CHD Living Ltd - Limited company accounts 23.2

REGISTERED NUMBER: 11204260 (England and Wales)

CHD LIVING LTD

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTOR AND

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023

Page

Company Information

1

Group Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

6

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

DIRECTOR:

Mr L Hasham

REGISTERED OFFICE:

Capital House

106 Meadrow

Godalming

Surrey

GU7 3HY

REGISTERED NUMBER:

11204260 (England and Wales)

AUDITORS:

Rothmans Audit LLP

Statutory Auditors

Chartered Accountants

Fryern House

125 Winchester Road

Chandlers Ford

Hampshire

SO53 2DR

The director presents his strategic report of the company and the group for the year ended 31 March 2023.

REVIEW OF BUSINESS

The Group provides care services from a number of separate care centres. The director is satisfied with the performance of the Group given the challenging economic conditions in the UK. The Group has faced rising energy costs which it has managed to counter with fixed price contracts with its energy suppliers. The Group has also continued a longer term cost control programme by recruiting more employees from overseas to reduce reliance on agency costs where possible, and has continued to invest in keeping homes to a high standard. The care homes continue to provide qualitative services as verified by independent regulatory authority checks.

Turnover for the period ended 31 March 2023 totalled £28,448,193 (2022: £24,751,020) with a profit before taxation of £2,632,129 (2022: £4,490,143). Net assets for the period ended 31 March 2023 totalled £21,965,929 (2022: £19,979,417).

PRINCIPAL RISKS AND UNCERTAINTIES

The key business risks and uncertainties relate to the current economic climate and possible staffing issues. The Group has taken measures to address this by recruiting staff from overseas. Funding and liquidity under the current climate will continue to be monitored by the director to ensure that the Group is able to support its activities and future growth.

KEY PERFORMANCE INDICATORS

The Group's key performance indicators are considered to be turnover, profit and net assets. These are considered under the review of business above. The Group also considers EBITDA to be a key performance indicator. An EBITDA of £4,472,754 was achieved in the year (2022: £5,555,532). The reason for the fall in EBITDA in 2023 compared to 2022 is due to both a reduction in government grants as well as increased cost pressures.

SECTION 172(1) STATEMENT

Promoting the success of the Group

Background

Section 172 (1) requires Directors to act in the way they consider would be most likely to promote the success of their company for the benefit of its members as a whole and in doing so have regard (amongst other matters) to:

(a) the likely long-term consequences of decisions;

(b) the interests of the Group's employees;

(c) the need to foster the Group's business relationships with suppliers, customers and others;

(d) the impact of the Group's operations on the community and the environment;

(e) the desirability of the Group maintaining a reputation for high standards of business conduct; and

(f) the need to act fairly as between the Group's owners.

This statement outlines how the Director of CHD Living Ltd takes these factors into account in their decision-making.

Long-term sustainability

The Director takes all decisions in the long-term interests of the Group. The key focus is on maintaining high care standards whilst managing costs, which is essential for the survival of the business. The long-term sustainability of the Group is at the forefront of decision-making, particularly in response to the recent impact of the coronavirus pandemic on the care home sector.

Employees

Our employees are fundamental to our operations and as such we strive to attract and retain the best employees by offering an attractive remuneration package and focused training.

Customers

Our customers are our most valued asset and we aim to provide the highest standards of care by continually investing and developing our care homes. This allows the Group to give our customers the best possible service.

Producers and suppliers

To be able to provide the high level of service to our customers, we rely on an efficient supply chain. We need to have a timely supply of food and other products to be able to maintain our service levels. The coronavirus pandemic demonstrated the strength of these relationships as we were able to continue to operate efficiently throughout.

Community and environment

The Group works with the local communities it operates within on a daily basis. The local community is our customer base therefore we operate initiatives to engage the local community and integrate them within our operations.

We are continually working to reduce our reliance on non-renewable sources of energy.

Business conduct

We ensure that our staff receive sufficient training to enable us to maintain our high standards of business conduct. Regular CQC inspections also ensure that we are meeting not only our own standards, but those expected by the industry.

Acting fairly as between the Group's owners

The ultimate shareholders of the Group all have an equal shareholding therefore all decisions made are considered to be fair.

ON BEHALF OF THE BOARD:

Mr L Hasham - Director

6 December 2023

The director presents his report with the financial statements of the company and the group for the year ended 31 March 2023.

DIVIDENDS

The total distribution of dividends for the period ended 31 March 2023 will be £400,000 (2022: £3,700,000).

FUTURE DEVELOPMENTS

The director considers that the programme of capital expansion, combined with identifying new care markets, will result in an increase in future profitability. Management policies will continue to be reviewed in the light of changing trading conditions.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTOR

Mr L Hasham held office during the whole year from 1 April 2022 to the date of this report.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Price risk

Due to the nature of the financial instruments used by the Group there is no exposure to price risk.

Credit risk

The Group is exposed to credit risk concerning the credit offered to customers. The risk is managed by regular monitoring of both amounts outstanding and credit limits.

Liquidity risk

The Group manages its liquidity risk by maintaining close control of cash balances, debtors and creditors.

Cash flow risk

The Group manages its cash flow risk by ensuring sufficient funds are available to meet amounts due.

EMPLOYEES

It is the Group's policy to involve all employees in matters affecting their functions. This takes place through staff council where management consult with staff representatives and through a team briefing system to keep all employees updated on key Group business issues.

Applications for employment by disabled persons are always fully considered, bearing in mind the abilities of the applicant concerned. In the event of members of staff becoming disabled every effort is made to ensure that their employment with the Group continues and that appropriate training is arranged. It is the policy of the Group that the training, career development and promotion be identical for all employees.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Group Strategic Report, the Report of the Director 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

-	select suitable accounting policies and then apply them consistently;

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

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-	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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and he has taken all the 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 group's auditors are aware of that information.

AUDITORS

The auditors, Rothmans Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr L Hasham - Director

6 December 2023

Opinion

We have audited the financial statements of CHD Living Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 March 2023 and of the group's profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 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 group's and 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors 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 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.

Other matter

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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 Report of the Director.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of 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 director

As explained more fully in the Statement of Director's Responsibilities set out on page four, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the director is responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the group or the parent company or to cease operations, or has no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors 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 obtained an understanding of the legal and regulatory framework that the Group operates in, focusing on those laws and regulations that had a direct effect on the Financial Statements or that had a fundamental effect of the operations of the Group. The key laws and relations we considered in this context included the UK Companies Act and the Care Quality Commission (CQC) regulations.

Discussions were held within the engagement team regarding how and where fraud might occur in the Financial Statements and any potential indicators of fraud. As part of this discussion, we identified potential risk areas such as the completeness of revenue. Audit procedures were designed to ensure all of the risks were addressed.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

o

enquiring of management as to actual and potential litigation and claims; and

o

reviewing any correspondence with regulators and the Group's legal advisors.

o

reviewing reports from CQC inspections and action plans.

To address the risk of fraud through management bias and override of controls, we:

o

performed analytical procedures to identify any unusual or unexpected relationships;

o

tested journal entries to identify unusual transactions and bias.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the director and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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 Report of the Auditors.

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 a Report of the Auditors 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.

Liz Martyn ACA (Senior Statutory Auditor)

for and on behalf of Rothmans Audit LLP

Statutory Auditors

Chartered Accountants

Fryern House

125 Winchester Road

Chandlers Ford

Hampshire

SO53 2DR

7 December 2023

TURNOVER

3

28,448,193

24,751,020

Cost of sales

19,130,237

16,809,882

GROSS PROFIT

9,317,956

7,941,138

Administrative expenses

5,745,359

3,936,841

3,572,597

4,004,297

Other operating income

4

-

1,006,490

OPERATING PROFIT

6

3,572,597

5,010,787

Interest receivable and similar income

25,728

2,088

3,598,325

5,012,875

Interest payable and similar expenses

7

966,196

522,732

PROFIT BEFORE TAXATION

2,632,129

4,490,143

Tax on profit

8

245,612

1,267,455

PROFIT FOR THE FINANCIAL YEAR

2,386,517

3,222,688

Profit attributable to:

Owners of the parent

2,386,517

3,222,688

PROFIT FOR THE YEAR

2,386,517

3,222,688

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

2,386,517

3,222,688

Total comprehensive income attributable to:

Owners of the parent

2,386,517

3,222,688

FIXED ASSETS

Tangible assets

11

49,495,593

49,874,911

Investments

12

-

-

49,495,593

49,874,911

CURRENT ASSETS

Debtors

13

3,860,940

2,406,347

Cash at bank and in hand

3,095,492

4,399,514

6,956,432

6,805,861

CREDITORS

Amounts falling due within one year

14

32,401,138

13,480,773

NET CURRENT LIABILITIES

(25,444,706

)

(6,674,912

)

TOTAL ASSETS LESS CURRENT LIABILITIES

24,050,887

43,199,999

CREDITORS

Amounts falling due after more than one year

15

(38,666

)

(21,117,362

)

PROVISIONS FOR LIABILITIES

19

(2,046,292

)

(2,103,220

)

NET ASSETS

21,965,929

19,979,417

CAPITAL AND RESERVES

Called up share capital

20

40

40

Other reserve

21

16,273,917

16,273,917

Retained earnings

21

5,691,972

3,705,460

SHAREHOLDERS' FUNDS

21,965,929

19,979,417

The financial statements were approved by the director and authorised for issue on 6 December 2023 and were signed by:

Mr L Hasham - Director

FIXED ASSETS

Tangible assets

11

44,432

43,301

Investments

12

21,324,850

21,324,849

21,369,282

21,368,150

CURRENT ASSETS

Debtors

13

18,461,922

14,624,884

Cash at bank and in hand

2,777,207

3,275,445

21,239,129

17,900,329

CREDITORS

Amounts falling due within one year

14

25,902,682

1,641,278

NET CURRENT (LIABILITIES)/ASSETS

(4,663,553

)

16,259,051

TOTAL ASSETS LESS CURRENT LIABILITIES

16,705,729

37,627,201

CREDITORS

Amounts falling due after more than one year

15

-

(21,102,042

)

PROVISIONS FOR LIABILITIES

19

(11,108

)

-

NET ASSETS

16,694,621

16,525,159

CAPITAL AND RESERVES

Called up share capital

20

40

40

Other reserve

21

16,273,917

16,273,917

Retained earnings

21

420,664

251,202

SHAREHOLDERS' FUNDS

16,694,621

16,525,159

Company's profit for the financial year

569,462

2,632,923

The financial statements were approved by the director and authorised for issue on 6 December 2023 and were signed by:

Mr L Hasham - Director

Called up

share

Retained

Other

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 April 2021

40

3,082,772

16,273,917

19,356,729

Changes in equity

Dividends

-

(2,600,000

)

-

(2,600,000

)

Total comprehensive income

-

3,222,688

-

3,222,688

Balance at 31 March 2022

40

3,705,460

16,273,917

19,979,417

Changes in equity

Dividends

-

(400,000

)

-

(400,000

)

Total comprehensive income

-

2,386,517

-

2,386,517

Balance at 31 March 2023

40

5,691,977

16,273,917

21,965,934

Called up

share

Retained

Other

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 April 2021

40

218,279

16,273,917

16,492,236

Changes in equity

Dividends

-

(2,600,000

)

-

(2,600,000

)

Total comprehensive income

-

2,632,923

-

2,632,923

Balance at 31 March 2022

40

251,202

16,273,917

16,525,159

Changes in equity

Dividends

-

(400,000

)

-

(400,000

)

Total comprehensive income

-

569,462

-

569,462

Balance at 31 March 2023

40

420,664

16,273,917

16,694,621

Cash flows from operating activities

Cash generated from operations

1

3,946,492

5,908,250

Interest paid

(842,196

)

(439,224

)

Interest element of hire purchase payments paid

(2,017

)

(3,376

)

Tax paid

(1,023,953

)

(1,104,186

)

Net cash from operating activities

2,078,326

4,361,464

Cash flows from investing activities

Purchase of tangible fixed assets

(479,475

)

(829,560

)

Sale of tangible fixed assets

8,779

15,571

Interest received

21,546

2,088

Net cash from investing activities

(449,150

)

(811,901

)

Cash flows from financing activities

Capital repayments in year

(573,529

)

-

Finance lease repayments

(17,230

)

(35,570

)

Inter-company payments

(2,342,439

)

(2,737,370

)

Net cash from financing activities

(2,933,198

)

(2,772,940

)

(Decrease)/increase in cash and cash equivalents

(1,304,022

)

776,623

Cash and cash equivalents at beginning of year

2

4,399,514

3,622,891

Cash and cash equivalents at end of year

2

3,095,492

4,399,514

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2023

2022

£

£

Profit before taxation

2,632,129

4,490,143

Depreciation charges

528,129

528,922

Loss on disposal of fixed assets

372,028

15,823

Finance costs

966,196

522,732

Finance income

(25,728

)

(2,088

)

4,472,754

5,555,532

(Increase)/decrease in trade and other debtors

(1,454,593

)

5,075

Increase in trade and other creditors

928,331

347,643

Cash generated from operations

3,946,492

5,908,250

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 March 2023

31/3/23

1/4/22

£

£

Cash and cash equivalents

3,095,492

4,399,514

Year ended 31 March 2022

31/3/22

1/4/21

£

£

Cash and cash equivalents

4,399,514

3,622,891

3.	ANALYSIS OF CHANGES IN NET DEBT

Other

non-cash

At 1/4/22

Cash flow

changes

At 31/3/23

£

£

£

£

Net cash

Cash at bank

and in hand

4,399,514

(1,304,022

)

-

3,095,492

4,399,514

(1,304,022

)

-

3,095,492

Debt

Finance leases

(28,920

)

17,230

(50,145

)

(61,835

)

Debts falling due

within 1 year

(331,882

)

573,529

(21,418,118

)

(21,176,471

)

Debts falling due

after 1 year

(21,297,239

)

-

21,297,239

-

(21,658,041

)

590,759

(171,024

)

(21,238,306

)

Total

(17,258,527

)

(713,263

)

(171,024

)

(18,142,814

)