Company Registration No. 01328355 (England and Wales)
CZAJKA PROPERTIES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
CZAJKA PROPERTIES LIMITED
COMPANY INFORMATION
Directors
Mr Konrad Czajka
Mrs Janina Czajka
Secretary
Mrs Janina Czajka
Company number
01328355
Registered office
Victoria House
66 - 70 Bingley Road
Saltaire
Shipley
West Yorkshire
BD18 4DJ
Auditor
BHP LLP
New Chartford House
Centurion Way
Cleckheaton
Bradford
West Yorkshire
BD19 3QB
CZAJKA PROPERTIES LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of total comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 26
CZAJKA PROPERTIES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 1 -
The directors present the strategic report for the year ended 31 December 2019.
Fair review of the business
During the year turnover increased by 2% , but the gross margin reduced by 1.5% as a result of additional employment costs in the form of increases in the National Living Wage, additional auto enrolment costs and general inflationary pressures.
The Directors were able to make some savings in general overheads which resulted in a slightly better pre tax profit than last year.
Key performance indicators
The company's key financial and other performance indicators during the year were as follows:
Principal risks and uncertainties
There are numerous risks that affect the company’s ability to meet is trading objectives. The primary ones being:
The impact of state funding available in the sector, Local Authorities continue to pay care and nursing home fees at a level which falls short of that which is required to deliver quality care at the same time as costs continue to rise. The Directors continue to monitor the level of funding and take appropriate decisions.
The ongoing process of Brexit and eventual outcomes are likely to have a range of impacts including on the recruitment of staff at a time when there is a national shortage of nurses. The maintenance of quality and reputation is of high priority to the board and as such internal system are focused on key factors to ensure any indication of quality concern are promptly investigated and resolved.
COVID 19 which impacted after the year end, has hit the care home sector particularly badly. Occupancy levels are much lower due to the non admission policy which had to be adopted to protect the homes. This has now eased a little and the directors have monitored the situation closely and made the appropriate changes to ensure the smooth operation of the business
Mr Konrad Czajka
Director
13 October 2020
CZAJKA PROPERTIES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2019.
Information relating to fair review of the business
and
principal risks and uncertainties is included in the strategic report.
Principal activities
The principal activity of the company continued to be that of the provision of long term care to the elderly and young disabled.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr Konrad Czajka
Mrs Janina Czajka
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Financial instruments
Price risk, credit risk, liquidity risk and cash flow risk
The business' principal financial instruments comprise bank balances, bank overdrafts, trade debtors, trade
creditors and loans to the business. The main purpose of these instruments is to finance the business' operations.
In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of
funding and flexibility through the use of overdrafts at floating rates of interest. All of the business' cash
balances are held in such a way that achieves a competitive rate of interest. The business makes use of money
market facilities where funds are available.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to
customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts
presented in the balance sheet are net of allowances for doubtful debtors.
Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
Loans comprise loans from financial institutions. The interest rate and monthly repayments on the loans from
financial institutions are fixed. The business manages the liquidity risk by ensuring that there are sufficient
funds to meet the payments.
Disabled persons
The company's policy is to give full and fair consideration to applications for employment made by disabled
persons, having regard to their particular aptitudes and abilities.
Disabled employees receive appropriate training to promote their career development within the company.
Employees who become disabled are retained in their existing posts where possible or retrained for suitable
alternative posts.
CZAJKA PROPERTIES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 3 -
Employee involvement
Regular meetings are held between senior management and employee representatives to discuss matters of
concern. Employees are kept well-informed about the progress and position of the company.
Future developments
Despite the challenges of COVID 19, the company continues to monitor and review prices in the market place and together with its strategy of increasing private client numbers is hopefully that the current years results will be ahead of 2019.
Auditor
In accordance with the company's articles, a resolution proposing that BHP LLP be reappointed as auditor of the company will be put at a General Meeting.
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
Mr Konrad Czajka
Director
13 October 2020
CZAJKA PROPERTIES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
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.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
CZAJKA PROPERTIES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CZAJKA PROPERTIES LIMITED
- 5 -
Opinion
We have audited the financial statements of Czajka Properties Limited (the 'company') for the year ended 31 December 2019 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 December 2019 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the 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.
CZAJKA PROPERTIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CZAJKA PROPERTIES LIMITED
- 6 -
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 directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
CZAJKA PROPERTIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CZAJKA PROPERTIES LIMITED
- 7 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Nigel Bullas (Senior Statutory Auditor)
for and on behalf of BHP LLP
13 October 2020
Chartered Accountants
Statutory Auditor
New Chartford House
Centurion Way
Cleckheaton
Bradford
West Yorkshire
BD19 3QB
CZAJKA PROPERTIES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
- 8 -
2019
2018
Notes
£
£
Turnover
3
8,185,058
8,024,663
Cost of sales
(6,416,252)
(6,169,520)
Gross profit
1,768,806
1,855,143
Administrative expenses
(1,656,226)
(1,718,123)
Other operating (expenses)/income
(6,016)
264
Operating profit
4
106,564
137,284
Interest receivable and similar income
8
59,729
56,775
Interest payable and similar expenses
9
(44,260)
(88,935)
Profit before taxation
122,033
105,124
Tax on profit
10
(29,029)
(90,113)
Profit for the financial year
93,004
15,011
Other comprehensive income
Tax relating to other comprehensive income
(12,426)
13,676
Total comprehensive income for the year
80,578
28,687
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CZAJKA PROPERTIES LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2019
31 December 2019
- 9 -
2019
2018
Notes
£
£
£
£
Fixed assets
Tangible assets
12
12,024,659
11,728,002
Investments
13
90,100
90,100
12,114,759
11,818,102
Current assets
Stocks
14
8,323
8,218
Debtors
15
4,837,960
4,526,203
Cash at bank and in hand
469,585
145,003
5,315,868
4,679,424
Creditors: amounts falling due within one year
16
(3,774,872)
(4,357,500)
Net current assets
1,540,996
321,924
Total assets less current liabilities
13,655,755
12,140,026
Creditors: amounts falling due after more than one year
17
(2,144,255)
(718,680)
Provisions for liabilities
19
(131,950)
(122,374)
Net assets
11,379,550
11,298,972
Capital and reserves
Called up share capital
22
4,075
4,075
Revaluation reserve
1,730,705
1,743,131
Profit and loss reserves
9,644,770
9,551,766
Total equity
11,379,550
11,298,972
The financial statements were approved by the board of directors and authorised for issue on 13 October 2020 and are signed on its behalf by:
Mr Konrad Czajka
Director
Company Registration No. 01328355
CZAJKA PROPERTIES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
- 10 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2018
4,075
1,729,455
9,536,755
11,270,285
Year ended 31 December 2018:
Profit for the year
-
-
15,011
15,011
Other comprehensive income:
Tax relating to other comprehensive income
-
13,676
-
13,676
Total comprehensive income for the year
-
13,676
15,011
28,687
Balance at 31 December 2018
4,075
1,743,131
9,551,766
11,298,972
Year ended 31 December 2019:
Profit for the year
-
-
93,004
93,004
Other comprehensive income:
Tax relating to other comprehensive income
-
(12,426)
-
(12,426)
Total comprehensive income for the year
-
(12,426)
93,004
80,578
Balance at 31 December 2019
4,075
1,730,705
9,644,770
11,379,550
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 11 -
1
Accounting policies
Company information
Czajka Properties Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Victoria House, 66 - 70 Bingley Road, Saltaire, Shipley, West Yorkshire, BD18 4DJ.
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 and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’
:
Interest income/expense and net gains/losses for each category of financial instrument;
basis
of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income
;
-
Section 26 ‘Share based Payment’
:
Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements
;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
Redhall Limited
. These consolidated financial statements are available from its registered office,
Victoria House, 66-70 Bingley Road, Saltaire, Shipley, West Yorkshire, BD18 4DJ.
The company has taken exemption from preparing group accounts as it is included in
consolidated accounts for
Redhall Limited, its ultimate parent undertaking.
1.2
Going concern
The Directors have considered the impact of COVID-19 on the Company’s trade, workforce and supply chain, as well as the wider economy. Whilst it is not considered practical to accurately assess the duration and extent of the disruption, the Directors are confident that they have in place plans to deal with any financial losses that may arise. Such plans include but are not limited to fully utilising the support that has been made available by the government in relation to staff costs and payment deferral of taxation.
1.3
Turnover
Turnover represents amounts chargeable in respect of the sale of services to residents.
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 12 -
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings
nil
Leasehold properties
10% straight line basis
Plant and machinery
25% reducing balance
Fixtures, fittings and equipment
25% reducing balance
Motor vehicles
25% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
It is the company's policy to maintain its property to a high standard through a programme of refurbishment and
maintenance. In accordance with this practice, depreciation is not provided on the freehold property as, in the
opinion of the directors, the residual value (in terms of original cost) is such that any depreciation charge would
be immaterial.
1.6
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
1.7
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 13 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Stocks
Stock is valued at the lower of cost and net realisable value, after due regard for obsolete and slow moving
stocks. Net realisable value is based on selling price less anticipated costs to completion and selling costs.
1.9
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.10
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 including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
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, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, 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.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 15 -
1.11
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.
1.12
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.
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 expected to apply in the period when the liability is settled or the asset is realised. 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.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 16 -
1.16
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2019
2018
£
£
Turnover analysed by class of business
Services
8,185,058
8,024,663
2019
2018
£
£
Other significant revenue
Interest income
59,729
56,775
Grants received
196
264
2019
2018
£
£
Turnover analysed by geographical market
UK
8,185,058
8,024,663
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 17 -
4
Operating profit
2019
2018
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(196)
(264)
Depreciation of owned tangible fixed assets
62,686
73,534
Amortisation of intangible assets
-
37,594
Operating lease charges
193,150
193,738
5
Auditors' remuneration
2019
2018
Fees payable to the company's auditor and its associates:
£
£
For audit services
Audit of the company's financial statements
14,550
13,350
For services in respect of group companies
Audit of the parent's financial statements
6,228
8,226
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
Administration and support
11
9
Directors
2
2
Care home staff
327
327
340
338
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
4,751,014
4,820,598
Social security costs
286,096
257,542
Pension costs
72,363
40,883
5,109,473
5,119,023
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 18 -
7
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
-
128,545
8
Interest receivable and similar income
2019
2018
£
£
Interest income
Other interest income
59,729
56,775
9
Interest payable and similar expenses
2019
2018
£
£
Interest on bank overdrafts and loans
43,326
26,439
Other interest
934
62,496
44,260
88,935
10
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
31,900
73,600
Adjustments in respect of prior periods
(21)
19,313
Total current tax
31,879
92,913
Deferred tax
Origination and reversal of timing differences
(2,850)
(2,800)
Total tax charge
29,029
90,113
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
10
Taxation
(Continued)
- 19 -
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:
2019
2018
£
£
Profit before taxation
122,033
105,124
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
23,186
19,974
Tax effect of expenses that are not deductible in determining taxable profit
1,227
41,133
Tax effect of income not taxable in determining taxable profit
(37)
(50)
Change in unrecognised deferred tax assets
-
19,314
Adjustments in respect of prior years
(21)
-
Group relief
(2,014)
-
Deferred tax adjustments in respect of prior years
1,976
(726)
Over/Under provided this year
-
(55)
Other difference
40
-
Fixed asset differences
4,679
11,822
Deferred tax not recognised
(7)
(1,299)
Tax expense for the year
29,029
90,113
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:
2019
2018
£
£
Deferred tax arising on:
Revaluation of property
12,426
(13,676)
11
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2019 and 31 December 2019
375,513
Amortisation and impairment
At 1 January 2019 and 31 December 2019
375,513
Carrying amount
At 31 December 2019
-
At 31 December 2018
-
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 20 -
12
Tangible fixed assets
Land and buildings
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 January 2019
11,772,726
1,298,586
401,061
3,097
13,475,470
Additions
359,343
-
-
-
359,343
At 31 December 2019
12,132,069
1,298,586
401,061
3,097
13,834,813
Depreciation and impairment
At 1 January 2019
196,959
1,232,771
315,637
2,101
1,747,468
Depreciation charged in the year
24,627
16,454
21,356
249
62,686
At 31 December 2019
221,586
1,249,225
336,993
2,350
1,810,154
Carrying amount
At 31 December 2019
11,910,483
49,361
64,068
747
12,024,659
At 31 December 2018
11,575,767
65,815
85,424
996
11,728,002
The carrying value of land and buildings comprises:
2019
2018
£
£
Freehold
11,885,801
11,526,457
Long leasehold
24,683
49,310
11,910,484
11,575,767
One of the freehold properties included in the
accounts
with a carrying amount of £4,300,000 were revalued at
18 September
2015
by qualified professionals working for the company Christie & Co, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was
valued
on
a
market value based upon its existing use and present condition as a fully-equipped
operational entity. The valuation was carried out in accordance with the RICS Valuation standards.
The Directors consider this valuation to remain current.
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:
2019
2018
£
£
Cost
2,450,795
2,450,795
Accumulated depreciation
-
-
Carrying value
2,450,795
2,450,795
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 21 -
13
Fixed asset investments
2019
2018
Notes
£
£
Investments in subsidiaries
28
100
100
Unlisted investments
90,000
90,000
90,100
90,100
Movements in fixed asset investments
Shares in group undertakings
Other investments other than loans
Total
£
£
£
Cost or valuation
At 1 January 2019 & 31 December 2019
100
358,100
358,200
Impairment
At 1 January 2019 & 31 December 2019
-
268,100
268,100
Carrying amount
At 31 December 2019
100
90,000
90,100
At 31 December 2018
100
90,000
90,100
14
Stocks
2019
2018
£
£
Stock
8,323
8,218
15
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
336,231
391,984
Amounts owed by group undertakings
1,060,665
1,057,665
Amounts owed by undertakings in which the company has a participating interest
1,955
-
Other debtors
3,373,326
2,983,807
Prepayments and accrued income
65,783
92,747
4,837,960
4,526,203
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 22 -
16
Creditors: amounts falling due within one year
2019
2018
Notes
£
£
Bank loans and overdrafts
18
312,349
615,869
Payments received on account
265,515
338,412
Trade creditors
475,468
300,098
Amounts owed to group undertakings
1,886,114
1,632,735
Amounts owed to undertakings in which the company has a participating interest
1,570
-
Corporation tax
31,900
123,600
Other taxation and social security
490,717
516,100
Government grants
4,093
4,289
Other creditors
206,221
761,762
Accruals and deferred income
100,925
64,635
3,774,872
4,357,500
17
Creditors: amounts falling due after more than one year
2019
2018
Notes
£
£
Bank loans and overdrafts
18
2,144,255
718,680
Amounts included above which fall due after five years are as follows:
Payable by instalments
1,645,871
88,235
18
Loans and overdrafts
2019
2018
£
£
Bank loans
2,268,851
872,138
Bank overdrafts
187,753
462,411
2,456,604
1,334,549
Payable within one year
312,349
615,869
Payable after one year
2,144,255
718,680
Bank loan and overdrafts are secured by a charge held over the freehold land and buildings, together with a
cross guarantee and debenture with Brookfield Care Limited, Czajka Care Limited, Fairmount Limited and
Czajka Group Holdings Limited, dated 6 February 2009
.
Interest on
Bank loans
is charged at LIBOR plus 2.00%, expiring in
September 2024.
Interest on
Bank
overdrafts
is charged at standard bank terms.
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 23 -
19
Provisions for liabilities
2019
2018
Notes
£
£
Deferred tax liabilities
20
131,950
122,374
20
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2019
2018
Balances:
£
£
Accelerated capital allowances
15,950
16,300
Revaluations
118,500
106,074
Retirement benefit obligations
(2,500)
-
131,950
122,374
2019
Movements in the year:
£
Liability at 1 January 2019
122,374
Credit to profit or loss
(2,850)
Charge to other comprehensive income
12,426
Liability at 31 December 2019
131,950
The amount of the net reversal of deferred tax expected to occur next year is £9,150, relating to the reversal of existing timing differences on tangible fixed assets.
21
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
72,363
40,883
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
Included in other creditors, the amount outstanding at the reporting end date was £33,821 (2018 - £21,833).
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 24 -
22
Share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
4,075 Ordinary shares of £1 each
4,075
4,075
Each ordinary share is entitled to one vote. All dividends shall be apportioned and paid proportionately to the amounts paid up on the ordinary shares.
23
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Rent paid
2019
2018
£
£
Other related parties (common control and common trustees)
193,150
193,330
The following amounts were outstanding at the reporting end date:
2019
2018
Amounts due to related parties
£
£
Other related parties (common control and common trustees)
150,468
150,468
As the company is a wholly owned subsidiary undertaking and the financial statements, which include the
results of the subsidiaries, are publicly available, the company has taken advantage of the Financial Reporting
Standard No. 8 exemption from disclosing transactions with group companies.
24
Operating lease commitments
Lessee
At 31 December 2019, the operating leases commitments were largely related to rental agreements.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2019
2018
£
£
Within one year
165,000
36,804
Between two and five years
123,750
-
288,750
36,804
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 25 -
25
Events after the reporting date
As part of their assessment of the going concern basis of preparation, the Directors have considered the impact of the COVID-19 pandemic on the Company’s trade, workforce, supply chain and the wider economies in which it operates. See 1.2. It is the view of the Directors that the events which have significantly impacted the Company are the direct result of Government and international policy in response to the pandemic (for example restrictions on travel, trade and personal interactions) and such policy only arose after the balance sheet date. The Directors therefore consider the impact of the COVID-19 on the business to be a non-adjusting post-balance sheet event.
26
Controlling party
The company is controlled by its parent company Czajka Group Holdings Limited, a company registered in
England and Wales
.
The ultimate controlling party is Redhall Limited, a company registered in the Isle of Man. Ultimate control is vested in K Czajka.
The financial statements contain information about Czajka Properties Limited as an individual company and do not contain consolidated financial information on the group to which Czajka Properties Limited belongs.
The financial statements of Redhall Limited, which consolidate those of its subsidiary companies are available from:
Redhall Limited
Victoria House
66-70 Bingley Road
Saltaire
Shipley
West Yorkshire
BD18 4DJ
27
Directors' transactions
Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Closing balance
£
£
£
£
£
Mr Konrad Czajka - Director's loan account
2.50
2,089,917
457,652
57,551
(7,500)
2,597,620
2,089,917
457,652
57,551
(7,500)
2,597,620
CZAJKA PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 26 -
28
Subsidiaries
Details of the company's subsidiaries at 31 December 2019 are as follows:
Name of undertaking
Nature of business
Class of
% Held
shareholding
Direct
Indirect
Brookfield Care Limited
Provision of retirement communities and related property development together with a private members leisure club
Ordinary shares
100
0
The above subsidiary company is included in the consolidation of
t
he ultimate controlling party
-
Redhall Limited
.
2019-12-31
2019-01-01
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