Coate Water Care Company Limited - Period Ending 2020-03-31

Registration number: 04165837

Coate Water Care Company Limited

Consolidated Financial Statements

for the Year Ended 31 March 2020

Hazlewoods LLP
Windsor House
Bayshill Road
Cheltenham
GL50 3AT

Coate Water Care Company Limited

Contents

Company Information	1
Strategic Report	2
Directors' Report	3
Statement of Directors' Responsibilities	4
Independent Auditor's Report	5 to 7
Consolidated Profit and Loss Account	8
Consolidated Balance Sheet	9
Balance Sheet	10
Consolidated Statement of Changes in Equity	11
Statement of Changes in Equity	12
Consolidated Statement of Cash Flows	13
Notes to the Financial Statements	14 to 31

Coate Water Care Company Limited

Company Information

Directors

C L Smith G F Smith J Smith N Smith

Company secretary

G F Smith

Registered office

3 Lancaster Mews South Marston Industrial Estate Swindon SN3 4YF

Bankers

National Westminster Bank PLC The Quadrangle The Promenade Cheltenham GL50 1PX

Auditors

Hazlewoods LLP Windsor House Bayshill Road Cheltenham GL50 3AT

- 1 -

Coate Water Care Company Limited

Strategic Report for the Year Ended 31 March 2020

The directors present their strategic report for the year ended 31 March 2020.

Principal activity

The principal activity of the company and the group is the provision of nursing and residential care for the elderly.

Fair review of the business

The consolidated results for the year which are set out in the group profit and loss account, show turnover for the year of £14,231,271 (2019 - £11,730,985) and an operating profit of £2,292,861 (2019 - £1,956,209). At 31 March 2020, the group had net assets of £5,539,827 (2019 - £4,155,789). The directors consider that the financial position of the group and the company at the year end is satisfactory.

Key performance indicators

Given the nature of the business, the group's directors are of the opinion that key performance indicators are important. The group uses a number of indicators to monitor and improve development and performance of the position of the business. Indicators are reviewed and altered to meet changes both in the internal and external environments. The directors do not consider the inclusion of an analysis, using key performance indicators, to be necessary to assist users of the financial statements in their understanding of the financial performance or the position of the group.

Principal risks and uncertainties

The management of the business and the execution of the group's strategy are subject to a number of risks. The key business risks and uncertainties affecting the group are considered to relate to the continued provision of adequate government funding and the ongoing compliance with current and future legislation affecting the sector.

Financial instruments

Objectives and policies

The directors constantly monitor the group's trading results and revise projections as appropriate to ensure that the group can meet its future obligations as they fall due.

Price risk, credit risk, liquidity risk and cash flow risk

The group is exposed to the usual credit and cash flow risk associated with selling on credit and manages this through credit control procedures. The nature of its financial instuments means that price and liquidity risks are minimised by the predetermination of the group funding facilities and terms.

In accordance with the Financial Reporting Council's 'Going Concern and Liquidity Risk: Guidance for Directors of UK Companies 2009', the directors of all companies are now required to provide disclosures regarding the adoption of the going concern basis of accounting.

The group has sufficient resources available and continues to trade profitably generating cash. The directors have prepared forecasts for the next 12 months that indicate that these trends will continue. The directors therefore have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future and has continued to adopt the going concern basis in preparing the financial statements.

Approved by the Board on 12 January 2021 and signed on its behalf by:

.........................................
G F Smith
Director

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Coate Water Care Company Limited

Directors' Report for the Year Ended 31 March 2020

The directors present their report and the for the year ended 31 March 2020.

Directors of the company

The directors who held office during the year were as follows:

C L Smith

G F Smith

J Smith

N Smith

Employment of disabled persons

The group’s policy is to consider the recruitment of disabled workers for those vacancies that they are able to fill. All necessary assistance with initial training courses is given. Once employed, a career plan is developed so as to ensure suitable opportunities for each disabled person. Arrangements are made, wherever possible, for retraining employees who become disabled, to enable them to perform work identified as appropriate to their aptitudes and abilities.

Employee involvement

The group encourages the involvement of employees in its management through regular departmental meetings.

Future developments

The external commercial environment is expected to remain competitive in the remainder of 2020. However, the directors remain confident that the group will improve its current level of performance in the future and will continue to trade as a going concern.

Disclosure of information to the auditor

Each director has taken the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditors

Hazlewoods LLP have expressed their willingness to continue in office.

Approved by the Board on 12 January 2021 and signed on its behalf by:

.........................................
G F Smith
Director

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Coate Water Care Company Limited

Statement of Directors' Responsibilities

The directors are responsible for preparing the Directors Report, Strategic Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

•	select suitable accounting policies and apply them consistently;
•	make judgements and accounting estimates that are reasonable and prudent;
•	state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
•	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 group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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Coate Water Care Company Limited

Independent Auditor's Report to the Members of Coate Water Care Company Limited

Opinion

We have audited the financial statements of Coate Water Care Company Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2020, which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 the parent company's affairs as at 31 March 2020 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 Auditor’s 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 or the parent 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.

However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company’s ability to continue as a going concern. For example, it is difficult to evaluate all of the potential implications of the current COVID-19 outbreak on the company’s trade, employees, customers, suppliers and the wider economy.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

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Coate Water Care Company Limited

Independent Auditor's Report to the Members of Coate Water Care Company Limited

Opinion on other matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

•	the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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 Strategic Report and the Directors' Report.

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 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the 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.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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Coate Water Care Company Limited

Independent Auditor's Report to the Members of Coate Water Care Company Limited

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 an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

......................................
Martin Howard (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor

Windsor House
Bayshill Road
Cheltenham
GL50 3AT

12 January 2021

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Coate Water Care Company Limited

Consolidated Profit and Loss Account for the Year Ended 31 March 2020

	Note	2020  £	2019  £
Turnover	3	14,231,271	11,730,985
Cost of sales		(8,814,018)	(7,200,129)
Gross profit		5,417,253	4,530,856
Administrative expenses		(3,174,620)	(2,607,085)
Other operating income	4	50,228	32,438
Operating profit	5	2,292,861	1,956,209
Other interest receivable and similar income	6	3,040	10,051
Interest payable and similar charges	7	(509,922)	(378,142)
Profit before tax		1,785,979	1,588,118
Taxation	11	(363,941)	(351,060)
Profit for the financial year		1,422,038	1,237,058

The above results were derived from continuing operations.

The group has no other comprehensive income for the year.

The notes on pages 14 to 31 form an integral part of these financial statements.
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Coate Water Care Company Limited

(Registration number: 04165837)
Consolidated Balance Sheet as at 31 March 2020

	Note	2020  £	2019  £
Fixed assets
Intangible assets	12	1,090,801	818,877
Tangible assets	13	21,747,161	15,033,125
		22,837,962	15,852,002
Current assets
Debtors	16	697,843	757,845
Cash at bank and in hand		469,580	985,041
		1,167,423	1,742,886
Creditors: Amounts falling due within one year	17	(3,004,485)	(3,345,453)
Net current liabilities		(1,837,062)	(1,602,567)
Total assets less current liabilities		21,000,900	14,249,435
Creditors: Amounts falling due after more than one year	17	(14,877,936)	(9,809,354)
Provisions for liabilities	11	(583,137)	(284,292)
Net assets		5,539,827	4,155,789
Capital and reserves
Called up share capital	19	102	102
Retained earnings		5,539,725	4,155,687
Total equity		5,539,827	4,155,789

Approved and authorised by the Board on 12 January 2021 and signed on its behalf by:
 

.........................................

G F Smith
Director

The notes on pages 14 to 31 form an integral part of these financial statements.
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Coate Water Care Company Limited

(Registration number: 04165837)
Balance Sheet as at 31 March 2020

	Note	2020  £	2019  £
Fixed assets
Tangible assets	13	4,788,111	4,906,474
Investments	14	785,069	561,058
		5,573,180	5,467,532
Current assets
Debtors	16	4,597,899	255,125
Cash at bank and in hand		388,208	910,427
		4,986,107	1,165,552
Creditors: Amounts falling due within one year	17	(1,144,388)	(1,601,612)
Net current assets/(liabilities)		3,841,719	(436,060)
Total assets less current liabilities		9,414,899	5,031,472
Creditors: Amounts falling due after more than one year	17	(6,988,924)	(2,703,809)
Provisions for liabilities	11	(27,812)	(32,749)
Net assets		2,398,163	2,294,914
Capital and reserves
Called up share capital	19	102	102
Retained earnings		2,398,061	2,294,812
Total equity		2,398,163	2,294,914

Approved and authorised by the Board on 12 January 2021 and signed on its behalf by:
 

.........................................

G F Smith
Director

The notes on pages 14 to 31 form an integral part of these financial statements.
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Coate Water Care Company Limited

Consolidated Statement of Changes in Equity for the Year Ended 31 March 2020
 

	Share capital £	Retained earnings £	Total £
At 1 April 2019	102	4,155,687	4,155,789
Profit for the year	-	1,422,038	1,422,038
Dividends	-	(38,000)	(38,000)
At 31 March 2020	102	5,539,725	5,539,827

	Share capital £	Retained earnings £	Total £
At 1 April 2018	100	3,162,629	3,162,729
Profit for the year	-	1,237,058	1,237,058
Dividends	-	(244,000)	(244,000)
New share capital subscribed	2	-	2
At 31 March 2019	102	4,155,687	4,155,789

The notes on pages 14 to 31 form an integral part of these financial statements.
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Coate Water Care Company Limited

Statement of Changes in Equity for the Year Ended 31 March 2020

	Share capital £	Retained earnings £	Total £
At 1 April 2019	102	2,294,812	2,294,914
Profit for the year	-	141,249	141,249
Dividends	-	(38,000)	(38,000)
At 31 March 2020	102	2,398,061	2,398,163

 

	Share capital £	Retained earnings £	Total £
At 1 April 2018	100	2,289,160	2,289,260
Profit for the year	-	249,652	249,652
Dividends	-	(244,000)	(244,000)
New share capital subscribed	2	-	2
At 31 March 2019	102	2,294,812	2,294,914

The notes on pages 14 to 31 form an integral part of these financial statements.
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Coate Water Care Company Limited

Consolidated Statement of Cash Flows for the Year Ended 31 March 2020

	Note	2020  £	2019  £
Cash flows from operating activities
Profit for the year		1,422,038	1,237,058
Adjustments to cash flows from non-cash items
Depreciation and amortisation	5	785,069	665,972
Finance income	6	(3,040)	(10,051)
Finance costs	7	509,922	378,142
Income tax expense	11	363,941	351,060
		3,077,930	2,622,181
Working capital adjustments
Decrease/(increase) in trade and other receivables	16	252,359	(173,898)
(Decrease)/increase in trade and other payables	17	(354,618)	247,592
Cash generated from operations		2,975,671	2,695,875
Income taxes paid	11	(498,686)	(173,483)
Net cash flow from operating activities		2,476,985	2,522,392
Cash flows from investing activities
Interest received		3,040	10,051
Acquisitions of property plant and equipment		(3,055,096)	(1,100,362)
Acquisition of subsidiary		(263,161)	-
Net cash flows from investing activities		(3,315,217)	(1,090,311)
Cash flows from financing activities
Interest paid	7	(509,922)	(378,142)
Proceeds from issue of ordinary shares, net of issue costs		-	(2)
New bank loans		6,062,730	-
Repayment of bank borrowing		(822,112)	(631,555)
Repayment of loans acquired with subsidiary		(4,356,528)	-
Repayment of other borrowing		-	(559,195)
Payments to finance lease creditors		(13,397)	(31,311)
Dividends paid		(38,000)	(244,000)
Net cash flows from financing activities		322,771	(1,844,205)
Net decrease in cash and cash equivalents		(515,461)	(412,124)
Cash and cash equivalents at 1 April		985,041	1,397,165
Cash and cash equivalents at 31 March		469,580	985,041

The notes on pages 14 to 31 form an integral part of these financial statements.
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Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

1

General information

The company is a private company limited by shares and is incorporated and domiciled in England and Wales.

The address of its registered office is:
3 Lancaster Mews
South Marston Industrial Estate
Swindon
SN3 4YF

2

Accounting policies

Statement of compliance
These financial statements were prepared in accordance with the Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Going concern

After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Parent company profit
As permitted by section 480 of the Companies Act 2006, the parent company’s statement of comprehensive income has not been included in these financial statements. The group profit for the period includes a profit of £141,249 (2019 - £249,652) dealt with in the profit and loss account of the parent company.

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Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertaking drawn up to 31 March 2020.

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

Judgements and estimation uncertainty

These financial statements do not contain any significant judgements or estimation uncertainty.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company. The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the group's activities.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

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Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Freehold buildings	1% on cost
Fixtures and fittings	25% reducing balance
Motor vehicles	25% reducing balance

Freehold land is not depreciated.

Intangible assets

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date.

Negative goodwill arising on an acquisition is recognised on the face of the balance sheet on the acquisition date and subsequently the excess up to the fair value of non-monetary assets acquired is recognised in profit or loss in the periods in which the non-monetary assets are recovered.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class	Amortisation method and rate
Goodwill	10 years straight line

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Debtors

Trade debtors are amounts due from customers for services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All debtors are repayable within one year and are hence included at the undiscounted amount of the cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables.

Creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

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Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

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Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Financial instruments

Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial assets or financial liabilities are measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Financial assets and liabilities are only offset in the statement of financial position when, and only when, there exists a legally enforcable right to set off the recognised amounts and the group intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

 Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.

For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.
 

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Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

3

Revenue

The total turnover of the group for the year has been derived from its principal activity wholly undertaken in the United Kingdom.

4

Other operating income

The analysis of the group's other operating income for the year is as follows:

	2020  £	2019  £
Rental income	18,274	20,355
Miscellaneous other operating income	31,954	12,083
	50,228	32,438

5

Operating profit

Arrived at after charging

	2020  £	2019  £
Depreciation expense	500,284	432,302
Amortisation expense	284,785	233,670
Operating lease expense - property	69,891	55,013
Operating lease expense - plant and machinery	2,124	-
Operating lease expense - other	180	360

6

Other interest receivable and similar income

	2020  £	2019  £
Bank interest receivable	3,040	10,051

7

Interest payable and similar expenses

	2020  £	2019  £
Interest on bank overdrafts and borrowings	507,248	372,560
Interest on obligations under finance leases and hire purchase contracts	2,674	5,582
	509,922	378,142

- 19 -

Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

8

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

	2020  £	2019  £
Wages and salaries	7,057,920	5,706,260
Social security costs	486,748	597,224
Pension costs, defined contribution scheme	173,759	103,882
	7,718,427	6,407,366

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

	2020  No.	2019  No.
Care staff	418	362
Administrative staff	29	29
	447	391

9

Directors' remuneration

The directors' remuneration for the year was as follows:

	2020  £	2019  £
Remuneration	32,656	32,652

10

Auditors' remuneration

	2020  £	As restated 2019  £
Audit of these financial statements	22,215	15,650
Other fees to auditors
Other non-audit services	6,000	6,000

 

- 20 -

Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

11

Taxation

Tax charged/(credited) in the income statement

	2020  £	2019  £
Current taxation
UK corporation tax	121,222	338,831
UK corporation tax adjustment to prior periods	(65,676)	(4,167)
	55,546	334,664
Deferred taxation
Arising from origination and reversal of timing differences	308,395	16,396
Tax expense in the income statement	363,941	351,060

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2019 - higher) of 19% (2019 - 19%).

The differences are reconciled below:

	2020  £	2019  £
Profit before tax	1,785,979	1,588,118
Corporation tax at standard rate	339,336	301,742
Expenses not deductible for tax purposes	27,904	9,565
Tax losses brought forward	(70,073)	-
Adjustment for prior period	(65,676)	(4,167)
Differences between depreciation and capital allowances	132,450	43,920
Total tax charge	363,941	351,060

- 21 -

Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Deferred tax

Group

Deferred tax assets and liabilities

2020	Liability £
Difference between accumulated depreciation and amortisation capital allowances	603,812
Tax losses carried forward	(20,675)
	583,137

2019	Liability £
Difference between accumulated depreciation and amortisation capital allowances	284,292
Tax losses carried forward	-
	284,292

Company

Deferred tax assets and liabilities

2020	Liability £
Difference between accumulated depreciation and amortisation and capital allowances	27,812

2019	Liability £
Difference between accumulated depreciation and amortisation and capital allowances	32,749

- 22 -

Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

12

Intangible assets

Group

	Goodwill  £
Cost
At 1 April 2019	2,793,331
Additions	556,709
At 31 March 2020	3,350,040
Amortisation
At 1 April 2019	1,974,454
Amortisation charge	284,785
At 31 March 2020	2,259,239
Carrying amount
At 31 March 2020	1,090,801
At 31 March 2019	818,877

Company

	Goodwill  £
Cost
At 1 April 2019 and 31 March 2020	402,147
Amortisation
At 1 April 2019	402,147
At 31 March 2020	402,147
Carrying amount
At 31 March 2020	-
At 31 March 2019	-

- 23 -

Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

13

Tangible assets

Group

	Land and buildings £	Furniture, fittings and equipment  £	Motor vehicles  £	Total £
Cost
At 1 April 2019	14,814,777	3,689,580	113,720	18,618,077
Additions	2,768,366	286,730	-	3,055,096
Acquired through business combinations	4,045,842	101,401	11,981	4,159,224
At 31 March 2020	21,628,985	4,077,711	125,701	25,832,397
Depreciation
At 1 April 2019	802,120	2,713,570	69,262	3,584,952
Charge for the year	156,022	317,540	26,722	500,284
At 31 March 2020	958,142	3,031,110	95,984	4,085,236
Carrying amount
At 31 March 2020	20,670,843	1,046,601	29,717	21,747,161
At 31 March 2019	14,012,657	976,010	44,458	15,033,125

Freehold land of £8,156,548 (2019 - £2,550,271) is not depreciated.

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

	2020 £	2019 £
Motor vehicles	23,883	31,845
Fixtures & fittings	26,890	35,854
	50,773	67,699

- 24 -

Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Company

	Land and buildings £	Furniture, fittings and equipment  £	Motor vehicles  £	Total £
Cost
At 1 April 2019	4,652,547	1,657,455	113,720	6,423,722
Additions	890	60,806	-	61,696
At 31 March 2020	4,653,437	1,718,261	113,720	6,485,418
Depreciation
At 1 April 2019	240,312	1,207,674	69,262	1,517,248
Charge for the year	42,805	122,513	14,741	180,059
At 31 March 2020	283,117	1,330,187	84,003	1,697,307
Carrying amount
At 31 March 2020	4,370,320	388,074	29,717	4,788,111
At 31 March 2019	4,412,235	449,781	44,458	4,906,474

Freehold land of £773,043 (2019 - £773,043) is not depreciated.

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

	2020 £	2019 £
Motor vehicles	23,883	31,845

- 25 -

Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

14

Investments

Company

	2020  £	2019  £
Investments in subsidiaries	785,069	561,058

Subsidiaries	£
Cost and carrying amount
At 1 April 2019	561,058
Additions	224,011
At 31 March 2020	785,069

Details of undertakings

Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking	Registered office	Holding	Proportion of voting rights and shares held
			2020	2019

Subsidiary undertakings
Coate Water Care Company (Church View Nursing Home) Limited		Ordinary	100%	100%
	England and Wales
Coate Water Care (Arbory) Limited	England and Wales	Ordinary	100%	0%

The principal activity of Coate Water Care Company (Church View Nursing Home) Limited is nursing care for the elderly.

The principal activity of Coate Water Care (Arbory) Limited is nursing care for the elderly.

- 26 -

Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

15

Business combinations

On 2 April 2019, Coate Water Care Company Limited acquired 100% of the issued share capital of Coate Water Care (Arbory) Limited , obtaining control.

Coate Water Care (Arbory) Limited contributed £2,111,458 revenue and £338,485 to the group's profit for the period between the date of acquisition and the balance sheet date.

The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below:
 

	Fair value 2020 £
Assets and liabilities acquired
Financial assets	68,830
Tangible assets	4,159,224
Financial liabilities	(4,521,602)
Total identifiable assets	(293,548)
Goodwill	556,709
Total consideration	263,161
Cash flow analysis:
Cash consideration	224,011
Less: cash and cash equivalent balances acquired	39,150
Net cash outflow arising on acquisition	263,161

The useful life of goodwill is 10 years.

16

Debtors

	Group		Company
	2020  £	2019  £	2020  £	2019  £
Trade debtors	311,569	538,186	62,014	75,367
Amounts owed by group undertakings	-	-	4,461,421	71,151
Other receivables	18,908	39,482	11,280	28,135
Prepayments	243,840	180,177	63,184	80,472
Corporation tax asset	123,526	-	-	-
	697,843	757,845	4,597,899	255,125

- 27 -

Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

17

Creditors

		Group		Company
	Note	2020  £	2019  £	2020  £	2019  £
Due within one year
Loans and borrowings	18	1,252,120	1,566,649	708,781	1,069,913
Trade creditors		674,821	529,419	158,705	203,336
Social security and other taxes		63,915	-	39,588	-
Outstanding defined contribution pension costs		8,753	11,428	8,753	11,428
Other payables		251,684	274,165	36,376	102,226
Accrued expenses		717,196	625,114	163,571	156,256
Corporation tax liability		28,614	338,678	28,614	58,453
Deferred income		7,382	-	-	-
		3,004,485	3,345,453	1,144,388	1,601,612
Due after one year
Loans and borrowings	18	14,877,936	9,809,354	6,988,924	2,703,809

18

Loans and borrowings

		Group		Company
		2020  £	2019  £	2020  £	2019  £
Current loans and borrowings
Bank borrowings		811,820	639,783	268,481	156,444
Finance lease liabilities		-	13,397	-	-
Other borrowings		440,300	913,469	440,300	913,469
		1,252,120	1,566,649	708,781	1,069,913

			Group		Company
			2020  £	2019  £	2020  £	2019  £
Non-current loans and borrowings
Bank borrowings			14,877,936	9,809,354	6,988,924	2,703,809

- 28 -

Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Group

Bank borrowings

The bank loans are secured by a legal charge over the freehold properties of the group. The company has seven term loans in place. The first two were loans of £4,950,000 and £2,625,000 commencing in June 2014, which are being repaid in 28 quarterly instalments. Interest is charged at 2.28% above LIBOR on these loans. The balances outstanding at 31 March 2020 were £3,315,000 and £2,037,829 (2019 - £3,570,000 and £2,175,987). The third loan was a £2,200,000 term loan commencing in September 2014 and is being repaid in 80 quarterly instalments. Interest is charged at 2.28% above LIBOR. The balance outstanding at 31 March 2020 is £1,751,790 (2019 - £1,842,897). The fourth loan of £1,100,000 is being repaid over a 5 year term with interest charged at 3% above Base Rate, and with a balance at 31 March 2020 of £1,062,732. The fifth loan of £300,000 is being repaid of 60 months with interest charged at 6.95, and with a balance at 31 March 2020 of £265,000. The sixth loan of £4,700,000 is being repaid over 60 months with interest charged at 2.27% above Base Rate, and with a balance at 31 March 2020 of £4,593,439. The seventh loan of £3,640,000 is being repaid over 48 months with interest charged at 2.75% above LIBOR, and with a balance at 31 March 2020 of £2,706,266.

19

Share capital

Allotted, called up and fully paid shares

	2020		2019
	No.	£	No.	£
Ordinary A shares of £1 each	44	44	44	44
Ordinary B shares of £1 each	44	44	44	44
Ordinary C shares of £1 each	6	6	6	6
Ordinary D shares of £1 each	6	6	6	6
Ordinary E shares of £1 each	1	1	1	1
Ordinary F shares of £1 each	1	1	1	1
	102	102	102	102

Rights, preferences and restrictions

The different classes of shares rank pari passu in all respects, other than dividend rights.

- 29 -

Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

20

Obligations under leases and hire purchase contracts

Group

Finance leases

The total of future minimum lease payments is as follows:

	2020 £	2019 £
Not later than one year	-	13,397
	-	13,397

Operating leases

The total of future minimum lease payments is as follows:

	2020 £	2019 £
Not later than one year	37,690	61,020
Later than one year and not later than five years	46,687	19,473
	84,377	80,493

Company

Operating leases

The total of future minimum lease payments is as follows:

	2020  £	2019  £
Not later than one year	37,690	61,020
Later than one year and not later than five years	46,687	19,473
	84,377	80,493

21

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £173,759 (2019 - £103,882).

Contributions totalling £8,753 (2019 - £11,428) were payable to the scheme at the end of the year and are included in creditors.

- 30 -

Coate Water Care Company Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

22

Related party transactions

Group and company

At 31 March 2020, the group owed £440,300 (2019 - £902,034) to Mr C L and Mrs G F Smith in the form of a directors loan account. There are no fixed repayment terms.

During the year, dividends of £148,000 were paid to the directors. There was also an adjustment made to the prior year dividends to directors of £110,000, reducing the prior year dividends to directors to £134,000.

Company

Summary of transactions with key management

Key management personnel are considered to be the directors of the company and key management personnel compensation is disclosed in note 9 to the financial statements.

23

Control

The group is controlled by Mr C and Mrs G Smith.

- 31 -