Castle Craig Hospital Limited - Period Ending 2015-12-31

Registration number: SC108534

Castle Craig Hospital Limited

Annual Report and Consolidated Financial Statements

for the Year Ended 31 December 2015

Castle Craig Hospital Limited

Contents

Company Information	1
Strategic Report	2 to 3
Directors' Report	4 to 5
Statement of Directors' Responsibilities	6
Independent Auditor's Report	7 to 8
Consolidated Profit and Loss Account	9
Consolidated Statement of Comprehensive Income	10
Consolidated Balance Sheet	11
Balance Sheet	12
Consolidated Statement of Changes in Equity	13
Statement of Changes in Equity	14 to 15
Consolidated Statement of Cash Flows	16
Notes to the Financial Statements	17 to 37

Castle Craig Hospital Limited

Company Information

Directors

Dr Michael Gerard McCann Dr Margaret Ann McCann Miss Frances Beek Mr John Lewis McCann Mr Peter John McCann Mr Dominic McCann

Company secretary

AS Company Services Limited

Registered office

Castle Craig Hospital Blyth Bridge West Linton Peeblesshire EH46 7DH

Solicitors

Anderson Strathern WS 1 Rutland Court Edinburgh EH3 8EY

Bankers

HSBC 76 Hanover Street Edinburgh EH2 1EL

Auditors

Whitelaw Wells Chartered Accountants and Registered Auditors 9 Ainslie Place Edinburgh EH3 6AT

Page 1

Castle Craig Hospital Limited

Strategic Report for the Year Ended 31 December 2015

The Directors present their strategic report for the year ended 31 December 2015.

Principal activity

The principal activity of the company is that of a hospital, providing treatment for addiction.

Fair review of the business

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

Together with Castle Craig Hospital (ECU) Limited, in which Castle Craig Hospital Limited holds 99% of the voting rights and shares, we form a healthcare facility, which treats alcoholism, drug abuse and other addictions. The object of the treatment is that patients should enjoy a good recovery and enhanced quality of life. Our treatment model follows the Minnesota Model or "12 Step Treatment". We view addiction as a disease and complete abstinence from all mind-altering drugs is necessary for long-lasting recovery. The business has been in existence since 1988. Castle Craig Hospital Ltd is responsible for the Primary Care of patients, whilst Castle Craig Hospital (ECU) Ltd is responsible for the extended care.

Patients fall into three main categories:
1) EU zone, from insurance companies
2) NHS
3) Private

The Group's key financial and other performance indicators during the year were as follows:

	Unit	2015	2014
Turnover	£	8,925,127.00	8,388,120.00
Cost of sales	£	4,209,974.00	4,611,892.00
Distribution costs	£	513,570.00	431,696.00
Administration	£	3,655,500.00	2,670,296.00

Occupancy levels during the period were similar to the previous year. In a difficult market, this is a testament to the reputation and standing of the group.

Principal risks and uncertainties

Challenges and risks facing the company include:
1) An over-reliance on Euro-based contracts with EU zone insurance companies, which form approximately 40% of total sales. We are striving to increase revenue from other sources, in particular the private market. Private sales increased by 45% in the period. Marketing emphasis has been and will continue to be placed on this sector.

2) Exchange rate: with 40% of sales in Euros, the company is at risk from any adverse change in the currency rate. For the year ended 31 December 2015, the rates were as follows (previous period rates in brackets)
1 January 2015 - 1.3455 (1.1978)
31 December 2015 - 1.357 (1.2779)
Period average - 1.3773 (1.2303)
Period high - 1.3932 (1.2842)
Period low - 1.3455 (1.1674)
Source: Onanda web-site, mid-point of buying and selling rates

Recent events and the result of the Euro referendum have highlighted this risk and underlined the need to increase sterling sales.

3) Restrictions on NHS budgets.

With these challenges and risks in mind, we are aware that any plans for the future development of the business may be subject to unforeseen future events outside our control.

Approved by the Board on 27 September 2016 and signed on its behalf by:

Page 2

Castle Craig Hospital Limited

Strategic Report for the Year Ended 31 December 2015

.........................................
Mr Peter John McCann
Director

Page 3

Castle Craig Hospital Limited

Directors' Report for the Year Ended 31 December 2015

The Directors present their report and the consolidated financial statements for the year ended 31 December 2015.

Directors of the Group

The directors who held office during the year were as follows:

Dr Michael Gerard McCann

Dr Margaret Ann McCann

Miss Frances Beek

Mr John Lewis McCann

Mr Peter John McCann

Mr Dominic McCann (appointed 27 November 2015)

Financial instruments

Objectives and policies

The main objective is to reduce risk through effective currency management, given the current level of trading with other countries. Efforts are being made to reduce this exposure by developing the home market. Currently, no hedging takes place in respect of currencies and this is an area that will be reviewed by management in 2016. At the time of signing the accounts, the depreciation in sterling against the Euro has produced currency gains from trading, however, it has also exposed the company to currency losses on the currency denominated debt. This risk is mitigated by the long term nature of the debt.

Price risk, credit risk, liquidity risk and cash flow risk

Due to the nature of the currency risk, the company sets a standard currency rate for accounting purposes in advance of its financial year. This is used as a benchmark for currency transactions. The currency exposure is monitored on a monthly basis. Debt denominated in currency is also reviewed in the light of currency movements. Advance payments are received from foreign insurance companies to reduce credit risk. Inter-company transactions are also monitored to reduce the currency exposure.

Future developments

EU Directive 2011/24/EU on the application of patients rights in cross-border healthcare became effective in October 2013. The directive entitles an EU citizen in one country to claim the costs of healthcare treatment provided in any other EU state. During 2014, we set up Smarmore Castle Private Clinic Limited in the Republic of Ireland to take advantage of the directive. This has been set up as a separate company with Castle Craig Hospital Limited owning the heritable property and renting to Smarmore Castle Private Clinic Limited on a landlord repairing lease for the next 10 years. The new company has been funded by inter-company loans that will be repaid as trading activity increases in Ireland. The facility in Ireland became operational in January 2016 and has already treated patients. We aim to continue to build the business in Ireland whilst also increasing the number of private patients utilising the UK facilities.

Strategic report

The company has chosen in accordance with s.414C(11) Companies Act 2006 to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors report. It has done so in respect of future developments.

Disclosure of information to the auditor

Each Director has taken steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information. The Directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditors

In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of Whitelaw Wells as auditors of the company is to be proposed at the forthcoming Annual General Meeting.

Approved by the Board on 27 September 2016 and signed on its behalf by:

Page 4

Castle Craig Hospital Limited

Directors' Report for the Year Ended 31 December 2015

.........................................
Mr Peter John McCann
Director

Page 5

Castle Craig Hospital Limited

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the

Director
s

to prepare financial statements for each financial year. Under that law the

Director
s 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

Director
s

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

Director
s are

required to:
•
select suitable accounting policies and 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 financial statements; and
•
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the

Company

will continue in business.
The

Director
s are

responsible for keeping adequate accounting records that are sufficient to show and explain the

Group
's and the

Company
's transactions and disclose with reasonable accuracy at any time the financial position of the

Group

and 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

Group

and the

Company

and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Page 6

Castle Craig Hospital Limited

Independent Auditor's Report

We have audited the financial statements of Castle Craig Hospital Limited for the year ended 31 December 2015, set out on pages 9 to 37. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland.

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.

Respective responsibilities of Directors and auditor

As explained more fully in the Statement of Directors' Responsibilities (set out on page 6), the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors to the financial statements.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Strategic and Directors' Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Basis for qualified opinion on financial statements of the parent company

With respect to Land and Buildings in the parent company having a carrying value of £1,600,000 the audit evidence available to us was limited because the property had been re-valued as a whole on a group basis but did not identify individual asset values or title attributable to each entity within the group. In the absence of this information, we were unable to obtain sufficient appropriate audit evidence regarding the carrying amount by using other audit procedures.

The group accounts are not qualified in this respect since the group property as a whole has been correctly valued.

Opinion on the financial statements

In our opinion, except for the possible effects on the parent company accounts of the matters described in the 'Basis for qualified opinion' paragraph, the financial statements:

• give a true and fair view of the state of the Group 's affairs as at 31 December 2015 and of the Group 's profit for the year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception
In respect solely of the limitation on our work relating to Land and Buildings in the parent company, described above:
- we have not received all the information and explanations we require for our audit.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
•
adequate accounting records have not been kept by the group, or returns adequate for our audit have not been received from branches not visited by us; or
•
the

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; or

Page 7

Castle Craig Hospital Limited

Independent Auditor's Report

......................................
Kevin Cattanach (Senior Statutory Auditor)
For and on behalf of Whitelaw Wells, Statutory Auditor

9 Ainslie Place
Edinburgh
EH3 6AT

28 September 2016

Page 8

Castle Craig Hospital Limited

Consolidated Profit and Loss Account for the Year Ended 31 December 2015

	Note	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
Turnover	3	8,925,127	8,388,120
Cost of sales		(4,209,974)	(4,611,892)
Gross profit		4,715,153	3,776,228
Distribution costs		(513,570)	(431,696)
Administrative expenses		(3,489,521)	(2,670,276)
Other operating income	4	105,552	248,942
Operating profit	6	817,614	923,198
Other interest receivable and similar income	7	5,317	96
Interest payable and similar charges	8	36,599	86,001
		41,916	86,097
Profit before tax		859,530	1,009,295
Taxation	12	(111,936)	(209,542)
Profit for the financial year		747,594	799,753
Profit/(loss) attributable to:
Owners of the company		747,564	799,623
Minority interests		30	130
		747,594	799,753
Retained earnings brought forward		2,480,371	1,778,638
Minority interests		(30)	(130)
Dividends paid		(150,000)	(97,890)
Retained earnings carried forward		3,077,935	2,480,371

The notes on pages 17 to 37 form an integral part of these financial statements.
Page 9

Castle Craig Hospital Limited

Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2015

	Note	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
Profit for the year		747,594	799,753
Total comprehensive income for the year		747,594	799,753
Total comprehensive income attributable to:
Owners of the company		747,564	799,623
Minority interests		30	130
		747,594	799,753

The notes on pages 17 to 37 form an integral part of these financial statements.
Page 10

Castle Craig Hospital Limited

(Registration number: SC108534)
Consolidated Balance Sheet as at 31 December 2015

	Note	31 December 2015  £	31 December 2014  £
Fixed assets
Tangible assets	13	5,183,016	5,117,590
Investment property	14	1,150,000	-
		6,333,016	5,117,590
Current assets
Stocks	16	20,157	20,157
Debtors	17	2,125,395	2,475,195
Cash at bank and in hand		425,333	598,725
		2,570,885	3,094,077
Creditors: Amounts falling due within one year	19	(1,776,817)	(1,851,064)
Net current assets		794,068	1,243,013
Total assets less current liabilities		7,127,084	6,360,603
Creditors: Amounts falling due after more than one year	19	(2,855,638)	(2,727,021)
Provisions for liabilities		(46,058)	(5,788)
Net assets		4,225,388	3,627,794
Capital and reserves
Called up share capital	21	100,000	100,000
Revaluation reserve		1,045,266	1,045,266
Profit and loss account		3,077,935	2,480,371
Equity attributable to owners of the company		4,223,201	3,625,637
Minority interests		2,187	2,157
Total equity		4,225,388	3,627,794

Approved and authorised by the Board on 27 September 2016 and signed on its behalf by:

.........................................

Mr Peter John McCann

Director

The notes on pages 17 to 37 form an integral part of these financial statements.
Page 11

Castle Craig Hospital Limited

(Registration number: SC108534)
Balance Sheet as at 31 December 2015

	Note	31 December 2015  £	31 December 2014  £
Fixed assets
Tangible assets	13	1,983,016	1,917,590
Investment property	14	1,150,000	-
Investments	15	150,000	150,000
		3,283,016	2,067,590
Current assets
Stocks	16	20,157	20,157
Debtors	17	1,951,580	2,330,500
Cash at bank and in hand		425,333	576,747
		2,397,070	2,927,404
Creditors: Amounts falling due within one year	19	(2,919,645)	(3,160,488)
Net current liabilities		(522,575)	(233,084)
Total assets less current liabilities		2,760,441	1,834,506
Creditors: Amounts falling due after more than one year	19	(936,243)	(535,555)
Provisions for liabilities		(46,058)	(5,788)
Net assets		1,778,140	1,293,163
Capital and reserves
Called up share capital		100,000	100,000
Revaluation reserve		824,186	824,186
Profit and loss account		853,954	368,977
Total equity		1,778,140	1,293,163

The company made a profit after tax for the financial year of £634,977 (2014 - profit of £215,539).

Approved and authorised by the Board on 27 September 2016 and signed on its behalf by:
 

.........................................

Mr Peter John McCann

Director

The notes on pages 17 to 37 form an integral part of these financial statements.
Page 12

Castle Craig Hospital Limited

Consolidated Statement of Changes in Equity for the Year Ended 31 December 2015
Equity attributable to the parent company

	Share capital £	Revaluation reserve £	Profit and loss account £	Total £	Non- controlling interests £	Total equity £
At 1 January 2015	100,000	1,045,266	2,480,371	3,625,637	2,157	3,627,794
Profit for the year	-	-	747,564	747,564	30	747,594
Total comprehensive income	-	-	747,564	747,564	30	747,594
Dividends	-	-	(150,000)	(150,000)	-	(150,000)
At 31 December 2015	100,000	1,045,266	3,077,935	4,223,201	2,187	4,225,388

	Share capital £	Revaluation reserve £	Profit and loss account £	Total £	Non- controlling interests £	Total equity £
At 1 October 2013	100,000	1,045,266	1,778,638	2,923,904	2,027	2,925,931
Profit for the year	-	-	799,623	799,623	130	799,753
Total comprehensive income	-	-	799,623	799,623	130	799,753
Dividends	-	-	(97,890)	(97,890)	-	(97,890)
At 31 December 2014	100,000	1,045,266	2,480,371	3,625,637	2,157	3,627,794

The notes on pages 17 to 37 form an integral part of these financial statements.
Page 13

Castle Craig Hospital Limited

Statement of Changes in Equity for the Year Ended 31 December 2015

	Share capital £	Revaluation reserve £	Profit and loss account £	Total £
At 1 January 2015	100,000	824,186	368,977	1,293,163
Profit for the year	-	-	634,977	634,977
Total comprehensive income	-	-	634,977	634,977
Dividends	-	-	(150,000)	(150,000)
At 31 December 2015	100,000	824,186	853,954	1,778,140

The notes on pages 17 to 37 form an integral part of these financial statements.
Page 14

Castle Craig Hospital Limited

Statement of Changes in Equity for the Year Ended 31 December 2015

	Share capital £	Revaluation reserve £	Profit and loss account £	Total £
At 1 October 2013	100,000	824,186	153,438	1,077,624
Profit for the year	-	-	215,539	215,539
Total comprehensive income	-	-	215,539	215,539
At 31 December 2014	100,000	824,186	368,977	1,293,163

The notes on pages 17 to 37 form an integral part of these financial statements.
Page 15

Castle Craig Hospital Limited

Consolidated Statement of Cash Flows for the Year Ended 31 December 2015

	Note	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
Cash flows from operating activities
Profit for the year		747,594	799,753
Adjustments to cash flows from non-cash items
Depreciation and amortisation	6	105,274	144,050
Financial instrument net gains (losses) through profit and loss		-	34,520
Profit on disposal of tangible assets	5	(16,465)	(252)
Profit from revaluation of investment properties	5	(165,979)	-
Finance income	7	(5,317)	(96)
Finance costs	8	98,089	124,367
Income tax expense	12	111,936	209,542
		875,132	1,311,884
Working capital adjustments
Increase in stocks	16	-	(1,773)
Decrease in trade debtors	17	606,937	833,928
Decrease in trade creditors	19	(215,753)	(855,925)
Cash generated from operations		1,266,316	1,288,114
Income taxes paid	12	(207,735)	(91,887)
Net cash flow from operating activities		1,058,581	1,196,227
Cash flows from investing activities
Interest received		5,317	96
Acquisitions of tangible assets		(191,235)	(118,754)
Proceeds from sale of tangible assets		37,000	1,900
Acquisition of investment properties	14	(1,150,000)	-
Gains from revaluation of investment properties		165,979	-
Advances of loans, classified as investing activities		(345,185)	(69,079)
Net cash flows from investing activities		(1,478,124)	(185,837)
Cash flows from financing activities
Interest paid	8	(88,341)	(110,918)
Proceeds from bank borrowing draw downs		498,349	350,341
Repayment of bank borrowing		(361,238)	(456,169)
Proceeds from other borrowing draw downs		60,801	-
Payments to finance lease creditors		(45,825)	(74,251)
Dividends paid		(150,000)	(97,890)
Net cash flows from financing activities		(86,254)	(388,887)
Net (decrease)/increase in cash and cash equivalents		(505,797)	621,503

Cash and cash equivalents at 1 January		530,476	(91,027)
Cash and cash equivalents at 31 December		24,679	530,476

The notes on pages 17 to 37 form an integral part of these financial statements.
Page 16

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

1	General information

The company is a private company limited by share capital incorporated in Scotland.

The address of its registered office is:
Castle Craig Hospital
Blyth Bridge
West Linton
Peeblesshire
EH46 7DH
Scotland

These financial statements were authorised for issue by the Board on 27 September 2016.

2	Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The accounts are presented in £.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the Company and its subsidiary undertakings drawn up to 31 December 2015.

A subsidiary is an entity controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group. The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the Group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill. Inter-company transactions, balances and unrealised gains on transactions between the Company and its subsidiaries, which are related parties, are eliminated in full. Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

Page 17

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

Judgements

In the application of the company's accounting policies, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Key sources of estimation uncertainty

The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements relate to the valuation of Land and Buildings, as well as investment property. As described in the notes to the accounts, land and buildings and investment property are stated at fair value based upon the valuations performed by professional valuers. The valuers have used observable market prices adjusted as necessary for any difference in the future, location or condition of the specific assets. The carrying amount is £5,950,000 (2014 - £4,800,000). The carrying amount is £Nil (2014 -£Nil).

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the Group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company.

Contract revenue recognition

In respect of long-term contracts and contracts for on-going services, turnover represents the value of work done in the period, including estimates of amounts not invoiced. Turnover in respect of long-term contracts and contracts for on-going services is recognised by reference to the stage of completion.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the Group. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date. The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation. Heritable property is stated at open market value. No depreciation is provided on heritable property as , in the opinion of the directors, the length of its estimated useful life and estimated residual value of the property is such that depreciation is not material. Costs of repairs and maintenance are changed against revenue as incurred. No depreciation is provided on assets under construction. On completion, these assets will be transferred to the appropriate fixed asset category and depreciated as appropriate.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Plant and machinery	25% on cost
Fixtures and fittings	10% on cost
Motor vehicles	25% on cost

Page 18

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

Investment property

Investment property is stated at fair value, based upon an external independent valuation. The cost of the investment property includes the purchase price, associated costs and all costs required to bring the property into use as a healthcare facility. The property is let under a long-term landlord repairing lease to Smarmore Private Clinic Limited, a company under the control of two of the directors of Castle Craig Hospital Limited. The property is located in the Republic of Ireland and will be held for the long term whilst Smarmore Castle Private Clinic Limited continues to trade. The property will generate rental income under the terms of the lease and the directors consider the property to be held for its investment value rather than its historic cost value.

Investments

Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Debtors

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

Inventories

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its realisable value less costs to complete and sell: the impairment loss is recognised immediately in the profit and loss account.

Creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the Group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities. Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing. Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Page 19

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation. Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the Group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability in the balance sheet. The corresponding dividends relating to the liability component are charged as interest expense in the profit and loss account.

3

Revenue

The analysis of the group's revenue for the year from continuing operations is as follows:

	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
Sale of services	8,925,127	8,388,120

The analysis of the group's turnover for the year by market is as follows:

	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
UK	5,380,278	5,431,474
Europe	3,544,849	2,956,646
	8,925,127	8,388,120

4	Other operating income

The analysis of the group's other operating income for the year is as follows:

Page 20

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
Miscellaneous other operating income	105,552	248,942

5	Other gains and losses

The analysis of the group's other gains and losses for the year is as follows:

	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
Gain (loss) on disposal of tangible fixed assets	16,465	252
Gain (loss) from revaluation of investment properties	165,979	-
	182,444	252

6	Operating profit

Arrived at after charging/(crediting)

	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
Depreciation expense	105,274	144,050
Operating lease expense - plant and machinery	88,180	127,589
Profit on disposal of tangible fixed assets	(16,465)	(252)

7	Other interest receivable and similar income

	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
Other finance income	5,317	96

8	Interest payable and similar charges

	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
Interest on bank overdrafts and borrowings	86,049	110,747
Interest on obligations under finance leases and hire purchase contracts	9,748	13,449
Interest expense on other finance liabilities	2,292	171
Foreign exchange (gains) / losses	(134,688)	(210,368)
	(36,599)	(86,001)

Page 21

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

9	Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
Wages and salaries	3,392,566	3,053,479
Social security costs	318,365	299,518
Pension costs, defined contribution scheme	50,337	123,490
	3,761,268	3,476,487

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

	Year ended 31 December 2015  No.	1 October 2013 to 31 December 2014  No.
Production	17	17
Administration and support	20	15
Medical	8	8
Management	61	60
	106	100

10	Directors' remuneration

The directors' remuneration for the year was as follows:

	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
Remuneration	199,903	149,439

11	Auditors' remuneration

	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
Audit of these financial statements	15,540	9,560

 

Page 22

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

12

Taxation

Tax charged/(credited) in the income statement

	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
Current taxation
UK corporation tax	54,857	198,645
UK corporation tax adjustment to prior periods	3,607	-
	58,464	198,645
Deferred taxation
Arising from origination and reversal of timing differences	53,472	10,897
Tax expense in the income statement	111,936	209,542

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2014 - higher than the standard rate of corporation tax in the UK) of 21.4% (2014 - 21.8%).

The differences are reconciled below:

	Year ended 31 December 2015  £	1 October 2013 to 31 December 2014  £
Profit before tax	859,530	1,009,295
Corporation tax at standard rate	183,939	220,026
Effect of expense not deductible in determining taxable profit (tax loss)	(34,062)	13,615
Deferred tax expense (credit) relating to changes in tax rates or laws	53,471	10,897
Increase (decrease) in UK and foreign current tax from adjustment for prior periods	(19,088)	(17,031)
Tax increase (decrease) from effect of capital allowances and depreciation	(77,174)	(17,819)
Other tax effects for reconciliation between accounting profit and tax expense (income)	4,850	(146)
Total tax charge	111,936	209,542

Deferred tax

Group

Deferred tax assets and liabilities

2015	Asset £	Liability £
Property revaluation	-	33,196
Accelerated capital allowances	63,532	-
	63,532	33,196

2014	Asset £
Property revaluation	-
Accelerated capital allowances	95,684
	95,684

Page 23

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

The amount of the net reversal of deferred tax assets and deferred tax liabilities expected to occur during the year beginning after the reporting period is £28,141 (2014 - £20,276).

Company

Deferred tax assets and liabilities

2015	Liability £
Accelerated capital allowances	12,862
Revaluation of investment property	33,196
	46,058

2014	Liability £
Accelerated capital allowances	5,788
Revaluation of investment property	-
	5,788

The amount of the net reversal of deferred tax assets and deferred tax liabilities expected to occur during the year beginning after the reporting period is £12,862 (2014 - £5,788).

13	Tangible assets

Group

	Land and buildings £	Furniture, fittings and equipment  £	Motor vehicles  £	Properties under construction  £	Other property, plant and equipment  £	Total £
Cost or valuation
At 1 January 2015	4,800,000	300,185	243,982	77,690	265,658	5,687,515
Additions	-	65,740	99,493	-	26,002	191,235
Disposals	-	-	(69,100)	-	(2,482)	(71,582)
At 31 December 2015	4,800,000	365,925	274,375	77,690	289,178	5,807,168
Depreciation
At 1 January 2015	-	248,802	188,089	-	133,034	569,925
Charge for the period	-	14,204	37,201	-	53,869	105,274
Eliminated on disposal	-	-	(50,374)	-	(673)	(51,047)
At 31 December 2015	-	263,006	174,916	-	186,230	624,152
Carrying amount
At 31 December 2015	4,800,000	102,919	99,459	77,690	102,948	5,183,016
At 31 December 2014	4,800,000	51,383	55,893	77,690	132,624	5,117,590

Page 24

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

	Land and buildings £	Furniture, fittings and equipment  £	Motor vehicles  £	Properties under construction  £	Other property, plant and equipment  £	Total £
Cost or valuation
At 1 January 2015	4,800,000	300,185	243,982	77,690	265,658	5,687,515
Additions	-	65,740	99,493	-	26,002	191,235
Disposals	-	-	(69,100)	-	(2,482)	(71,582)
At 31 December 2015	4,800,000	365,925	274,375	77,690	289,178	5,807,168
Depreciation
At 1 January 2015	-	248,802	188,089	-	133,034	569,925
Charge for the period	-	14,204	37,201	-	53,869	105,274
Eliminated on disposal	-	-	(50,374)	-	(673)	(51,047)
At 31 December 2015	-	263,006	174,916	-	186,230	624,152
Carrying amount
At 31 December 2015	4,800,000	102,919	99,459	77,690	102,948	5,183,016
At 31 December 2014	4,800,000	51,383	55,893	77,690	132,624	5,117,590

Included within the net book value of land and buildings above is £4,800,000 (2014 - £4,800,000) in respect of freehold land and buildings.
 

Page 25

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

Revaluation

The fair value of the company's Heritable property was revalued on 5 August 2013 by an independent valuer.
Heritable property was revalued at market value on an existing use basis by Savills (UK) Limited. The directors do not consider the value to have changed significantly between the date of the last valuation and the balance sheet date.
Had this class of asset been measured on a historical cost basis, their carrying amount would have been £3,754,732 (2014 - £3,754,732).
 

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

	2015 £	2014 £
Motor vehicles	84,749	26,207
Plant and equipment	42,899	68,008
	127,648	94,215

Company

	Land and buildings £	Furniture, fittings and equipment  £	Motor vehicles  £	Properties under construction  £	Other property, plant and equipment  £	Total £
Cost or valuation
At 1 January 2015	1,600,000	107,162	243,982	77,690	265,658	2,294,492
Additions	-	65,740	99,493	-	26,002	191,235
Disposals	-	-	(69,100)	-	(2,482)	(71,582)
At 31 December 2015	1,600,000	172,902	274,375	77,690	289,178	2,414,145
Depreciation
At 1 January 2015	-	55,779	188,089	-	133,034	376,902
Charge for the period	-	14,204	37,201	-	53,869	105,274
Eliminated on disposal	-	-	(50,374)	-	(673)	(51,047)
At 31 December 2015	-	69,983	174,916	-	186,230	431,129
Carrying amount
At 31 December 2015	1,600,000	102,919	99,459	77,690	102,948	1,983,016
At 31 December 2014	1,600,000	51,383	55,893	77,690	132,624	1,917,590

Page 26

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

	Land and buildings £	Furniture, fittings and equipment  £	Motor vehicles  £	Properties under construction  £	Other property, plant and equipment  £	Total £
Cost or valuation
At 1 January 2015	1,600,000	107,162	243,982	77,690	265,658	2,294,492
Additions	-	65,740	99,493	-	26,002	191,235
Disposals	-	-	(69,100)	-	(2,482)	(71,582)
At 31 December 2015	1,600,000	172,902	274,375	77,690	289,178	2,414,145
Depreciation
At 1 January 2015	-	55,779	188,089	-	133,034	376,902
Charge for the period	-	14,204	37,201	-	53,869	105,274
Eliminated on disposal	-	-	(50,374)	-	(673)	(51,047)
At 31 December 2015	-	69,983	174,916	-	186,230	431,129
Carrying amount
At 31 December 2015	1,600,000	102,919	99,459	77,690	102,948	1,983,016
At 31 December 2014	1,600,000	51,383	55,893	77,690	132,624	1,917,590

Included within the net book value of land and buildings above is £1,600,000 (2014 - £1,600,000) in respect of freehold land and buildings.
 

Revaluation

The fair value of the company's Heritable property was revalued on 5 August 2013 by an independent valuer.
Were the property to be disposed of at the balance sheet figure, the directors estimate that the company would incur a tax liability of £96,764.
Had this class of asset been measured on a historical cost basis, their carrying amount would have been £775,814 (2014 - £775,814).
 

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

	2015 £	2014 £
Motor vehicles	84,749	26,207
Plant and equipment	42,889	68,008
	127,638	94,215

14	Investment properties

Group

	31 December 2015  £
Additions	984,021
Fair value adjustments	165,979
At 31 December	1,150,000

The investment property in Ireland was valued by G Ranachan BSc MRICs, RICS, registered valuer of Christie & Co. The valuation was undertaken in January 2015 on a turnkey basis. The directors do not consider the valuation to have changed significantly between the valuation date and the year end.

Page 27

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

There has been no valuation of investment property by an independent valuer.

The property is pledged as security to HSBC bank to support a term loan.

The property is let to Smarmore Castle Private Clinic Limited on a landlord repairing lease for a period of 10 years.

Company

	31 December 2015  £
Additions	984,021
Fair value adjustments	165,979
At 31 December	1,150,000

The investment property in Ireland was valued by G Ranachan BSc MRICs, RICS, registered valuer of Christie & Co. The valuation was undertaken in January 2015 on a turnkey basis. The directors do not consider the valuation to have changed significantly between the valuation date and the year end.

There has been no valuation of investment property by an independent valuer.

The property is pledged to HSBC bank to support a term loan.

The property is let to Smarmore Castle Private Clinic Limited on a landlord repairing lease for a period of 10 years.

15	Investments

Company

	31 December 2015  £	31 December 2014  £
Investments in subsidiaries	150,000	150,000

Subsidiaries	£
Cost
At 1 January 2015	150,000
Provision
Carrying amount
At 31 December 2015	150,000
At 31 December 2014	150,000

Details of undertakings

Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking	Country of incorporation	Holding	Proportion of voting rights and shares held
			2015	2014
Subsidiary undertakings
Castle Craig Hospital (ECU) Limited	Scotland	Ordinary £1 shares	99.97%	99.97%

The principal activity of Castle Craig Hospital (ECU) Limited is provision of addiction treatment

The profit for the financial period of Castle Craig Hospital (ECU) Limited was £114,278 (2014- £584,214) and the aggregate amount of capital and reserves at the end of the period was £2,598,910 (2014 - £2,484,632).

Page 28

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

16

Stocks

	Group		Company
	31 December 2015  £	31 December 2014  £	31 December 2015  £	31 December 2014  £
Other inventories	20,157	20,157	20,157	20,157

Page 29

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

17

Debtors

		Group		Company
	Note	31 December 2015  £	31 December 2014  £	31 December 2015  £	31 December 2014  £
Trade debtors		512,009	547,879	422,379	477,317
Amounts owed by related parties	24	996,604	1,156,039	988,813	1,188,248
Other debtors		20,448	36,867	20,448	20,121
Prepayments		6,527	-	6,527	-
Gross amount due from customers for contract work		513,413	644,814	513,413	644,814
Deferred tax assets	12	76,394	89,596	-	-
		2,125,395	2,475,195	1,951,580	2,330,500
Less non-current portion		(482,391)	(741,338)	(482,391)	(741,338)
Total current trade and other debtors		1,643,004	1,733,857	1,469,189	1,589,162

Page 30

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

Details of non-current trade and other debtors

Group

£482,391 (2015 - £741,338) of amounts owed by related parties are classified as non current.

Company

£482,391 (2015 - £741,338) of amounts owed by related parties are classified as non current.

18	Cash and cash equivalents

	Group		Company
	31 December 2015  £	31 December 2014  £	31 December 2015  £	31 December 2014  £
Cash on hand	8,502	4,516	8,502	4,516
Cash at bank	416,831	594,209	416,831	572,231
	425,333	598,725	425,333	576,747
Bank overdrafts	(400,654)	(68,249)	(141,190)	-
Cash and cash equivalents in statement of cash flows	24,679	530,476	284,143	576,747

19

Creditors

		Group		Company
	Note	31 December 2015  £	31 December 2014  £	31 December 2015  £	31 December 2014  £
Due within one year
Loans and borrowings	22	1,307,613	1,287,175	860,150	1,012,451
Trade creditors		141,913	145,276	141,913	145,276
Amounts due to related parties	24	-	-	1,632,300	1,747,146
Social security and other taxes		103,544	104,804	84,676	85,211
Outstanding defined contribution pension costs		34,000	62,000	34,000	62,000
Other payables		25,047	14,497	23,257	13,719
Accrued expenses		109,843	33,184	104,480	27,547
Income tax liability	12	54,857	204,128	38,869	67,138
		1,776,817	1,851,064	2,919,645	3,160,488
Due after one year
Loans and borrowings	22	2,855,638	2,727,021	936,243	535,555

20	Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £50,337 (2014 - £123,490).

Contributions totalling £(34,000) (2014 - £(62,000)) were payable to the scheme at the end of the year and are included in creditors.

Page 31

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

21	Share capital

Allotted, called up and fully paid shares

	31 December 2015		31 December 2014
	No.	£	No.	£
Ordinary shares of £1 each	100,000	100,000	100,000	100,000

Rights, preferences and restrictions

Ordinary £1 shares have the following rights, preferences and restrictions:Ordinary shares have the right to participate in the profits of the company. Holders of ordinary shares are entitled to vote at the AGM.

22	Loans and borrowings

	Group		Company
	31 December 2015  £	31 December 2014  £	31 December 2015  £	31 December 2014  £
Non-current loans and borrowings
Bank borrowings	2,802,486	2,686,927	883,091	495,461
Finance lease liabilities	53,152	40,094	53,152	40,094
	2,855,638	2,727,021	936,243	535,555

	Group		Company
	31 December 2015  £	31 December 2014  £	31 December 2015  £	31 December 2014  £
Current loans and borrowings
Bank borrowings	274,707	253,157	86,708	46,682
Bank overdrafts	400,654	68,249	141,190	-
Finance lease liabilities	35,079	23,414	35,079	23,414
Other borrowings	597,173	942,355	597,173	942,355
	1,307,613	1,287,175	860,150	1,012,451

Group

Bank borrowings

Bank overdraft is denominated in £ with a nominal interest rate of 2.5% over base rate. The carrying amount at year end is £400,653 (2014 - £68,349). HSBC Bank holds Unlimited Inter Company Composite Guarantees backing the group's borrowings. These borrowings comprise 2 Euro loans and a sterling overdraft. The guarantees are supported by Standard Securities and Floating Charges held by the guarantor over the whole property and undertaking of the Group.

Term loans is denominated in € with a nominal interest rate of 2.5% over EURIBOR. The carrying amount at year end is £3,077,192 (2014 - £2,940,084). The company has granted standard securities over the freehold property as well as providing the bank with a Bond and Floating Charge over all assets.

Included in the loans and borrowings are the following amounts due after more than five years:

	31 December 2015  £	31 December 2014  £
After more than five years by instalments	1,400,207	1,684,493
	1,400,207	1,684,493

Page 32

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

Company

Bank borrowings

Bank loans is denominated in € with a nominal interest rate of 2.5% . The carrying amount at year end is £969,797 (2014 - £542,142).

Included in the loans and borrowings are the following amounts due after more than five years:

	31 December 2015  £	31 December 2014  £
After more than five years by instalments	477,201	310,615
	477,201	310,615

23

Dividends

The directors are proposing a final dividend of £Nil (2014 - £Nil) per share totalling £Nil (2014 - £Nil).

24	Related party transactions

Group

Transactions with directors

2015	At 1 January 2015 £	Advances to directors £	Repayments by director £	Other payments made to company by director £	Written off £	Waived £	At 31 December 2015 £
Mr Peter John McCann
Loans advanced, no specific terms for repayment - interest charged at approved rates.	204,926	158,892	(248,436)	-	-	-	115,382
Mr Dominic McCann
Interest is charged at 3.25% flat from 1 January 2015.	-	14,054	-	-	-	-	14,054

2014	At 1 October 2013 £	Advances to directors £	Repayments by director £	Other payments made to company by director £	Written off £	Waived £	At 31 December 2014 £
Mr Peter John McCann
Loans advanced, no specific terms for repayment - interest charged at approved rates.	(18,871)	324,365	(100,568)	-	-	-	204,926

Dividends paid to directors

	2015 £	2014 £
Mr Peter John McCann
Dividend paid	150,000	-

Page 33

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

Other transactions with directors

The company paid £8,722 (2014 - £10,301) to Acrium Holdings in respect of services provided by Miss F Beek. Directors fees of £7,240 (2014 - £7,094) were paid to Occupational Health Strategies LLP in respect of Mr M McCann's non-executive directorship.

McCann family

Members of the McCann family owe the group £12,014. (2014 - £7,427)

Summary of transactions with subsidiaries

Castle Craig Hospital (ECU) Limited
 The group has taken advantage of disclosure exemptions, so as not to disclose related party transactions with wholly owned subsidiaries within the group.
 

Summary of transactions with associates

Castle Craig Nederland BV
 During the year, the company was contracted to Castle Craig Nederland BV to pay a commission of 17.5% of gross fees received for patient referrals. This amounted to £619,515 in the year to 31 December 2015. (2014 - £941,101). At the balance sheet date £54,043 was due from Castle Craig Nederland BV (2014 - £262,918). 50% of the ordinary share capital of Castle Craig Nederland BV is owned by Hopeburn Limited, a company wholly owned by Mr PJ McCann. The company incurred professional fees of £17,116 on behalf of Castle Craig Nederland BV. There are no specific terms for repayment of these amounts and no interest is charged.
 

Summary of transactions with other related parties

Hyperbaric Oxygen Treatment Trust
 The Hyperbaric Oxygen Treatment Trust has a loan for the purchase of the hyperbaric chamber used by the group in is treatment of addiction. The Trust charges £15,000 a year for the hire of the chamber and this is set off against the outstanding loan. Mr PJ McCann is a trustee of the Hyperbaric Oxygen Treatment Trust. The company incurred costs of £18,600 during the year in relation to the running costs of the trust helpline. These were re-charged to the trust. At the year end, an amount of £37,465 was due from the trust (2014 - £83,510).
 

Smarmore Castle Private Clinic Limited

Smarmore Castle Private Clinic Limited is under the control of Mr Peter John McCann and Dr Margaret McCann, who hold 80% of the ordinary share capital. During the year, loans of £161,106 were advanced (2014 - £69,079) and rent of £53,093 was accrued and the balance owed at the year end was £280,478. There are no specific terms for repayment of these loans and they are interest free. Smarmore Castle Private Clinic Limited is the tenant of the investment property held by the company. It is let on a 10 year landlord repairing lease with an initial rent free period. The annual rental payable under the terms of the lease is €100,000.

Hopeburn Limited

Hopeburn Limited owes the company £482,391 (2014 - £741,338). Hopeburn Limited is under the control of Mr PJ McCann. These loans are interest free and there are no specific terms for repayment.

Life Anew ADA

Life Anew ADA is a company in which Hopeburn Limited holds 50% of the issued share capital. During the year, the company incurred costs of £12,986 in relation to this company. These costs were re-imbursed after the year end.

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Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

25	Transition to FRS 102

Consolidated Balance Sheet at 1 October 2013
 

	Note	As originally reported £	Reclassification £	Remeasurement £	As restated £
Fixed assets
Tangible assets		5,144,534	-	-	5,144,534
Current assets
Stocks		18,384	-	-	18,384
Debtors		2,538,678	-	-	2,538,678
Cash at bank and in hand		110,480	-	-	110,480
		2,667,542	-	-	2,667,542
Creditors: Amounts falling due within one year		(1,623,648)	-	-	(1,623,648)
Net current assets		1,043,894	-	-	1,043,894
Total assets less current liabilities		6,188,428	-	-	6,188,428
Creditors: Amounts falling due after more than one year		(3,262,496)	-	-	(3,262,496)
Provisions for liabilities		(2,027)	-	-	(2,027)
Net assets		2,923,905	-	-	2,923,905
Capital and reserves
Called up share capital		(100,000)	-	-	(100,000)
Revaluation reserve		(1,045,267)	-	-	(1,045,267)
Profit and loss account		(1,778,638)	-	-	(1,778,638)
Total equity		(2,923,905)	-	-	(2,923,905)

Page 35

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

Consolidated Balance Sheet at 31 December 2014
 

	Note	As originally reported £	Reclassification £	Remeasurement £	As restated £
Fixed assets
Tangible assets		5,117,591	-	-	5,117,591
Current assets
Stocks		20,157	-	-	20,157
Debtors		2,469,406	-	-	2,469,406
Cash at bank and in hand		530,476	-	-	530,476
		3,020,039	-	-	3,020,039
Creditors: Amounts falling due within one year		(1,782,816)	-	-	(1,782,816)
Net current assets		1,237,223	-	-	1,237,223
Total assets less current liabilities		6,354,814	-	-	6,354,814
Creditors: Amounts falling due after more than one year		(2,727,020)	-	-	(2,727,020)
Provisions for liabilities		(2,157)	-	-	(2,157)
Net assets		3,625,637	-	-	3,625,637
Capital and reserves
Called up share capital		(100,000)	-	-	(100,000)
Revaluation reserve		(1,045,267)	-	-	(1,045,267)
Profit and loss account		(2,480,370)	-	-	(2,480,370)
Total equity		(3,625,637)	-	-	(3,625,637)

Page 36

Castle Craig Hospital Limited

Notes to the Financial Statements for the Year Ended 31 December 2015

Consolidated Profit and Loss Account for the period from 1 October 2013 to 31 December 2014
 

	Note	As originally reported £	Reclassification £	Remeasurement £	As restated £
Turnover		8,388,119	-	-	8,388,119
Cost of sales		(4,611,892)	-	-	(4,611,892)
Gross profit		3,776,227	-	-	3,776,227
Distribution costs		(431,696)	-	-	(431,696)
Administrative expenses		(2,670,447)	-	-	(2,670,447)
Other operating income		459,309	-	-	459,309
Operating profit		1,133,393	-	-	1,133,393
Other interest receivable and similar income		96	-	-	96
Interest payable and similar charges		(124,195)	-	-	(124,195)
		(124,099)	-	-	(124,099)
Profit before tax		1,009,294	-	-	1,009,294
Taxation		(209,542)	-	-	(209,542)
Profit for the financial year		799,752	-	-	799,752

Page 37