewed for impairment at each reporting date.
The gain on a bargain purchase is recognised in profit or loss in the period of the acquisition.
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. An impairment loss recognised for goodwill is subsequently reversed if, and only if, the reasons for the impairment loss have ceased to apply.
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 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 .
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The company recogni s es financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either ' financial liabilities at fair value through profit or loss ' or ' other financial liabilities ' .
Other financial liabilities, including borrowings , t rade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method . For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The tax expense represents the sum of the tax currently payable and deferred tax.
At inception, the company assesses whether a contract is , or contains , a lease within the scope of IFRS 16. A contract is , or contains , a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property .
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in : future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
The discount rate varies between 2.87 and 3.14% depending on the term of the lease. The weighted-average rate applied was 1.4%.
The preparation of financial statements requires the management to make estimates and judgements which affect the amounts reported for assets, liabilities and contingent liabilities as of the date of preparation of the financial statements, and for revenues and expenses for the period.
Estimates and underlying assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
The estimates and judgements that have the most material impact on the financial performance and position of the Company are as follows:
(i) Provisions for bad debts
Provision is made for aged debts. These provisions require management’s best estimate of the likelihood of recovery of each debt.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
Directors received no remuneration from Prestige Nursing Ltd during the year. Directors receive remuneration from another of the Sodexo group companies.
Dividends received from subsidiaries consists of £435,000 (2020: £390,000) from Prestige Nursing (Franchise) Ltd, £685,686 (2020: £475,000) from Prestige Nursing (Scotland) Ltd.
The charge for the year can be reconciled to the (loss)/profit per the income statement as follows:
On 1 April 2017, the standard rate of corporation tax changed to 19%. For the purpose of the company accounts to 31 August 2021, the standard rate of corporation tax has been applied.
The March 2020 Budget announced that a rate of 19% would continue to apply with effect from 1 April 2020, and this change was substantively enacted on 17 March 2020. In the 3 March 2021 Budget it was announced that the UK tax rate will increase to 25% from 1 April 2023 for companies with profits over £250,000 . This will have a consequential effect on the company’s future tax charge .
Leasehold property includes right-of-use assets, as follows:
These financial statements are separate company financial statements for Prestige Nursing Ltd.
Details of the company's subsidiaries at 31 August 2021 are as follows. All shares held are ordinary shares.
Registered office addresses (all UK unless otherwise indicated):
The company has not designated any financial assets that are not classified as held for trading as financial assets at fair value through profit or loss.
Except as detailed below the directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
Disposal of Prestige Medical Recruitment Ltd. The company was dissolved 13 October 2020. Provision for diminution in value of Lifecarers Ltd, reducing the investment to the net assets of the company.
Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.
The loans that were in existence at the 31 August 2020 were repaid in March 2021 and replaced with two new loans from a Sodexo Finance DAC. Loan 1 is for £4m repayable in five equal instalments at an interest rate of 1.37% per annum from March 2022 to March 2026. Loan 2 is for £8m repayable at the end of five years (i.e. March 2026) at an interest rate of 1.64%.
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
The fair value of the company's lease obligations is approximately equal to their carrying amount.
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
The deferred tax liability set out above relates to accelerated capital allowances that are expected to reverse within 2 years.
The Company provides long term incentives, such as shares in Sodexo SA to help retain talent and recognise future leaders.
On a periodic basis Sodexo SA invites senior managers to participate in its performance share scheme. Under the FY21 plan, shares vest over a three year period, provided the performance criteria is met and the beneficiary continued to be employed by the Sodexo Group at the vesting date.
The Company has also taken the exemptions available under FRS 101 in relation to group settled share based payments as the consolidated financial statements of Sodexo SA include the relevant disclosures.
There were no capital commitments in place as at 31 August 2021 (2020: £nil).