MCB Investments Limited - Period Ending 2020-03-31

Registration number: 06167948

MCB Investments Limited

Annual Report and Consolidated Financial Statements

for the Year Ended 31 March 2020

MCB Investments Limited

Contents

Company Information	1
Strategic Report	2
Director's Report	3
Statement of Director's Responsibilities	4
Independent Auditor's Report	5 to 6
Consolidated Profit and Loss Account	7
Consolidated Balance Sheet	8
Balance Sheet	9
Consolidated Statement of Changes in Equity	10
Statement of Changes in Equity	11
Consolidated Statement of Cash Flows	12
Notes to the Financial Statements	13 to 26

MCB Investments Limited

Company Information

Director

M C Bila

Company secretary

S White

Registered office

Mendip Court Bath Road Wells Somerset BA5 3DG

Bankers

Barclays plc 4th Floor Bridgewater House Counterslip Finzels Reach Bristol BS1 6BX

Auditors

Hazlewoods LLP Windsor House Bayshill Road Cheltenham GL50 3AT

- 1 -

MCB Investments Limited

Strategic Report for the Year Ended 31 March 2020

The director presents her strategic report for the year ended 31 March 2020.

Principal activity

The principal activity of the company is that of a dormant holding company. The principal activity of the group is the operation of nursing and residential homes.

Fair review of the business

The results for the year, which are set out in the consolidated profit and loss account, show an operating profit of £963,805 (2019 - £1,181,779). At 31 March 2020, the group had fixed assets valued in the financial statements at cost less amortisation/depreciation amounting to £7,608,302 (2019 - £7,797,517). The director considers the result for the year and the financial position of the group and the company at the year end to be satisfactory.

Given the nature of the business, the group's director is of the opinion that key performance indicators are important. The group uses a number indicators to monitor and improve development, performance or the position of the business. Indicators are reviewed and altered to meet changes both in the internal and external environments. The director does 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 position of the group.

Financial instruments

Objectives and policies

The company does not actively use financial instruments as part of its financial risk management. The nature of its financial instruments means that they are subject to price risk, as detailed in note 18 to the financial statements.

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

It is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages this through credit control procedures.

The company has sufficient financial resources available and is expected to continue to trade profitably generating cash. The director, therefore, has a reasonable expectation that the company 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.

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 servicing of debt as it falls due.

Approved by the director on 12 March 2021

.........................................
M C Bila
Director

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MCB Investments Limited

Director's Report for the Year Ended 31 March 2020

The director presents her report and the for the year ended 31 March 2020.

Director of the company

The director who held office during the year was as follows:

M C Bila

Future developments

The external environment is expected to remain competitive in 2021, however the director remains confident that the company will continue to improve its level performance in the future.

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 director on 12 March 2021

.........................................
M C Bila
Director

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MCB Investments Limited

Statement of Director's Responsibilities

The directors are responsible for preparing the Director's 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.

- 4 -

MCB Investments Limited

Independent Auditor's Report to the Members of MCB Investments Limited

Opinion

We have audited the financial statements of MCB Investments 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.

Other information

The director is 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.

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 Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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MCB Investments Limited

Independent Auditor's Report to the Members of MCB Investments Limited

•	the Strategic Report and Director's 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 Director's 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 the director

As explained more fully in the Statement of Director's Responsibilities set out on page 4, the director is 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 director determines 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 director is 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 director either intends 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.

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.

......................................
Simon Worsley (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor

Windsor House
Bayshill Road
Cheltenham
GL50 3AT

12 March 2021

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MCB Investments Limited

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

	Note	2020  £	2019  £
Turnover	3	7,479,609	7,504,024
Cost of sales		(4,754,808)	(4,460,042)
Gross profit		2,724,801	3,043,982
Administrative expenses		(1,820,524)	(1,916,619)
Other operating income	4	59,528	54,416
Operating profit	5	963,805	1,181,779
Interest payable and similar charges	6	(161,154)	(155,407)
Profit before tax		802,651	1,026,372
Taxation	10	(191,951)	(201,099)
Profit for the financial year		610,700	825,273

The above results were derived from continuing operations.

The group has no other comprehensive income for the year.

The notes on pages 13 to 26 form an integral part of these financial statements.
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MCB Investments Limited

(Registration number: 06167948)
Consolidated Balance Sheet as at 31 March 2020

	Note	2020  £	2019  £
Fixed assets
Intangible assets	11	597,314	717,532
Tangible assets	12	5,510,988	5,579,985
Investment property	13	1,500,000	1,500,000
		7,608,302	7,797,517
Current assets
Stocks	15	8,725	8,725
Debtors	16	2,033,301	1,232,190
Cash at bank and in hand		1,868,481	2,179,893
		3,910,507	3,420,808
Creditors: Amounts falling due within one year	17	(1,073,139)	(1,018,446)
Net current assets		2,837,368	2,402,362
Total assets less current liabilities		10,445,670	10,199,879
Creditors: Amounts falling due after more than one year	17	(5,867,581)	(6,186,973)
Provisions for liabilities	10	(170,406)	(142,855)
Net assets		4,407,683	3,870,051
Capital and reserves
Called up share capital	19	5	5
Revaluation reserve		801,693	809,761
Other reserves		999	999
Profit and loss account		3,604,986	3,059,286
Total equity		4,407,683	3,870,051

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

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

M C Bila

Director

The notes on pages 13 to 26 form an integral part of these financial statements.
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MCB Investments Limited

(Registration number: 06167948)
Balance Sheet as at 31 March 2020

	Note	2020  £	2019  £
Fixed assets
Tangible assets	12	7,883	10,942
Investments	14	4,285,812	4,285,812
		4,293,695	4,296,754
Current assets
Debtors: Amounts falling due after more than one year	16	2,119,286	2,243,173
Cash at bank and in hand		1,559,631	1,551,425
		3,678,917	3,794,598
Creditors: Amounts falling due within one year	17	(226,252)	(224,318)
Net current assets		3,452,665	3,570,280
Total assets less current liabilities		7,746,360	7,867,034
Creditors: Amounts falling due after more than one year	17	(6,443,010)	(6,593,393)
Provisions for liabilities	10	(266)	(687)
Net assets		1,303,084	1,272,954
Capital and reserves
Called up share capital	19	5	5
Other reserves		749,999	749,999
Retained earnings		553,080	522,950
Total equity		1,303,084	1,272,954

The company made a profit after tax for the financial year of £95,130 (2019 - £131,679).

Approved and authorised by the director on 12 March 2021
 

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

M C Bila

Director

The notes on pages 13 to 26 form an integral part of these financial statements.
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MCB Investments Limited

Consolidated Statement of Changes in Equity for the Year Ended 31 March 2020
Equity attributable to the parent company

	Share capital £	Revaluation reserve £	Other reserves £	Retained earnings £	Total £
At 1 April 2019	5	809,761	999	3,059,286	3,870,051
Profit for the year	-	-	-	610,700	610,700
Deferred tax on revaluation reserve	-	(8,068)	-	-	(8,068)
Dividends	-	-	-	(65,000)	(65,000)
At 31 March 2020	5	801,693	999	3,604,986	4,407,683

	Share capital £	Revaluation reserve £	Other reserves £	Retained earnings £	Total £
At 1 April 2018	5	806,204	999	2,299,013	3,106,221
Profit for the year	-	-	-	825,273	825,273
Deferred tax on revaluation reserve	-	3,557	-	-	3,557
Dividends	-	-	-	(65,000)	(65,000)
At 31 March 2019	5	809,761	999	3,059,286	3,870,051

The notes on pages 13 to 26 form an integral part of these financial statements.
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MCB Investments Limited

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

	Share capital £	Other reserves £	Retained earnings £	Total £
At 1 April 2019	5	749,999	522,950	1,272,954
Profit for the year	-	-	95,130	95,130
Dividends	-	-	(65,000)	(65,000)
At 31 March 2020	5	749,999	553,080	1,303,084

	Share capital £	Other reserves £	Retained earnings £	Total £
At 1 April 2018	5	749,999	456,271	1,206,275
Profit for the year	-	-	131,679	131,679
Dividends	-	-	(65,000)	(65,000)
At 31 March 2019	5	749,999	522,950	1,272,954

The notes on pages 13 to 26 form an integral part of these financial statements.
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MCB Investments 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		610,700	825,273
Adjustments to cash flows from non-cash items
Depreciation and amortisation	5	221,761	217,367
Finance costs	6	161,154	155,407
Taxation	10	191,951	201,099
		1,185,566	1,399,146
Working capital adjustments
Increase in trade and other receivables	16	(801,111)	(161,255)
Increase in trade and other payables	17	103,929	23,623
Cash generated from operations		488,384	1,261,514
Corporation tax paid	10	(217,346)	(115,024)
Net cash flow from operating activities		271,038	1,146,490
Cash flows from investing activities
Acquisitions of property plant and equipment		(32,546)	(69,962)
Cash flows from financing activities
Interest paid		(161,154)	(155,407)
Advance of bank borrowing		-	6,475,000
Repayment of bank borrowing		(323,750)	(6,562,516)
Dividends paid	22	(65,000)	(65,000)
Net cash flows from financing activities		(549,904)	(307,923)
Net (decrease)/increase in cash and cash equivalents		(311,412)	768,605
Cash and cash equivalents at 1 April		2,179,893	1,411,288
Cash and cash equivalents at 31 March		1,868,481	2,179,893

The notes on pages 13 to 26 form an integral part of these financial statements.
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MCB Investments Limited

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

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Mendip Court
Bath Road
Wells
Somerset
BA5 3DG

2

Accounting policies

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.

Statement of compliance

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.

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.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings 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 consolidated profit and loss account and balance sheet include the financial statements of the company its subsidiary undertakings made up to 31 March 2020. The company acquired its trading subsidiaries Avon Care Homes Limited and Williamston Nursing Home Limited on a share for share exchange basis on 30 March 2012. The shareholdings were identical pre and post acquisition and the conditions for accounting for the acquisition as a merger are met. On that basis, merger accounting has been applied.

The company's other subsidiaries were acquired from third parties and have therefore been accounted for using acquisition accounting.

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.

Judgements and estimation uncertainty

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

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MCB Investments Limited

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

Revenue recognition

Turnover comprises the amounts receivable during the year for the provision of care and accommodation. Where the amount received relates to a period which covers the balance sheet date, the amount is apportioned over the period to which it relates.

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.

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
Land	Not depreciated
Freehold property	1% on cost
Furniture, fittings and equipment	15% on cost
Motor vehicles	25% on cost

Investment property

Investment property is carried at fair value, derived from the current market prices for comparable real estate determined annually by external valuers. The valuers use observable market prices, adjusted if necessary for any difference in the nature, location or condition of the specific asset. Changes in fair value are recognised in profit or loss.

Goodwill

Purchased goodwill is capitalised and written off over a period of between 7.5 and 20 years. These periods are considered by the director to be the useful economic lives of the various goodwill acquired.

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MCB Investments Limited

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

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

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.

Trade 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 hence are included at the undiscounted amount of 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.

Trade 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.

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

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the lease term.

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.

- 15 -

MCB Investments Limited

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

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.

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 as 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 asset or financial liability is 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 enforceable right to set off the recognised amounts and the company 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.

Non-financial assets:

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.

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MCB Investments Limited

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

Financial instruments (continued)

Financial assets:

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.

3

Revenue

The analysis of the group's revenue for the year from continuing operations is as follows:

	2020 £	2019 £
Rendering of services	7,458,408	7,502,255
Other revenue	21,201	1,769
Rental income	28,636	21,152
	7,508,245	7,525,176

The total turnover of the group 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 on investment properties	24,392	23,995

5

Operating profit

Arrived at after charging:

	2020  £	2019  £
Depreciation expense	101,543	97,149
Amortisation expense	120,218	120,218
Operating lease expense - property	41,816	41,589
Operating lease expense - plant and machinery	2,661	6,127

- 17 -

MCB Investments Limited

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

6

Interest payable and similar expenses

	2020  £	2019  £
Interest on bank borrowings	161,154	155,407

7

Staff costs

Group

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

	2020  £	2019  £
Wages and salaries	3,593,691	3,584,482
Social security costs	239,976	249,346
Pension costs, defined contribution scheme	57,403	41,397
	3,891,070	3,875,225

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

	2020  No.	2019  No.
Administration and support	14	15
Care	202	201
	216	216

Company

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

	2020  No.	2019  No.
Directors	1	1

8

Director's remuneration

The director's remuneration for the year was as follows:

	2020 £	2019 £
Remuneration (including benefits in kind)	25,259	23,132

- 18 -

MCB Investments Limited

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

9

Auditors' remuneration

	2020 £	2019 £
Audit of these financial statements	25,200	25,200

 

	2020 £	2019 £
All other non-audit services	15,407	14,560

10

Taxation

Tax charged in the income statement

	2020  £	2019  £
Current taxation
UK corporation tax	175,149	213,542
UK corporation tax adjustment to prior periods	(2,681)	(14,008)
	172,468	199,534
Deferred taxation
Arising from origination and reversal of timing differences	19,483	1,565
Tax expense in the income statement	191,951	201,099

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

The differences are reconciled below:

	2020 £	2019 £
Profit before tax	802,651	1,026,372
Corporation tax at standard rate	152,504	195,011
Effect of expense not deductible in determining taxable profit (tax loss)	10,643	9,962
Deferred tax expense relating to changes in tax rates or laws	19,483	1,565
Tax increase/(decrease) from effect of capital allowances and depreciation	12,002	(4,189)
Other timing differences	(2,681)	(1,250)
Total tax charge	191,951	201,099

- 19 -

MCB Investments 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 and capital allowances	57,313
Long term timing differences	113,918
Other timing differences	(825)
	170,406

2019	Liability £
Difference between accumulated depreciation and amortisation and capital allowances	40,579
Long term timing differences	105,850
Other timing differences	(3,574)
	142,855

Company

Deferred tax assets and liabilities

2020	Liability £
Difference between accumulated depreciation and amortisation and capital allowances	266

2019	Liability £
Difference between accumulated depreciation and amortisation and capital allowances	687

- 20 -

MCB Investments Limited

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

11

Intangible assets

Group

	Goodwill  £
Cost
At 1 April 2019 and 31 March 2020	1,892,512
Amortisation
At 1 April 2019	1,174,980
Amortisation charge	120,218
At 31 March 2020	1,295,198
Carrying amount
At 31 March 2020	597,314
At 31 March 2019	717,532

- 21 -

MCB Investments Limited

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

12

Tangible assets

Group

	Land and buildings £	Furniture, fittings and equipment  £	Motor vehicles  £	Total £
Cost
At 1 April 2019	6,093,766	1,039,771	15,293	7,148,830
Additions	-	31,923	623	32,546
At 31 March 2020	6,093,766	1,071,694	15,916	7,181,376
Depreciation
At 1 April 2019	706,627	857,867	4,351	1,568,845
Charge for the year	48,105	50,223	3,215	101,543
At 31 March 2020	754,732	908,090	7,566	1,670,388
Carrying amount
At 31 March 2020	5,339,034	163,604	8,350	5,510,988
At 31 March 2019	5,387,139	181,904	10,942	5,579,985

Freehold land of £917,910 (2019 - £917,910) is not depreciated.

Company

	Motor vehicles  £
Cost
At 1 April 2019 and at 31 March 2020	15,293
Depreciation
At 1 April 2019	4,351
Charge for the year	3,059
At 31 March 2020	7,410
Carrying amount
At 31 March 2020	7,883
At 31 March 2019	10,942

- 22 -

MCB Investments Limited

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

13

Investment properties

Group

	2020  £
Cost or valuation
At 1 April 2019 and at 31 March 2020	1,500,000

The director considers the value of the investment property at 31 March 2020 to be £1,500,000 (2019 - £1,500,000) on an open market basis. The historical cost of the investment property is £584,389 (2019 - £584,389).

14

Investments

Company

	2020 £	2019 £
Investments in subsidiaries	4,285,812	4,285,812

Subsidiaries	£
Cost and carrying amount
At 1 April 2019 and 31 March 2020	4,285,812

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
Avon Care Homes Limited		Ordinary	100%	100%
	England and Wales
Sutton Veny House Limited		Ordinary	100%	100%
	England and Wales
Williamston Nursing Home Limited		Ordinary	100%	100%
	England and Wales
Pondsmead (Shepton Mallet) Limited		Ordinary	100%	100%
	England and Wales

The principal activity of all subsidiaries is the operation of nursing and residential homes.

15

Stocks

	Group		Company
	2020  £	2019  £	2020  £	2019  £
Stocks	8,725	8,725	-	-

- 23 -

MCB Investments Limited

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

16

Debtors

		Group		Company
	Note	2020  £	2019  £	2020  £	2019  £
Trade debtors		719,658	184,963	-	-
Receivables from related parties	23	832,271	691,336	-	-
Other debtors		338,635	221,655	-	-
Prepayments and accrued income		142,737	134,236	-	-
Amounts owed by group undertakings		-	-	2,119,286	2,243,173
		2,033,301	1,232,190	2,119,286	2,243,173
Less non-current portion		-	-	(2,119,286)	(2,243,173)
Total current trade and other debtors		2,033,301	1,232,190	-	-

Details of non-current trade and other debtors

Company

£2,119,286 (2019 - £2,243,173) of amounts owed by group undertakings is classified as non-current on the basis that the parent company has confirmed unconditionally that the loans are repayable after more than one year.

17

Creditors

		Group		Company
	Note	2020  £	2019  £	2020  £	2019  £
Due within one year
Loans and borrowings	18	178,258	167,249	178,258	167,249
Trade creditors		231,264	111,117	205	-
Social security and other taxes		52,914	110,906	-	-
Outstanding defined contribution pension costs		7,047	12,548	-	-
Other payables		41,479	41,765	-	-
Accruals and deferred income		341,225	309,031	24,953	25,755
Corporation tax liability	10	220,952	265,830	22,836	31,314
		1,073,139	1,018,446	226,252	224,318
Due after one year
Loans and borrowings	18	5,867,581	6,186,973	5,867,581	6,186,973
Amounts owed to group undertakings		-	-	575,429	406,420
		5,867,581	6,186,973	6,443,010	6,593,393

Details of debt including security are disclosed in note 18 to the financial statements.

- 24 -

MCB Investments Limited

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

18

Loans and borrowings

	Group		Company
	2020 £	2019 £	2020 £	2019 £
Current loans and borrowings
Bank borrowings	178,258	167,249	178,258	167,249

	Group		Company
	2020 £	2019 £	2020 £	2019 £
Non-current loans and borrowings
Bank borrowings	5,867,581	6,186,973	5,867,581	6,186,973

The loan of £6,070,313 (gross of capitalised debt costs of £24,474) held by MCB Investments Limited is secured by way of freehold property owned by the group, an intercompany guarantee and a debenture over all of the assets of the company and three of its subsidiaries. The loan is being repaid in equal quarterly instalments of £80,938 until a final lump sum payments is due in October 2023. The interest rate applicable on the loan is on a floating rate basis, under which the interest rate will never be less than the margin 1.5%.

19

Share capital

Allotted, called up and fully paid shares

	2020		2019
	No.	£	No.	£
Ordinary A shares of £1 each	4	4	4	4
Ordinary B shares of £1 each	1	1	1	1
	5	5	5	5

Rights, preferences and restrictions

The ordinary A and B shares rank pari passu in all respects other than dividend rights.

20

Obligations under leases and hire purchase contracts

Group

Operating leases

The total of future minimum lease payments is as follows:

	2020  £	2019  £
Not later than one year	23,091	28,057
Later than one year and not later than five years	17,707	40,842
	40,798	68,899

The amount of non-cancellable operating lease payments recognised as an expense during the year was £45,752 (2019 - £48,242).

- 25 -

MCB Investments Limited

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

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 £57,403 (2019 - £41,397).

Contributions totalling £7,047 (2019 - £14,257) were payable to the scheme at the end of the year and are included in creditors.

22

Dividends

	2020  £	2019  £
Dividend paid on ordinary A shares	65,000	65,000

23

Related party transactions

Group

The director, M C Bila, is considered to be the key management personnel of the group. The directors remuneration is disclosed in note 8 to the financial statements.

As at 31 March 2020 the group was owed £832,271 (2019 - £691,158) by M C Bila in the form of an overdrawn director's loan account. The maximum overdrawn amount in the year was £877,271. The loan is interest free and considered repayable in less than one year.

24

Statement of changes in net debt

Analysis of changes in net debt	At 1 April 2019  £	Cash flows  £	Other non cash changes £	At 31 March 2020 £
Cash and cash equivalents
Cash at bank	2,179,893	(311,412)	-	1,868,481
Borrowings
Bank loans - gross of debt costs	(6,394,063)	323,750	-	(6,070,313)
Total net debt	(4,214,170)	12,338	-	(4,201,832)

25

Control

The company is controlled by M C Bila.

- 26 -