Cedar Care Homes Limited - Limited company accounts 18.2

REGISTERED NUMBER: 03585946 (England and Wales)

Strategic Report, Report of the Directors and

Audited Financial Statements

for the Year Ended 31 July 2018

for

Cedar Care Homes Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Income Statement

6

Other Comprehensive Income

7

Balance Sheet

8

Statement of Changes in Equity

9

Cash Flow Statement

10

Notes to the Cash Flow Statement

11

Notes to the Financial Statements

12

DIRECTORS:

Mr M C Desai

Mr K C Desai

Mr A M Desai

Mrs M A Desai

SECRETARY:

Mr A M Desai

REGISTERED OFFICE:

Head Office

20 Richmond Hill

Clifton

Bristol

BS8 1BA

REGISTERED NUMBER:

03585946 (England and Wales)

AUDITORS:

Wormald & Partners

Redland House

157 Redland Road

Redland

Bristol

BS6 6YE

The directors present their strategic report for the year ended 31 July 2018.

REVIEW OF BUSINESS

The principal activity of the company was that of the owning and operating of nursing homes.

The company operates from locations in Bristol and Bath and provides General Nursing Care, Residential

Care,Dementia Care and also provides for Mental Disorder and Residential Dementia.

All of the homes operated by the company are monitored by Care Quality Commission (CQC) and ensures the company

meets the standards set by the CQC.

The results for the year and the financial position at the year end were considered satisfactory by the directors.

Despite the current economic climate, the directors expect to see continued growth in the company for the foreseeable

future both organically and through further anticipated acquisitions.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors consider there to be no significant risks and uncertainties associated with the business.

The company manages the liquidity risk by ensuring the continuity of funding and flexibility through maintaining adequate

bank reserves, with trade creditors liquidity risk managed by ensuring sufficient funds are available to meet amounts due

for payment. Trade debtors are managed in respect of credit and cash flow risk by policies concerning the customers'

credit accounts, together with the daily monitoring of amounts outstanding.

ON BEHALF OF THE BOARD:

Mr A M Desai - Secretary

24 April 2019

The directors present their report with the financial statements of the company for the year ended 31 July 2018.

DIVIDENDS

No dividends will be distributed for the year ended 31 July 2018.

DIRECTORS

The directors set out in the table below have held office during the whole of the period from 1 August 2017 to the date of

this report.

The beneficial interests of the directors holding office at 31 July 2018 in the shares of the company, according to the

register of directors' interests, were as follows:

31.7.18

1.8.17

Ordinary shares of £1 each

Mr M C Desai

10,000

10,000

Mr K C Desai

10,000

10,000

Mr A M Desai

10,000

10,000

Mrs M A Desai

-

-

These directors did not hold any non-beneficial interests in the shares of the company.

MARKET VALUE OF LAND AND BUILDINGS

In the opinion of the directors, the present market value of the company's properties exceeds that at which they are

stated in the financial statements.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements

in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors

have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve

the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company

and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required

to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the

company's transactions and disclose with reasonable accuracy at any time the financial position of the company and

enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for

safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud

and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to

have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that

the company's auditors are aware of that information.

AUDITORS

The auditors, Wormald & Partners, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr A M Desai - Secretary

24 April 2019

Opinion

We have audited the financial statements of Cedar Care Homes Limited (the 'company') for the year ended 31 July 2018

which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity,

Cash Flow Statement and Notes to the Cash Flow Statement, 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 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:

-	give a true and fair view of the state of the company's affairs as at 31 July 2018 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.

Basis for opinion

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 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.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic

Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors

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.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

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 identified material misstatements in the Strategic Report or the Report of the Directors.

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 Statement of Directors' Responsibilities set out on page three, 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 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.

Auditors' 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 a Report of the Auditors 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 www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our 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 a Report of the Auditors 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.

Neil Dando FCA (Senior Statutory Auditor)

for and on behalf of Wormald & Partners

Redland House

157 Redland Road

Redland

Bristol

BS6 6YE

24 April 2019

TURNOVER

17,218,991

15,094,416

Cost of sales

11,265,386

9,728,850

GROSS PROFIT

5,953,605

5,365,566

Administrative expenses

2,087,781

1,844,428

3,865,824

3,521,138

Other operating income

248,085

219,931

OPERATING PROFIT

4

4,113,909

3,741,069

Interest receivable and similar income

1,989

1,501

4,115,898

3,742,570

Interest payable and similar expenses

5

527,568

466,750

PROFIT BEFORE TAXATION

3,588,330

3,275,820

Tax on profit

6

724,940

142,511

PROFIT FOR THE FINANCIAL YEAR

2,863,390

3,133,309

PROFIT FOR THE YEAR

2,863,390

3,133,309

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

2,863,390

3,133,309

FIXED ASSETS

Intangible assets

7

96,667

-

Tangible assets

8

40,748,106

32,450,263

Investments

9

1,000

-

40,845,773

32,450,263

CURRENT ASSETS

Stocks

10

24,923

23,407

Debtors

11

1,198,179

975,924

Cash at bank and in hand

1,912,527

1,257,351

3,135,629

2,256,682

CREDITORS

Amounts falling due within one year

12

2,601,000

2,281,922

NET CURRENT ASSETS/(LIABILITIES)

534,629

(25,240

)

TOTAL ASSETS LESS CURRENT LIABILITIES

41,380,402

32,425,023

CREDITORS

Amounts falling due after more than one year

13

23,826,705

17,734,716

NET ASSETS

17,553,697

14,690,307

CAPITAL AND RESERVES

Called up share capital

18

30,000

30,000

Retained earnings

19

17,523,697

14,660,307

SHAREHOLDERS' FUNDS

17,553,697

14,690,307

The financial statements were approved by the Board of Directors on 24 April 2019 and were signed on its behalf by:

Mr A M Desai - Director

Mrs M A Desai - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 August 2016

30,000

11,526,998

11,556,998

Changes in equity

Total comprehensive income

-

3,133,309

3,133,309

Balance at 31 July 2017

30,000

14,660,307

14,690,307

Changes in equity

Total comprehensive income

-

2,863,390

2,863,390

Balance at 31 July 2018

30,000

17,523,697

17,553,697

Cash flows from operating activities

Cash generated from operations

1

4,833,508

4,219,676

Interest paid

(527,340

)

(457,802

)

Interest element of hire purchase payments paid

(228

)

(8,948

)

Tax paid

(530,892

)

(794,143

)

Net cash from operating activities

3,775,048

2,958,783

Cash flows from investing activities

Purchase of intangible fixed assets

(100,000

)

-

Purchase of tangible fixed assets

(8,927,670

)

(2,230,112

)

Purchase of fixed asset investments

(1,000

)

-

Interest received

1,989

1,501

Net cash from investing activities

(9,026,681

)

(2,228,611

)

Cash flows from financing activities

New loans in year

7,250,000

-

Loan repayments in year

(1,047,381

)

(678,702

)

Loans to subsidiary

(267,609

)

-

Capital repayments in year

(2,900

)

(37,620

)

Amount withdrawn by directors

(3,459

)

(11,647

)

Net cash from financing activities

5,928,651

(727,969

)

Increase in cash and cash equivalents

677,018

2,203

Cash and cash equivalents at beginning of year

2

1,235,509

1,233,306

Cash and cash equivalents at end of year

2

1,912,527

1,235,509

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2018

2017

£

£

Profit before taxation

3,588,330

3,275,820

Depreciation charges

633,160

469,089

Finance costs

527,568

466,750

Finance income

(1,989

)

(1,501

)

4,747,069

4,210,158

Increase in stocks

(1,516

)

(3,983

)

Increase in trade and other debtors

(21,289

)

(35,529

)

Increase in trade and other creditors

109,244

49,030

Cash generated from operations

4,833,508

4,219,676

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of

these Balance Sheet amounts:

Year ended 31 July 2018

31.7.18

1.8.17

£

£

Cash and cash equivalents

1,912,527

1,257,351

Bank overdrafts

-

(21,842

)

1,912,527

1,235,509

Year ended 31 July 2017

31.7.17

1.8.16

£

£

Cash and cash equivalents

1,257,351

1,233,306

Bank overdrafts

(21,842

)

-

1,235,509

1,233,306

1.	STATUTORY INFORMATION

Cedar Care Homes Limited is a private company, limited by shares , registered in England and Wales. The

company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover

Turnover represents net invoiced fees.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of care homes is being amortised evenly over

its estimated useful life of five years.

In view of the changes in Government legislation concerning the compliance standards now imposed on Care

Homes the directors believe that goodwill should now be written off over it estimated useful life of five years from

the previously adopted policy of ten years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost

less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

2% on cost

Fixtures and fittings

-

15% on reducing balance basis

Motor vehicles

-

25% on straight line basis

Computer equipment

-

33.33% on straight line basis

No depreciation is charged on freehold land or assets in the course of construction.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow

moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to

the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance

sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws

that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of

the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those

held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance

leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element

of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension

scheme are charged to profit or loss in the period to which they relate.

3.	EMPLOYEES AND DIRECTORS

2018

2017

£

£

Wages and salaries

9,183,095

7,996,167

Social security costs

794,080

678,101

Other pension costs

78,726

45,278

10,055,901

8,719,546

The average number of employees during the year was as follows:

2018

2017

Administration & maintenance

51

43

Nursing care & domestic

397

358

448

401

Please note that a significant number of the employees of Cedar Care Homes Limited are part time or part time

equivalent.

2018

2017

£

£

Directors' remuneration

100,000

100,000

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

2

2

4.	OPERATING PROFIT

The operating profit is stated after charging:

2018

2017

£

£

Hire of plant and machinery

1,744

2,078

Depreciation - owned assets

629,827

465,759

Depreciation - assets on hire purchase contracts

-

3,331

Goodwill amortisation

3,333

-

Auditors remuneration

6,000

6,000

Other taxation services

5,000

4,500

Other financial services

43,297

30,807

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

2018

2017

£

£

Bank loan interest

527,340

451,920

Other interest

-

5,882

Hire purchase

228

8,948

527,568

466,750

6.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2018

2017

£

£

Current tax:

UK corporation tax

658,297

585,892

Deferred tax

66,643

(443,381

)

Tax on profit

724,940

142,511

UK corporation tax has been charged at 19% .

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is

explained below:

2018

2017

£

£

Profit before tax

3,588,330

3,275,820

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2017 - 19%)

681,783

622,406

Effects of:

Expenses not deductible for tax purposes

10,731

10,130

Capital allowances in excess of depreciation

(34,217

)

(66,764

)

Adjustments to tax charge in respect of previous periods

-

20,120

Deferred tax

66,643

(443,381

)

Total tax charge

724,940

142,511

7.	INTANGIBLE FIXED ASSETS

Goodwill

£

COST

At 1 August 2017

901,670

Additions

100,000

At 31 July 2018

1,001,670

AMORTISATION

At 1 August 2017

901,670

Amortisation for year

3,333

At 31 July 2018

905,003

NET BOOK VALUE

At 31 July 2018

96,667

At 31 July 2017

-