SPRINGCARE (WESTON) LIMITED - Accounts to registrar (filleted) - small 18.2

REGISTERED NUMBER: 05222219 (England and Wales)

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

FOR

SPRINGCARE (WESTON) LIMITED

Page

Statement of Financial Position

1

Notes to the Financial Statements

2

to

9

FIXED ASSETS

Intangible assets

5

10,000

15,000

Tangible assets

6

760,000

743,216

770,000

758,216

CURRENT ASSETS

Stocks

594

857

Debtors

7

83,962

60,731

Cash in hand

200

200

84,756

61,788

CREDITORS

Amounts falling due within one year

8

(380,360

)

(467,426

)

NET CURRENT LIABILITIES

(295,604

)

(405,638

)

TOTAL ASSETS LESS CURRENT LIABILITIES

474,396

352,578

PROVISIONS FOR LIABILITIES

(2,101

)

(3,270

)

NET ASSETS

472,295

349,308

CAPITAL AND RESERVES

Called up share capital

1

1

Non-distributable reserve

26,475

-

Retained earnings

445,819

349,307

472,295

349,308

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the director and authorised for issue on 2 September 2022 and were signed by:

L D Cox - Director

1.	STATUTORY INFORMATION

Springcare (Weston) LImited is a private company limited by shares and is incorporated in England. The address of the registered office is 20 Watergate Mansions, St. Marys Place, Shrewsbury, SY1 1DW.

The principal activity of the company is that of the provision of residential and care services for the elderly.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

The financial statements are prepared in sterling, which is the functional currency of the entity.

Significant judgements and estimates

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Judgements

The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows:

The tangible fixed assets are regularly revalued based on independent valuations which adopt value in use as the valuation basis. Value in use is determined by considering various factors such as EBITDA, occupancy levels and trading potential. As the valuations are performed at a particular point in time, they may be subject to fluctuation depending on current trading conditions. Due to this, the director regularly reviews the value in use to ensure that it is still appropriate

Key sources of estimation uncertainty

Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

As described in the accounting policies of the financial statements, depreciation of intangible and tangible fixed assets has been based on estimated useful lives and residual values deemed appropriate by the directors. Estimated useful lives and residual values are reviewed annually and revised as appropriate. Revisions take in to account actual asset lives and residual values as evidenced by disposals during the current and prior accounting periods..

Going concern

The company is a subsidiary company of Springcare Limited.

The Springcare Group has been affected by the Covid-19 pandemic, as it has the whole care sector. Sadly, despite our best efforts, a sharp increase in the loss on resident numbers was seen in April 2020 in our homes as the first wave of the virus spread across the country.

Since then we have seen smaller waves of Covid-19 but significantly smaller than the one in April 2020. We have seen a significant reduction in Covid-19 infections amongst residents and staff and business is returning to some form of normality due to the success of the vaccination programme.

Occupancy levels for the Springcare Limited group are increasing steadily which encourages us to believe that our forecasts are achievable.

The company therefore continues to adopt the going concern basis in preparing the financial statements.

Revenue recognition

The company provides residential and care services to the elderly. The turnover shown in the profit and loss account represents the fees due for the services provided during the year. Revenue is recognised in the period of care to which it is applicable.

Goodwill

Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business.

Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years.

Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:

Goodwill - Straight line over 8 years

If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.

Tangible fixed assets

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

Fixtures and fittings

-

25% on cost

Depreciation on land and buildings is not provided, as any uncharged depreciation for the year and the accumulated uncharged depreciation would be immaterial in aggregate, as a result of the estimated high residual value of the properties.

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.

Tangible fixed assets are valued on a value in use basis as a fully operational entity including fixtures and fittings, tools and equipment held by the company and having regard to its trading potential. Due to the specialist nature of the valuations, no deferred tax has been provided on the increase in value.

Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets

Government grants

Due to the Covid-19 pandemic, the company has claimed various government backed grants. Grants are recognised as other income when received other than the Coronavirus Job Retention Scheme grants which are recognised in the month the payroll costs relate to. The grants are accounted for on the accruals basis.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Financial instruments

A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument.

Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Debt instruments are subsequently measured at amortised cost.

Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.

For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics.

Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities.

Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

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

Hire purchase and leasing commitments

Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset.

Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.

Operating leases

Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.

Defined contribution plans

Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in further payments or a cash refund.

When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted presented value basis. The unwinding of the discount is recognised as a finance cost in profit and loss in the period which it arises.

Employee benefits

The company provides a range of benefits to employees.

Short term benefits, including holiday pay, are recognised as an expense in the profit and loss account in the period in which they are incurred.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 24 (2020 - 34 ) .

4.	AUDITORS' REMUNERATION

31.12.21

31.12.20

£

£

Fees payable to the company's auditors for the audit of the company's financial statements

2,600

2,538

5.	INTANGIBLE FIXED ASSETS

Goodwill

£

COST

At 1 January 2021

and 31 December 2021

40,000

AMORTISATION

At 1 January 2021

25,000

Charge for year

5,000

At 31 December 2021

30,000

NET BOOK VALUE

At 31 December 2021

10,000

At 31 December 2020

15,000

6.	TANGIBLE FIXED ASSETS

Fixtures

Freehold

and

property

fittings

Totals

£

£

£

COST OR VALUATION

At 1 January 2021

721,384

86,674

808,058

Disposals

-

(9,814

)

(9,814

)

Revaluations

26,475

-

26,475

At 31 December 2021

747,859

76,860

824,719

DEPRECIATION

At 1 January 2021

-

64,842

64,842

Charge for year

-

9,691

9,691

Eliminated on disposal

-

(9,814

)

(9,814

)

At 31 December 2021

-

64,719

64,719

NET BOOK VALUE

At 31 December 2021

747,859

12,141

760,000

At 31 December 2020

721,384

21,832

743,216

Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:

31.12.21

31.12.20

£

£

Fixtures and fittings

-

3,727

-

3,727

The assets are secured under finance leases or hire purchase agreements taken out by the ultimate parent company, Springcare Limited.

Cost or valuation at 31 December 2021 is represented by:

Fixtures

Freehold

and

property

fittings

Totals

£

£

£

Valuation in 2021

26,475

-

26,475

Cost

721,384

76,860

798,244

747,859

76,860

824,719

If tangible fixed assets had not been revalued it would have been included at the following historical cost:

31.12.21

31.12.20

£

£

Cost

798,244

-

Aggregate depreciation

64,719

-

The business was valued in April 2022 by Colliers International as a fully equipped operational entity, including fixtures, fittings, tools and equipment held by the company at the valuation date and having regard to its trading potential. The director believe this to be the fair value as at 31 December 2021.

7.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.21

31.12.20

£

£

Trade debtors

77,658

58,294

Amounts owed by group undertakings

3,837

-

Other debtors

2,467

2,437

83,962

60,731

Amounts due by group undertakings are unsecured, interest free and repayable on demand.

8.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.21

31.12.20

£

£

Bank loans and overdrafts

13,172

12,361

Trade creditors

18,901

13,087

Amounts owed to group undertakings

220,409

280,799

Taxation and social security

28,050

52,700

Other creditors

99,828

108,479

380,360

467,426

Amounts due to group undertakings are unsecured, interest free and repayable on demand.

9.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Michelle Coates (Senior Statutory Auditor)

for and on behalf of DPC Accountants Limited

10.	OTHER FINANCIAL COMMITMENTS

There are cross guarantees between the companies within the Llithyia Holdings Ltd group and the Kingsview Homes Limited group totalling £10,606,789 (2020: £10,969,724).

Other commitments, guarantees and contingencies total £1,934 (2020: £5,041)

11.	RELATED PARTY DISCLOSURES

Details of the transactions between fellow group companies have not been disclosed in line with paragraph 33.1A of FRS102.

12.	EVENTS AFTER THE END OF THE REPORTING PERIOD

There were no material events up to the date of approval of the financial statements by the Board.

13.	ULTIMATE CONTROLLING PARTY

14.	GOING CONCERN

The company is a subsidiary company of Springcare Limited.

The Springcare Group has been affected by the Covid-19 pandemic, as it has the whole care sector. Sadly, despite our best efforts, a sharp increase in the loss on resident numbers was seen in April 2020 in our homes as the first wave of the virus spread across the country.

Since then we have seen smaller waves of Covid-19 but significantly smaller than the one in April 2020. We have seen a significant reduction in Covid-19 infections amongst residents and staff and business is returning to some form of normality due to the success of the vaccination programme.

Occupancy levels for the Springcare Limited group are increasing steadily which encourages us to believe that our forecasts are achievable.

The company therefore continues to adopt the going concern basis in preparing the financial statements.