Cedar Care Homes Limited - Limited company accounts 20.1

REGISTERED NUMBER: 03585946 (England and Wales)

Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 July 2019

for

Cedar Care Homes Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Income Statement

8

Consolidated Other Comprehensive Income

9

Consolidated Balance Sheet

10

Company Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Cash Flow Statement

14

Notes to the Consolidated Cash Flow Statement

15

Notes to the Consolidated Financial Statements

16

DIRECTORS:

Mr M C Desai

Mr K C Desai

Mr A M Desai

Mrs M A Desai

SECRETARY:

Mr A M Desai

REGISTERED OFFICE:

Mortimer House

Clifton Down Road

Bristol

BS8 4AE

REGISTERED NUMBER:

03585946 (England and Wales)

AUDITORS:

Wormald & Partners

Chartered Accountants (ICAEW)

Redland House

157 Redland Road

Redland

Bristol

BS6 6YE

The directors present their strategic report of the company and the group for the year ended 31 July 2019.

REVIEW OF BUSINESS

The principal activity of the group was that of owning, operating and construction of nursing homes.

The group owns and operates several care homes across Bath (Larkhall Springs, The Orangery, Winfield Lodge and

Woodside,) and Bristol (Gracefields, Oakhill Mansions, Oakhill Lodge, Saville Manor, and Waltham House).

All the homes provide accommodation for adults over 65 years who require nursing or personal care, including in some

cases, care for residents living dementia and mental disorder.

The group has made a profit during the year with revenue growth continuing to be supported by an increase in occupancy

and average fees together with a full year of operation of the Winfield Lodge home acquired in June 2018. The average fees

at each home increased due to increases in private fees and increase in Funded Nursing Care rates paid to the company for

delivering nursing services. The fee uplift from local authorities continued to be lower than inflation and to mitigate this, the

group continues to focus on improving the percentage of privately funded residents.

The group continues to invest in maintaining and improving the properties and fixtures and fittings of all the nursing homes

to provide a comfortable, safe and happy environment for the residents. The directors regard this investment as being

integral to the continuing success of the business and ensure the company provides its residents with a home which they

can enjoy. The group places a strong importance on investing in the development and training of its staff to ensure that it

meets all the statutory and regulatory requirements as well as providing a high level of service to their residents.

All the nursing homes are monitored by Care Quality Commission (CQC) and endeavour to meet all the standards as

required by the CQC.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties facing the group relate to the impact of potential increased competition, and the

possible impact of future government legislation. The directors ensure they are up to date with legislation and monitor the

impact on the group of new care homes opening in the local area. The main risks are:

1. Changes in agreements with local councils. A significant proportion of revenue is derived from public sources. Cuts in

public spending will inhibit the company's ability to continue to provide services to disadvantaged adults.

2. It is not yet known whether changes to the immigration regime post Brexit will have an impact on

3. the ability to recruit staff from outside the U.K.

4. High standards of hygiene and infection control are inherent in the group's operations and have continued to be applied to

manage the immediate risk posed by the outbreak of the virus Covid-19. There has been a temporary spike in costs and

reduction in occupancy as a result of measures taken to contain the virus. However additional government funding for the

sector is also being actively pursued which may mitigate some of these costs. The longer term impact on operating costs

and revenue is not fully known at the time of writing.

Recruiting staff remains challenging but changes to the rate of pay and pay structure are having a positive effect.

There has been no indication that the local authorities and social services will change agreements considerably, thus these

sources are not threatened and an ageing population supports an increased demand for the services provided by the group.

The group has a risk management process in place, which is designed to identify, manage and mitigate business risk. It also

has a dedicated Human Resource Department, an Operations head who ensures the recommendations by CQC are

implemented and maintain highest level of care provisions to residents at all times and the quality of care is underpinned by

a robust and comprehensive operating manual to guide local managers and staff.

The Chief Operating Officer and Directors have been involved in the management of the care homes for many years and

have built up a considerable body of expertise. They are supported by trained nurses who have considerable experience in

looking after the residents and their needs at the nursing homes. The most fundamental risk faced by the company is poor

delivery of care which could impact on compliance with the Statutory Regulator and reputation and subsequently impact on

occupancy and profitability. The group recognises this and has invested heavily in both their management team,

management processes and quality assurance team which underpins the group's activities.

FINANCIAL INSTRUMENTS

The group's principal financial instruments comprise of bank balances, bank borrowings, trade creditors and trade debtors.

The main purpose of these instruments is to raise funds for and to finance the group's operations. In respect of bank

balances the liquidity risk is managed by maintaining a balance between the continuity of funding and optimization of

interest of funds placed in deposit accounts. In addition major capital investments such as acquisition and redevelopment of

sites is usually funded by bank lending secured on the relevant properties, so as not to impinge on operational cashflow.

The group manages the liquidity risk by ensuring there are sufficient funds to meet the payments. Trade creditors liquidity

risk is managed by ensuring that sufficient funds are available to make the payments as and when they fall due. Trade

debtors and cash flow are managed through credit processes to monitor and pursue overdue receipts from local councils

and private residents

DEVELOPMENT AND PERFORMANCE

The group's profit on ordinary activities after taxation was £3,032,825 (2018: £2,859,130). Turnover for the year was

£23,714,496 compared to £17,159,501 in the previous year. The results for the year are set out on page 8. The company's

net current assets are £2,139,462 (2018:£520,292) and total shareholders funds were £20,582,262 (2018:£ £17,549,437)

respectively as at the balance sheet date.

The company has not declared dividends during the year (2018: £Nil).

Key performance indicators

Key Performance Indicators ('KPI') of the business are earnings before interest and tax, return on capital employed, average

occupancy of care homes, customer satisfaction and CQC compliance.

Turnover for the year was £23,714,496 compared to £17,159,501 in the previous year.

Earnings before interest and tax was £4,209,990 compared to £4,113,723 in the previous year.

The Return on capital employed for the year was 9.6% compared to 9.7% in the previous year.

Average room occupancy for the year was 89% compared to 86% in the previous year.

EMPLOYEE PRACTICES AND OTHER INFORMATION

An equal opportunities statement and policies to ensure employees are treated with dignity, respect, and equality,

regardless of gender, race, nationality, ethnic identity, national origin, religious beliefs, disability, age, marital status, family

circumstance, sexual orientation or trade union activity are embedded in the Group's operations manual which governs all

aspects of operations including recruitment, training, promotion and discipline of staff.

The group runs regular forums with the representatives of staff both to inform employees about developments in the

organisation and changes in processes and also to gather feedback on the group's operations.

Other information and explanations

Whilst the current market conditions in the care home sector are challenging, the directors however are optimistic that there

will be continued and sustained growth in the group for the foreseeable future

ON BEHALF OF THE BOARD:

Mr A M Desai - Director

17 July 2020

The directors present their report with the financial statements of the company and the group for the year ended

31 July 2019.

DIVIDENDS

No dividends will be distributed for the year ended 31 July 2019.

DIRECTORS

The directors set out in the table below have held office during the whole of the period from 1 August 2018 to the date of this

report.

The board are sad to announce the passing of Mr KC Desai on 2 May 2020. Mr KC Desai was a founding director and

shareholder of the company and served the company from its incorporation. He will be sadly missed by all concerned at

Cedar Care Homes Limited.

The beneficial interests of the directors holding office at 31 July 2019 in the shares of the company, according to the register

of directors' interests, were as follows:

31.7.19

1.8.18

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.

The board are sad to announce the passing of Mr KC Desai on 2 May 2020. Mr KC Desai was a founding director and

shareholder of the company and served the company from its incorporation. He will be sadly missed by all concerned at

Cedar Care Homes Limited.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group 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

the group and of the profit or loss of the group 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

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

the group 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 the group 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 group'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

group'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 - Director

17 July 2020

Opinion

We have audited the financial statements of Cedar Care Homes Limited (the 'parent company') and its subsidiaries (the

'group') for the year ended 31 July 2019 which comprise the Consolidated Income Statement, Consolidated Other

Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in

Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated 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 group's and of the parent company affairs as at 31 July 2019 and of the group's 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 group 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 group'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 Group

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.

Opinions 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 Group 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 Group 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 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 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company 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 four, 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 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

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

Chartered Accountants (ICAEW)

Redland House

157 Redland Road

Redland

Bristol

BS6 6YE

17 July 2020

TURNOVER

23,714,496

17,159,501

Cost of sales

17,162,902

11,218,019

GROSS PROFIT

6,551,594

5,941,482

Administrative expenses

2,620,596

2,077,833

3,930,998

3,863,649

Other operating income

268,800

248,085

OPERATING PROFIT

4

4,199,798

4,111,734

Interest receivable and similar income

10,192

1,989

4,209,990

4,113,723

Interest payable and similar expenses

5

651,304

527,568

PROFIT BEFORE TAXATION

3,558,686

3,586,155

Tax on profit

6

525,861

727,025

PROFIT FOR THE FINANCIAL YEAR

3,032,825

2,859,130

Profit attributable to:

Owners of the parent

3,032,825

2,859,130

PROFIT FOR THE YEAR

3,032,825

2,859,130

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

3,032,825

2,859,130

Total comprehensive income attributable to:

Owners of the parent

3,032,825

2,859,130

FIXED ASSETS

Intangible assets

8

76,667

96,667

Tangible assets

9

40,953,471

40,759,183

Investments

10

-

-

41,030,138

40,855,850

CURRENT ASSETS

Stocks

11

92,476

84,413

Debtors

12

2,166,018

1,326,592

Cash at bank and in hand

3,453,171

1,944,192

5,711,665

3,355,197

CREDITORS

Amounts falling due within one year

13

3,572,203

2,834,905

NET CURRENT ASSETS

2,139,462

520,292

TOTAL ASSETS LESS CURRENT LIABILITIES

43,169,600

41,376,142

CREDITORS

Amounts falling due after more than one year

14

22,587,338

23,826,705

NET ASSETS

20,582,262

17,549,437

CAPITAL AND RESERVES

Called up share capital

18

30,000

30,000

Retained earnings

19

20,552,262

17,519,437

SHAREHOLDERS' FUNDS

20,582,262

17,549,437

The financial statements were approved by the Board of Directors and authorised for issue on 17 July 2020 and were signed

on its behalf by:

Mr A M Desai - Director

FIXED ASSETS

Intangible assets

8

76,667

96,667

Tangible assets

9

40,943,306

40,748,106

Investments

10

1,000

1,000

41,020,973

40,845,773

CURRENT ASSETS

Stocks

11

29,265

24,923

Debtors

12

1,882,389

1,198,179

Cash at bank and in hand

3,235,946

1,912,527

5,147,600

3,135,629

CREDITORS

Amounts falling due within one year

13

3,035,500

2,601,000

NET CURRENT ASSETS

2,112,100

534,629

TOTAL ASSETS LESS CURRENT LIABILITIES

43,133,073

41,380,402

CREDITORS

Amounts falling due after more than one year

14

22,587,338

23,826,705

NET ASSETS

20,545,735

17,553,697

CAPITAL AND RESERVES

Called up share capital

18

30,000

30,000

Retained earnings

19

20,515,735

17,523,697

SHAREHOLDERS' FUNDS

20,545,735

17,553,697

Company's profit for the financial year

2,992,038

2,863,390

The financial statements were approved by the Board of Directors and authorised for issue on 17 July 2020 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 2017

30,000

14,660,307

14,690,307

Changes in equity

Total comprehensive income

-

2,859,130

2,859,130

Balance at 31 July 2018

30,000

17,519,437

17,549,437

Changes in equity

Total comprehensive income

-

3,032,825

3,032,825

Balance at 31 July 2019

30,000

20,552,262

20,582,262

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 August 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

Changes in equity

Total comprehensive income

-

2,992,038

2,992,038

Balance at 31 July 2019

30,000

20,515,735

20,545,735

Cash flows from operating activities

Cash generated from operations

1

5,015,007

4,609,816

Interest paid

(651,304

)

(527,340

)

Interest element of hire purchase or finance lease rental payments paid

-

(228

)

Tax paid

(810,724

)

(530,892

)

Net cash from operating activities

3,552,979

3,551,356

Cash flows from investing activities

Purchase of intangible fixed assets

-

(100,000

)

Purchase of tangible fixed assets

(854,186

)

(8,940,922

)

Interest received

10,192

1,989

Net cash from investing activities

(843,994

)

(9,038,933

)

Cash flows from financing activities

New loans in year

-

7,250,000

Loan repayments in year

(1,181,108

)

(1,047,381

)

Capital repayments in year

-

(2,900

)

Amount withdrawn by directors

(18,898

)

(3,459

)

Net cash from financing activities

(1,200,006

)

6,196,260

Increase in cash and cash equivalents

1,508,979

708,683

Cash and cash equivalents at beginning of year

2

1,944,192

1,235,509

Cash and cash equivalents at end of year

2

3,453,171

1,944,192

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

2019

2018

£

£

Profit before taxation

3,558,686

3,586,155

Depreciation charges

664,749

635,335

Loss on disposal of fixed assets

15,150

-

Finance costs

651,304

527,568

Finance income

(10,192

)

(1,989

)

4,879,697

4,747,069

Increase in stocks

(8,063

)

(61,006

)

Increase in trade and other debtors

(771,639

)

(419,396

)

Increase in trade and other creditors

915,012

343,149

Cash generated from operations

5,015,007

4,609,816

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 2019

31.7.19

1.8.18

£

£

Cash and cash equivalents

3,453,171

1,944,192

Year ended 31 July 2018

31.7.18

1.8.17

£

£

Cash and cash equivalents

1,944,192

1,257,351

Bank overdrafts

-

(21,842

)

1,944,192

1,235,509

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 General 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 is measured at the fair value of the consideration received or receivable, excluding discounts, rebates,

value added tax and other sales taxes.

Goodwill

Goodwill, being the amount paid in connection with 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 standard now imposed on Care Homes

the directors believe that goodwill should now be written off over its 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 each asset over its estimated useful life.

Freehold property

-

2% on cost

Fixtures and fittings

-

15% on reducing balance basis

Motor vehicles

-

25% on straight line basis and 25% on reducing balance basis

Computer equipment

-

33.33% on straight line basis

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 Consolidated 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.