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Registered number: 04334712
Nicholas James Care Homes Ltd
Annual report and financial statements
For the Year Ended 30 April 2021
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Nicholas James Care Homes Ltd
Company Information
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Dr. Charles Nicholas Rajakanthan (appointed 4 January 2021)
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Alexandra Thurlby (appointed 27 January 2021)
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Chartered Accountants & Statutory Auditors
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2nd Floor Equitable House
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Nicholas James Care Homes Ltd
Contents
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Independent auditors' report
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Consolidated income statement
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Consolidated statement of comprehensive income
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Consolidated statement of financial position
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Company statement of financial position
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Consolidated statement of changes in equity
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Company statement of changes in equity
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Consolidated Statement of cash flows
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Notes to the financial statements
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Nicholas James Care Homes Ltd
Group strategic report
For the Year Ended 30 April 2021
The director presents the strategic report for the year ended 30 April 2021.
The Principal activity of the group during the year continued to be the operation, managing and administering nursing homes for the elderly.
Due to difficult trading conditions posed by Covid 19, the group's revenue has slightly decreased from £11.6 million in 2020 to £11.08 million in the current year. Due to increase in wages cost and exceptional losses, the operating profit has decreased from £2.18 million in 2020 to £1.69 million in the current year. Net assets of the group has increased from £17.48 million in 2020 to £18.51 million in the current year.
This year the group has focused on consolidating its operations and enhancing its attention on monitoring the quality of care delivered. Internal policies, procedures and systems were enhanced and strengthened in line with the demands of the marketplace. The directors are pleased with the results of the group and believe the turnover and operating profits will be steady for the foreseeable future.
Principal risks include non-compliance with regulation, fee income not rising in line with the cost of providing care, lack of nursing resources and general increase in costs.
The group is investing in training in order to improve the employees' skill and enhance the customer service. The key to our success is our highly motivated, trained and dedicated staff team. We continue working as a team, supporting and training on each other to ensure that our resident's needs are met within a safe environment.
To keep in step with the world around us, we believe it is important to provide access to new technology. All our houses are equipped with wireless broadband and computer for use by staffs and residents.
Principal risks and uncertainties
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The group's activities expose it to a number of financial risks.
Interest rate risk
The group has bank loans and is therefore exposed to interest rate fluctuation on borrowings.
Credit risk
The group's principal financial assets are bank balance, trade and other receivables. The group's credit risk is primarily attributable to its trade receivables. The amounts presented in the financial statements are net of allowances for doubtful receivables.
It is group policy to ensure that where a resident is privately funded, the immediate next of kin are required to sign the resident's contract. Where a resident's property is being sold to pay for their care fees the company may require them to accept a charge on the property to secure any debt for care fees. The credit risk is liquid funds are limited because the counter parties are banks which are supported and underwritten by the UK government. The company has no significant concentration of credit risk, with exposure spread over a large number of counter parties and customers.
Liquidity risk
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations the group manages its cash flow from operations.
Insurance risk
The group is exposed to potential claims from employees and from residents and their next of kin. In order to protect the company from these risks, the Board has put in place a comprehensive cover with reputable insurers.
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Nicholas James Care Homes Ltd
Group strategic report (continued)
For the Year Ended 30 April 2021
Employees
The group is an equal opportunities employer and gives full and fair consideration to applications for employment made by disabled persons, having regard to their particular aptitudes and abilities. Where people become disabled during the course of their employment, every effort is made to retain their services and to provide retraining, if necessary. All employees are eligible for consideration for appropriate training, career development and promotional opportunities: disabled employees are not treated differently in this respect. The company has established the practice of keeping employees informed of maters affecting them as employees and of the financial and economic factors affecting the performance of the company.
Covid 19 Pandemic:
This is the full year under Covid 19 pandemic and the country has gone through two lock down periods in the same accounting period covered by these financial statements. Although the pandemic caused major disruption in the business, due to group's resilience and quality control procedure, it managed to minimise the impact of the pandemic. The support from government from time to time also been instrumental to manage cashflow in these difficult trading conditions.
This report was approved by the board on 28 April 2022 and signed on its behalf.
Kanagaratnam Rajakanthan
Director
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Nicholas James Care Homes Ltd
Directors' report
For the Year Ended 30 April 2021
The directors present their report and the financial statements for the year ended 30 April 2021.
Directors' responsibilities statement
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The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £1,029,963 (2020 - £1,206,533).
The company has paid interim dividends of £4,000.
The directors who served during the year were:
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Dr. Charles Nicholas Rajakanthan (appointed 4 January 2021)
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Alexandra Thurlby (appointed 27 January 2021)
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Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
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Nicholas James Care Homes Ltd
Directors' report (continued)
For the Year Ended 30 April 2021
Post balance sheet events
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There have been no significant events affecting the Group since the year end.
The auditors, Mantax Lynton, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 28 April 2022 and signed on its behalf.
Kanagaratnam Rajakanthan
Director
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Nicholas James Care Homes Ltd
Independent auditors' report to the members of Nicholas James Care Homes Ltd
We have audited the financial statements of Nicholas James Care Homes Ltd (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 30 April 2021, which comprise the Group Income statement, the Group Statement of comprehensive income, the Group and Company Statements of financial position, the Group Statement of cash flows, the Group and Company Statement of changes in equity and the related notes, 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 of the parent Company's affairs as at 30 April 2021 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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
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In auditing the financial statements, we have concluded that the directors' 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 Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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Nicholas James Care Homes Ltd
Independent auditors' report to the members of Nicholas James Care Homes Ltd (continued)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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 matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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In the light of the 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 Group strategic report or the Directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
∙the parent Company financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
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As explained more fully in the Directors' responsibilities statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
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Nicholas James Care Homes Ltd
Independent auditors' report to the members of Nicholas James Care Homes Ltd (continued)
Auditors' responsibilities for the audit of the financial statements
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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 Auditors' 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 Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙We obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the CQC regulations, Companies Act 2006, FRS 102 and relevant taxation legislation.
∙We identified the greatest risks of material impact on the financial statements from irregularities, including fraud, to be override of controls by management, inappropriate revenue recognition and going concern. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, reviewing accounting estimates for biases corroborating revenue recognised by the company through agreements to supporting documentation corroborating intangible additions to supporting documentation and ensuring accounting policies are appropriate under United Kingdom Generally Accepted Accounting Practice and applicable law.
∙Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing noncompliance and cannot be expected to detect non-compliance with all laws and regulations.
∙These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations.
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 Auditors' report.
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Nicholas James Care Homes Ltd
Independent auditors' report to the members of Nicholas James Care Homes Ltd (continued)
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 Auditors' 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.
Janak Raj Pokhrel (Senior statutory auditor)
for and on behalf of
Mantax Lynton
Chartered Accountants & Statutory Auditors
2nd Floor Equitable House
7 General Gordon Square
London
SE18 6FH
28 April 2022
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Nicholas James Care Homes Ltd
Consolidated income statement
For the Year Ended 30 April 2021
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Exceptional administrative expenses
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Amounts written off investments
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Interest payable and similar expenses
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Profit for the financial year
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Profit for the year attributable to:
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There were no recognised gains and losses for 2021 or 2020 other than those included in the consolidated income statement.
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The notes on pages 18 to 39 form part of these financial statements.
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Nicholas James Care Homes Ltd
Consolidated statement of comprehensive income
For the Year Ended 30 April 2021
Profit for the financial year
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Other comprehensive income
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Total comprehensive income for the year
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Profit for the year attributable to:
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Owners of the parent Company
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There were no recognised gains and losses for 2021 or 2020 other than those included in the consolidated income statement.
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The notes on pages 18 to 39 form part of these financial statements.
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Nicholas James Care Homes Ltd
Registered number: 04334712
Consolidated statement of financial position
As at 30 April 2021
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 28 April 2022.
The notes on pages 18 to 39 form part of these financial statements.
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Nicholas James Care Homes Ltd
Registered number: 04334712
Company statement of financial position
As at 30 April 2021
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Net assets excluding pension asset
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 28 April 2022.
The notes on pages 18 to 39 form part of these financial statements.
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Nicholas James Care Homes Ltd
Consolidated statement of changes in equity
For the Year Ended 30 April 2021
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Equity attributable to owners of parent Company
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Comprehensive income for the year
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Taxation in respect of items of other comprehensive income
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Reclassification from revaluation reserve to profit
and loss account
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Other comprehensive income for the year
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Total comprehensive income for the year
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Dividends: Equity capital
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Reclassification from revaluation reserve to profit
and loss account
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Total transactions with owners
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The notes on pages 18 to 39 form part of these financial statements.
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Nicholas James Care Homes Ltd
Consolidated statement of changes in equity
For the Year Ended 30 April 2020
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Equity attributable to owners of parent Company
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Comprehensive income for the year
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Taxation in respect of items of other comprehensive income
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Surplus on revaluation of other fixed assets
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Other comprehensive income for the year
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Total comprehensive income for the year
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Dividends: Equity capital
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Transfer to/from profit and loss account
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Total transactions with owners
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The notes on pages 18 to 39 form part of these financial statements.
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Nicholas James Care Homes Ltd
Company statement of changes in equity
For the Year Ended 30 April 2021
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Comprehensive income for the year
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Surplus on revaluation of other fixed assets
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Other comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Transfer to/from profit and loss account
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Total transactions with owners
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Comprehensive income for the year
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Surplus on revaluation of other fixed assets
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Other comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Transfer to/from profit and loss account
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Total transactions with owners
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The notes on pages 18 to 39 form part of these financial statements.
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Nicholas James Care Homes Ltd
Consolidated statement of cash flows
For the Year Ended 30 April 2021
Cash flows from operating activities
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Profit for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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Loss on disposal of tangible assets
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Net cash from investing activities
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Cash flows from financing activities
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Repayment of/new finance leases
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Net cash used in financing activities
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Net (decrease)/increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 18 to 39 form part of these financial statements.
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Nicholas James Care Homes Ltd
Consolidated Analysis of Net Debt
For the Year Ended 30 April 2021
The notes on pages 18 to 39 form part of these financial statements.
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
Nicholas James Care Homes Ltd is a company limited by shares incorporated in England and Wales. The company's registration number and address of the registered office is given in the company information page of these financial statements.
The principal activities of the company in the year under review was that of Residential nursing care facilities.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Income statement in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated income statement from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being .
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Group has transferred the significant risks and rewards of ownership to the buyer;
∙the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
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Operating leases: the Group as lessee
|
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Consolidated income statement in the same period as the related expenditure.
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
2.Accounting policies (continued)
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.
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Current and deferred taxation
|
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income 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 and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of financial position date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
2.Accounting policies (continued)
Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated income statement over its useful economic life.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
2.Accounting policies (continued)
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Revaluation of tangible fixed assets
|
Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the Statement of financial position date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments in unlisted Group shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Consolidated income statement for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
Investments in listed company shares are remeasured to market value at each Statement of financial position date. Gains and losses on remeasurement are recognised in profit or loss for the period.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
|
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
2.Accounting policies (continued)
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Provisions for liabilities
|
Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Statement of financial position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Investments in non-derivative instruments that are equity to the issuer are measured:
∙at fair value with changes recognised in the Consolidated income statement if the shares are publicly traded or their fair value can otherwise be measured reliably;
∙at cost less impairment for all other investments.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated income statement.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the reporting date.
Financial assets and liabilities are offset and the net amount reported in the Statement of financial
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
2.Accounting policies (continued)
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Financial instruments (continued)
|
position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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Judgments in applying accounting policies and key sources of estimation uncertainty
|
In preparing the financial statements, management are required to make estimates and judgments which may materially affect reported income, expenses, assets, liabilities or disclosure of contingent assets and liabilities, and the valuation of investment properties, which were based on open market transactions. The estimates and assumptions are reviewed on an on-going basis and are based on historical experience and other factors that are considered to be relevant. Revision to accounting estimates are recognised in the period in which the estimate is revised.
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An analysis of turnover by class of business is as follows:
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Provision of "Residential Care"
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Analysis of turnover by country of destination:
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
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The operating profit is stated after charging:
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Other operating lease rentals
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Government grants receivable
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Exceptional income for 2020 relates to reimbursement of VAT from HMRC (Kingscrest vs HMRC) (Exemption – Residential care homes – Whether changes to UK legislation compatible with European law – Whether cancellation of appellants’ VAT registration appropriate – Value Added Tax Act 1994, Sch. 9, Grp. 7, item 9; Directive 77/388, the sixth VAT directive, art. 13(A)(1)(g) and (h).)
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Advance to connected company written off
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Legal & professional fees
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After the year end, a company under common control which owed £582,600 to the group has been dissolved. Amount owed to the group at the time of dissolution has been written off in these financial statements.
Legal and professional fees shown as exceptional item in 2020 refers to the professional fees paid by the company relating to the VAT reimbursement as shown in other operating income note above.
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
|
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Fees payable to the Group's auditor and its associates for the audit of the Group's annual financial statements
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Remuneration for qualifying services
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
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Interest payable and similar expenses
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Current tax on profits for the year
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Origination and reversal of timing differences
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Taxation on profit on ordinary activities
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
12.Taxation (continued)
|
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2020 - higher than) the standard rate of corporation tax in the UK of 19% (2020 - 19%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2020 - 19%)
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Non-tax deductible amortisation of goodwill and impairment
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Depreciation for the year in excess of capital allowances
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Short term timing difference leading to an increase (decrease) in taxation
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Unpaid pension contribution
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Expenses not deductible for tax
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Non trade loan relationship
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Other differences leading to an increase (decrease) in the tax charge
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Total tax charge for the year
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Factors that may affect future tax charges
|
There were no factors that may affect future tax charges.
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
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Charge for the year on owned assets
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
14.Intangible assets (continued)
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
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Charge for the year on owned assets
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
15.Tangible fixed assets (continued)
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Charge for the year on owned assets
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
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Investments in subsidiary companies
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The following were subsidiary undertakings of the Company:
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The aggregate of the share capital and reserves as at 30 April 2021 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:
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Aggregate of share capital and reserves
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
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Due after more than one year
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Amounts owed by group undertakings
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Amounts owed by connected companies
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Prepayments and accrued income
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
|
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Accruals and deferred income
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
|
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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Amounts falling due after more than 5 years
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Bank loans are repayable by monthly installments and carry interest at variable rates. The group has provided security as below:
∙Legal and inter-company guarantee among group companies
∙Legal mortgage over all freehold properties of the group as per charge dated 27 January 2017.
∙Debenture dated 27 January 2017 given by the company and subsidiaries incorporating a fixed and floating charge over all current and future assets of the group.
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
|
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Creditors: Amounts falling due after more than one year
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Credited to profit or loss during the year
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
22.Deferred taxation (continued)
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Charged to profit or loss
|
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Accelerated capital allowances
|
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Asset - due after one year
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Allotted, called up and fully paid
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4 (2020 - 4) Ordinary Shares shares of £1.00 each
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Revaluation reserve
This reserve records the value of asset revaluations and fair value movements on assets recognised in other comprehensive income. This is non-distributable reserve.
Profit and loss account
This reserve records retained earnings and accumulated losses. This is distributable reserve.
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
The group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund and amounted to £94,998 (2020: £98,567). Contributions totaling £71,992 (2020: £46,368) were payable to the fund at balance sheet date.
|
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Commitments under operating leases
|
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The Group and the Company had no commitments under non-cancellable operating leases at the reporting date.
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Related party transactions
|
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The group has taken advantage of the exemption available under FRS102 for Related Party disclosure, not to disclose any transactions and balances between the group companies that have been eliminated on consolidation.
During the year, the group advanced £12,257 (2020: £nil) to a company under common control and received £nil (2020: £270,710). Amount owed to the group at the year end was £12,547 (2020: £Nil). This is an interest free unsecured advance and is repayable on demand.
During the year, the group advanced £nil (2020: £2,000,000) to a company under common control and received £2,000,000 (2020: £nil). Amount owed to the company at the year end was £nil (2020: £2,000,000).
During the year, the group advanced £87,268 (2020: £412,896) to a company under common control. Balances owed to the group at the year end was £1,080,500 (2020: £993,232). This is an interest free unsecured advance and is repayable on demand.
During the year, the group advanced £119,900 (2020: £38,513) to a company under common control. Balances owed to the group at the year end was £238,413 (2020: £38,513). This is an interest free unsecured advance and is repayable on demand.
During the year, the group advanced £1,055,821 (2020: £67,315) to a company under common control. Balances owed to the group at the year end was £1,158,171 (2020:£102,350). This is an interest free unsecured advance and is repayable on demand.
During the year, the group advanced £Nil (2020: £nil) and received £165,000 (2020: £188,452), from a company under common control. The company under common control was dissolved after the year end and the balance due at the time of dissolution of £582,600 (2020: £300,000) has been written off in full in these financial statements.
During the year, the group has provided interest free unsecured advances totaling £487,343 to one of the directors of the company which is included in other debtors. This amount has been repaid in full after the year end.
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Nicholas James Care Homes Ltd
Notes to the financial statements
For the Year Ended 30 April 2021
The group is under the control of Mr K Rajakanthan, and Mrs D C Rajakanthan, by virtue of their shareholdings.
Mr K Rajakanthan is the managing director and majority shareholder in the company which is the ultimate parent company in the group.
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