The directors present the strategic report for the year ended 31 August 2022.
The principal activity of the company continued to be the provision of high quality domiciliary and complex care to clients in England.
Brexit
The UK left the EU on the 31 January 2020 and the subsequent transition period ended on 31 December 2020. This has adversely impacted the care sector’s ability to recruit professional carers from the European Union, unless they have settled status or otherwise have the right to work in the UK, and has therefore reduced the size of the available labour pool.
Covid-19
On 8 March 2021, England began a phased exit from lockdown, following a four-step plan which resulted in all lockdown laws being revoked by 18 July 2021, although some other general restrictions, such as self-isolation and international quarantine, remained in place until the spring of 2022.
In order to (i) protect those who use health and care services, a large number of whom are vulnerable, as well as healthcare workers and the wider community, and (ii) to help reduce Covid-19 related sickness absences, the UK Government introduced Vaccination as a Condition of Deployment regulations for care homes on 11 November 2021. These regulations required all care home workers and other visiting professionals to be fully vaccinated against Covid-19, unless they fell within an exemption. The Government also planned to extend the regulations to the wider health and social care sector from 1 April 2022 but subsequently withdrew those regulations. Whilst well intentioned, the introduction of the Vaccination as a Condition of Deployment regulations resulted in an estimated 40,000 workers, who did not wish to be vaccinated, permanently leaving the sector in the final quarter of 2021.
Recruitment
Given the buoyant job market and the increasingly tight labour market as the economy has reopened following the lifting of lockdown restrictions, many sectors such as care, retail and hospitality are finding it increasingly difficult to recruit and retain key workers.
Prestige Nursing continues to invest in pay and benefits, and we have recently introduced a discount card for all of our employees to help them mitigate the increased cost of living through discounts with local businesses and large national retailers.
Client Needs
We continue to work closely with our clients to ensure we deliver the very best care, but we have not been able to take on new clients at the rate same we did before the pandemic given the tighter labour market, particularly in the live-in care sector. We are actively working to address this issue.
Our Team
It has been an incredibly challenging time for our team since the first lockdown came into force on 23 March 2020, and the Directors would like to record their thanks for the dedication of our professional carers and support teams have shown to the company and our clients throughout this difficult period, as well as the empathy and support they have shown each other. Thank you.
KPIs
Revenue fell by £1,526,955 driven by lower volumes offset by improved pricing, consequently gross profit increased by £264,347 to 24.6% of revenue. We continued to carefully control administrative expenses which fell by £812,833 in the year, reducing the operating loss by £1,077,180 to an operating profit of £910 (2021: £1,076,270 loss).
| 2021-22 | 2020-21 | Change |
Revenue | £35,215,652 | £36,742,607 | -4.2% |
Gross Profit | £8,660,181 | £8,395,834 | +3.1% |
Administrative exp | £8,659,271 | £9,472,104 | -8.6% |
Operating Profit/(Loss) | £910 | £(1,076,270) | -100.1% |
Health, Safety and Wellbeing
We will continue to put the health, safety and wellbeing of our clients and professional carers first in everything we do.
Pricing
We continue to work closely with our funders and clients to ensure we deliver the very best care at a competitive price which reflects the investment we continue to make in our workforce and the inflationary environment in which the company is operating.
Pay
We will continue to invest in pay and benefits to ensure that our professional carers and support teams are fairly rewarded for the outstanding job that they do, and will continue to 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 a 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 is committed to ensuring:
• Health & Safety
• Ongoing support to all employees
• High levels of employee engagement, wellbeing 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 is 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. The Coronavirus Job Retention Scheme (CJRS) ended on 30 September 2021. We did not utilise the scheme during the year, although we were able to utilise the scheme in the previous financial year to protect the jobs of colleagues who could not safely continue in their front-line roles, and could not be redeployed to other parts of the organisation, during the height of the pandemic.
Employee engagement
We measure the effectiveness Employee Value Proposition (EVP) by conducting annual employee engagement surveys and ad hoc surveys to address specific areas of concern. The data are thematically and statistically analysed to distil an action plan to address the points raised through the survey.
We monitor attrition rates, feedback from exit interviews, and absenteeism levels in an effort 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.
The Company continues to provide ongoing support to all employees and provides a confidential route (‘Speak-Up’) for staff to raise concerns
The Company is proud of all of its teams and their dedication and agility as our client and business needs continue to evolve.
Diversity, Equity & Inclusion
Inclusivity is a key commitment to ensure colleagues ‘can bring their authentic selves to work’ so they feel a sense of belonging that allows them to act with purpose and thrive.
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.
Clients
We recognise that client retention is the first step to growth. We provide the best possible care to our clients and carefully monitor and act on their feedback.
Suppliers
Sodexo manages their 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. The level of initial assessment and ongoing monitoring relates directly to the services/products provided or 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.
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 RLC.
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.
Each year we publish our progress against our social impact commitments. This can be found at Social Impact Pledge ‑ https://uk.sodexo.com/social‑impact/people.html
Sodexo is the founding partner of the Stop Hunger Foundation; an independent registered charity active in over 54 countries around the world and was created in 1996 by US Sodexo colleagues who witnessed children going to school hungry.
Further information on the Company’s work in this area, and the impact in local communities, is set out at https://uk.stop‑hunger.org/home
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 as part of any major decisions and transactions undertaken by 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 to ensure all are optimal as our environment evolves.
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. This is underpinned through regular training and an embedded ethical culture. The Company has implemented a Whistleblower 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 Whistleblower Policy (including any allegations of bribery and corruption), conducts investigations, takes appropriate action, monitors and reviews incidents and training, measures trends and reports appropriately to the Board. The Committee maintains an 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 2022.
The results for the year are set out on page 13. The company's profit after tax for the year was £87,375 (2021: £66,480) and net assets as at 31 August 2022 were £3,954,607 (2021: £3,797,232).
No ordinary dividends were paid (2021: £nil). The directors do not recommend payment of a final dividend.
No preference dividends were paid (2021: £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 8 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 CO2 information for Prestige Nursing Limited covering the 2021-22 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 2022, Prestige Nursing Limited’s energy consumption and greenhouse gas emissions were calculated to be:
Natural gas 103,546 kWh
Electricity (renewable backed) 87,748 kWh
Electricity (non-renewable backed) 119,948 kWh
Transport (Company Vehicles and Support Team) 228,224 kWh
Total carbon emissions (market-based) 63.30 tonnes CO2e
Total carbon emissions (location-based) 103.47 tonnes CO2e
GHG Emissions (previous financial year, restated to include serviced offices)
For financial year ending August 2021, Prestige Nursing Limited’s energy consumption and greenhouse gas emissions were calculated to be:
Natural gas 99,493 kWh
Electricity 170,219 kWh
Transport (Company Vehicles and Support Team) 247,474 kWh
Total carbon emissions 111.24 tonnes CO2e
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 2022:
Total building energy 310,966 kWh
Gross floor area 2,966 m2
EnPI total building energy per square metre 104.9 kWh/m2
Energy Efficiency Measures
Over the current financial year, the company has continued to transfer its fleet to hybrid cars to reduce fuel consumption and carbon emissions. All company offices are supplied with 100% renewable-backed electricity (in serviced offices this is not always the case as the supplier is selected by the landlord) and further investments in energy efficiency and carbon emission reductions are planned.
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 where 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 2022’. 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 through the UK wide Covid-19 lockdowns which ended on 18 July 2021 due to the essential nature of the service it provides and the high proportion of local government and health service clients. We continue to see opportunities for organic growth provided that we can continue to attract, recruit and retain professional carer in an increasingly tight labour market.
As inflationary pressures increase, we continue to work with our clients to ensure we receive a fair price for the services that we provide, so that we can continue to invest in our workforce. Agility, good commercial management, and careful cost control continue to be critical to our ongoing success.
To inform the basis of preparation of these accounts, the directors have considered cash and profit scenarios for forward trade over the next 12 months.
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 2022 financial year.
As at the date of approval of the financial statements, the shareholders of Prestige Nursing Ltd are exploring various strategic options with regard to their shareholding, including the sale of their shares. Although the outcome of the process is currently uncertain, the directors have considered the consequences if a sale was to occur in the forecast period. It is not possible to predict what would happen to the entity if there was a sale, however, the directors have no reason to believe that the company would not continue to trade given that it holds multiple registrations with the Care Quality Commission in respect of a network of regulated branches throughout England, and that it would be difficult to reregister these branches and novate the client contracts within the going concern period. The inter-company loans from Sodexo Finance DAC which are shown in the financial statements would be repayable on the sale of the shares and it is expected that any new share holder would provide the necessary refinancing. The plausible downside scenarios show that there is no need for additional funding over and above this amount.
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 2022 which 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. 2021 administrative expenses have been increased and 2021 investment income has been reduced by £12,390 to more accurately allocate costs between these two headings. The notes on 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 recognises 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, trade 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 £nil (2021: £435,000) from Prestige Nursing (Franchise) Ltd and £nil (2021: £685,686) from Prestige Nursing (Scotland) Ltd.
The charge for the year can be reconciled to the loss 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 2022, 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.
Property, plant and equipment 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 2022 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.
Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.
Two loans were existence at the 31 August 2022, both were from 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%. Interest is payable annually.
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.
See note 11 for further details of depreciation on right of use assets recognised in the profit or loss.
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
Deferred tax assets and liabilities are offset in the financial statements only where the company has a legally enforceable right to do so.
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 FY22 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 2022 (2021: £nil).