Kapil Care Homes Limited - Period Ending 2021-09-30

KAPIL CARE HOMES LIMITED - Company Information

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Registration number: 1878651

Kapil Care Homes Limited

Annual Report and Financial Statements

for the Year Ended 30 September 2021

Kapil Care Homes Limited

Contents

Strategic Report	1 to 2
Director's Report	3
Statement of Director's Responsibilities	4
Independent Auditor's Report	5 to 8
Profit and Loss Account	9
Balance Sheet	10
Statement of Changes in Equity	11
Statement of Cash Flows	12
Notes to the Financial Statements	13 to 22

Kapil Care Homes Limited

Strategic Report for the Year Ended 30 September 2021

The director presents his strategic report for the year ended 30 September 2021.

Principal activity

The principal activity of the company is that of proprietors of rest homes for the elderly.

Fair review of the business

The current period has seen some recovery following the COVID-19 pandemic. The company has continued to trade profitably and has continued to focus on managing occupancy and costs to maintain profitability. This is reflected through a 2% increase in turnover.

There has been a slight increase in the operating profit margin this year from 20% to 21%.

Continuity of service and care provided to residents is vitally important to the business. In order to ensure high quality care is provided it is necessary for the business to employ well trained staff and to encourage strong staff retention. Throughout the year the company has maintained its dedication to providing training staff and to ensure we provide high quality care as recognised by the Care Quality Commission.

Despite the challenges, I am pleased with the performance of the company and expect continued growth in revenue in the coming year.

Non-financial measures include occupancy, both in absolute terms and as a percentage of available beds and weekly fees. Both of which underpin revenue and therefore management monitor these KPIs regularly.

The company's key financial and other performance indicators during the year were as follows:

Financial KPIs	Unit	2021	2020
Turnover	£000	2,822	2,758
Turnover growth	%	2	4
Operating profit	£000	597	552
Operating profit margin	%	21	20

Principal risks and uncertainties

The business' principal risks are based on the reliance on local authority funding. Continued pressure is being exerted to reduce Government and Local Authority spending, which is manifesting itself increasingly in the reduction of fees being paid for the care of funded residents. In response to this I will continue to work closely with the local authorities and seek efficiencies across our operations.

Changes to the macroeconomic environment and how we respond to these is another principal risk to the business as the principal costs for the business include staff costs, energy and food. All of which are subject to on-going cost pressures in advance of inflation.

Management perform regular reviews of these costs to ensure that we source both energy and food at the best possible rate, and that labour is employed as effectively as possible.

The Company's activities are subject to a high level of regulation and inspection by the Care Quality Commission. The risk from the negative effects of any non-compliance is the impact which it may have on the Company's reputation and profits. Inspections of the care homes take place regularly. The risks are minimised by a strict management reporting regime which is part of a rigorous process of internal control over quality and compliance, along with evolving policies and practices that take into account changes in regulatory obligations.

Kapil Care Homes Limited

Strategic Report for the Year Ended 30 September 2021

Approved by the director on 21 June 2022 and signed on its behalf by:

Mr S P Kapil
Director

Kapil Care Homes Limited

Director's Report for the Year Ended 30 September 2021

The director presents his report and the financial statements for the year ended 30 September 2021.

Director of the company

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

Mr S P Kapil

Financial instruments

Objectives and policies

The director takes the management of risk very seriously and as such have policies and procedures in place which have been authorised by the board. The director is involved in the day to day operations and as such risks are highlighted and mitigated on a timely basis.

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

The business' principal financial instruments comprise bank balances, trade debtors and trade creditors. The main purpose of these instruments is to finance the business' operations.

In respect of bank balances, the liquidity risk is managed by holding sufficient cash reserves in order to fund operations and to meet loan repayment requirements.

Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

Disclosure of information to the auditors

The director has taken steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. The director confirms that there is no relevant information that he knows of and of which he knows the auditors are unaware.

Approved by the Board on 21 June 2022 and signed on its behalf by:

Mr S P Kapil
Director

Kapil Care Homes Limited

Statement of Director's Responsibilities

The director acknowledges his responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

•	select suitable accounting policies and apply them consistently;

•	make judgements and accounting estimates that are reasonable and prudent;

•	state whether applicable United Kingdom 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Kapil Care Homes Limited

Independent Auditor's Report to the Members of Kapil Care Homes Limited

Opinion

We have audited the financial statements of Kapil Care Homes Limited (the 'company') for the year ended 30 September 2021, which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, 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 company's affairs as at 30 September 2021 and of its profit for the year then ended;
•	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
•	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.

Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.

Other information

The director 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.

Kapil Care Homes Limited

Independent Auditor's Report to the Members of Kapil Care Homes 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 Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

•	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 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, or returns adequate for our audit have not been received from branches not visited by us; or
•	the financial statements are not in agreement with the accounting records and returns; or
•	certain disclosures of director's 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 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 company or to cease operations, or have no realistic alternative but to do so.

Auditor 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

	In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
•	the nature of the industry and sector, control environment and business performance;

Kapil Care Homes Limited

Independent Auditor's Report to the Members of Kapil Care Homes Limited

•	the company’s own assessment of the risks that irregularities may occur either as a result of fraud or error;
•	results of our enquiries of management about their own identification and assessment of the risks of irregularities;
•	the key laws and regulations under which the business operates and whether management were aware of any instances of noncompliance;
•	whether the management have knowledge of any actual, suspected or alleged fraud;
•	the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
•	the matters discussed among the audit engagement team, regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
	In addition to the above, our procedures to respond to risks identified included the following:
•	reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described above as having a direct effect on the financial statements;
•	enquiring of management, concerning any actual and potential litigation and claims;
•	performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
•	in addressing the risk of fraud in revenue recognition, in addition to our testing described above we have performed focused testing on trades close to the year-end combined with analytical review procedures to assess accuracy and completeness of revenue recognised;
•	in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business; and
•	We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
	Due to the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

Kapil Care Homes Limited

Independent Auditor's Report to the Members of Kapil Care Homes Limited

A further description of our responsibilities is available 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.

Robert Smith BSc FCA (Senior Statutory Auditor)
For and on behalf of RNS Chartered Accountants, Statutory Auditor

50-54 Oswald Road
Scunthorpe
North Lincolnshire
DN15 7PQ

21 June 2022

Kapil Care Homes Limited

Profit and Loss Account for the Year Ended 30 September 2021

	Note	2021 £	2020 £
Turnover	3	2,822,131	2,758,423
Gross profit		2,822,131	2,758,423
Administrative expenses		(2,299,117)	(2,233,999)
Other operating income	4	74,194	27,144
Operating profit	5	597,208	551,568
Other interest receivable and similar income	6	4,604	4,675
Interest payable and similar expenses	7	(77,277)	(89,582)
		(72,673)	(84,907)
Profit before tax		524,535	466,661
Taxation	11	(99,662)	(88,665)
Profit for the financial year		424,873	377,996

The above results were derived from continuing operations.

The company has no recognised gains or losses for the year other than the results above.

Kapil Care Homes Limited

(Registration number: 1878651)
Balance Sheet as at 30 September 2021

	Note	2021 £	2020 £
Fixed assets
Tangible assets	12	4,307,256	4,353,296
Investment property	13	503,276	503,276
		4,810,532	4,856,572
Current assets
Stocks	14	6,900	6,699
Debtors	15	1,277,870	974,396
Cash at bank and in hand	16	156,323	235,919
		1,441,093	1,217,014
Creditors: Amounts falling due within one year	17	(481,011)	(430,858)
Net current assets		960,082	786,156
Total assets less current liabilities		5,770,614	5,642,728
Creditors: Amounts falling due after more than one year	17	(2,620,035)	(2,790,954)
Provisions for liabilities	19	(176,818)	(177,886)
Net assets		2,973,761	2,673,888
Capital and reserves
Called up share capital	21	100	100
Profit and loss account		2,973,661	2,673,788
Total equity		2,973,761	2,673,888

Approved and authorised by the director on 21 June 2022

Mr S P Kapil
Director

Kapil Care Homes Limited

Statement of Changes in Equity for the Year Ended 30 September 2021

	Share capital £	Retained earnings £	Total £
At 1 October 2020	100	2,673,788	2,673,888
Profit for the year	-	424,873	424,873
Total comprehensive income	-	424,873	424,873
Dividends	-	(125,000)	(125,000)
At 30 September 2021	100	2,973,661	2,973,761

	Share capital £	Retained earnings £	Total £
At 1 October 2019	100	2,420,792	2,420,892
Profit for the year	-	377,996	377,996
Dividends	-	(125,000)	(125,000)
At 30 September 2020	100	2,673,788	2,673,888

Kapil Care Homes Limited

Statement of Cash Flows for the Year Ended 30 September 2021

	Note	2021 £	2020 £
Cash flows from operating activities
Profit for the year		424,873	377,996
Adjustments to cash flows from non-cash items
Depreciation and amortisation	5	42,571	45,774
Finance income	6	(4,604)	(4,675)
Finance costs	7	77,277	89,582
Corporation tax expense	11	99,662	88,665
		639,779	597,342
Working capital adjustments
Increase in stocks		(201)	(195)
Increase in debtors		(303,474)	(145,990)
(Decrease)/increase in creditors		(35,370)	109,252
Cash generated from operations		300,734	560,409
Corporation taxes paid		(89,326)	(79,774)
Net cash flow from operating activities		211,408	480,635
Cash flows from investing activities
Interest received	6	4,604	4,675
Acquisitions of tangible assets		-	(41,000)
Proceeds from sale of tangible assets		3,469	6,750
Net cash flows from investing activities		8,073	(29,575)
Cash flows from financing activities
Interest paid	7	(77,277)	(89,582)
Repayment of bank borrowing		(122,119)	(150,346)
Proceeds from other borrowing draw downs		50,000	30,000
Repayment of other borrowing		(24,681)	(26,322)
Dividends paid		(125,000)	(125,000)
Net cash flows from financing activities		(299,077)	(361,250)
Net (decrease)/increase in cash and cash equivalents		(79,596)	89,810
Cash and cash equivalents at 1 October		235,919	146,109
Cash and cash equivalents at 30 September	16	156,323	235,919

Kapil Care Homes Limited

Notes to the Financial Statements for the Year Ended 30 September 2021

1	General information

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

The address of its registered office is:
Old Barn
Burringham Road
Scunthorpe
North Lincolnshire
DN17 2AA

Registered number:1878651

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 were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

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

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the company’s activities. Turnover is shown net of returns, rebates and discounts.

The company 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 company's activities.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change 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 company operates and generates taxable income.

Kapil Care Homes Limited

Notes to the Financial Statements for the Year Ended 30 September 2021

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

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
Furniture, fittings and equipment	15% per annum on written down value
Motor vehicles	15% per annum on written down value
Freehold land and buildings	No depreciation is provided on as residual value is equivalent to cost and so any depreciation is immaterial

Investment property

Investment property is carried at fair value, derived from the current market prices for comparable real estate determined annually by the director. The director uses 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.

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 at the transaction price, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Kapil Care Homes Limited

Notes to the Financial Statements for the Year Ended 30 September 2021

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

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 company 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 at the transaction price.

Borrowings

Interest-bearing borrowings are recorded at fair value, net of transaction costs.

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 company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

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.

Kapil Care Homes Limited

Notes to the Financial Statements for the Year Ended 30 September 2021

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company 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.

Turnover

The analysis of the company's Turnover for the year from continuing operations is as follows:

	2021 £	2020 £
Rendering of services	2,822,131	2,750,365
Rental income from investment property	-	8,058
	2,822,131	2,758,423

4	Other operating income

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

	2021 £	2020 £
Government grants	74,194	27,144

5	Operating profit

Arrived at after charging

	2021 £	2020 £
Depreciation expense	42,571	45,774

6	Other interest receivable and similar income

	2021 £	2020 £
Interest income on bank deposits	-	36
Other finance income	4,604	4,639
	4,604	4,675

Kapil Care Homes Limited

Notes to the Financial Statements for the Year Ended 30 September 2021

7	Interest payable and similar expenses

	2021 £	2020 £
Interest on obligations under finance leases and hire purchase contracts	5,077	6,248
Interest expense on other finance liabilities	72,200	83,334
	77,277	89,582

8	Staff costs

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

	2021 £	2020 £
Wages and salaries	1,637,681	1,569,827
Social security costs	118,552	101,587
Pension costs, defined contribution scheme	74,744	25,147
Other employee expense	8,494	7,673
	1,839,471	1,704,234

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

	2021 No.	2020 No.
Administration and support	5	5
Other departments	105	109
	110	114

9	Director's remuneration

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

	2021 £	2020 £
Remuneration	49,200	74,201
Contributions paid to money purchase schemes	46,902	404
	96,102	74,605

During the year the number of directors who were receiving benefits and share incentives was as follows:

	2021 No.	2020 No.
Accruing benefits under money purchase pension scheme	1	1

Kapil Care Homes Limited

Notes to the Financial Statements for the Year Ended 30 September 2021

10	Auditors' remuneration

	2021 £	2020 £
Audit of the financial statements	3,250	3,250

Taxation

Tax charged/(credited) in the profit and loss account

	2021 £	2020 £
Current taxation
UK corporation tax	100,730	89,326
Deferred taxation
Arising from origination and reversal of timing differences	(1,068)	(661)
Tax expense in the profit and loss account	99,662	88,665

For both 2020 and 2021, the tax assessed for the year is at 19%, the standard rate of corporation tax in the UK, which is reconciled below.

	2021 £	2020 £
Profit before tax	524,535	466,661
Corporation tax at standard rate	99,662	88,665
Deferred tax credit from unrecognised tax loss or credit	(1,068)	(661)
Tax increase from effect of capital allowances and depreciation	1,068	661
Total tax charge	99,662	88,665

Deferred tax

Deferred tax assets and liabilities

2021	Liability £
Difference between accumulated depreciation and capital allowances	176,819
	176,819

2020	Liability £
Difference between accumulated depreciation and capital allowances	177,886
	177,886

Kapil Care Homes Limited

Notes to the Financial Statements for the Year Ended 30 September 2021

12	Tangible assets

	Freehold land and buildings £	Furniture, fittings and equipment £	Motor vehicles £	Total £
Cost or valuation
At 1 October 2020	4,146,778	409,038	202,840	4,758,656
Disposals	-	-	(8,000)	(8,000)
At 30 September 2021	4,146,778	409,038	194,840	4,750,656
Depreciation
At 1 October 2020	-	327,075	78,285	405,360
Charge for the year	-	12,299	30,272	42,571
Eliminated on disposal	-	-	(4,531)	(4,531)
At 30 September 2021	-	339,374	104,026	443,400
Carrying amount
At 30 September 2021	4,146,778	69,664	90,814	4,307,256
At 30 September 2020	4,146,778	81,963	124,555	4,353,296

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:

	2021 £	2020 £
Motor vehicles	61,953	82,604

13	Investment properties

	2021 £
At 1 October	503,276
At 30 September	503,276

Investment property was valued by the director who is internal to the company. The basis of this valuation was fair value.

There has been no valuation of investment property by an independent valuer.

Stocks

	2021 £	2020 £
Stocks	6,900	6,699

Kapil Care Homes Limited

Notes to the Financial Statements for the Year Ended 30 September 2021

Debtors

Current	2021 £	2020 £
Trade debtors	58,663	24,895
Other debtors	1,182,480	932,154
Prepayments	36,727	17,347
	1,277,870	974,396

16	Cash and cash equivalents

	2021 £	2020 £
Cash on hand	819	819
Cash at bank	155,504	235,100
	156,323	235,919

Creditors

	Note	2021 £	2020 £
Due within one year
Loans and borrowings	18	205,009	130,890
Trade creditors		81,691	108,481
Outstanding defined contribution pension costs		6,182	6,097
Other payables		71,753	59,753
Accrued expenses		15,646	36,311
Corporation tax liability		100,730	89,326
		481,011	430,858
Due after one year
Loans and borrowings	18	2,620,035	2,790,954

Kapil Care Homes Limited

Notes to the Financial Statements for the Year Ended 30 September 2021

18	Loans and borrowings

	2021 £	2020 £
Current loans and borrowings
Bank borrowings	126,079	106,087
Hire purchase contracts	78,930	24,803
	205,009	130,890

	2021 £	2020 £
Non-current loans and borrowings
Bank borrowings	2,601,944	2,694,055
Hire purchase contracts	18,091	96,899
	2,620,035	2,790,954

Bank borrowings

The bank loan is secured by a charge over the land and buildings belonging to the company.

The loans are repayable by instalments with monthly repayments at fixed interest rates of 2.88%, 2.8% and 3%.

Other borrowings

The obligations under hire purchase contracts are secured upon the assets to which they relate.

19	Provisions for liabilities

	Deferred tax £	Total £
At 1 October 2020	177,886	177,886
Decrease in existing provisions	(1,068)	(1,068)
At 30 September 2021	176,818	176,818

Kapil Care Homes Limited

Notes to the Financial Statements for the Year Ended 30 September 2021

20	Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £74,744 (2020 - £25,147).

Contributions totalling £6,182 (2020 - £6,097) were payable to the scheme at the end of the year and are included in creditors.

21	Share capital

Allotted, called up and fully paid shares

	2021		2020
	No.	£	No.	£
Ordinary shares of £1 each	100	100	100	100

22	Contingent liabilities

Intercompany guarantee. The amount guaranteed is £639,883 (2020 - £702,830). The company is party to an intercompany guarantee to its bankers in respect of Statepalm Limited.

23	Related party transactions

During the year the director received an additional loan of £181,757 (2020 - £71,307). £65,000 was repaid in the year (2020 - £65,000). The amount owed by the director at the start of the year was £184,592 (2020 - £178,285) and the amount outstanding at the year end was £301,349 (2020 - £184,592). Interest has been charged on this loan at the official rate of 2.25% and it is repayable on demand.

Summary of transactions with entities with joint control or significant interest

During the year the company recharged goods and services of £106,907 (2020 - £106,197) to a company under common control.

At the balance sheet date the amount due from companies under common control was £823,969 (2020 - £712,034).