Company Registration No. 02565595 (England and Wales)
A.G.E. NURSING HOMES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
A.G.E. NURSING HOMES LIMITED
COMPANY INFORMATION
Directors
J R Hainsworth - Adams
S A Hainsworth
Secretary
J R Hainsworth - Adams
Company number
02565595
Registered office
249 Cranbrook Road
Ilford
Essex
IG1 4TG
Auditor
Leibovitch & Co
249 Cranbrook Road
Ilford
Essex
IG1 4TG
A.G.E. NURSING HOMES LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 5
Income statement
6
Statement of comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 23
A.G.E. NURSING HOMES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 1 -
The directors present the strategic report for the year ended 31 December 2019.
Fair review of the business
The directors are satisfied with the results for the year and anticipate improved results for the coming year. There have been no important events since the end of the year.
Principal risks and uncertainties
The management team follow a continuous review of the performance of the Company through monthly senior management meetings. Action plans are developed and reviewed on an ongoing basis. The key risks are principally the competitiveness of the UK market. Sales opportunities are continually evaluated to the current market and economic climate.
Key performance indicators
The management team analyse various key performance indicators as part of their overall strategic review but have identified the following as being particularly important:
Sales performance versus main competitors, sales versus budget and prior year and quality statistics.
..............................
J R Hainsworth - Adams
Director
.........................
A.G.E. NURSING HOMES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2019.
Principal activities
The principal activity of the company during the year remained the operation of a Nursing Home.
Directors
J R Hainsworth - Adams
S A Hainsworth
Results and dividends
The results for the year are set out on page 6.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Auditor
In accordance with the company's articles, a resolution proposing that Leibovitch & Co be reappointed as auditor of the company will be put at a General Meeting.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of "Fair review of the business", Principal risks and uncertainties" and "Key performance indicators".
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
J R Hainsworth - Adams
Director
29 September 2020
A.G.E. NURSING HOMES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 3 -
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;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
A.G.E. NURSING HOMES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF A.G.E. NURSING HOMES LIMITED
- 4 -
Opinion
We have audited the financial statements of A.G.E. Nursing Homes Limited (the 'company') for the year ended 31 December 2019 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and 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 December 2019 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
A.G.E. NURSING HOMES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF A.G.E. NURSING HOMES LIMITED
- 5 -
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.
Barry Leibovitch (Senior Statutory Auditor)
for and on behalf of Leibovitch & Co
30 September 2020
Chartered Accountants
Statutory Auditor
249 Cranbrook Road
Ilford
Essex
IG1 4TG
A.G.E. NURSING HOMES LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 6 -
2019
2018
Notes
£
£
Revenue
3
7,051,228
5,553,542
Cost of sales
(5,380,614)
(4,396,344)
Gross profit
1,670,614
1,157,198
Administrative expenses
(1,091,661)
(1,117,926)
Operating profit
5
578,953
39,272
Investment income
8
475
6
Finance costs
9
(97,266)
(119,024)
Profit/(loss) before taxation
482,162
(79,746)
Tax on profit/(loss)
10
(126,225)
(38,265)
Profit/(loss) for the financial year
355,937
(118,011)
The income statement has been prepared on the basis that all operations are continuing operations.
A.G.E. NURSING HOMES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
- 7 -
2019
2018
£
£
Profit/(loss) for the year
355,937
(118,011)
Other comprehensive income
-
-
Total comprehensive income for the year
355,937
(118,011)
A.G.E. NURSING HOMES LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2019
31 December 2019
- 8 -
2019
2018
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
11
7,314,949
7,447,079
Investments
12
12,100
2,012,100
7,327,049
9,459,179
Current assets
Inventories
14
-
30,000
Trade and other receivables
15
313,635
751,548
Cash and cash equivalents
562,658
202,464
876,293
984,012
Current liabilities
Borrowings
18
200,000
200,000
Taxation and social security
260,013
133,203
Other payables
1,156,111
2,363,479
1,616,124
2,696,682
Net current liabilities
(739,831)
(1,712,670)
Total assets less current liabilities
6,587,218
7,746,509
Non-current liabilities
17
(2,445,434)
(3,952,700)
Provisions for liabilities
19
(48,812)
(56,774)
Net assets
4,092,972
3,737,035
Equity
Called up share capital
22
202
202
Retained earnings
4,092,770
3,736,833
Total equity
4,092,972
3,737,035
The financial statements were approved by the board of directors and authorised for issue on 29 September 2020 and are signed on its behalf by:
J R Hainsworth - Adams
Director
Company Registration No. 02565595
A.G.E. NURSING HOMES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
- 9 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 January 2018
202
3,854,844
3,855,046
Year ended 31 December 2018:
Loss and total comprehensive income for the year
-
(118,011)
(118,011)
Balance at 31 December 2018
202
3,736,833
3,737,035
Year ended 31 December 2019:
Profit and total comprehensive income for the year
-
355,937
355,937
Balance at 31 December 2019
202
4,092,770
4,092,972
A.G.E. NURSING HOMES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 10 -
2019
2018
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
265,570
399,246
Interest paid
(97,266)
(119,024)
Income taxes paid
(68,331)
(38,451)
Net cash inflow from operating activities
99,973
241,771
Investing activities
Purchase of property, plant and equipment
(92,995)
(98,303)
Proceeds on disposal of property, plant and equipment
(139,991)
-
Proceeds on disposal of subsidiaries
2,000,000
-
Interest received
473
6
Net cash generated from/(used in) investing activities
1,767,487
(98,297)
Financing activities
Repayment of bank loans
(1,507,266)
(200,000)
Net cash used in financing activities
(1,507,266)
(200,000)
Net increase/(decrease) in cash and cash equivalents
360,194
(56,526)
Cash and cash equivalents at beginning of year
202,464
258,990
Cash and cash equivalents at end of year
562,658
202,464
A.G.E. NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 11 -
1
Accounting policies
Company information
A.G.E. Nursing Homes Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
249 Cranbrook Road, Ilford, Essex, IG1 4TG.
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.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
A
true
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
Revenue
Turnover represents amounts receivable for services net of trade discounts.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that
it is probable will be
recover
ed
.
1.4
Property, plant and equipment
Property, plant and equipment
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:
Land and buildings Freehold
2% on cost
Land and buildings Leasehold
10% on cost
Plant and machinery
25% on net book value
Fixtures, fittings & equipment
25% on net book value
Motor vehicles
25% on net book value
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
.
A.G.E. NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 12 -
1.5
Non-current investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities
.
1.6
Impairment of non-current assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Inventories
Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.
Inventories 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.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventories over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
A.G.E. NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 13 -
1.8
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
A.G.E. NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 14 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including trade and other payables, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade payables
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade payables are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
A.G.E. NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 15 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
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 income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset 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.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
A.G.E. NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 16 -
3
Revenue
An analysis of the company's revenue is as follows:
2019
2018
£
£
Revenue analysed by class of business
Sales
7,051,228
5,553,542
2019
2018
£
£
Other revenue
Interest income
475
6
2019
2018
£
£
Revenue analysed by geographical market
United Kingdom
7,051,228
5,553,542
4
Exceptional item
2019
2018
£
£
Income
Exceptional item - Sales
1,377,186
-
5
Operating profit
2019
2018
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
4,000
4,000
Depreciation of owned property, plant and equipment
225,125
234,779
Loss on disposal of property, plant and equipment
139,991
-
Operating lease charges
96
1,611
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
197
196
A.G.E. NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
6
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
4,633,525
3,668,187
Social security costs
369,826
276,553
Pension costs
64,501
39,230
5,067,852
3,983,970
7
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
125,000
35,000
8
Investment income
2019
2018
£
£
Interest income
Interest on bank deposits
475
3
Other interest income
-
3
Total income
475
6
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
475
3
9
Finance costs
2019
2018
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
96,912
119,024
Other finance costs:
Other interest
354
-
97,266
119,024
10
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
134,187
43,438
A.G.E. NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
10
Taxation
2019
2018
£
£
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
(7,962)
(5,173)
Total tax charge
126,225
38,265
The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2019
2018
£
£
Profit/(loss) before taxation
482,162
(79,746)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
91,611
(15,152)
Tax effect of expenses that are not deductible in determining taxable profit
26,672
74,047
Group relief
(5,916)
(49,732)
Permanent capital allowances in excess of depreciation
21,820
24,775
Other non-reversing timing differences
-
4,327
Deferred tax adjustments in respect of prior years
(7,962)
-
Taxation charge for the year
126,225
38,265
A.G.E. NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 19 -
11
Property, plant and equipment
Land and buildings Freehold
Land and buildings Leasehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2019
7,737,691
63,761
155,539
1,645,678
19,735
9,622,404
Additions
-
-
-
92,995
-
92,995
At 31 December 2019
7,737,691
63,761
155,539
1,738,673
19,735
9,715,399
Depreciation and impairment
At 1 January 2019
685,447
63,761
137,881
1,271,145
17,091
2,175,325
Depreciation charged in the year
103,168
-
4,414
116,882
661
225,125
At 31 December 2019
788,615
63,761
142,295
1,388,027
17,752
2,400,450
Carrying amount
At 31 December 2019
6,949,076
-
13,244
350,646
1,983
7,314,949
At 31 December 2018
7,052,244
-
17,658
374,533
2,644
7,447,079
12
Fixed asset investments
2019
2018
Notes
£
£
Investments in subsidiaries
13
12,100
2,012,100
Movements in non-current investments
Shares in group undertakings
£
Cost or valuation
At 1 January 2019
2,012,100
Disposals
(2,000,000)
At 31 December 2019
12,100
Carrying amount
At 31 December 2019
12,100
At 31 December 2018
2,012,100
A.G.E. NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 20 -
13
Subsidiaries
These financial statements are separate company financial statements for AGE Nursing Homes Limited.
Details of the company's subsidiaries at 31 December 2019 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
AGE Homes Limited
England and Wales
Ordinary
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
AGE Homes Limited
12,100
14
Inventories
2019
2018
£
£
Finished goods and goods for resale
-
30,000
15
Trade and other receivables
2019
2018
Amounts falling due within one year:
£
£
Trade receivables
249,194
597,057
Other receivables
13,949
12,699
Prepayments and accrued income
50,492
141,792
313,635
751,548
16
Current liabilities
2019
2018
Notes
£
£
Bank loans
18
200,000
200,000
Trade payables
202,268
426,954
Amounts owed to group undertakings
12,100
12,100
Corporation tax
134,187
68,331
Other taxation and social security
125,826
64,872
Other payables
789,320
1,705,524
Accruals and deferred income
152,423
218,901
1,616,124
2,696,682
A.G.E. NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 21 -
17
Non-current liabilities
2019
2018
Notes
£
£
Bank loans and overdrafts
18
2,445,434
3,952,700
The long-term loan is secured by a legal charge over the properties owned by the company
.
Handelsbanken also holds a debenture
over the assets of the company.
18
Borrowings
2019
2018
£
£
Bank loans
2,645,434
4,152,700
Payable within one year
200,000
200,000
Payable after one year
2,445,434
3,952,700
19
Provisions for liabilities
2019
2018
Notes
£
£
Deferred tax liabilities
20
48,812
56,774
20
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2019
2018
Balances:
£
£
ACAs
48,812
56,774
A.G.E. NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
20
Deferred taxation
(Continued)
- 22 -
2019
Movements in the year:
£
Liability at 1 January 2019
56,774
Credit to profit or loss
(7,962)
Liability at 31 December 2019
48,812
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
21
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
64,501
39,230
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.
22
Share capital
2019
2018
£
£
Issued and fully paid
202 Ordinary shares of £1 each
202
202
23
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2019
2018
£
£
Aggregate compensation
282,000
192,000
Transactions with related parties
During the year the company entered into the following transactions with related parties:
A.G.E. NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
23
Related party transactions
(Continued)
- 23 -
The following amounts were outstanding at the reporting end date:
2019
2018
Amounts due to related parties
£
£
Entities over which the entity has control, joint control or significant influence
12,100
12,100
24
Cash generated from operations
2019
2018
£
£
Profit/(loss) for the year after tax
355,939
(118,011)
Adjustments for:
Taxation charged
126,225
38,265
Finance costs
97,266
119,024
Investment income
(475)
(6)
Loss on disposal of property, plant and equipment
139,991
-
Depreciation and impairment of property, plant and equipment
225,125
234,779
Movements in working capital:
Decrease/(increase) in inventories
30,000
(30,000)
Decrease/(increase) in trade and other receivables
437,913
(35,429)
(Decrease)/increase in trade and other payables
(1,146,414)
190,624
Cash generated from operations
265,570
399,246
25
Analysis of changes in net debt
1 January 2019
Cash flows
31 December 2019
£
£
£
Cash at bank and in hand
202,464
360,194
562,658
Borrowings excluding overdrafts
(4,152,700)
1,507,266
(2,645,434)
(3,950,236)
1,867,460
(2,082,776)
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