Company Registration No. 08900912 (England and Wales)
HARTWOOD CARE (4) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
HARTWOOD CARE (4) LIMITED
COMPANY INFORMATION
Directors
C Hunt
G A Swire
Company number
08900912
Registered office
The Old House
64 The Avenue
Egham
TW20 9AD
Auditor
Azets Audit Services
Ship Canal House
98 King Street
Manchester
M2 4WU
HARTWOOD CARE (4) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 20
HARTWOOD CARE (4) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2022
- 1 -
The directors present the strategic report for the year ended 31 March 2022.
Principal activity
Hartwood Care (4) Limited operates a 63 bed care home in Romsey, Hampshire. The principal activity of the entity is the provision of residential care and dementia care services.
Business review and key performance indicators
The company’s key priority is resident welfare and its core strategic focus is on continuing to provide high quality care that meets and exceeds our residents’ expectations.
The company’s key financial performance indicators during the year are revenue and net profit as reported in the statement of comprehensive income. In addition, the company considers occupancy rate and average weekly fee to be the main non-financial KPI’s.
The directors are satisfied with the results for the year which were in line with expectations.
Principal risks and uncertainties
Management consider the principal risk of the business is the retention of Care Quality Commission registration. Strict policies and procedures are in place to ensure a high level of governance is maintained, which is enhanced through central support and the retention of quality personnel.
The business has been financed using a combination of bank loans and loan notes. The business also has cash and other items such as trade debtors and trade creditors that arise directly from operation. Following, the business is exposed to certain financial risks which are described below.
Liquidity risk
The company has adopted conservative policies for cash flow management and seeks to mitigate liquidity risk by maintaining significant cash headroom to meet foreseeable needs.
Credit risk
The entities principal credit risk is attributable to trade debtors. Background checks are performed on incoming residents to protect against credit risk.
Impact of COVID-19
The global outbreak of COVID-19 continued during this trading period. The impact of this virus has led to an unprecedented healthcare crisis and the governmental measures taken to contain its spread has inevitably caused significant economic uncertainty.
The group has implemented various new policies and procedures to minimise the spread of the infection at the care home, with the safety and wellbeing of its residents and care staff the key priority.
Amidst this economic uncertainty, the group has continued to report sound financial performance, maintains a healthy liquidity position and accordingly, the group’s management remains confident of the long-term financial stability and future of the business.
C Hunt
Director
27 February 2023
HARTWOOD CARE (4) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2022
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2022.
Principal activities
The principal activity of the company was the operation and management of a care home providing residential care for the elderly.
Results and dividends
The results for the year are set out on page 7.
No ordinary 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:
C Hunt
G A Swire
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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;
-
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.
HARTWOOD CARE (4) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 3 -
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.
On behalf of the board
C Hunt
Director
27 February 2023
HARTWOOD CARE (4) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HARTWOOD CARE (4) LIMITED
- 4 -
Opinion
We have audited the financial statements of Hartwood Care (4) Limited (the 'company') for the year ended 31 March 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(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 31 March 2022 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
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
HARTWOOD CARE (4) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HARTWOOD CARE (4) LIMITED
- 5 -
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 strategic report and 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
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 is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
HARTWOOD CARE (4) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HARTWOOD CARE (4) LIMITED
- 6 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
-
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
-
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
-
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
-
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company’s
shareholders
, 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
shareholders
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
shareholders
as a body, for our audit work, for this report, or for the opinions we have formed.
Lee Van Houplines (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
27 February 2023
Chartered Accountants
Statutory Auditor
Ship Canal House
98 King Street
Manchester
M2 4WU
HARTWOOD CARE (4) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
- 7 -
2022
2021
Notes
£
£
Turnover
2
4,226,281
3,695,294
Cost of sales
(2,216,938)
(1,934,484)
Gross profit
2,009,343
1,760,810
Administrative expenses
(1,010,765)
(905,283)
Other operating income
172,850
125,234
Operating profit
3
1,171,428
980,761
Interest receivable and similar income
5
44,000
Interest payable and similar expenses
6
(197,743)
(201,407)
Profit before taxation
1,017,685
779,354
Tax on profit
7
(213,757)
(150,258)
Profit for the financial year
803,928
629,096
Other comprehensive income
Revaluation of tangible fixed assets
6,231,198
Deferred tax arising on revaluation gain
(751,090)
(1,183,928)
Total comprehensive income for the year
52,838
5,676,366
HARTWOOD CARE (4) LIMITED
BALANCE SHEET
AS AT
31 MARCH 2022
31 March 2022
- 8 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
8
18,880,273
19,048,757
Current assets
Debtors
9
3,592,376
2,967,435
Cash at bank and in hand
635,750
463,849
4,228,126
3,431,284
Creditors: amounts falling due within one year
10
(1,536,365)
(1,344,889)
Net current assets
2,691,761
2,086,395
Total assets less current liabilities
21,572,034
21,135,152
Creditors: amounts falling due after more than one year
11
(5,987,500)
(6,372,500)
Provisions for liabilities
Deferred tax liability
12
3,248,154
2,479,110
(3,248,154)
(2,479,110)
Net assets
12,336,380
12,283,542
Capital and reserves
Called up share capital
13
1
1
Revaluation reserve
9,793,469
10,544,559
Profit and loss reserves
2,542,910
1,738,982
Total equity
12,336,380
12,283,542
The financial statements were approved by the board of directors and authorised for issue on 27 February 2023 and are signed on its behalf by:
C Hunt
Director
Company Registration No. 08900912
HARTWOOD CARE (4) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
- 9 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 April 2020
1
5,497,289
1,109,886
6,607,176
Year ended 31 March 2021:
Profit for the year
-
-
629,096
629,096
Other comprehensive income:
Revaluation of tangible fixed assets
-
6,231,198
-
6,231,198
Tax relating to other comprehensive income
-
(1,183,928)
(1,183,928)
Total comprehensive income for the year
5,047,270
629,096
5,676,366
Balance at 31 March 2021
1
10,544,559
1,738,982
12,283,542
Year ended 31 March 2022:
Profit for the year
-
-
803,928
803,928
Other comprehensive income:
Tax relating to other comprehensive income
-
(751,090)
(751,090)
Total comprehensive income for the year
(751,090)
803,928
52,838
Balance at 31 March 2022
1
9,793,469
2,542,910
12,336,380
HARTWOOD CARE (4) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2022
- 10 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
17
973,230
906,334
Income taxes paid
(147,822)
(144,075)
Net cash inflow from operating activities
825,408
762,259
Investing activities
Purchase of tangible fixed assets
(114,764)
(91,525)
Interest received
44,000
Net cash used in investing activities
(70,764)
(91,525)
Financing activities
Net movement in bank loans
(385,000)
(192,500)
Interest paid
(197,743)
(201,407)
Net cash used in financing activities
(582,743)
(393,907)
Net increase in cash and cash equivalents
171,901
276,827
Cash and cash equivalents at beginning of year
463,849
187,022
Cash and cash equivalents at end of year
635,750
463,849
HARTWOOD CARE (4) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
- 11 -
1
Accounting policies
Company information
Hartwood Care (4) Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
The Old House, 64 The Avenue, Egham, TW20 9AD.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties. The principal accounting policies adopted are set out below.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
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.
1.3
Turnover
Turnover represents income generated from the principal activity of the company, provision of residential care for the elderly. It is recognised at the point the attributable service is delivered. Turnover is recorded to the extent that it is probable that the economic benefits will flow to the company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received and receivable, excluding discounts, rebates, value added tax and other sales taxes.
1.4
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:
Freehold land and buildings
Nil
Plant and equipment
10% straight line
Fixtures and fittings
5% - 25% straight line
Computers
50% straight line
Motor vehicles
20% straight line
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 credited or charged to profit or loss
.
Freehold property is carried at fair value at the date of the revaluation plus additions at cost. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date. The surplus or deficit on book value is transferred to the revaluation reserve.
1.5
Cash at bank and in hand
Cash and cash equivalents are basic financial assets and represent cash in hand and deposits held at call with banks.
HARTWOOD CARE (4) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 12 -
1.6
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price.
Financial assets classified as receivable within one year are not amortised.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans
and
loans from
fellow group companies, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.7
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.8
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.
HARTWOOD CARE (4) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 13 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are
enacted or substantively enacted at the balance sheet date
. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The company is exempt from corporation tax, it being a company not carrying on a business for the purposes of making a profit.
1.9
Employee benefits
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.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
HARTWOOD CARE (4) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 14 -
2
Turnover and other revenue
2022
2021
£
£
Other significant revenue
Interest income
44,000
-
Grants received
172,850
125,234
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
4,226,281
3,695,294
3
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(172,850)
(125,234)
Fees payable to the company's auditor for the audit of the company's financial statements
6,300
6,000
Depreciation of owned tangible fixed assets
283,248
262,049
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Operative
94
91
Management and administrative
8
8
Total
102
99
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
1,911,489
1,667,417
Social security costs
127,414
111,297
Pension costs
27,094
25,387
2,065,997
1,804,101
HARTWOOD CARE (4) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 15 -
5
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest receivable from group companies
44,000
6
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
197,743
201,407
7
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
200,279
152,298
Adjustments in respect of prior periods
(4,476)
(982)
Total current tax
195,803
151,316
Deferred tax
Origination and reversal of timing differences
17,954
(1,058)
Total tax charge
213,757
150,258
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
1,017,685
779,354
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
193,360
148,077
Tax effect of expenses that are not deductible in determining taxable profit
949
1,128
Adjustments in respect of prior years
(4,499)
(982)
Effect of change in corporation tax rate
28,467
Deferred tax adjustments in respect of prior years
2,035
Enhanced capital allowances
(4,520)
Taxation charge for the year
213,757
150,258
HARTWOOD CARE (4) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
7
Taxation
(Continued)
- 16 -
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2022
2021
£
£
Deferred tax arising on:
Revaluation of property
751,090
1,183,928
8
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 1 April 2021
17,434,871
1,387,008
1,242,377
129,130
22,755
20,216,141
Additions
12,216
61,931
40,617
114,764
At 31 March 2022
17,434,871
1,399,224
1,304,308
169,747
22,755
20,330,905
Depreciation and impairment
At 1 April 2021
755,252
339,004
67,060
6,068
1,167,384
Depreciation charged in the year
139,464
106,763
32,470
4,551
283,248
At 31 March 2022
894,716
445,767
99,530
10,619
1,450,632
Carrying amount
At 31 March 2022
17,434,871
504,508
858,541
70,217
12,136
18,880,273
At 31 March 2021
17,434,871
631,756
903,373
62,070
16,687
19,048,757
The valuation
of freehold land and buildings
was made as
at September 2021 by Prina Shah MRICS and Henry Harris MRICS of Cushman & Wakefield
on an open market
for existing use
basis
with subsequent additions recorded at cost pending external valuation
.
It is the opinion of the directors that the carrying value stated above is a fair reflection of the market value of the property at the balance sheet date.
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
2022
2021
£
£
Cost
7,213,402
7,139,255
Carrying value
7,213,402
7,139,255
HARTWOOD CARE (4) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 17 -
9
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
339,987
301,154
Amounts owed by group undertakings
896,413
2,534,206
Other debtors
92,133
96,690
Prepayments and accrued income
43,751
35,385
1,372,284
2,967,435
2022
2021
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
2,176,092
Other debtors
44,000
2,220,092
Total debtors
3,592,376
2,967,435
10
Creditors: amounts falling due within one year
2022
2021
£
£
Bank loans
385,000
385,000
Trade creditors
60,238
47,340
Corporation tax
200,279
152,298
Other taxation and social security
44,472
47,307
Other creditors
372,611
296,473
Accruals and deferred income
473,765
416,471
1,536,365
1,344,889
The bank loan is repayable in quarterly instalments
of £96,250
with a bullet repayment in February 2024. Interest is
charged at 2.8%
plus
SONIA
.
The bank loan is secured by way of a debenture incorporating a fixed and floating charge covering the property and undertaking of the company.
11
Creditors: amounts falling due after more than one year
2022
2021
£
£
Bank loans
5,987,500
6,372,500
The bank loan is repayable in quarterly instalments of £96,250 with a bullet repayment in February 2024.
Interest is
charged at 2.8%
plus
SONIA. The bank loan is secured by way of a debenture incorporating a fixed and floating charge covering the property and undertaking of the company.
HARTWOOD CARE (4) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 18 -
12
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
126,318
107,762
Short term timing differences
(7,704)
(7,102)
Unrealised revaluation gain
3,129,540
2,378,450
3,248,154
2,479,110
2022
Movements in the year:
£
Liability at 1 April 2021
2,479,110
Charge to profit or loss
17,954
Charge to other comprehensive income
751,090
Liability at 31 March 2022
3,248,154
13
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
14
Financial commitments, guarantees and contingent liabilities
The company is party to unlimited cross guarantees, in favour of
NatWest
, in respect of certain
borrowings of
the company and Hartwood Care (3) Limited, a fellow group company of the group headed by Cinnamon Care Homes LP
. At 31 March 20
22
, the net
borrowing encompassed by the cross guarantee amounted to
£15,287,500 (2021: £16,192,500)
.
HARTWOOD CARE (4) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 19 -
15
Related party transactions
At the balance sheet date, the company was owed £2,176,092 (2021: £
2,176,092
) by
Cinnamon Finance Company Limited
, a fellow member of the group headed by
Cinnamon Care Homes LP
. The balance is interest free and repayable on demand, however in view of the longer term nature of the balance it has been classified as falling due after more than one year.
Notional interest in the sum of £
44
,000 (2021: £
nil
) has been recognised on the amounts due
from Cinnamon Finance Company
Limited as required by FRS 102, and is presented in other
debtors
falling due after more than one year. The settlement of such interest is subordinated to advances from external funders.
At the balance sheet date, the company was owed £655,413 (2021: £
358,113
) by
Bexhill Care Limited
and £241,000 (2021: £nil) by Hartwood Care (3) Limited, fellow members of the group headed by
Cinnamon Care Homes LP
. The balances are interest free and repayable on demand, and have therefore been classified as falling due within one year.
Unless otherwise stated, notional interest charges between fellow subsidiary undertakings have been disregarded on the grounds of materiality.
During the year Cinnamon Care Collection Limited ("CCC"), a company related by common directorship, paid centrally incurred expenses on behalf of the company. In addition, CCC raised management charges of £190,540 (2021: £179,172). At the year end the company owed £32,355 (2021: £30,296) to CCC.
16
Controlling party
The parent and ultimate controlling company is Cinnamon Care Homes LP by virtue of its beneficial shareholding. There is no individual controlling party.
17
Cash generated from operations
2022
2021
£
£
Profit for the year after tax
803,928
629,096
Adjustments for:
Taxation charged
213,757
150,258
Finance costs
197,743
201,407
Investment income
(44,000)
Depreciation and impairment of tangible fixed assets
283,248
262,049
Movements in working capital:
Increase in debtors
(624,941)
(278,836)
Increase/(decrease) in creditors
143,495
(57,640)
Cash generated from operations
973,230
906,334
HARTWOOD CARE (4) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 20 -
18
Analysis of changes in net debt
1 April 2021
Cash flows
31 March 2022
£
£
£
Cash at bank and in hand
463,849
171,901
635,750
Borrowings excluding overdrafts
(6,757,500)
385,000
(6,372,500)
(6,293,651)
556,901
(5,736,750)
2022-03-31
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