Company Registration No. 05137535 (England and Wales)
LAKELAND CARE SERVICES LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
LAKELAND CARE SERVICES LTD
COMPANY INFORMATION
Directors
A Jebson
(Appointed 17 March 2020)
F Sinclair-Brown
(Appointed 17 March 2020)
P Stamps
(Appointed 17 March 2020)
Secretary
Bruce Wallace Associates Limited
Company number
05137535
Registered office
First Floor Offices
Sweeps Ditch
44a Gresham Road
Staines Upon Thames
TW18 2AN
Auditor
Clarkson Hyde LLP
3rd Floor
Chancery House
St Nicholas Way
Sutton
Surrey
SM1 1JB
LAKELAND CARE SERVICES LTD
CONTENTS
Page
Directors' report
1 - 2
Independent auditor's report
3 - 4
Profit and loss account
5
Balance sheet
6
Statement of changes in equity
7
Notes to the financial statements
8 - 18
LAKELAND CARE SERVICES LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 1 -
The directors present their annual report and financial statements for the year ended 30 September 2020.
Principal activities
The principal activity of the company continued to be that of operating two residential care homes.
Results and dividends
The results for the year are set out on page 5.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
No preference dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
A Jebson
(Appointed 17 March 2020)
F Sinclair-Brown
(Appointed 17 March 2020)
P Stamps
(Appointed 17 March 2020)
A Root
(Resigned 17 March 2020)
C Root
(Resigned 17 March 2020)
Auditor
Clarkson Hyde LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
LAKELAND CARE SERVICES LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 2 -
On behalf of the board
A Jebson
Director
3 June 2021
LAKELAND CARE SERVICES LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LAKELAND CARE SERVICES LTD
- 3 -
Opinion
We have audited the financial statements of Lakeland Care Services Ltd
(the 'company')
for the year ended 30 September 2020 which comprise the profit and loss account, the balance sheet, the statement of changes in equity and
notes to the financial statements, 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 FRS 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 30 September 2020 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
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. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the directors' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the directors' report has been prepared in accordance with applicable legal requirements.
LAKELAND CARE SERVICES LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LAKELAND CARE SERVICES LTD
- 4 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements
.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor's report.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Michael Clark (Senior Statutory Auditor)
For and on behalf of Clarkson Hyde LLP
3 June 2021
Chartered Accountants
Statutory Auditor
3rd Floor
Chancery House
St Nicholas Way
Sutton
Surrey
SM1 1JB
LAKELAND CARE SERVICES LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 5 -
2020
2019
Notes
£
£
Turnover
3
1,460,949
1,331,776
Cost of sales
(875,239)
(834,583)
Gross profit
585,710
497,193
Administrative expenses
(415,039)
(366,665)
Other operating income
44,562
12,000
Operating profit
4
215,233
142,528
Interest receivable and similar income
7
2,110
3,490
Interest payable and similar expenses
8
(3,637)
(9,706)
Profit before taxation
213,706
136,312
Tax on profit
9
(25,818)
(27,770)
Profit and total comprehensive income for the financial year
187,888
108,542
The profit and loss account has been prepared on the basis that all operations are continuing operations.
LAKELAND CARE SERVICES LTD
BALANCE SHEET
AS AT
30 SEPTEMBER 2020
30 September 2020
- 6 -
2020
2019
Notes
£
£
£
£
Fixed assets
Intangible assets - goodwill
10
161,687
161,687
Tangible fixed assets
11
157,131
174,543
318,818
336,230
Current assets
Stocks
12
5,980
1,980
Debtors
13
532,895
376,770
Cash at bank and in hand
44,116
100,130
582,991
478,880
Creditors: amounts falling due within one year
14
(142,133)
(183,038)
Net current assets
440,858
295,842
Total assets less current liabilities
759,676
632,072
Creditors: amounts falling due after more than one year
14
(51,496)
Provisions for liabilities
Deferred tax liabilities
18
(25,211)
(33,999)
Net assets
734,465
546,577
Capital and reserves
Called up share capital
19
2
2
Profit and loss reserves
734,463
546,575
Total equity
734,465
546,577
The financial statements were approved by the board of directors and authorised for issue on 3 June 2021 and are signed on its behalf by:
A Jebson
Director
Company Registration No. 05137535
LAKELAND CARE SERVICES LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 7 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 October 2018
2
438,033
438,035
Year ended 30 September 2019:
Profit and total comprehensive income for the year
-
108,542
108,542
Balance at 30 September 2019
2
546,575
546,577
Year ended 30 September 2020:
Profit and total comprehensive income for the year
-
187,888
187,888
Balance at 30 September 2020
2
734,463
734,465
LAKELAND CARE SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 8 -
1
Accounting policies
Company information
Lakeland Care Services Ltd is a private company limited by shares incorporated in England and Wales. The registered office is First Floor Offices, Sweeps Ditch, 44a Gresham Road, Staines Upon Thames, TW18 2AN.
The company's principal activities and nature of its operations are disclosed in the directors' report.
1.1
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
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 prepared under the historical cost convention. The principal accounting policies adopted are set out below.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
-
inclusion of an explicit and unreserved statement of compliance with IFRS;
-
presentation of a statement of cash flows and related notes;
-
disclosure of the objectives, policies and processes for managing capital;
-
disclosure of key management personnel compensation;
-
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
-
the effect of financial instruments on the statement of comprehensive income;
-
comparative period reconciliations for the number of shares outstanding and the carrying amounts of property, plant and equipment, intangible assets, investment property and biological assets;
-
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
-
a reconciliation of the number and weighted average exercise prices of share options, how the fair value of share-based payments was determined and their effect on profit or loss and the financial position;
-
comparative narrative information;
-
for financial instruments, investment property and biological assets measured at fair value and within the scope of IFRS 13, the valuation techniques and inputs used to measure fair value, the effect of fair value measurements with significant unobservable inputs on the result for the period and the impact of credit risk on the fair value; and
-
related party disclosures for transactions with the parent or wholly owned members of the group.
Where required, equivalent disclosures are given in the group accounts of Churchlake Holdings Ltd.
Lakeland Care Services Ltd is a wholly owned subsidiary of Churchlake Holdings Ltd and the results of Lakeland Care Services Ltd are included in the consolidated financial statements of Churchlake Holdings Ltd which are available from Sweeps Ditch, 44a Gresham Road, Staines upon Thames TW18 2AN.
1.2
Going concern
The directors have at the time of approving the financial statements, a reasonable expectation that the
true
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
LAKELAND CARE SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
1
Accounting policies
(Continued)
- 9 -
1.3
Turnover
Turnover is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The company recognises revenue when it transfers control of a product or service to a customer.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue represents fees receivable for care services. Revenue is recognised as it is incurred, either daily, weekly or monthly. Where charges are billed in advance, these are recorded as deferred income.
1.4
Goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less impairment losses.
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.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
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:
Fixtures and fittings
20% reducing balance
Plant and equipment
20% reducing balance
Motor vehicles
25% reducing balance
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 profit and loss account.
1.6
Impairment of tangible and intangible assets
At each reporting end date, the
company
reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
LAKELAND CARE SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
1
Accounting policies
(Continued)
- 10 -
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.
1.7
Stocks
Stocks
are stated at the lower of cost and
estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks
held for distribution at no or nominal consideration are measured the lower of cost and replacement cost,
adjusted where applicable for any loss of service potential.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
1.8
Cash at bank and in hand
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial assets
Financial assets are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.
LAKELAND CARE SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
1
Accounting policies
(Continued)
- 11 -
Impairment of financial assets
Financial assets, other than those
measured
at fair value through profit or loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.
Derecognition of financial assets
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.
1.10
Financial liabilities
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
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the
company’s
obligations are discharged, cancelled, or they expire.
1.11
Equity instruments
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.
1.12
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability. A derivative is presented as a non-current asset or liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are classified as current.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the 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
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
LAKELAND CARE SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
1
Accounting policies
(Continued)
- 12 -
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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.
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of
inventories
or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15
Leases
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 tangible fixed assets, 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 tangible fixed assets. 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.
LAKELAND CARE SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
1
Accounting policies
(Continued)
- 13 -
1.16
Grants
Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grants will be received.
2
Critical accounting estimates and judgements
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Critical judgements
Useful lives of fixed assets
Management reviews the useful lives and residual values of the items of property and equipment on a regular basis. During the financial year, the directors determined no significant changes in the useful lives and residual values.
3
Turnover
2020
2019
£
£
Turnover analysed by class of business
Care home revenue
1,460,949
1,331,776
2020
2019
£
£
Other significant revenue
Interest income
2,110
3,490
Grants received
44,562
4
Operating profit
2020
2019
£
£
Operating profit for the year is stated after charging/(crediting):
Government grants
(44,562)
Depreciation of property, plant and equipment
40,177
44,828
Profit on disposal of tangible fixed assets
(160)
Amortisation of intangible assets (included within administrative expenses)
-
28,838
Cost of inventories recognised as an expense
89,674
82,349
LAKELAND CARE SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 14 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
47
50
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
778,227
756,375
6
Directors' remuneration
2020
2019
£
£
Remuneration for qualifying services
8,640
16,590
7
Interest receivable and similar income
2020
2019
£
£
Interest income
Other interest income
2,110
3,490
8
Interest payable and similar expenses
2020
2019
£
£
Interest on financial liabilities measured at amortised cost:
Interest on other loans
3,637
9,706
9
Taxation
2020
2019
£
£
Current tax
UK corporation tax on profits for the current period
22,630
28,067
Adjustments in respect of prior periods
11,976
-
Total UK current tax
34,606
28,067
LAKELAND CARE SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
9
Taxation
2020
2019
£
£
(Continued)
- 15 -
Deferred tax
Origination and reversal of temporary differences
(8,788)
(297)
Total tax charge
25,818
27,770
The charge for the year can be reconciled to the profit per the profit and loss account as follows:
2020
2019
£
£
Profit before taxation
213,706
136,312
Expected tax charge based on a corporation tax rate of 19.00% (2019: 19.00%)
40,604
25,899
Effect of expenses not deductible in determining taxable profit
3,411
8,780
Adjustment in respect of prior years
11,976
(12,327)
Group relief
(21,283)
Deferred tax adjustments in respect of prior years
(4,107)
-
Movement in deferred tax position
(4,783)
5,418
Taxation charge for the year
25,818
27,770
10
Intangible fixed assets
Goodwill
£
Cost
At 30 September 2019
576,750
At 30 September 2020
576,750
Amortisation and impairment
At 30 September 2019
415,063
At 30 September 2020
415,063
Carrying amount
At 30 September 2020
161,687
At 30 September 2019
161,687
LAKELAND CARE SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 16 -
11
Tangible fixed assets
Fixtures and fittings
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 30 September 2019
473,434
116,829
24,597
614,860
Additions
20,281
2,484
22,765
At 30 September 2020
493,715
119,313
24,597
637,625
Accumulated depreciation and impairment
At 30 September 2019
359,791
70,233
10,293
440,317
Charge for the year
26,785
9,816
3,576
40,177
At 30 September 2020
386,576
80,049
13,869
480,494
Carrying amount
At 30 September 2020
107,139
39,264
10,728
157,131
At 30 September 2019
113,643
46,596
14,304
174,543
12
Stocks
2020
2019
£
£
Finished goods
5,980
1,980
13
Debtors
2020
2019
£
£
Trade debtors
46,114
60,894
Provision for bad and doubtful debts
(2,400)
-
43,714
60,894
Corporation tax recoverable
-
16,202
Amount owed by parent undertaking
276,227
Amounts owed by fellow group undertakings
194,740
Other debtors
200
273,521
Prepayments and accrued income
18,014
26,153
532,895
376,770
LAKELAND CARE SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 17 -
14
Creditors
Due within one year
Due after one year
2020
2019
2020
2019
Notes
£
£
£
£
Loans and overdrafts
15
48,618
Creditors
16
111,450
150,784
Taxation and social security
27,805
27,660
Lease liabilities
17
2,878
4,594
-
2,878
142,133
183,038
-
51,496
15
Loans and overdrafts
Due after one year
2020
2019
£
£
Borrowings held at amortised cost:
Bank loans
-
48,618
16
Creditors
2020
2019
£
£
Trade creditors
35,179
61,559
Accruals and deferred income
74,324
67,940
Other creditors
1,947
21,285
111,450
150,784
17
Lease liabilities
2020
2019
Maturity analysis
£
£
Within one year
2,878
4,594
In two to five years
-
2,878
Total undiscounted liabilities
2,878
7,472
LAKELAND CARE SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
17
Lease liabilities
(Continued)
- 18 -
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:
2020
2019
£
£
Current liabilities
2,878
4,594
Non-current liabilities
-
2,878
2,878
7,472
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
ACAs
£
Deferred tax liability at 1 October 2018
(33,702)
Deferred tax movements in prior year
Credit to profit or loss
(297)
Deferred tax liability at 1 October 2019
(33,999)
Deferred tax movements in current year
Credit to profit or loss
8,788
Deferred tax liability at 30 September 2020
(25,211)
19
Share capital
2020
2019
2020
2019
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
1
1
1
1
Ordinary B shares of £1 each
1
1
1
1
2
2
2
2
20
Controlling party
In the opinion of the directors, the company's ultimate parent parent company, the ultimate controlling party and which includes the company for which group accounts are prepared is Churchlake Holdings Limited, a company incorporated in Great Britain.
Copies of the consolidated financial statements for Churchlake Holdings Limited may be obtained from Sweeps Ditch, 44a Gresham Road, Staines-Upon-Thames TW18 2AN.
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