Riverside Healthcare Limited - Accounts

Registered number

04979179

Riverside Healthcare Limited

Report and Financial Statements

30 September 2017

Riverside Healthcare Limited
Report and accounts
Contents
Page
Company information	1
Directors' report	2
Strategic report	4
Independent auditor's report	5
Income statement	6
Statement of comprehensive income	6
Statement of financial position	7
Statement of changes in equity	8
Statement of cash flows	9
Notes to the financial statements	10

Riverside Healthcare Limited

Company Information

Directors

A P Levack

J G Rhoden

Dr R E Pearson

Auditors

D & J Randles Limited

203 Askern Road

Bentley

Doncaster

DN5 0JR

Registered office

Cheswold Park Hospital

Cheswold Lane

Doncaster

South Yorkshire

DN5 8AR

Registered number

04979179

Riverside Healthcare Limited
Registered number:				04979179
Directors' Report
The directors present their report and financial statements for the period ended 30 September 2017.
Principal activity
The company's principal activity during the period continued to be that of operators of mental health care facilities.
Directors
The following persons served as directors during the period:
	A P Levack
	J G Rhoden
	Dr R E Pearson
	A P Levack resigned as a director on 26th February 2018.
Directors' responsibilities

The directors are responsible for preparing the report and financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (Financial Reporting Standard 102 and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
●	select suitable accounting policies and then apply them consistently;
●	make judgements and 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 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 directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Disclosure of information to auditors

Each person who was a director at the time this report was approved confirms that:
●	so far as he is aware, there is no relevant audit information of which the company's auditor is 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 company's auditor is aware of that information.

Employment of disabled persons

Auditors

The auditors, D & J Randles Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

This report was approved by the board on 27 June 2018 and signed on its behalf.

J G Rhoden

Director

Riverside Healthcare Limited

Strategic Report

Review of Business

The directors aim to present a balanced and comprehensive review of the development and performance of the business during the year and its position at the year end. Our review is consistent with the size and nature of our business and is written in the context of the risks and uncertainties we face.

Turnover has increased from £16,598,865 (for 12 months) to £26,368,508 (for 18 months), a proportionate increase of 6%. The net profit after tax for the 18 month period is £2,419,977 and net assets are now £3,020,733. The net profits increased substantially becasue the directors decided not to make any payments to the Remuneration Benefit Trust for the 18 month period under review. The directors did decide to make significant pension payments to key individuals though. Given the underlying profits of the group the directors consider the company’s finances to be in a satisfactory situation.

Principal Risks and Uncertainties

The company’s largest customer is NHS England which continues to experience downward budgetary pressure and this represents a continuing risk for the company. This is managed by providing high quality well-trained staff to ensure that we offer quality care to patients and by trying to decrease the time taken for patients to sufficiently recover to be able to move along a recovery path.

The company keeps exposure to credit risk and cash flow risk to a minimum by agreeing early payment terms with customers who are government funded rather than privately funded.

The company’s objective is to minimise the risks and uncertainties to the level of the marketplace in which it operates and achieves this through its quality of service compared to other providers in the market place. The company adopts rigorous internal controls, benchmarking and review procedures to achieve this.

The directors consider that an analysis of key performance indicators is not necessary to understand the financial performance of the company.

Employee Involvement

Within the grounds of commercial confidentiality, information is disseminated to all levels of staff about matters that affect the progress of the company and are of interest to them as employees.

Disabled Employees

The company gives equal opportunity to the employment of disabled persons where practicable.

It is the policy of the company that training, career development and promotion opportunities should be available to all employees.

This report was approved by the board on 27 June 2018 and signed on its behalf.

J G Rhoden

Director

Riverside Healthcare Limited

Independent auditor's report

to the members of Riverside Healthcare Limited

Opinion

We have audited the financial statements of Riverside Healthcare Limited for the period ended 30 September 2017 which comprise the Income Statement, the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows 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 FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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.
In our opinion the financial statements:
●	give a true and fair view of the state of the company's affairs as at 30 September 2017 and of its profit for the period then ended;
●	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;
●	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis of 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 Auditor’s 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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
●	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
●	the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Other information
The other information comprises the information included in the report and financial statements, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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 directors’ report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
●	the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception

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 directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
●	adequate accounting records have not been kept, 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 directors’ remuneration specified by law are not made; or
●	we have not received all the information and explanations we require for our audit; or

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor’s 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 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.

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 auditor’s report.

D F Randles FCA
(Senior Statutory Auditor)		203 Askern Road
for and on behalf of		Bentley
D & J Randles Limited		Doncaster
Accountants and Statutory Auditors
27 June 2018		DN5 0JR

Riverside Healthcare Limited
Income Statement
for the period from 1 April 2016 to 30 September 2017
Notes						2017		2016
£							£
Turnover				2		26,368,508		16,598,865
Cost of sales						(12,509,129)		(8,141,359)
Gross profit						13,859,379		8,457,506
Administrative expenses						(10,849,167)		(8,423,094)
Operating profit				3		3,010,212		34,412
Interest receivable						4,963		2,012
Profit on ordinary activities before taxation						3,015,175		36,424
Tax on profit on ordinary activities				6		(595,198)		(12,762)
Profit for the period						2,419,977		23,662

Riverside Healthcare Limited
Statement of comprehensive income
for the period from 1 April 2016 to 30 September 2017
Notes					2017		2016
£						£
Profit for the period					2,419,977		23,662
Other comprehensive income
Total comprehensive income for the period					2,419,977		23,662

Riverside Healthcare Limited
Statement of Financial Position
as at 30 September 2017
Notes				2017			2016
£					£
Fixed assets
Tangible assets	7			1,391,592			-
Current assets
Stocks	8		10,000			12,194
Debtors	9		2,956,900			1,601,230
Cash at bank and in hand			3,855,621			428,484
			6,822,521			2,041,908
Creditors: amounts falling due within one year	10		(1,748,380)			(1,441,152)
Net current assets				5,074,141			600,756
Total assets less current liabilities				6,465,733			600,756
Provisions for liabilities
Other provisions	11			(3,445,000)			-
Net assets				3,020,733			600,756
Capital and reserves
Called up share capital	12			1,000			1,000
Profit and loss account	13			3,019,733			599,756
Total equity				3,020,733			600,756
J G Rhoden
Director
Approved by the board on 27 June 2018

Riverside Healthcare Limited
Statement of Changes in Equity
for the period from 1 April 2016 to 30 September 2017
Share			Share		Other		Profit		Total
capital			premium		reserves		and loss
account
£			£		£		£		£
At 1 April 2015		1,000		-		-		576,094		577,094
Profit for the financial year								23,662		23,662
At 31 March 2016		1,000		-		-		599,756		600,756
At 1 April 2016		1,000		-		-		599,756		600,756
Profit for the period								2,419,977		2,419,977
At 30 September 2017		1,000		-		-		3,019,733		3,020,733

Riverside Healthcare Limited
Statement of Cash Flows
for the period from 1 April 2016 to 30 September 2017
Notes			2017		2016
£				£
Operating activities
Profit for the period			2,419,977		23,662
Adjustments for:
Interest receivable			(4,963)		(2,012)
Tax on profit on ordinary activities			595,198		12,762
Decrease in stocks			2,194		1,348
Increase in debtors			(1,355,670)		(130,242)
Increase/(decrease) in creditors			3,119,526		(791,454)
			4,776,262		(885,936)
Interest received			4,963		2,012
Corporation tax paid			37,504		(1,514)
Cash generated by/(used in) operating activities			4,818,729		(885,438)
Investing activities
Payments to acquire tangible fixed assets			(1,391,592)		-
Cash used in investing activities			(1,391,592)		-
Net cash generated/(used)
Cash generated by/(used in) operating activities			4,818,729		(885,438)
Cash used in investing activities			(1,391,592)		-
Net cash generated/(used)			3,427,137		(885,438)
Cash and cash equivalents at 1 April			428,484		1,313,922
Cash and cash equivalents at 30 September			3,855,621		428,484
Cash and cash equivalents comprise:
Cash at bank			3,855,621		428,484

Riverside Healthcare Limited
Notes to the Accounts
for the period from 1 April 2016 to 30 September 2017
1	Summary of significant accounting policies
	Basis of preparation
	The financial statements have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland.
	Turnover
	Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs.
	Tangible fixed assets

	Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows:
	Tenants Improvements			not depreciated whilst under construction

	Stocks
	Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised.
	Taxation
	A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted.
	Provisions
	Provisions (ie liabilities of uncertain timing or amount) are recognised when the Company has a present legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation taking into account the risks and uncertainties surrounding the obligation.
	Leased assets
	A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term.
	Pensions
	Contributions to defined contribution plans are expensed in the period to which they relate.
2	Analysis of turnover					2017		2016
£							£
	Sale of services					26,368,508		16,598,865
	By geographical market:
	UK					26,368,508		16,598,865
3	Operating profit					2017		2016
£							£
	This is stated after charging:
	Operating lease rentals - plant and machinery					84,149		57,049
	Operating lease rentals - land and buildings					2,040,000		1,360,000
	Auditors' remuneration for audit services					21,600		14,400
	Contributions to Remuneration Trusts					-		3,800,000
	Provision for unregulated pensions					3,445,000		-
	Unregulated pension scheme
	During the period, a provision has been made in respect of a liability to an unregulated pension scheme for the benefit of the directors amounting to £3,445,000. The provision represents the directors' best estimate of the present value of the cost to the company due to the obligation in the financial reporting period.
	Remuneration trust
	During the period payments of £nil (2016: £3,800,000) including fees of £nil (2016: £94,264) have been made to Riverside Healthcare Remuneration Trust which following assurance from the trustees' advisers has been treated as a deductible expense for corporation tax purposes.
	The trustee of the trust is Bay International, a company registered in Belize. The power of appointing and removing trustees is vested in the protectors who are A P Levack, J G Rhoden and R E Pearson who are directors of Riverside Healthcare Limited. The trustees have the power to apply the income and capital of the trust for the benefit of the beneficiaries in such shares and in such manner as generally as the trustees in their absolute discretion think fit.
	The following are excluded from being beneficiaries of the trust:
	i) Riverside Healthcare Ltd
	ii) Any person connected with Riverside Healthcare Limited
	iii) Any participator in Riverside Healthcare Limited
	iv) Any former, present or future employee of Riverside Healthcare Limited
	However, the trustees have the power to make loans to such excluded persons.
	The beneficiaries of the trust are wives, husbands, widows, widowers, children, step children and remoter issue of a person who provides or has provided or may in future provide:
	i) services or custom or products or finance to Riverside Healthcare Limited
	ii) finance to the trustees or any manager of the trust fund.
	The trust fund is invested under the supervision and cusodianship of companies nominated by the protectors who are A P Levack, J G Rhoden and R E Pearson who are directors of Riverside Healthcare Limited.
4	Directors' emoluments					2017		2016
£							£
	Emoluments					307,500		205,000
	Company contributions to defined contribution pension plans					9,075		6,050
						316,575		211,050
	Highest paid director:
	Emoluments					307,500		205,000
	Company contributions to defined contribution pension plans					9,075		6,050
						316,575		211,050
	Number of directors to whom retirement benefits accrued:					2017		2016
Number							Number
	Defined contribution plans					2		1
5	Staff costs					2017		2016
£							£
	Wages and salaries					2,863,355		1,656,295
	Social security costs					263,637		160,280
	Other pension costs					3,480,904		18,610
						6,607,896		1,835,185
	Average number of employees during the year					Number	Number
	Directors					3		3
	Administration					68		60
	Healthcare					345		310
						416		373
6	Taxation					2017		2016
£							£
	Analysis of charge in period
	Current tax:
	UK corporation tax on profits of the period					595,198		12,762
	Tax on profit on ordinary activities					595,198		12,762
	Factors affecting tax charge for period
	The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows:
						2017		2016
£							£
	Profit on ordinary activities before tax					3,015,175		36,424
	Standard rate of corporation tax in the UK					19.5%		20%
£							£
	Profit on ordinary activities multiplied by the standard rate of corporation tax					587,959		7,285
	Effects of:
	Expenses not deductible for tax purposes					12,976		5,477
	Group relief					(5,737)		-
	Current tax charge for period					595,198		12,762
7	Tangible fixed assets
								Tenants Improvements
								At cost
£
	Cost or valuation
	Additions							1,391,592
	At 30 September 2017							1,391,592
	Depreciation
	At 30 September 2017							-
	Carrying amount
	At 30 September 2017							1,391,592
8	Stocks					2017		2016
£							£
	Raw materials and consumables					10,000		12,194
9	Debtors					2017		2016
£							£
	Trade debtors					499,913		829,180
	Amounts owed by group undertakings and undertakings in which the company has a participating interest					1,853,258		413,079
	Other debtors					258,973		164,207
	Prepayments and accrued income					344,756		194,764
						2,956,900		1,601,230
10	Creditors: amounts falling due within one year					2017		2016
£							£
	Trade creditors					410,422		221,634
	Corporation tax					643,948		11,246
	Other taxes and social security costs					216,483		188,387
	Other creditors					18,813		775,976
	Accruals and deferred income					458,714		243,909
						1,748,380		1,441,152
11	Provisions for liabilities
								Pension Provision
£
	At 1 April 2016							-
	Provision created during the year							3,445,000
	At 30 September 2017							3,445,000
	The provision represents the directors best estimate of the present value of the cost to the Company due to the obligation in the financial period. A formal decision regarding the amount and its form will be taken at some point after the reporting period end.
12	Share capital	Nominal		2017		2017		2016
value			Number		£		£
	Allotted, called up and fully paid:
	Ordinary shares	£1 each		1,000		1,000		1,000
13	Profit and loss account					2017		2016
£							£
	At 1 April					599,756		576,094
	Profit for the period					2,419,977		23,662
	At 30 September					3,019,733		599,756
14	Contingent liabilities
	During 2011, HMRC launched an enquiry into the Remuneration Trust payments made by the company as disclosed in note 3. Should the enquiry be decided against the company it may be liable to additional corporation tax, PAYE and National Insurance Liabilities. The company is strongly defending this enquiry and as a result no provision has been included in the financial statements as the outcome of the enquiry is uncertain.
15	Loans to directors
	Description and conditions	B/fwd	Paid		Repaid		C/fwd
£			£		£		£
	Dr R E Pearson
	Directors Loan Account	-		152,618		-		152,618
		-		152,618		-		152,618
	Interest is charged on directors overdrawn loan accounts at the official rate of interest.
16	Ultimate parent company
	Denlev Limited is regarded by the directors as being the company's ultimate parent company.
17	Controlling party
	There is no ultimate controlling party.
18	Presentation currency
	The financial statements are presented in Sterling.
19	Legal form of entity and country of incorporation
	Riverside Healthcare Limited is a private company limited by shares and incorporated in England.
20	Principal place of business
	The address of the company's principal place of business and registered office is:
	Cheswold Park Hospital
	Cheswold Lane
	Doncaster
	South Yorkshire
	DN5 8AR