RUSHCLIFFE_CARE_HOLDINGS_ - Accounts

The director presents the strategic report for the year ended 30 November 2022.

On 28 July 2022 a group reorganisation took place to streamline the group operations. As a result of this reorganisation a new intermediate holding company was put in place between Rushcliffe Care Holdings Limited and its subsidiary companies. As part of the reorganisation the group has negotiated new bank facilities of £30m.

For the year ended 30 November 2022 group turnover increased by 18.96% when compared to the turnover for 2021.

Cost of sales have also increased during the year, but at a lower rate, due to an increase in group wages costs, giving an increased gross profit percentage of 36.24% (2021: 33.89%).

Government support for the group during the year amounted to over £1.1m and goes some way towards compensating the group for the lost gross profit resulting from the increased staffing requirements throughout the pandemic.

The results for the year show consolidated net profit after tax at £4.0m compared to £3.6m in 2021.

The market for the provision of care remains highly competitive but occupancy levels across the homes of the group have been in line with industry norm, with the exception of a few homes. The director believes that there are some indications of overall bed occupancy continuing to increase but sees the care home market remaining profitable with the demographic trend leading to a growing number of people living in care.

The market for provision of education for children on the Autistic spectrum seems to be expanding with new facilities opening both locally to high Grange School and on a national level. The additional competition whilst a possible risk shows the true potential in the sector with more and more success stories from Specialist Schools seeing placements in the sector increase. Referral levels have remained strong with occupancy remaining high and is expected to remain at this level.

The group has continued to provide a range of care services to the residents of its various sites enabling it to ensure that services can be provided to meet demand where it arises. This helps to minimise the business risk to the company.

The group's banking facilities are in a subsidiary company and new facilities, totalling £30m, from the company's bankers have been put in place during the year.

The group continues to have a policy of continual training for its staff and to encourage employee participation in its development at each site.

The group has previously introduced a monthly reporting package which has allowed a more detailed analysis of the monthly results. This has been continued throughout 2022 and 2021.

This has helped with the monitoring of of wages, occupancy and EBITDA generation as previously but an additional emphasis is now put on cash generation.

From an operational viewpoint the KPI's have helped identify homes where the average fee is falling and thus address pricing along costs of care per resident statistics which work alongside the wages percentage calculations.

The group closely monitors its performance against CQC guidelines. Internal reviews are carried out against key criteria to ensure that homes are meeting the necessary standards for when inspections take place.

The homes have all been reviewed in the past three years with five homes being highlighted as requiring improvement and the rest being rated good.

The school operated by the group has been inspected by Ofsted and awarded an Outstanding rating in July 2023.

The director considers that he has acted in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in S172 (1) (a-f) of the Act) in the decisions taken during the year ended 30 November 2022.

The following paragraphs summarise how the director fulfils his duties:

Our purpose, strategy and consideration of the consequences of decisions in the long term

Our purpose is to be a high quality provider of care, supporting those in our care to lead their best lives with the intention of our homes being the first choice for our service users, their relevant families, commissioners that we work with, together with all of our fellow colleagues.

The group's strategy is reviewed on an annual basis and discussed with all the senior management team.

Engaging with our stakeholders

The director recognises his responsibility to act fairly between all stakeholders and all decisions are made with a view to protecting all the major stakeholders.

Residents and relatives

Residents come at the fore of the group's reason for operating and we pride ourselves on looking after those residents on a 24 hour basis, 7 days a week and we look to maintain continuous dialogue with our service users and their families.

Our people

Our colleagues are critical to the business and for ensuring that the business provides the best possible care to our service users. The director and senior management team meet regularly with our wider colleagues, and we always look to maintain an inclusive workplace, where colleagues can make sure that they work with the full support of the director.

Lenders

The group has a strong relationship with its lenders and has a transparent and open relationship, ensuring that the company always has the resources available to provide the best possible care.

Commissioners

Our commissioners are clearly imperative to the group and its ability to execute its strategy. The group aims always to be the first choice for commissioners and is committed to maintaining and developing relationships with said commissioners.

Our suppliers

The group strives to maintain strong relationships with all of its suppliers and to have an open dialogue with all of them at all times. They are key to the strategy of the business to make sure that the company can fulfil its service provision to service users.

Community and environment

The group is keen to have an active involvement in the local community and environment and regular open days are held, when it is safe to do so, to encourage local communities to be one of our key supporters.

On behalf of the board

The director presents his annual report and financial statements for the year ended 30 November 2022.

The principal activity of the company and group continued to be that of the provision of nursing services, residential care services, learning facilities and property rental.

The results for the year are set out on page 11.

Ordinary dividends were paid amounting to £2,000. The director does not recommend payment of a further dividend.

The director who held office during the year and up to the date of signature of the financial statements was as follows:

The company finances its operations through a mixture of retained profits and bank borrowings.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The group operates a policy whereby all information about matters of concern to employees is made available to them, and employee involvement in matters of concern is encouraged.

Statement of carbon emissions in compliance with Streamlined Energy and Carbon Reporting (SECR) covering energy use and associated greenhouse gas emissions relating to gas, electricity and transport, intensity ratios and information relating to energy efficiency actions.

This report only includes information for one of the subsidiaries within the group as all the other subsidiaries are not required to include this information in their directors report. The parent company is exempt from reporting on its energy usage as a low energy user.

The footprint is calculated in accordance with the Greenhouse Gas (GHG) Protocol and Environmental Reporting Guidelines: Including streamlined energy and carbon reporting guidance. Activity data has been converted into Carbon emissions using published emissions factors.

A wide range of published carbon emission factors are publicly available. DEFRA emission factors have been used for all emission sources as this provides the most comprehensive list of factors available. They allow an activity to be converted into tonnes of carbon dioxide equivalent (tCO2e). Market based emissions factors have been taken from each of our relevant suppliers.

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per full-time employee, the recommended ratio for the sector.

We will take a forward-looking approach in reducing our energy and carbon footprint, which will include future investments and infrastructure plans. This is our first-year report on SECR and therefore sets the benchmark for the organisation. We are already taking guidance from our energy saving opportunity scheme reports, which included:

• replacements of lighting and heating systems with more efficient and energy saving options,

• utilising energy saving control units where possible,

• insulation in various forms, such as property or pipework,

• improvement of staff energy awareness and education,

• replacing old for new, including equipment and or materials,

• reviewing processes and practices across the organisation.

We will, where practicable, use technology to improve greater energy efficiency and look to reduce our transport usage and carbon footprint, which will include all waste streams. We will continue to work with energy consultants and suppliers to ensure business sustainability from a cost perspective and to contribute to the UK Government energy efficiency strategies.

Over the last period the Group has undertaken some property refurbishments and has included better use of LED lighting, replacement of old for new insulated windows, heating improvements and insulation. To prevent heat loss in some areas, additional measures such as airlocks have been installed. We believe that although small in each area, collectively they will contribute to meeting targets.

The director is responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and company, 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 UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;

•     prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

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

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Qualified opinion on financial statements

We have audited the financial statements of Rushcliffe Care Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 November 2022 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including 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, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:

•     give a true and fair view of the state of the company's affairs as at 30 November 2022 and of its 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 qualified opinion

Included in fixed assets in the group statement of financial position is an amount of £25,152,415 which relates to investments. The audit evidence available to us was limited as the value of these fixed assets could not be determined with reasonable certainty. Accordingly we have been unable to determine the value of any corresponding effect on the group income statement for the year.

The company's investment in Rushcliffe Investments at 30 November 2022 had a carrying value of £24,045,333. The audit evidence available to us was limited as the market value of the assets held by Rushcliffe Investments at 30 November 2022 could not be determined with reasonable certainty. Accordingly we have been unable to determine the value of any corresponding effect on the company's result for the financial year.

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 qualified 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 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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.

As described in the basis for qualified opinion section of our report, we are unable to satisfy ourselves concerning the value of the group investments of £25,152,415 held at 30 November 2022 and have concluded that where the other information refers to the carrying value of investments or related balances such as a result for the year or financial position, it may be materially misstated for the same reason. Furthermore, as described in the Basis for qualified opinion on other matters prescribed by the Companies Act 2006 section of our report we have concluded that a material misstatement of the other information exists.

Qualified opinion on other matters prescribed by the Companies Act 2006

Except for the matter described in the Basis for qualified opinion on other matters prescribed by the Companies Act 2006 section of our report, in our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the director's report have been prepared in accordance with applicable legal requirements.

Basis for qualified opinion on other matters prescribed by the Companies Act 2006

Based on the work undertaken during the course of the audit, as described in the basis for qualified opinion section of our report, we have been unable to satisfy ourselves concerning the value of the group investments of £25,152,415 held at 30 November 2022 and have concluded that where the other information refers to the carrying value of investments or related balances such as result for the year or financial position, it may be materially misstated for the same reason.

Except for the matters described in the Basis for qualified opinion on other matters prescribed by the Companies Act 2006 section of our report, in the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.

Arising solely from the limitation on the scope of our work relating to the group's investment in Rushcliffe Investments, referred to above:

• we have not obtained all the information and explanations that we considered necessary for the purpose of our audit.

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.

As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the 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 parent company or to cease operations, or has no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

We considered the nature of the group's business and its control environment. We also enquired of management about their identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory framework in which the group operates and identified key laws and regulations that:

- Had a direct effect on the determination of material amounts and disclosures in the financial statements, which included the Companies Act 2006, tax legislation and payroll legislation; and

- Did not have a direct effect on the financial statements but compliance with which may be fundamental to the group's ability to operate.

We discussed among the audit engagement team the opportunities and incentives that may exist within the organisation for fraud and how / where fraud might occur in the financial statements.

In common with all audits under ISA's (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of accounting adjustments and journal entries, assessed whether accounting estimates were reasonable and accurate and reviewed the accounting records for any significant or unusual transactions.

In addition, our procedures to respond to the risks identified included:

- Reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provision of relevant laws and regulations described as having a direct effect on the financial statements;

- Performing analytical procedures to identify any unusual or unexpected variances that may indicate risks of material misstatement due to fraud;

- Enquiring of management about any instances of non-compliance with laws and regulations and any instances of known or suspected fraud; and

- Reviewing the latest available Care Quality Commission, Health Inspectorate Wales and Ofsted inspection reports for all registered homes, hospitals and schools operated by the group.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment forgery, collusion, omission or misrepresentation.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £13,476 (2021 - £4,337 loss).

Rushcliffe Care Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Epinal Way Care Centre, Hospital Way, Loughborough, Leicestershire, LE11 3GD.

The group consists of Rushcliffe Care Holdings Limited and all of its subsidiaries.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated group financial statements consist of the financial statements of the parent company Rushcliffe Care Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 30 November 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

At the year end the group had net current assets of £4,814,178 (2021 net current liabilities: £22,467,389, including bank borrowings).

New bank facilities totalling £30m have been received in July 2022.

The group meets its day to day working capital requirements through the overdraft facility, which is repayable on demand.

The group forecasts to operate well within these new facilities.

Given the above and that the group continues to make significant profits, it is on this basis that the director considers that the company will have sufficient cash resources available to fund its activities and other obligations during the course of the twelve months from the date of approval of the financial statements and it is therefore appropriate for the financial statements to be prepared on the going concern basis.

Turnover is recognised at the fair value of the consideration received or receivable for nursing, services, residential care services and learning facilities provided in the normal course of business, and is shown net of VAT and other sales related taxes.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stock is valued at the lower of cost and net realisable value, after making due allowances for obsolete and slow moving items.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally 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.

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.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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 finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The average monthly number of persons (including directors) employed by the group and company during the year was:

Their aggregate remuneration comprised:

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

Tangible fixed assets with a carrying value of £43,650,788 (2021: £32,959,170) are pledged as a security for the group's borrowing facilities.

Included in cost of freehold land and buildings is freehold land of £2,866,000 (2021: £2,866,000) which is not depreciated.

Included in cost of freehold land and buildings is property of £60,825 (2021: £65,057) which is not depreciated as the director believes depreciation would be immaterial due to the expected residual values after the useful economic lives, or that the asset has not yet been brought into full use.

Investment property is included at fair value. Fair value has been determined based upon the value the property is being marketed for, as assessed by an independent commercial estate agent. No formal valuation has been undertaken.

The historical cost of investment property held at fair value is £1,258,301.

Investment properties with a carrying value of £685,135 (2021: £2,903,429) are pledged as a security for the group's borrowing facilities.

Details of the company's subsidiaries at 30 November 2022 are as follows:

The group's bank reserve a right to set off and holds first legal mortgages, life policies, mortgage debentures and guarantees over land and buildings.

Lloyds Bank plc holds a debenture and an omnibus guarantee and set off agreement for the subsidiaries of Rushcliffe Care Holdings Limited, excluding Rushcliffe Independent Hospitals (Markfield) Limited and Rushcliffe Investments.

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

Teachers' Pensions Scheme

The TPS is an unfunded multi-employer defined benefits scheme governed by the Teachers' Pensions Regulations 2022. Members contribute on a "pay as you go" basis with contributions from members and the employer being credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament.

The employer contribution rate is set following scheme valuations undertaken by the Government Actuary's Department. The latest actuarial valuation of the TPS was prepared as at 31 March 2020 and the valuation report, which was published in October 2023, confirmed an employer contribution rate for the TPS of 28.6% from 1 April 2024. Employers are also required to pay a scheme administration levy of 0.08% giving a total employer contribution rate of 28.68%, having previously been 23.68% during the year.

This employer rate will be payable until the outcome of the next actuarial valuation which is due to be prepared as at 31 March 2024, with any resulting changes to the employer rate expected to take effect from 1 April 2027. This valuation will also determine the opening balance of the cost cap fund and provide an analysis of the cost cap as required by the Public Service Pensions Act 2022.

The pension charge for the year includes £66,381 (2021: £99,518) in respect of contributions . At the year end £0 (2021: £0) was due in respect of contributions to this scheme.

The company other reserves relates to a merger relief reserve.

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

During the year the group rented property from the director on normal commercial terms.

Loans have been granted by the group to its directors as follows:

The ultimate controlling party is the director, S Rai, by virtue of his majority shareholding.