ST MAGNUS HOUSE LIMITED - Limited company accounts 20.1

REGISTERED NUMBER: 06495501 (England and Wales)

Strategic Report, Report of the Directors and

Audited Financial Statements for the Year Ended 31 December 2019

for

ST MAGNUS HOUSE 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:

R J F WHITE

J M RANDALL

P JEFFREY

REGISTERED OFFICE:

ROSEMARY PARK NURSING HOME

MARLEY COMMON

MARLEY LANE

HASLEMERE

Surrey

GU27 3PX

REGISTERED NUMBER:

06495501 (England and Wales)

AUDITORS:

AUDIT NETWORK LIMITED

Chartered Accountants & Statutory Auditors

23 Mountside

Stanmore

Middlesex

HA7 2DS

The directors present their strategic report for the year ended 31 December 2019.

REVIEW OF BUSINESS

The directors consider that the results for the year and the financial position at the end of the year to be satisfactory.

The company maintained near full occupancy levels and achieved some fee increases. Additionally staff costs were kept under control, resulting in improved profitability.

The company expects to make savings in the overheads in the coming year and improve profitability further.

PRINCIPAL RISKS AND UNCERTAINTIES

Majority of the times the company enjoys a healthy waiting list for beds that become vacant but maintaining that in the face of competition in the market place and reducing the lead time is always challenging.

Increasing staff costs and the resistance from health and local authorities to increases in bed fees are the principal risks facing the company.

BUSINESS PERFORMANCE

The directors consider that the key financial performance indicators that communicate the financial performance and strength of the company as a whole are turnover, staff costs, profit before tax, total shareholders' funds and net cash inflow. These were as follows:

- Turnover £8,440,625 (2018: £7,142,905)

- Staff costs £5,446,975 (2018: £5,437,553)

- Profit/(Loss) before tax £500,755 (2018: £(321,230))

- Total shareholders' funds £3,895,569 (2018: £3,467,224)

- Net cash (outflow) £(1,127,904 ) (2018: £(1,431,182))

FINANCIAL INSTRUMENTS

The company has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities which are for the most part conducted in sterling.

ON BEHALF OF THE BOARD:

J M RANDALL - Director

6 November 2020

The directors present their report with the financial statements of the company for the year ended 31 December 2019.

DIVIDENDS

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

DIRECTORS

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

R J F WHITE

J M RANDALL

P JEFFREY

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, AUDIT NETWORK LIMITED, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J M RANDALL - Director

6 November 2020

Opinion

We have audited the financial statements of ST MAGNUS HOUSE LIMITED (the 'company') for the year ended 31 December 2019 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 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.

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.

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 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.

KIAN DADFARMA (Senior Statutory Auditor)

for and on behalf of AUDIT NETWORK LIMITED

Chartered Accountants & Statutory Auditors

23 Mountside

Stanmore

Middlesex

HA7 2DS

6 November 2020

TURNOVER

8,440,625

7,142,905

Cost of sales

3,852,376

3,770,686

GROSS PROFIT

4,588,249

3,372,219

Administrative expenses

4,172,234

3,782,223

416,015

(410,004

)

Other operating income

54,970

48,874

OPERATING PROFIT/(LOSS)

4

470,985

(361,130

)

Interest receivable and similar income

30,982

42,348

501,967

(318,782

)

Interest payable and similar expenses

5

1,212

2,448

PROFIT/(LOSS) BEFORE TAXATION

500,755

(321,230

)

Tax on profit/(loss)

6

72,410

(1,262

)

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

428,345

(319,968

)

PROFIT/(LOSS) FOR THE YEAR

428,345

(319,968

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

428,345

(319,968

)

FIXED ASSETS

Tangible assets

7

487,492

522,556

CURRENT ASSETS

Debtors

8

3,144,533

3,775,535

Cash at bank and in hand

1,607,992

2,735,896

4,752,525

6,511,431

CREDITORS

Amounts falling due within one year

9

1,324,573

3,546,383

NET CURRENT ASSETS

3,427,952

2,965,048

TOTAL ASSETS LESS CURRENT LIABILITIES

3,915,444

3,487,604

PROVISIONS FOR LIABILITIES

10

19,875

20,380

NET ASSETS

3,895,569

3,467,224

CAPITAL AND RESERVES

Called up share capital

11

1,000,000

1,000,000

Retained earnings

12

2,895,569

2,467,224

SHAREHOLDERS' FUNDS

3,895,569

3,467,224

The financial statements were approved by the Board of Directors and authorised for issue on 6 November 2020 and were signed on its behalf by:

J M RANDALL - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2018

1,000,000

2,787,192

3,787,192

Changes in equity

Total comprehensive income

-

(319,968

)

(319,968

)

Balance at 31 December 2018

1,000,000

2,467,224

3,467,224

Changes in equity

Total comprehensive income

-

428,345

428,345

Balance at 31 December 2019

1,000,000

2,895,569

3,895,569

Cash flows from operating activities

Cash generated from operations

1

(488,377

)

777,818

Interest paid

(1,212

)

(2,448

)

Tax paid

(652,432

)

(238,820

)

Net cash from operating activities

(1,142,021

)

536,550

Cash flows from investing activities

Purchase of tangible fixed assets

(16,865

)

(10,080

)

Interest received

30,982

42,348

Net cash from investing activities

14,117

32,268

Cash flows from financing activities

Amount withdrawn by directors

-

(2,000,000

)

Net cash from financing activities

-

(2,000,000

)

Decrease in cash and cash equivalents

(1,127,904

)

(1,431,182

)

Cash and cash equivalents at beginning of year

2

2,735,896

4,167,078

Cash and cash equivalents at end of year

2

1,607,992

2,735,896

1.	RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.12.19

31.12.18

£

£

Profit/(loss) before taxation

500,755

(321,230

)

Depreciation charges

51,929

58,661

Finance costs

1,212

2,448

Finance income

(30,982

)

(42,348

)

522,914

(302,469

)

Decrease in trade and other debtors

631,002

53,200

(Decrease)/increase in trade and other creditors

(1,642,293

)

1,027,087

Cash generated from operations

(488,377

)

777,818

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 December 2019

31.12.19

1.1.19

£

£

Cash and cash equivalents

1,607,992

2,735,896

Year ended 31 December 2018

31.12.18

1.1.18

£

£

Cash and cash equivalents

2,735,896

4,167,078

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.19

Cash flow

At 31.12.19

£

£

£

Net cash

Cash at bank and in hand

2,735,896

(1,127,904

)

1,607,992

2,735,896

(1,127,904

)

1,607,992

Total

2,735,896

(1,127,904

)

1,607,992

1.	STATUTORY INFORMATION

ST MAGNUS HOUSE 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.

Significant judgements and estimates

Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgments and estimates have been made include:

- Useful life of fixed assets and depreciation rates

- Fair value of assets

- Recoverability of debts

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts and rebates. Care fees are recognised in the period in which they are receivable.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Fixtures and fittings

-

15% on reducing balance

Motor vehicles

-

25% on reducing balance

Financial instruments

Financial instruments are recognised at fair value with any gains or losses being reported in profit or loss. Outstanding derivatives at reporting date are included under the appropriate format heading depending on the nature of the derivative.

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.

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

31.12.19

31.12.18

£

£

Wages and salaries

4,922,710

4,930,274

Social security costs

460,048

463,006

Other pension costs

64,217

44,273

5,446,975

5,437,553

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

31.12.19

31.12.18

Administration

10

7

Nursing

110

121

120

128

31.12.19

31.12.18

£

£

Directors' remuneration

-

-

4.	OPERATING PROFIT/(LOSS)

The operating profit (2018 - operating loss) is stated after charging:

31.12.19

31.12.18

£

£

Depreciation - owned assets

51,929

58,661

Auditors remuneration

3,600

3,600

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.12.19

31.12.18

£

£

Other interest

1,212

2,448

6.

TAXATION

Analysis of the tax charge/(credit)

The tax charge/(credit) on the profit for the year was as follows:

31.12.19

31.12.18

£

£

Current tax:

UK corporation tax

72,915

-

Deferred tax:

Accelerated capital allowances

(505

)

(1,262

)

Tax on profit/(loss)

72,410

(1,262

)

Reconciliation of total tax charge/(credit) included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

31.12.19

31.12.18

£

£

Profit/(loss) before tax

500,755

(321,230

)

Profit/(loss) multiplied by the standard rate of corporation tax in the UK of 19% (2018 - 19%)

95,143

(61,034

)

Effects of:

Depreciation in excess of capital allowances

2,902

1,410

Group relief

(25,130

)

59,624

Deferred tax

(505

)

(1,262

)

Total tax charge/(credit)

72,410

(1,262

)

7.	TANGIBLE FIXED ASSETS

Fixtures

Freehold

and

Motor

property

fittings

vehicles

Totals

£

£

£

£

COST

At 1 January 2019

202,494

775,039

44,879

1,022,412

Additions

-

16,865

-

16,865

At 31 December 2019

202,494

791,904

44,879

1,039,277

DEPRECIATION

At 1 January 2019

-

468,874

30,982

499,856

Charge for year

-

48,455

3,474

51,929

At 31 December 2019

-

517,329

34,456

551,785

NET BOOK VALUE

At 31 December 2019

202,494

274,575

10,423

487,492

At 31 December 2018

202,494

306,165

13,897

522,556

Included in cost of land and buildings is freehold land of £ 202,494 (2018 - £ 202,494 ) which is not depreciated.

8.

DEBTORS

31.12.19

31.12.18

£

£

Amounts falling due within one year:

Trade debtors

483,814

1,059,042

Other debtors

-

56,918

Prepayments

10,719

9,575

494,533

1,125,535

31.12.19

31.12.18

£

£

Amounts falling due after more than one year:

Directors' loan accounts

2,000,000

2,000,000

Tax

650,000

650,000

2,650,000

2,650,000

Aggregate amounts

3,144,533

3,775,535

9.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.19

31.12.18

£

£

Trade creditors

762,085

688,492

Amounts owed to group undertakings

238,860

1,981,841

Tax

72,915

652,432

Social security and other taxes

122,287

112,965

Pension contributions

13,161

8,353

Accrued expenses

115,265

102,300

1,324,573

3,546,383

10.	PROVISIONS FOR LIABILITIES

31.12.19

31.12.18

£

£

Deferred tax

19,875

20,380

Deferred

tax

£

Balance at 1 January 2019

20,380

Accelerated capital allowances

(505

)

Balance at 31 December 2019

19,875

11.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.12.19

31.12.18

value:

£

£

1,000,000

Ordinary

£1

1,000,000

1,000,000

12.

RESERVES

Retained

earnings

£

At 1 January 2019

2,467,224

Profit for the year

428,345

At 31 December 2019

2,895,569

13.	ULTIMATE PARENT COMPANY

Oldercare (Haslemere) Limited is regarded by the directors as being the company's ultimate parent company.

14.	DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

The following advances and credits to a director subsisted during the years ended 31 December 2019 and 31 December 2018:

31.12.19

31.12.18

£

£

R J F WHITE

Balance outstanding at start of year

2,000,000

-

Amounts advanced

-

2,000,000

Amounts repaid

-

-

Amounts written off

-

-

Amounts waived

-

-

Balance outstanding at end of year

-

2,000,000

Loan to R White is secured on a property and repayable on demand. The rate of interest is 1.5% per annum.