Company Registration No. 03943652 (England and Wales)
AJ & CO.(DEVON) LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2018
AJ & CO.(DEVON) LTD
COMPANY INFORMATION
Directors
Mr D J Smallridge
Mrs G M Smallridge
Secretary
Mr D J Smallridge
Company number
03943652
Registered office
Ludbrook House
Ludbrook
Ivybridge
Devon
PL21 0LL
Auditor
Baldwins Audit Services
20 Western Road
Launceston
Cornwall
PL15 7BA
AJ & CO.(DEVON) LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 22
AJ & CO.(DEVON) LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2018
- 1 -
The directors present the strategic report for the year ended 31 July 2018.
Fair review of the business
AJ & Co.(Devon) Ltd runs Meadowside and St Francis Residential and Nursing Home as well as Merafield Nursing Home which provide a total of 69 beds and 40 beds respectively in the South Devon area. The Company purchased Merafield Nursing Home in June 2015.
The Company has a significant number of private paying residents, in addition to this, a number are funded by local authorities. The company is in constant dialogue regarding the negotiation of funding levels from local authorities.
The measures the company use to monitor it’s progress against its objectives are
-
Occupancy rates,
-
Fee Levels
-
Margin
-
Staff and Agency Costs
The business is supported by strong future demand based on the demographics of the UK population. The segment of the UK population aged over 80 or over is projected to increase from 3,000,000 in 2012 to 6,100,000 in 2037.
The company’s growth strategy is to develop and update it’s existing facilities and improve the care levels it offers.
Where possible the company seeks to employ well qualified and experienced staff.
Principal risks and uncertainties
The management of the business and the execution of the Company’s strategy are subject to a number of risks. The key business risks and uncertainties are considered to relate to competition from other residential and nursing homes, low local authority fees, staff retention, compliance with care standards and interest rates rises.
In order to mitigate these risks, the company: maintains its property to a high standard, endeavours to maintain a healthy dialogue with the local authorities, seeks it engage well trained and experienced staff, and has long term finance in place.
AJ & CO.(DEVON) LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2018
- 2 -
Key performance indicators
Following a CQC inspection at Meadowside and St Francis from 29th June to 3rd July 2017, the home was rated inadequate. Admissions were stopped until the issues were resolved. This had a major impact on performance for the year to 31st July 2018, with the turnover decreasing by 21.4% to £2,270,035 with occupancy rates reducing from 96.9% to 66.0%. The gross profit margin had reduced from 27.9% to 9.0%. Wages (excluding administrative and Directors) increased from 65% to 84% of turnover and a net loss of £455,758 was sustained in the year. However, a follow up inspection in February 2018 allowed us to recommence admissions which has meant that profitability has steadily recovered.
Merafield Nursing Home has increased turnover by 5.9% to £1,511,133 with occupancy rates being maintained at approximately 98.5% for the year to 31st July 2018. The gross profit margin has also been maintained at approximately 29.5%. Wages (excluding administrative) remained the same at 65% of turnover for the second year running. Overall a net profit before tax of £162,671 was achieved compared to a profit of £118,141, in the previous year. The Directors are very pleased with the continued progression and stability that Merafield has shown during the year. This has financially supported the downturn of profits at Meadowside and St Francis during this period.
Mr D J Smallridge
Director
26 April 2019
Date
AJ & CO.(DEVON) LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2018
- 3 -
The directors present their annual report and financial statements for the year ended 31 July 2018.
Principal activities
The principal activity of the company continued to be that of the operation of a Nursing and Residential Home.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr D J Smallridge
Mrs G M Smallridge
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £98,500. The directors do not recommend payment of a further dividend.
Auditor
On 17th November 2017 Potter Baker resigned as auditors, and Baldwins Audit Service Limited were appointed on 20th November, Baldwins Audit Services Limited will be proposed for re-appointment at the forthcoming Annual General Meeting.
Statement of disclosure to auditor
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 company’s auditor 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 company’s auditor is aware of that information.
On behalf of the board
Mr D J Smallridge
Director
26 April 2019
AJ & CO.(DEVON) LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2018
- 4 -
The directors are responsible for preparing the annual report and the 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 (United Kingdom Accounting Standards 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 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 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.
AJ & CO.(DEVON) LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF AJ & CO.(DEVON) LTD
- 5 -
Opinion
We have audited the financial statements of AJ & Co.(Devon) Ltd (the 'company') for the year ended 31 July 2018 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, 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 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 July 2018 and of its loss for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report 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 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 our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial year 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.
AJ & CO.(DEVON) LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AJ & CO.(DEVON) LTD
- 6 -
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 identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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 directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s 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.
Mr Andrew Baker FCA (Senior Statutory Auditor)
for and on behalf of Baldwins Audit Services
29 April 2019
Statutory Auditor
20 Western Road
Launceston
Cornwall
PL15 7BA
AJ & CO.(DEVON) LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JULY 2018
- 7 -
2018
2017
Notes
£
£
Turnover
3,781,168
4,316,084
Cost of sales
(3,133,150)
(3,086,521)
Gross profit
648,018
1,229,563
Administrative expenses
(858,964)
(795,671)
Operating (loss)/profit
2
(210,946)
433,892
Interest payable and similar expenses
5
(82,141)
(84,940)
(Loss)/profit before taxation
(293,087)
348,952
Tax on (loss)/profit
6
49,379
(67,300)
(Loss)/profit for the financial year
(243,708)
281,652
The Profit And Loss Account has been prepared on the basis that all operations are continuing operations.
AJ & CO.(DEVON) LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2018
- 8 -
2018
2017
£
£
(Loss)/profit for the year
(243,708)
281,652
Other comprehensive income
Tax relating to other comprehensive income
9,504
25,932
Total comprehensive income for the year
(234,204)
307,584
AJ & CO.(DEVON) LTD
BALANCE SHEET
AS AT
31 JULY 2018
31 July 2018
- 9 -
2018
2017
Notes
£
£
£
£
Fixed assets
Goodwill
8
244,687
285,937
Tangible assets
9
4,632,440
4,640,432
4,877,127
4,926,369
Current assets
Stocks
10
18,497
17,000
Debtors
11
472,010
423,554
Cash at bank and in hand
123,382
84,703
613,889
525,257
Creditors: amounts falling due within one year
12
(469,892)
(354,644)
Net current assets
143,997
170,613
Total assets less current liabilities
5,021,124
5,096,982
Creditors: amounts falling due after more than one year
13
(2,367,563)
(2,057,963)
Provisions for liabilities
16
(154,300)
(207,054)
Net assets
2,499,261
2,831,965
Capital and reserves
Called up share capital
19
375,013
375,013
Share premium account
20
133,170
133,170
Revaluation reserve
21
1,485,847
1,476,343
Capital redemption reserve
22
393,915
393,915
Profit and loss reserves
23
111,316
453,524
Total equity
2,499,261
2,831,965
The financial statements were approved by the board of directors and authorised for issue on 26 April 2019 and are signed on its behalf by:
Mr D J Smallridge
Director
Company Registration No. 03943652
AJ & CO.(DEVON) LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2018
- 10 -
Share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 August 2016
375,013
133,170
1,450,411
393,915
293,744
2,646,253
Year ended 31 July 2017:
Profit for the year
-
-
-
-
281,652
281,652
Other comprehensive income:
Tax relating to other comprehensive income
-
-
25,932
-
-
25,932
Total comprehensive income for the year
-
-
25,932
-
281,652
307,584
Dividends
7
-
-
-
-
(121,872)
(121,872)
Balance at 31 July 2017
375,013
133,170
1,476,343
393,915
453,524
2,831,965
Year ended 31 July 2018:
Loss for the year
-
-
-
-
(243,708)
(243,708)
Other comprehensive income:
Tax relating to other comprehensive income
-
-
9,504
-
-
9,504
Total comprehensive income for the year
-
-
9,504
-
(243,708)
(234,204)
Dividends
7
-
-
-
-
(98,500)
(98,500)
Balance at 31 July 2018
375,013
133,170
1,485,847
393,915
111,316
2,499,261
AJ & CO.(DEVON) LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2018
- 11 -
2018
2017
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
26
(198,027)
625,178
Interest paid
(82,141)
(84,940)
Income taxes paid
(6,129)
(5,000)
Net cash (outflow)/inflow from operating activities
(286,297)
535,238
Investing activities
Purchase of tangible fixed assets
(53,988)
(80,572)
Net cash used in investing activities
(53,988)
(80,572)
Financing activities
Proceeds of new bank loans
500,000
-
Repayment of bank loans
(85,544)
(65,662)
Payment of finance leases obligations
(9,437)
Dividends paid
(98,500)
(121,872)
Net cash generated from/(used in) financing activities
306,519
(187,534)
Net (decrease)/increase in cash and cash equivalents
(33,766)
267,132
Cash and cash equivalents at beginning of year
84,703
(182,429)
Cash and cash equivalents at end of year
50,937
84,703
Relating to:
Cash at bank and in hand
123,382
84,703
Bank overdrafts included in creditors payable within one year
(72,445)
-
AJ & CO.(DEVON) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2018
- 12 -
1
Accounting policies
Company information
AJ & Co.(Devon) Ltd is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Ludbrook House, Ludbrook, Ivybridge, Devon, PL21 0LL.
1.1
Accounting convention
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.
1.2
Going concern
A
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents gross income from residents and sundry services. The Company is not VAT registered.
1.4
Intangible fixed assets - goodwill
Goodwill, being the amount paid in connection with the purchase of Meadowside and St Francis in 2004 is being amortised evenly over it's estimated useful life of twenty years.
Goodwill, being the amount paid in connection with the purchase of Merafield in 2015 is being amortised evenly over it's estimated useful life of 10 years.
1.5
Tangible fixed assets
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:
Fixtures and fittings
20% Reducing Balance
Motor vehicles
25% Reducing Balance
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 credited or charged to profit or loss
.
No depreciation is charged on the Company's properties as depreciation is deemed to be immaterial. The buildings are expected to have long economic lives and very high residual values. The Company's property known as Meadowside/St Francis was revalued in 2012 and this is now regarded as "deemed historic cost" under FRS102.
1.6
Stocks
Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.
1.7
Cash at bank and in hand
Cash at bank and in hand
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.
AJ & CO.(DEVON) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2018
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets
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.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
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 profit and loss account, 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 when the
company
has 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.
1.9
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.10
Leases
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated lives or the lease term, whichever is shorter.
The interest element of these obligations are charged to the profit & loss over the relevant period. The capital element of the future payments are treated as liabilities.
AJ & CO.(DEVON) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2018
- 14 -
2
Operating (loss)/profit
2018
2017
Operating (loss)/profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
7,100
7,500
Depreciation of owned tangible fixed assets
55,926
61,085
Depreciation of tangible fixed assets held under finance leases
6,055
945
Amortisation of intangible assets
41,250
41,250
Cost of stocks recognised as an expense
230,221
261,652
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2018
2017
Number
Number
Nursing, catering and cleaners
178
186
Administrative
7
5
185
191
Their aggregate remuneration comprised:
2018
2017
£
£
Wages and salaries
2,720,699
2,752,124
Social security costs
180,419
170,514
Pension costs
20,468
14,027
2,921,586
2,936,665
4
Directors' remuneration
2018
2017
£
£
Remuneration for qualifying services
75,000
75,037
AJ & CO.(DEVON) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2018
- 15 -
5
Interest payable and similar expenses
2018
2017
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
80,776
83,270
Interest on finance leases and hire purchase contracts
1,365
1,670
82,141
84,940
6
Taxation
2018
2017
£
£
Current tax
UK corporation tax on profits for the current period
-
6,129
Adjustments in respect of prior periods
(6,129)
-
Total current tax
(6,129)
6,129
Deferred tax
Origination and reversal of timing differences
(43,250)
61,171
Total tax (credit)/charge
(49,379)
67,300
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2018
2017
£
£
(Loss)/profit before taxation
(293,087)
348,952
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2017: 20.00%)
(55,687)
69,790
Tax effect of expenses that are not deductible in determining taxable profit
815
755
Tax effect of utilisation of tax losses not previously recognised
-
(56,192)
Unutilised tax losses carried forward
50,133
-
Permanent capital allowances in excess of depreciation
(1,184)
(7,057)
Difference in tax rates (19% & 20%)
(206)
(1,167)
Deferred tax
(43,250)
61,171
Taxation (credit)/charge for the year
(49,379)
67,300
AJ & CO.(DEVON) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2018
(Continued)
- 16 -
In addition to the amount (credited)/charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2018
2017
£
£
Deferred tax arising on:
Revaluation of property
(9,504)
(25,932)
7
Dividends
2018
2017
£
£
Final paid
98,500
121,872
8
Intangible fixed assets
Goodwill
£
Cost
At 1 August 2017 and 31 July 2018
675,000
Amortisation and impairment
At 1 August 2017
389,063
Amortisation charged for the year
41,250
At 31 July 2018
430,313
Carrying amount
At 31 July 2018
244,687
At 31 July 2017
285,937
AJ & CO.(DEVON) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2018
- 17 -
9
Tangible fixed assets
Freehold land and buildings
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 August 2017
4,390,955
552,273
43,258
41,641
5,028,127
Additions
-
53,988
-
-
53,988
At 31 July 2018
4,390,955
606,261
43,258
41,641
5,082,115
Depreciation and impairment
At 1 August 2017
-
353,640
18,161
15,894
387,695
Depreciation charged in the year
-
50,524
5,019
6,437
61,980
At 31 July 2018
-
404,164
23,180
22,331
449,675
Carrying amount
At 31 July 2018
4,390,955
202,097
20,078
19,310
4,632,440
At 31 July 2017
4,390,955
198,633
25,097
25,747
4,640,432
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2018
2017
£
£
Fixtures and fittings
18,165
12,361
Depreciation charge for the year in respect of leased assets
6,055
945
The land and buildings known as Meadowside & St Francis were revalued during the year ended 31st July 2012 to £3,375,000. This valuation was completed
by
Jones Lang LaSalle
,
an
independent valuers not connected with the company on the basis of market value.
If disposed of at this valuation, the corporation tax arising would be £137,611. This is now included within the deferred tax provision in the accordance with FRS 102.
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
2018
2017
£
£
Cost
1,748,964
1,748,964
Accumulated depreciation
-
-
Carrying value
1,748,964
1,748,964
The revaluation surplus is disclosed in note 21.
AJ & CO.(DEVON) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2018
- 18 -
10
Stocks
2018
2017
£
£
Stocks
18,497
17,000
11
Debtors
2018
2017
Amounts falling due within one year:
£
£
Trade debtors
143,584
96,296
Corporation tax recoverable
6,129
-
Other debtors
318,743
318,743
Prepayments and accrued income
3,554
8,515
472,010
423,554
12
Creditors: amounts falling due within one year
2018
2017
Notes
£
£
Bank loans and overdrafts
14
252,955
83,507
Obligations under finance leases
15
7,853
9,437
Trade creditors
65,352
71,251
Corporation tax
-
6,129
Other taxation and social security
48,792
44,432
Other creditors
88,950
131,202
Accrued expenses
5,990
8,686
469,892
354,644
13
Creditors: amounts falling due after more than one year
2018
2017
Notes
£
£
Bank loans and overdrafts
14
2,359,641
2,042,188
Obligations under finance leases
15
7,922
15,775
2,367,563
2,057,963
AJ & CO.(DEVON) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2018
- 19 -
14
Loans and overdrafts
2018
2017
£
£
Bank loans
2,540,151
2,125,695
Bank overdrafts
72,445
-
2,612,596
2,125,695
Payable within one year
252,955
83,507
Payable after one year
2,359,641
2,042,188
The above debts are secured by a 1st legal charge dated 08/01/2004 over the freehold property of Meadowside & St Francis, Plymbridge Road, Plympton and a 1st legal charge dated 29/05/2015 over the freehold of Merafield View Nursing Home, Underlane, Plympton.
The debts are also secured against an unlimited debenture dated 19/07/2000 incorporating a fixed and floating charge and the right of set off.
15
Finance lease obligations
2018
2017
Future minimum lease payments due under finance leases:
£
£
Within one year
7,853
9,437
In two to five years
7,922
15,775
15,775
25,212
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
16
Provisions for liabilities
2018
2017
Notes
£
£
Deferred tax liabilities
17
154,300
207,054
AJ & CO.(DEVON) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2018
- 20 -
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2018
2017
Balances:
£
£
Accelerated capital allowances
66,822
59,939
Tax losses
(50,133)
-
Revaluations
137,611
147,115
154,300
207,054
2018
Movements in the year:
£
Liability at 1 August 2017
207,054
Credit to profit or loss
(43,250)
Credit to other comprehensive income
(9,504)
Liability at 31 July 2018
154,300
18
Retirement benefit schemes
2018
2017
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
20,468
14,027
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
19
Share capital
2018
2017
£
£
Ordinary share capital
Issued and fully paid
375,013 Ordinary of £1 each
375,013
375,013
375,013
375,013
20
Share premium account
AJ & CO.(DEVON) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2018
20
Share premium account
(Continued)
- 21 -
2018
2017
£
£
At the beginning and end of the year
133,170
133,170
21
Revaluation reserve
2018
2017
£
£
At beginning of year
1,476,343
1,450,411
Deferred tax on revaluation of tangible assets
9,504
25,932
At end of year
1,485,847
1,476,343
22
Capital redemption reserve
2018
2017
£
£
At the beginning and end of the year
393,915
393,915
23
Profit and loss reserves
2018
2017
£
£
At the beginning of the year
453,524
293,744
(Loss)/profit for the year
(243,708)
281,652
Dividends declared and paid in the year
(98,500)
(121,872)
At the end of the year
111,316
453,524
24
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2018
2017
£
£
Aggregate compensation
165,000
165,000
Transactions with related parties
AJ & CO.(DEVON) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2018
24
Related party transactions
(Continued)
- 22 -
Eggs were supplied on an arms length basis to both Meadowside and Merafield homes during the year amounting to £3,485 and £1,180 respectively from 'Ludbrook Ladies'. These were provided by a farming business run by Mr D Smallridge, the director of the Company.
Meat was supplied on an arms length basis to both Meadowside and Merafield homes during the year amounting to £25,017 & £14,107 respectively from 'Ludbrook Butchers'. These were provided by a business run by Mr B Smallridge, the son of the director of the Company Mr D Smallridge.
25
Directors' transactions
During the year the Company operated a loan account with Mr D Smallridge, a director. The loan is interest free and repayable on demand.
£55,000 of the loan to Mr D Smallridge relates to a loan to the director's farming business.
Description
% Rate
Opening balance
Closing balance
£
£
Mr D J Smallridge
-
254,995
254,995
254,995
254,995
26
Cash generated from operations
2018
2017
£
£
(Loss)/profit for the year after tax
(243,708)
281,652
Adjustments for:
Taxation (credited)/charged
(49,379)
67,300
Finance costs
82,141
84,940
Amortisation and impairment of intangible assets
41,250
41,250
Depreciation and impairment of tangible fixed assets
61,980
62,031
Movements in working capital:
(Increase) in stocks
(1,497)
(17,000)
(Increase) in debtors
(42,327)
(168,560)
(Decrease)/increase in creditors
(46,487)
255,571
Cash (absorbed by)/generated from operations
(198,027)
607,184
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