Company registration number:
09714017
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ANNUAL REPORT AND FINANCIAL STATEMENTS
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FOR THE YEAR ENDED
31 MARCH 2021
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MITCHELLS HOLDING LIMITED
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MITCHELLS HOLDING LIMITED
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COMPANY INFORMATION
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Chartered Accountants
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Statutory Auditor
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MITCHELLS HOLDING LIMITED
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CONTENTS
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Independent Auditors' Report
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Consolidated Statement of Comprehensive Income
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Consolidated Statement of Financial Position
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Company Statement of Financial Position
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Notes to the Financial Statements
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MITCHELLS HOLDING LIMITED
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GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 31 MARCH 2021
The principal activity of the group during the year was the provision of residential care and supported living.
Our previous full review by the Care Quality Commission was in 2019 and we were awarded a good rating to the residential care homes and Domiciliary Care Services and outstanding in the responsive section of our Domiciliary Care Services, and these levels continued to be maintained during the year to 2021.
Despite the continued pandemic our services continued in full and care home occupancy was near capacity throughout the year with overall income increasing by circa 3% excluding any one-off Council grants, in comparison to the previous year. Bridgeham Grange has now been fully operational for a complete year which assisted the group in significantly improving profitability. Our bankers continue to provide their support to the group leaving the group in a strong financial position going forward.
Our key KPIs are occupancy levels and staff costs. During the period our occupancy levels were in the high 90% and staff to turnover is shown below. Whilst occupancy levels were improved during the period, staff to turnover reduced slightly.
We received an uplift in fee rates from the Council’s during the year under review and one off grants/support (included under other income). The cash position of the group has improved with positive cashflows being generated from operations during the year and we expect this to continue to improve during the coming year. Overall the group’s net assets have improved by over £470k.
Group cash reserves have increased, and indebtedness reduced, which will enable us to undertake some further refurbishment work during the coming year, which will further improve the quality of our homes.
Principal risks and uncertainties
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The Directors carefully monitor activities and ensure the follow up risks are investigated to successfully deliver our plans.
Our principal risks are failure to:
• Achieve our focus on quality, risk and safety during scale of charge.
• Work in partnership with Health and Social care partners, including commissioners, to integrate to make the best use of collective resources available to us.
• Engage stakeholders and our staff in our continued improvement in staff management and experience.
• Achieve and evidence outgoing compliance with Care Quality Commission.
• Manage our finances effectively in the economic climate and failure to deliver increases in efficiency.
• Respond effectively to the global pandemic to protect our users.
Financial key performance indicators
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This has been a year of strong performance for our organisation with improvements in the quality of our services and our environments. We continue to focus on the areas that require more work, including helping people to feel involved in their care planning.
A selection of performance indicators are:
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Turnover (flexed for 2020 to a year)
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Gross Profit (flexed for 2020 to a year)
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Net Profit before tax (flexed for 2020 to a year)
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MITCHELLS HOLDING LIMITED
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2021
Our financial focus remains the long-term financial sustainability of the group as a partner within the local health and social care sector.
Our staff continue to cope with ongoing issues arising from the pandemic with new infection preventions and control measures with enormous skill and dedication, keeping our users safe. We have also undertaken complete refurbishments of our properties at The Sheilings and Rosetta which will vastly improve our users’ facilities and comfort.
The directors continue to monitor all activities to ensure that there are robust arrangements in place to govern service quality, to ensure the safety of our service users and staff.
We have continued to develop our service in line with our strategic and service plan and we have had a period of relative stability amongst our staff team and considering this we would very much like to thank our staff who deserve the highest praise.
Ultimately, however, we ensure 'business continuity' through preparedness, resilience and response.
This report was approved by the board
and signed on its behalf.
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B. A. Mitchell
Director
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MITCHELLS HOLDING LIMITED
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DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 MARCH 2021
The directors present their report and the financial statements for the period ended 31 March 2021.
Directors' responsibilities statement
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The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the
consolidated
financial statements in accordance with applicable law and regulations.
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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
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select suitable accounting policies for the Group's financial statements and then apply them consistently;
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make judgements and accounting estimates that are reasonable and prudent;
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the period, after taxation, amounted to £
583,374
(2020 -
£
27,472
)
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During the year dividends of £113,200 were declared £Nil (2020 - £Nil).
The directors who served during the period were:
Matters covered in the strategic report
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Information on future developments is covered in the Strategic Report.
Disclosure of information to auditors
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Each of the persons who are
directors at the time when this Directors' Report is approved has confirmed that:
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so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
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the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
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MITCHELLS HOLDING LIMITED
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DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2021
This report was approved by the board and signed on its behalf.
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B. A. Mitchell
Director
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MITCHELLS HOLDING LIMITED
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MITCHELLS HOLDING LIMITED
We have audited the financial statements of Mitchells Holding Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 March 2021, which comprise the Group Statement of Comprehensive Income, the Group and Company Statements of Financial Position, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity
and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
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give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 March 2021 and of the Group's profit for the period then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
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the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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MITCHELLS HOLDING LIMITED
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MITCHELLS HOLDING LIMITED (CONTINUED)
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
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the parent Company financial statements are not in agreement with the accounting records and returns; or
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certain disclosures of directors
' remuneration specified by law are not made; or
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we have not received all the information and explanations we require for our audit.
Responsibilities of directors
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As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
Auditors' responsibilities for the audit of the financial statements
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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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
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The Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant:
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The Companies Act 2006;
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Financial Reporting Standard 102;
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UK employment legislation;
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UK health and safety legislation;
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General Data Protection Regulations;
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Care Quality Commission regulations and guidance; and
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UK tax legislation.
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We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
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We understood how the parent Company and the Group is complying with those legal and regulatory frameworks by, making inquiries to management and those responsible for legal and compliance procedures. We corroborated our inquiries through our review of relevant documentation.
∙The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. No issues were identified in this area.
We assessed the susceptibility of the parent company’s and Group’s financial statements to material misstatement,
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MITCHELLS HOLDING LIMITED
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MITCHELLS HOLDING LIMITED (CONTINUED)
including how fraud might occur. Audit procedures performed by the Group engagement team included:
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Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
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Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
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Challenging assumptions and judgements made by management in its significant accounting estimates; and
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Identifying and testing journal entries, in particular any journal entries posted outside of the normal working patterns of the accounts team, or with unusual descriptions or account combinations.
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As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
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The application of inappropriate judgements or estimation to manipulate the Group's financial position in the calculation of the year end accrued and deferred revenue balances in relation to long term contracts.
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The posting of unusual journals and complex transactions.
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The use of management override of controls to manipulate results, or to cause the Group to enter into transactions not in its best interests.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx.This description forms part of our Auditors' 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 Auditors' 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.
Caroline Milton FCA
(Senior Statutory Auditor)
for and on behalf of
Menzies LLP
Chartered Accountants
Statutory Auditor
Ashcombe House
5 The Crescent
Leatherhead
Surrey
KT22 8DY
31 January 2022
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MITCHELLS HOLDING LIMITED
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 MARCH 2021
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As restated
6 months ended
31 March
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Interest receivable and similar income
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Interest payable and similar expenses
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Profit for the period attributable to:
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Owners of the parent Company
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There were no recognised gains and losses for 2021 or 2020 other than those included in the consolidated statement of comprehensive income.
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There was no other comprehensive income for 2021 (2020:£
NIL).
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The notes on pages 15 to 33 form part of these financial statements.
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MITCHELLS HOLDING LIMITED
REGISTERED NUMBER:
09714017
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2021
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on
28 January 2022
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B. A. Mitchell
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The notes on pages 15 to 33 form part of these financial statements.
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MITCHELLS HOLDING LIMITED
REGISTERED NUMBER:
09714017
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COMPANY STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2021
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Profit and loss account brought forward
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Other changes in the profit and loss account
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Profit and loss account carried forward
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on
28 January 2022
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B. A. Mitchell
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The notes on pages 15 to 33 form part of these financial statements.
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MITCHELLS HOLDING LIMITED
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED
31 MARCH 2021
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At 1 April 2020 (as previously stated)
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At 1 April 2020 (as restated)
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Dividends: Equity capital
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED
31 MARCH 2020
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Equity attributable to owners of parent Company
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At 1 October 2019 (as previously stated)
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At 1 October 2019 (as restated)
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MITCHELLS HOLDING LIMITED
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED
31 MARCH 2021
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At 1 April 2020 (as previously stated)
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At 1 April 2020 (as restated)
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Contributions by and distributions to owners
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Dividends: Equity capital
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED
31 MARCH 2020
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At 1 October 2019 (as previously stated)
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At 1 October 2019 (as restated)
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MITCHELLS HOLDING LIMITED
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 MARCH 2021
Cash flows from operating activities
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Profit for the financial period
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Amortisation of intangible assets
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Depreciation of tangible assets
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Loss on disposal of tangible assets
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(Decrease)/increase in creditors
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Sale of tangible fixed assets
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Net cash from investing activities
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Cash flows from financing activities
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Repayment of/new finance leases
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Net cash used in financing activities
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Net increase/(decrease) in cash and cash equivalents
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Cash and cash equivalents at beginning of period
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Cash and cash equivalents at the end of period
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Cash and cash equivalents at the end of period comprise:
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MITCHELLS HOLDING LIMITED
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CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 31 MARCH 2021
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New/ Repayments of loans and finance leases
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MITCHELLS HOLDING LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
The company is a private limited company limited by shares and incorporated in England and Wales. The address of the registered office and the Company's registered number is disclosed on the company information page of these financial statements. The principal place of business is Unit 5D, Shawlands Court, Newchapel Road, Lingfield, Surrey RH7 6BL.
The financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest £.
The financial statements have been prepared for a year to 31 March 2021. The comparatives show 6 months to 31 March 2020.
The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.
2.
Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Income and Retained Earnings from the date on which control is obtained. They are deconsolidated from the date control ceases.
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MITCHELLS HOLDING LIMITED
|
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
2.
Accounting policies (continued)
The Group reported a profit for the period of £583,374 (2020: £27,472), net current liabilities of £15,592 (2020: £4,517,296) and net assets of £2,917,764 (2020: £2,447,590) at the balance sheet date. The Group remains reliant on the support of its bankers, Coutts & Co to ensure cash flows are sufficient to continue meeting its liabilities as they fall due.
The emergence and spread of COVID-19 in 2020, the associated social distancing measures and imposed travel restrictions have significantly impacted businesses globally. The Group provides essential care services which are supported by local authorities and therefore demand for services and the ability of customers to pay for services remain unaffected by the COVID-19 pandemic and resulting recession. The directors are therefore confident that the Group has a sustainable source of income for the foreseeable future, and that their combined industry and operational expertise will ensure these are managed responsibly and profitably.
During the period, Coutts & Co approved an application to extend the existing borrowing facilities, demonstrating their continued support of the business in economically challenging times. The Group is subject to various borrowing covenants which it forecasts will not be breached. Together with the continued support of the shareholders, this financial support will ensure that the Group can cover its costs and continue in operation for the foreseeable future.
Whilst the directors are mindful that economic developments resulting from the pandemic will impact the Group, they have assessed that the going concern basis of accounting remains appropriate based on the available bank support, continued demand and funding for services and post year end performance to date.
Revenue from provision of care services and domiciliary care is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable including including contribution from residents in relation to additional costs incurred in the provision of both care and supported living services.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated Statement of Comprehensive Income over its useful economic life.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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MITCHELLS HOLDING LIMITED
|
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
2.
Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Investment property rented to other group entities and accounted for under the cost model is stated at historical cost less accumulated depreciation and any accumulated impairment losses. This is a change in accounting policy in the Company financial statements, the impact of which is summarised in Note 24.
Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight line and reducing basis method.
Depreciation is provided on the following basis:
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Short-term leasehold property
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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Impairment of fixed assets and goodwill
|
Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Grants are accounted under the accruals model as permitted by FRS 102.
Grants of a revenue nature are recognised in the Consolidated Statement of Comprehensive Income in the same period as the related expenditure.
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MITCHELLS HOLDING LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
2.
Accounting policies (continued)
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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Operating leases: the Group as lessee
|
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.
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Provisions for liabilities
|
Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
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MITCHELLS HOLDING LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
2.
Accounting policies (continued)
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Current and deferred taxation
|
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position date, except that:
∙
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
∙
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
|
Judgements in applying accounting policies and key sources of estimation uncertainty
|
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The main areas of estimation are amortisation of goodwill, provisions for bad and doubtful debts and provisions and contingent liabilities. Further details of these estimations have been set out below.
Management are required to estimate the expected useful economic life of the goodwill of the business based on their commercial knowledge of the business sector. The goodwill is assessed annually for signs of impairment.
The provisions for bad and doubtful debts are based on past experience and expectations of future events.
Provisions are estimated by management based on the information supplied by legal advisers of expected outcomes. Where they are unable to make a reliable estimate due to the level of uncertainty then it remains a disclosed contingent liability.
The whole of the turnover is attributable to residential care and supported living.
|
All turnover arose within the United Kingdom.
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MITCHELLS HOLDING LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
|
Government grants receivable
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The operating profit is stated after charging:
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As restated
6 months ended
31 March
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Depreciation on tangible fixed assets
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(Profit)/loss on disposal
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Amortisation and impairment of intangible assets, including goodwill
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Fees payable to the Group's auditor and its associates for the audit of the
Company's annual financial statements
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Other operating lease rentals
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MITCHELLS HOLDING LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
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Staff costs, including directors' remuneration, were as follows:
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The average monthly number of employees, including the directors, during the period was as follows:
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Company contributions to defined contribution pension schemes
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During the period retirement benefits were accruing to
1
director
(2020 -
1
)
in respect of defined contribution pension schemes.
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MITCHELLS HOLDING LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
|
Interest payable and similar expenses
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Finance leases and hire purchase contracts
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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Taxation on profit on ordinary activities
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MITCHELLS HOLDING LIMITED
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
10.
Taxation (continued)
|
Factors affecting tax charge for the period
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|
The tax assessed for the period is higher than
(2020 - higher than)
the standard rate of corporation tax in the UK of 19%
(2020 -
19
%)
. The differences are explained below:
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As restated
6 months ended
31 March
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2020 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Amortisation and depreciation on ineligible assets
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Adjustments to tax charge in respect of prior periods
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Other timing differences leading to an increase (decrease) in taxation
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Changes in tax rates leading to an increase (decrease) in the tax charge
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Total tax charge for the period
|
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Factors that may affect future tax charges
|
On 3 March 2021 the UK Government announced that from 1 April 2023, the main rate of Corporation Tax on profits over £250,000 will be increased to 25%.
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MITCHELLS HOLDING LIMITED
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
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Charge for the period on owned assets
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The company had no intangible assets.
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MITCHELLS HOLDING LIMITED
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
|
|
Freehold land and property
|
Short-term leasehold property
|
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At 1 April 2020 (as restated)
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Charge for the period on owned assets
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Charge for the period on financed assets
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At 31 March 2020 (as restated)
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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MITCHELLS HOLDING LIMITED
|
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
13.
Tangible fixed assets (continued)
|
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Freehold land and property
|
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At 1 April 2020 (as previously stated)
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At 1 April 2020 (as restated)
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At 1 April 2020 (as previously stated)
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At 1 April 2020 (as restated)
|
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Charge for the period on owned assets
|
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At 31 March 2020 (as restated)
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MITCHELLS HOLDING LIMITED
|
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
|
|
Investments in subsidiary companies
|
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The Group has no investments.
|
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|
The following were subsidiary undertakings of the Company:
|
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|
Mitchell's Care Homes Limited
|
Ashcombe House, 5 The Crescent, Leatherhead, KT22 8DY
|
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Ashcombe House, 5 The Crescent, Leatherhead, KT22 8DY
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MITCHELLS HOLDING LIMITED
|
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
|
Due after more than one year
|
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Prepayments and accrued income
|
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Amounts owed by group undertakings
|
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Prepayments and accrued income
|
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Cash and cash equivalents
|
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|
MITCHELLS HOLDING LIMITED
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
|
Creditors: Amounts falling due within one year
|
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Amounts owed to group undertakings
|
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Other taxation and social security
|
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|
Obligations under finance lease and hire purchase contracts
|
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Accruals and deferred income
|
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Included in creditors amounts falling due within one year is an amount of £111,692 (2020: £102,798) which is secured by the directors' personal guarantee.
All bank overdrafts and loans are secured by fixed and floating charges including a legal mortgage on all the freehold properties owned by the Group.
Hire purchase liabilities are secured over the assets financed.
|
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Creditors: Amounts falling due after more than one year
|
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Net obligations under finance leases and hire purchase contracts
|
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|
Included in creditors amounts falling due after more than one year is an amount of £149,838 (2020: £261,066) which is secured by the directors' personal guarantee.
All bank overdrafts and loans are secured by fixed and floating charges including a legal mortgage on all the freehold properties owned by the Group.
Hire purchase liabilities are secured over the assets financed.
|
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MITCHELLS HOLDING LIMITED
|
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
|
|
|
Analysis of the maturity of loans is given below:
|
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|
|
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|
|
|
|
|
|
|
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|
Amounts falling due within one year
|
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Amounts falling due 1-2 years
|
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Amounts falling due 2-5 years
|
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|
|
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|
|
|
The bank loan is subject to interest at 3.75% over LIBOR per annum with repayment due in full in March 2025. After the year end the bank provided a 6 month capital repayment holiday in order to cover short term capital expenditure.
|
|
Hire purchase and finance leases
|
|
Minimum lease payments under hire purchase fall due as follows:
|
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|
MITCHELLS HOLDING LIMITED
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
|
|
|
|
|
|
|
|
|
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|
|
Charged to the profit or loss
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
Charged to profit or loss
|
|
|
|
|
|
Accelerated capital allowances
|
|
|
|
|
|
Tax losses carried forward
|
|
|
|
|
|
Short term timing differences
|
|
|
|
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|
|
|
|
|
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|
Allotted, called up and fully paid
|
|
|
|
|
|
|
|
|
|
10,000
(2020 -
10,000
)
Ordinary
shares of £
1.00
each
|
|
|
|
|
|
|
|
|
MITCHELLS HOLDING LIMITED
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
Merger Reserve
This reserve represents amounts arising from group reconstruction.
Profit and loss account
This reserve records retained earnings and accumulated losses.
The Directors have elected to show investment properties which are leased to group companies for trade purposes as tangible fixed assets in the Company statement of financial position at cost as permitted by FRS 102. This is a change in accounting policy and as such a prior period adjustment has been made to adjust this retrospectively.
The impact of this change in accounting policy in the prior year Company financial statements is shown below:
Decrease in investment properties
|
|
Increase in tangible fixed assets
|
|
Decrease in retained profits brought forward
|
|
|
|
In addition a prior period adjustment has been made to account for an error in the provision of depreciation charges on the freehold property in the Group accounts.
The impact of this adjustment in the prior year Group financial statements is shown below:
Decrease in retained profits brought forward
|
|
|
|
There is no tax impact.
The Group has given Coutts & Co a cross guarantee in favour of the parent company Mitchells Holdings Limited and its subsidiaries Mitchell's Care Homes Limited and Rowan Housing Limited.
Prior to the signing of the accounts the Group had received claims by two staff members in respect of accidents. There is not expected to be any material financial impact to the Group in regard to this claim but at the time of signing no outcome had been decided.
|
|
|
At 31 March 2021 the Group and Company had capital commitments as follows:
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
Contracted for but not provided in these financial statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MITCHELLS HOLDING LIMITED
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £64,261 (2020: £34,140). At the year end contributions of £22,615 (2020: £55,919) were payable to the fund.
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Commitments under operating leases
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At 31 March 2021 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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The Company had no operating leases.
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Transactions with directors
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At the balance sheet date the director, B A Mitchell, owed the Group £115,433 (2020: £24,455). Interest has been charged on a market rate basis.
At the balance sheet date the director, N V Mitchell, owed the Group £354,716 (2020: £193,671). Interest has been charged on a market rate basis.
The directors are of the opinion that there is no single controlling party.
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