Kachra Holdings Limited - Limited company accounts 20.1

KACHRA HOLDINGS LIMITED

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

Page

Company Information

1

Group Strategic Report

2

to

4

Report of the Directors

5

to

6

Report of the Independent Auditors

7

to

8

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Statement of Financial Position

11

Company Statement of Financial Position

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Statement of Cash Flows

15

Notes to the Consolidated Statement of Cash Flows

16

to

17

Notes to the Consolidated Financial Statements

18

to

33

DIRECTORS:

A Kachra

A A Kachra

A Kachra

REGISTERED OFFICE:

c/o Duncan & Toplis Limited

Enterprise Way

Pinchbeck

Spalding

Lincolnshire

PE11 3YR

BUSINESS ADDRESS:

Millennium House

102 Dukesmead Industrial Estate

Werrington

Peterborough

Cambridgeshire

PE4 6ZN

REGISTERED NUMBER:

11402733 (England and Wales)

AUDITORS:

Duncan & Toplis Limited, Statutory Auditor

Enterprise Way

Pinchbeck

Spalding

Lincolnshire

PE11 3YR

The directors present their strategic report of the company and the group for the year ended 31 March 2020.

REVIEW OF BUSINESS

The business rebranded in the year ending 31st March 2019 to Country Court. Country Court was due to acquire 3 care homes in

London within the financial year but took place a few days after. Refurbishment work is planned in the upcoming financial year

ending March 2021. During the year construction work finished on 2 large extensions in London and Wisbech. Construction work

started on two new-build developments in Peterborough (80) and Spalding (60) both with completion due in the following financial

year. Refurbishment across the group continues with planned works to improve bedroom and communal spaces on a phased

programme to ensure every home within the group secures a long-term future and is able to provide a 'fit-for-purpose'

environment for residents to live in.

The year across care-based roles continued to be a challenge, however vacancies and staff turnover are declining as the

recruitment and retention becomes embedded across the organisation. 2020/21 is expected to show further improvements in this

area.

Within the year Country Court became part of the CQC Market Oversight system due to size and spread of the business. Country

Court ranks highly in compliance when benchmarked against competitors in the oversight program.

As part of the consolidation of debt from 2018 Country Court has funds to draw to complete one additional new-build development

and two large extensions, separate to those mentioned above. These are due to start in mid-2020.

Country Court has invested heavily in IT and telecoms systems this financial year. This ranges from in-home video calling facilities to

care management systems. There are a number of projects underway and more to start in 2020 to ensure the business has the

latest available technology.

Country Court disposed of two care homes within the year, one in Sheffield and one in Lincolnshire.

PRINCIPAL RISKS AND UNCERTAINTIES

Risks around data security remain at the forefront of Country Court's strategy. With the increasing amount of technology within the

group it is imperative that the business expands its cyber-security and data protection processes.

With political uncertainty resolved in the medium term the outlook for the business and sector is very positive as at the year end.

Covid 19

Shortly before the year end the UK entered a period of lockdown due to the Covid-19 pandemic. Covid-19 planning began in

February 2020 with the expected spread of coronavirus across the UK.

The main Covid-related risk to the business lies in outbreaks. Due to the nature of the virus residents within care homes are

considered high risk and therefore an outbreak could lead to significant loss of life if not identified early enough and managed

effectively once it has been established it is in the home.

Contingency planning were in 2 key areas: supply chain and staffing. Infection control practices across the group are strong and

expected to cope with outbreaks. With adequate staffing and supply chain Country Court is well placed to manage the Covid-19

crisis.

SECTION 172(1) STATEMENT

Stakeholder Engagement

As the Board at Country Court, we have a legal responsibility under section 172 of the Companies Act 2006 to act in the way we

consider, in good faith, would be most likely to promote the company's success for the benefit of its members as a whole, and to

have regard to the long-term effect of our decisions on the company and its stakeholders. This statement addresses the ways in

which we as a Board outwork this responsibility.

How we work

Country Court was founded in 1983 by Roshan Bogha and current Chairman, Abdul Kachra. Today, Country Court operate 33 care

and nursing homes nationally, employing over 2300 staff and looking after 1500 residents, every person part of our family. Despite

having national coverage our aim is to have a strong local presence. Individual communities are what matter and we aspire to

embody this notion.

Over 36 years since our founding, Country Court is still a truly family business. Abdul's sons, Alykhan and Al-Karim, manage the day

to day running of the company, working alongside all our care teams to embrace and celebrate our values; to care for, entertain

and enable our residents to live the best life they can. We are proud of our heritage and culture, with the company philosophy "Our

family caring for yours" at the heart of every home.

We believe that care homes shouldn't be places of inactivity, they should represent the opening of a new chapter of life. The

opportunity to meet new friends, to socialise and experience an enjoyable life without unnecessary worry and with help on hand

whenever it is needed. Through the standard of our care and the homes we make for our residents, we aspire to provide the kind of

care every one of us would wish our loved ones to receive.

As we continue to grow as a business, we will remain family owned and run. We will continue to invest in our homes, offering

luxurious yet homely facilities for those who live with us, to accompany the high standards of care that every person receives.

Engaging with stakeholders

Our key stakeholders, and the ways in which we engage with them, are as follows:

Our employees

Recruitment and staff retention is a key part of any business and particularly critical in the care industry. We recognise that our staff are what makes our homes special and do everything we can to provide the best possible working environment for them. Nearly 25% of our staff have been with us 5 years or more and just over half of all our Home Managers, as well as all of our Area Operations Managers, have been promoted internally, showing the clear career progression available with us.

Some of the ways we help engage and motivate our staff include:

- Offer competitive pay investing in industry leading development and training for all staff

- providing open and welcoming environments in each of our homes

- offering clear career progression opportunities for those who want it

- taking on regular feedback from all staff departments to develop and improve our staff offerings

- Offer competitive pay rates and access to retailer discounts, reimbursement for Annual Nurse PIN registration cost and recommend a friend bonus scheme

Our customers and suppliers

Our residents come first at Country Court and everything we do as a business is to provide the best possible person-centred care for those who live with us.

Every resident who lives with us has an individual care plan, incorporating their life history, medical needs, care requirements and mental and physical wellbeing. This is updated daily via our electronic system, Nourish.

We recognise that each person is different, so it is important to take a personal approach for each resident, getting to know them and their families in order to understand their needs, preferences and wishes. This helps us take a holistic approach and deliver the best possible care, benefiting people both mentally and physically.

Our community

We are a family-run company with well-established community connections at our Head Office in Peterborough. Each of our homes are key parts of their local community, both in helping care for those who need it and establishing strong connections across a range of groups from local health care professionals to schools and interest groups. Each home regularly hosts local events and fundraisers, as well as reaching out to the vulnerable people in society through social meet ups or occasions such as 'Community Christmas Lunches'

We raise money for Charities both on a local and national level, including Alzheimer's Society, Age UK, Dementia UK and many more.

Our planet

We dispose of all waste in a responsible manner and strive to recycle where possible. We operate under strict regulations for the disposal of medical and clinical waste and follow the correct procedures for these at all times. We are regularly examining our supply chain to cut down on wastage and single use materials.

KEY PERFORMANCE INDICATORS

Country Court uses a number of KPIs to monitor the financial and non-financial performance of the business.

Care-related KPIs are strong with 32 care homes being rated as good by CQC and 1 requires improvement. This represents the

highest level of compliance of all the care groups within CQC Market Oversight.

The financial key performance indicators are a growth in turnover of 92.62%, a gross profit margin of 37.27% (2019: 36.05%) and an

operating profit margin of 16.55% (2019: 7.02%).

GREENHOUSE GAS EMISSIONS, ENERGY CONSUMPTION AND ENERGY EFFICIENCY

Due to the coronavirus pandemic it has not been feasible to acquire the relevant information to make this statement this year.

ON BEHALF OF THE BOARD:

A Kachra - Director

14 September 2020

The directors present their report with the financial statements of the company and the group for the year ended 31 March 2020.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of management of care homes.

DIVIDENDS

The directors declared a dividend on the redeemable preference shares of £1 each amounting to £16,518 (2019: £11,653). The

directors recommend that no dividends be paid on any other shares.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2019 to the date of this report.

A Kachra

A A Kachra

A Kachra

FINANCIAL INSTRUMENTS

Interest rate risk

The group finances its operations through a mixture of retained profit and bank borrowings. The group's exposure to interest rate

fluctuations on its borrowings is managed by the use of both fixed and floating facilities.

EMPLOYEES

Employee Involvement

The group keeps employees informed of group wide activities and changes through a monthly newsletter. The group holds regular

meetings with key representatives of all services whom raise issues from their respective service. All departments across the group

hold regular meetings with staff. We have regular staff surveys which has lead to the review of performance related pay and other

benefits and rewards.

Disabled Employees

Applications for employment by disabled persons are given full and fair consideration for all vacancies in accordance with their

particular aptitudes and abilities. Training, career development and promotion opportunities are available to all employees.

In the event of employees becoming disabled, the group would provide support and retraining (if necessary) to ensure their

employment with the group may continue.

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;

-	state whether applicable 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 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 ought to have taken as a director in order

to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

ON BEHALF OF THE BOARD:

A Kachra - Director

14 September 2020

Opinion

We have audited the financial statements of Kachra Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for

the year ended 31 March 2020 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income,

Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in

Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement

of Cash Flows, 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' (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 March 2020 and of the group's

loss 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.

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 March 2020 and of the group's loss 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 five, 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.

Alistair Main FCA (Senior Statutory Auditor)

for and on behalf of Duncan & Toplis Limited, Statutory Auditor

Enterprise Way

Pinchbeck

Spalding

Lincolnshire

PE11 3YR

14 September 2020

TURNOVER

3

63,851,328

33,149,101

Cost of sales

40,054,298

21,209,939

GROSS PROFIT

23,797,030

11,939,162

Administrative expenses

13,597,549

9,773,236

10,199,481

2,165,926

Other operating income

371,099

159,366

OPERATING PROFIT

5

10,570,580

2,325,292

Impairment of freehold property

6

(2,312,968

)

-

Impairment written back

6

1,224,608

-

9,482,220

2,325,292

Interest receivable and similar income

17,129

593

9,499,349

2,325,885

Interest payable and similar expenses

7

12,255,291

9,025,597

LOSS BEFORE TAXATION

(2,755,942

)

(6,699,712

)

Tax on loss

8

(7,878

)

(33,837

)

LOSS FOR THE FINANCIAL YEAR

(2,748,064

)

(6,665,875

)

Loss attributable to:

Owners of the parent

(2,726,912

)

(6,672,836

)

Non-controlling interests

(21,152

)

6,961

(2,748,064

)

(6,665,875

)

LOSS FOR THE YEAR

(2,748,064

)

(6,665,875

)

OTHER COMPREHENSIVE INCOME

Revaluation of freehold property

29,648,056

-

Income tax relating to other comprehensive income

(7,425,427

)

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

22,222,629

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(6,665,875

)

Note

Prior year adjustment

11

(614,144

)

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

18,860,421

Total comprehensive income attributable to:

Owners of the parent

18,881,573

(6,672,836

)

Non-controlling interests

(21,152

)

6,961

18,860,421

(6,665,875

)

FIXED ASSETS

Intangible assets

12

10,309,935

11,412,551

Tangible assets

13

213,630,601

152,898,883

Investments

14

-

-

223,940,536

164,311,434

CURRENT ASSETS

Stocks

15

63,862

61,341

Debtors

16

2,826,334

3,247,229

Cash at bank

12,311,383

1,388,507

15,201,579

4,697,077

CREDITORS

Amounts falling due within one year

17

23,979,006

19,657,751

NET CURRENT LIABILITIES

(8,777,427

)

(14,960,674

)

TOTAL ASSETS LESS CURRENT LIABILITIES

215,163,109

149,350,760

CREDITORS

Amounts falling due after more than one year

18

(161,181,174

)

(122,897,053

)

PROVISIONS FOR LIABILITIES

23

(17,593,732

)

(9,523,553

)

NET ASSETS

36,388,203

16,930,154

CAPITAL AND RESERVES

Called up share capital

24

23,607,682

23,607,682

Revaluation reserve

25

22,222,629

-

Retained earnings

25

(9,419,404

)

(6,675,974

)

SHAREHOLDERS' FUNDS

36,410,907

16,931,708

NON-CONTROLLING INTERESTS

26

(22,704

)

(1,554

)

TOTAL EQUITY

36,388,203

16,930,154

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on

14 September 2020 and were signed on its behalf by:

A Kachra - Director

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

-

-

Investments

14

36,031,061

36,031,061

36,031,061

36,031,061

CURRENT ASSETS

Debtors

16

1,391,353

1,312,718

CREDITORS

Amounts falling due within one year

17

12,557,482

12,478,847

NET CURRENT LIABILITIES

(11,166,129

)

(11,166,129

)

TOTAL ASSETS LESS CURRENT LIABILITIES

24,864,932

24,864,932

CAPITAL AND RESERVES

Called up share capital

24

23,607,682

23,607,682

Retained earnings

1,257,250

1,257,250

SHAREHOLDERS' FUNDS

24,864,932

24,864,932

Company's profit for the financial year

16,518

1,268,903

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 14 September 2020 and were signed on its behalf by:

A Kachra - Director

Called up

share

Retained

Revaluation

capital

earnings

reserve

£

£

£

Changes in equity

Issue of share capital

23,607,682

-

-

Dividends

-

(11,653

)

-

Total comprehensive income

-

(6,050,177

)

-

23,607,682

(6,061,830

)

-

Acquisition of non-controlling interest

-

-

-

Balance at 31 March 2019

23,607,682

(6,061,830

)

-

Prior year adjustment

-

(614,144

)

-

As restated

23,607,682

(6,675,974

)

-

Changes in equity

Dividends

-

(16,518

)

-

Total comprehensive income

-

(2,726,912

)

22,222,629

23,607,682

(9,419,404

)

22,222,629

Acquisition of non-controlling interest

-

-

-

Balance at 31 March 2020

23,607,682

(9,419,404

)

22,222,629

Non-controlling

Total

Total

interests

equity

£

£

£

Changes in equity

Issue of share capital

23,607,682

-

23,607,682

Dividends

(11,653

)

-

(11,653

)

Total comprehensive income

(6,050,177

)

6,961

(6,043,216

)

17,545,852

6,961

17,552,813

Acquisition of non-controlling interest

-

(8,515

)

(8,515

)

Balance at 31 March 2019

17,545,852

(1,554

)

17,544,298

Prior year adjustment

(614,144

)

-

(614,144

)

As restated

16,931,708

(1,554

)

16,930,154

Changes in equity

Dividends

(16,518

)

-

(16,518

)

Total comprehensive income

19,495,717

(21,152

)

19,474,565

36,410,907

(22,706

)

36,388,201

Acquisition of non-controlling interest

-

2

2

Balance at 31 March 2020

36,410,907

(22,704

)

36,388,203

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Changes in equity

Issue of share capital

23,607,682

-

23,607,682

Dividends

-

(11,653

)

(11,653

)

Total comprehensive income

-

1,268,903

1,268,903

Balance at 31 March 2019

23,607,682

1,257,250

24,864,932

Changes in equity

Dividends

-

(16,518

)

(16,518

)

Total comprehensive income

-

16,518

16,518

Balance at 31 March 2020

23,607,682

1,257,250

24,864,932

Cash flows from operating activities

Cash generated from operations

1

9,850,399

6,691,898

Interest paid

-

(39,011

)

Interest element of hire purchase payments paid

(5,302

)

(12,200

)

Net cash from operating activities

9,845,097

6,640,687

Cash flows from investing activities

Purchase of intangible fixed assets

(2,000,000

)

-

Purchase of tangible fixed assets

(26,288,067

)

(9,893,829

)

Sale of tangible fixed assets

2,498,858

63,149

Cash to acquire subsidiaries

(1,763,184

)

(21,617,681

)

Cash acquired with subsidiaries

1,770

926,708

Interest received

17,129

593

Net cash from investing activities

(27,533,494

)

(30,521,060

)

Cash flows from financing activities

New loans in year

36,224,854

120,008,966

Loan repayments in year

-

(86,351,298

)

Bank loan interest paid

(12,249,992

)

(5,234,755

)

Repayment of other loans

4,770,414

(2,840,067

)

Capital repayments in year

(117,487

)

(53,486

)

Amount withdrawn by directors

-

(260,480

)

Share issue

2

-

Equity dividend paid

(16,518

)

-

Net cash from financing activities

28,611,273

25,268,880

Increase in cash and cash equivalents

10,922,876

1,388,507

Cash and cash equivalents at beginning of year

2

1,388,507

-

Cash and cash equivalents at end of year

2

12,311,383

1,388,507