Heart of England Properties Limited - Limited company accounts 23.2

REGISTERED NUMBER: 03322727 (England and Wales)

STRATEGIC REPORT,

REPORT OF THE DIRECTOR AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2023

FOR

HEART OF ENGLAND PROPERTIES LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Director

3

Report of the Independent Auditors

5

Statement of Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

DIRECTOR:

J H Briggs

REGISTERED OFFICE:

Perton Manor

Wrottesley Park Road

Perton

South Staffordshire

WV8 2HE

REGISTERED NUMBER:

03322727 (England and Wales)

AUDITORS:

TGFP

Chartered Accountants & Statutory Auditors

Fulford House

Newbold Terrace

Leamington Spa

Warwickshire

CV32 4EA

The director presents her strategic report for the year ended 31 March 2023.

REVIEW OF BUSINESS

The company's performance in the year under review has been in line with expectations. Turnover has

remained consistent with previous years, with 2024 looking to be at a similar level again.

The director is satisfied with the result of the company and the company continues to place safeguards and processes to ensure that the home and, therefore, the company remain unaffected from infection control risks, with the 2024 results expected to be consistent.

The key performance indicator of the company is turnover as disclosed in the Statement of Income and

Retained Earnings.

The company supports the ongoing training of its staff utilizing the Open University to deliver Registered mental health nurse training, this has assisted in developing its own nursing team.

PRINCIPAL RISKS AND UNCERTAINTIES

Heart of England Properties Limited, like all businesses, faces several operating risks and uncertainties. There is a few risks that could impact on the company's long-term performance and steps are taken to understand and evaluate these to achieve the company's objective of creating long term sustainable returns.

The most fundamental risks faced by the company are:

(a) if the company fails to comply with regulations, regulatory action could include among other penalties, the

revocation of the care home's licence to operate.

(b) the company could suffer severe negative publicity if a serious incident were to occur at the care home.

(c) if budgeted occupancy levels are not achieved then profit will be reduced.

(d) if the company fails to attract and retain nursing and other qualified staff, it may be unable to provide residents with quality nursing care and may have to reduce the number of beds in the care home.

Steps have been taken to manage very closely all movements in and out of the home and ensured a high level of cleanliness, hygiene and provision of PPE are adhered to.

ON BEHALF OF THE BOARD:

J H Briggs - Director

26 October 2023

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of a nursing home.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2023.

DIRECTOR

J H Briggs held office during the whole of the period from 1 April 2022 to the date of this report.

FINANCIAL INSTRUMENTS

The directors constantly monitor the company's trading results and revise projections as appropriate to

ensure that the company meets its future obligations as they fall due.

The company is exposed to the usual credit and cash flow risk associated with selling on credit and manages

this through credit control procedures. The nature of its financial instruments mean that price and liquidity

risks are minimised by the predetermination of the company's funding facilities and terms.

STRATEGIC REPORT

In accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors Report)

Regulations 2013, the company has prepared a strategic report, which includes information that would have

previously been included in the Director's Report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the 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 she is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements 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 company will continue in business.

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

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 company's auditors are unaware, and she has taken all the steps that she ought to have taken as a director in order to make herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

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

ON BEHALF OF THE BOARD:

J H Briggs - Director

26 October 2023

Opinion

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

In our opinion the financial statements:

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

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

-	the 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, or returns adequate for our audit have not been received from branches not visited by us; or

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

-	certain disclosures of director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page three, 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or 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 have considered how irregularities, including fraud, can be detected in this Business and how they may occur. This is not a cash intensive business and the company holds no high value stock. However, we are aware there are always opportunities to manipulate the accounts, in particular by increasing or decreasing profits and window dressing by making the balance sheet look stronger than it may in reality be.

To mitigate these risks we have reviewed all Journals made during the year ensuring all are authorised and approved at the appropriate level. We have also reviewed any transactions outside of the business, and we have carried out a detailed analytical review of income and expenses highlighting any variances and obtaining reasons from Senior Management as to the reasons why. Materiality has been set at a level we feel more comfortable to include a greater range of testing to enable us to detect irregularities.

In respect of non- compliance with laws and regulations we have carried out the following enquiries:

Review minutes of meetings of those charged with governance.

Enquiry of management, those charged with governance and the Companies solicitors around actual and potential litigation and claim

Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

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.

Benjamin R. Reynolds (Senior Statutory Auditor)

for and on behalf of TGFP

Chartered Accountants & Statutory Auditors

Fulford House

Newbold Terrace

Leamington Spa

Warwickshire

CV32 4EA

30 October 2023

TURNOVER

3

4,528,673

4,387,620

Cost of sales

2,581,509

2,360,895

GROSS PROFIT

1,947,164

2,026,725

Administrative expenses

1,121,027

961,682

826,137

1,065,043

Other operating income

64,714

156,154

OPERATING PROFIT

5

890,851

1,221,197

Interest receivable and similar income

64

-

890,915

1,221,197

Interest payable and similar expenses

6

281,909

137,459

PROFIT BEFORE TAXATION

609,006

1,083,738

Tax on profit

7

353,336

454,328

PROFIT FOR THE FINANCIAL YEAR

255,670

629,410

OTHER COMPREHENSIVE INCOME

Revaluation gain

-

3,377,630

Deferred tax

-

(831,031

)

Income tax relating to components of other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

2,546,599

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

255,670

3,176,009

FIXED ASSETS

Tangible assets

8

4,062,533

4,135,861

CURRENT ASSETS

Stocks

9

1,523

1,523

Debtors

10

8,959,880

8,705,422

Cash at bank and in hand

305,088

219,470

9,266,491

8,926,415

CREDITORS

Amounts falling due within one year

11

1,238,968

883,262

NET CURRENT ASSETS

8,027,523

8,043,153

TOTAL ASSETS LESS CURRENT LIABILITIES

12,090,056

12,179,014

CREDITORS

Amounts falling due after more than one year

12

(5,251,507

)

(5,585,741

)

PROVISIONS FOR LIABILITIES

15

(856,014

)

(866,408

)

NET ASSETS

5,982,535

5,726,865

CAPITAL AND RESERVES

Called up and paid share capital

16

100

100

Revaluation reserve

17

2,546,599

2,546,599

Retained earnings

17

3,435,836

3,180,166

SHAREHOLDERS' FUNDS

5,982,535

5,726,865

The financial statements were approved by the director and authorised for issue on 26 October 2023 and were signed by:

J H Briggs - Director

Called up

and paid

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 April 2021

100

2,550,756

-

2,550,856

Changes in equity

Total comprehensive income

-

629,410

2,546,599

3,176,009

Balance at 31 March 2022

100

3,180,166

2,546,599

5,726,865

Changes in equity

Total comprehensive income

-

255,670

-

255,670

Balance at 31 March 2023

100

3,435,836

2,546,599

5,982,535

1.	STATUTORY INFORMATION

Heart of England Properties Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

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" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

Financial Reporting Standard 102 - reduced disclosure exemptions

FRS 102 allows a qualifying entity certain disclosure exemptions. The company has taken advantage of the following available exemptions:

1 - the requirement to prepare a statement of cash flows;

2 - financial instruments disclosures, including categories of financial instruments; and

3 - the disclosure of key management personnel remuneration in total.

Judgements

The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed under "key sources of estimation uncertainty" below.

Key sources of estimation uncertainty

The company makes estimates and assumptions concerning the future. The director does not consider that any estimates or judgements have a material degree of judgement or uncertainty.

Tangible fixed assets

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

Freehold property

-

1% on cost

Fixtures, fittings and equipment

-

25% on reducing balance

Motor vehicles

-

25% on reducing balance

Computer equipment

-

33% on cost

Tangible assets are stated at cost, less any subsequent accumulated depreciation and impairment loss. The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

The freehold property class of tangible assets are initially recorded at cost and subsequently at fair value, with revaluation gains/ losses recognised in other comprehensive income.

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

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, 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 balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet 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.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to profit and loss over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Debtors

Trade debtors are amounts due from customers for services performed in the ordinary course of

business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Creditors

Trade creditors are recognised initially at the transaction price and subsequently measured amortised cost using the effective interest method.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

All of the company's turnover is from continuing operations arising in the UK and relates to the

provision of services.

4.	EMPLOYEES AND DIRECTORS

2023

2022

£

£

Wages and salaries

2,467,066

2,258,964

Social security costs

129,209

117,067

Other pension costs

22,445

22,064

2,618,720

2,398,095

The average number of employees during the year was as follows:

2023

2022

Administration

2

3

Nursing

105

104

107

107

2023

2022

£

£

Director's remuneration

34,900

35,733

5.	OPERATING PROFIT

The operating profit is stated after charging:

2023

2022

£

£

Other operating leases

38,001

28,555

Depreciation - owned assets

74,536

45,434

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2023

2022

£

£

Bank loan interest

272,919

127,392

Corporation tax interest

3,989

5,066

Hire purchase

5,001

5,001

281,909

137,459

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2023

2022

£

£

Current tax:

UK corporation tax

363,730

418,951

Deferred tax

(10,394

)

35,377

Tax on profit

353,336

454,328

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2023

2022

£

£

Profit before tax

609,006

1,083,738

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2022 - 19%)

115,711

205,910

Effects of:

Expenses not deductible for tax purposes

745

-

Capital allowances in excess of depreciation

-

(21,155

)

Depreciation in excess of capital allowances

13,823

-

Utilisation of tax losses

(52,600

)

(25,167

)

Deferred tax

(10,394

)

35,377

NTLR debits

51,855

25,167

APN settlement

234,196

234,196

Total tax charge

353,336

454,328

Tax effects relating to effects of other comprehensive income

There were no tax effects for the year ended 31 March 2023.

2022

Gross

Tax

Net

£

£

£

Revaluation gain

3,377,630

-

3,377,630

Deferred tax

(831,031

)

-

(831,031

)

2,546,599

-

2,546,599

Legislation was introduced in the Finance Bill 2021 to increase the rate of corporation tax to 25% with effect from 1 April 2023.

8.	TANGIBLE FIXED ASSETS

Fixtures,

fittings

Freehold

and

Motor

Computer

property

equipment

vehicles

equipment

Totals

£

£

£

£

£

COST OR VALUATION

At 1 April 2022

4,000,000

422,966

101,478

1,326

4,525,770

Additions

-

637

-

571

1,208

At 31 March 2023

4,000,000

423,603

101,478

1,897

4,526,978

DEPRECIATION

At 1 April 2022

-

364,097

25,370

442

389,909

Charge for year

40,000

14,877

19,027

632

74,536

At 31 March 2023

40,000

378,974

44,397

1,074

464,445

NET BOOK VALUE

At 31 March 2023

3,960,000

44,629

57,081

823

4,062,533

At 31 March 2022

4,000,000

58,869

76,108

884

4,135,861

Cost or valuation at 31 March 2023 is represented by:

Fixtures,

fittings

Freehold

and

Motor

Computer

property

equipment

vehicles

equipment

Totals

£

£

£

£

£

Valuation in 2022

4,000,000

-

-

-

4,000,000

Cost

-

423,603

101,478

1,897

526,978

4,000,000

423,603

101,478

1,897

4,526,978

If the freehold building had not been revalued it would have been included at the following historical cost:

2023

2022

£

£

Cost

675,875

675,875

Aggregate depreciation

(59,023

)

(59,023

)

Value of land in freehold land and buildings

616,852

616,852

The freehold building was valued on an open market basis on 10 May 2021 by Knight Frank .