Combine Asset Limited - Limited company accounts 20.1

REGISTERED NUMBER: 10309458 (England and Wales)

Strategic Report, Report of the Director and

Financial Statements

for the Year Ended 31 December 2019

for

Combine Asset Limited

Page

Company Information

1

Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

5

Income Statement

7

Other Comprehensive Income

8

Statement of Financial Position

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

DIRECTOR:

J N Rouch

REGISTERED OFFICE:

192 Altrincham Road

Manchester

M22 4RZ

REGISTERED NUMBER:

10309458 (England and Wales)

AUDITORS:

Venture House Business Service Limited

Chartered Accountants and

Statutory Auditors

Venture House

Calne Road

Lyneham

Chippenham

SN15 4PP

The director presents his strategic report for the year ended 31 December 2019.

REVIEW OF BUSINESS

The company owns a hospital at Bromsgrove Birmingham. The property is now operated and maintained by Transform Hospital Group Limited, who took over the tenancy in July 2019 from TFHC Ltd, when that company was put into in Administration. Both tenants were at the time of their tenancies members of the Aurelius Group of Companies.

There are no key performance indicators.

A principal risk of the business is the financial performance of the tenant. Without continued use and maintenance the value of the property may fall. The current tenant has the confirmed financial support of the group to assist it through difficult trading post occupation of the site.

Currently no rent is charged to the tenant which is a group company. Until such times as the tenant can pay a rent the company will have to rely on the credit and support of other group companies.

A principal risk of the business is the continued support of the lender. The lender has indicated its willingness not to seek repayment of interest or capital to the detriment of the company for a period of twelve months from the date of the audit report.

According to experts, the continuing and worsening coronavirus crisis at the time of this report will have considerable effects on the development of the global economy. In an economic forecast published in early March 2020, the Organization for Economic Cooperation and Development (OECD) concludes that the continuing coronavirus crisis represents the greatest risk to the global economy since the global financial crisis and that economic activity will decline sharply throughout the world in the first half of the year. The coronavirus crisis poses currently not yet quantifiable risks for general economic conditions and therefore also for AURELIUS. It is not possible to estimate the actual medium-term and long-term effects of the coronavirus crisis on the AURELIUS Group at the present time. Therefore, there is a risk that it may not be possible to meet the targets set in the companies' business plans. There is a risk that impairments may need to be recognized in intangible assets, property, plant and equipment or trade receivables and a risk that the portfolio companies may require additional funding. There is also a risk that potential sales of companies cannot be realized or only realized at a later time than planned. In view of the fluid state of developments, the Executive Board will continually re-assess the strategy and orientation of AURELIUS and its portfolio companies.

SECTION 172(1) STATEMENT

See below

ENGAGEMENT WITH EMPLOYEES

People create success. Our success is the result of the individual performance of every employee.

Respectful treatment of all employees.

Unconditional respect of human rights.

Conscious diversity and internationality of our workforce.

More jobs thanks to successful growth strategies.

ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS

Corporate codex

Principles such as responsible, sustainable management are firmly embedded in the Aurelius ESG (Environmental Social Governance) policy, including:

No investment in the arms industry.

No investment in emissions-intensive companies.

No trading in weapons or armaments, tobacco or tobacco products.

Code of Conduct for suppliers and service providers.

Anti-corruption and anti-bribery policy.

Protection and support for whistleblowers.

STATEMENT OF CORPORATE GOVERNANCE ARRANGEMENTS

Environment:

Goal for the year 2025: Reduce Group wide CO2 emissions by 30 percent.

Measures have been introduced to permanently reduced CO2 emissions.

Reduction of flights through the increased use of video conferences and online meetings and using train travel as an alternative.

Precautions to prevent environmental damage.

CO2 offsetting of the flights of all holding company employees since the 2019 financial year.

Social commitment:

Aurelius refugee initiative e.v. Aurelius has been helping refugees since 2015.

Extensive support of the START Foundation to promote outstanding young people with migration backgrounds since 2018.

Long established tradition: Christmas-season collection drive for important social projects; AURELIUS matches the donations raised by employees.

ON BEHALF OF THE BOARD:

J N Rouch - Director

17 December 2020

The director presents his report with the financial statements of the company for the year ended 31 December 2019.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2019.

DIRECTORS

G Engleder - appointed 8 May 2019

A R Veverka - resigned 5 September 2019

J N Rouch was appointed as a director after 31 December 2019 but prior to the date of this report.

G Engleder ceased to be a director after 31 December 2019 but prior to the date of this report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	state whether applicable 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 director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Venture House Business Service Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J N Rouch - Director

17 December 2020

Opinion

We have audited the financial statements of Combine Asset Limited (the 'company') for the year ended 31 December 2019 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity 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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion 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 loss for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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 draw your attention to note 13, as stated, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other information

The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors 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 the audit:

-	the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Director.

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 director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page four, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

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

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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.

Christopher Baylis (Senior Statutory Auditor)

for and on behalf of Venture House Business Service Limited

Chartered Accountants and

Statutory Auditors

Venture House

Calne Road

Lyneham

Chippenham

SN15 4PP

18 December 2020

REVENUE

-

Administrative expenses

225,500

225,000

OPERATING LOSS

(225,500

)

(225,000

)

Interest payable and similar expenses

4

817,512

758,619

LOSS BEFORE TAXATION

5

(1,043,012

)

(983,619

)

Tax on loss

6

-

LOSS FOR THE FINANCIAL YEAR

(1,043,012

)

(983,619

)

LOSS FOR THE YEAR

(1,043,012

)

(983,619

)

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

(1,043,012

)

(983,619

)

FIXED ASSETS

Property, plant and equipment

7

8,449,499

8,674,999

CURRENT ASSETS

Debtors

8

1

CREDITORS

Amounts falling due within one year

9

11,348,016

10,530,504

NET CURRENT LIABILITIES

(11,348,015

)

(10,530,503

)

TOTAL ASSETS LESS CURRENT
LIABILITIES

(2,898,516

)

(1,855,504

)

CAPITAL AND RESERVES

Called up share capital

10

1

Retained earnings

11

(2,898,517

)

(1,855,505

)

SHAREHOLDERS' FUNDS

(2,898,516

)

(1,855,504

)

The financial statements were approved by the director and authorised for issue on 17 December 2020 and were signed by:

J N Rouch - Director

Called up

share

Retained

Total

capital

earnings

equity

£

Balance at 1 January 2018

1

(871,886

)

(871,885

)

Changes in equity

Total comprehensive income

-

(983,619

)

(983,619

)

Balance at 31 December 2018

1

(1,855,505

)

(1,855,504

)

Changes in equity

Total comprehensive income

-

(1,043,012

)

(1,043,012

)

Balance at 31 December 2019

1

(2,898,517

)

(2,898,516

)

1.	STATUTORY INFORMATION

Combine Asset Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 3.17(d);

•

the requirement of paragraph 33.7.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Significant judgements and estimates

The significant estimate is the rate of depreciation that is applied to the property.

Not with standing the rate of depreciation chosen there is a risk that without continued use and maintenance the value of the property may fall. The current tenant has the confirmed financial support of the group to assist it through difficult trading post occupation of the site.

Changes in accounting policies

The directors have reclassified the investment property as a fixed asset so as to better reflect its use by another group company.

As a result of this change depreciation is to be charged as set out in the fixed asset note. Had depreciation been charged previously then depreciation to 31 December 2016 would have been £112,500 and £225,000 per annum from that period end onwards.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Freehold property

-

in accordance with the property

Freehold property is currently being depreciated at 2.5% of cost.

Financial instruments

The group has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

Basic financial assets, including trade and other receivables and cash and bank balances, are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method.

Basic financial liabilities, including trade and other payables, bank loans and loans from fellow group companies, 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 receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

3.	EMPLOYEES AND DIRECTORS

There were no staff costs for the year ended 31 December 2019 nor for the year ended 31 December 2018.

The average number of employees during the year was as follows:

31.12.19

31.12.18

1

31.12.19

31.12.18

£

Directors' remuneration

-

4.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.12.19

31.12.18

£

Interest on inter group loan

817,512

758,619

5.	LOSS BEFORE TAXATION

The loss is stated after charging:

31.12.19

31.12.18

£

Depreciation - owned assets

225,500

225,000

31.12.18

31.12.17

£

Auditors' remuneration

3,000

Auditors' remuneration for non audit work

1,000

The above fees were borne by a group company Transform Hospital Group Limited.

6.

TAXATION

Analysis of the tax charge

No liability to UK corporation tax arose for the year ended 31 December 2019 nor for the year ended 31 December 2018.

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

31.12.19

31.12.18

£

Loss before tax

(1,043,012

)

(983,619

)

Loss multiplied by the standard rate of corporation tax in the UK of
19% (2018 - 19%)

(198,172

)

(186,888

)

Effects of:

rate

Deferred tax not recognised

198,172

186,888

Total tax charge

-

7.	PROPERTY, PLANT AND EQUIPMENT

Freehold

property

£

COST

At 1 January 2019

and 31 December 2019

8,899,999

DEPRECIATION

At 1 January 2019

225,000

Charge for year

225,500

At 31 December 2019

450,500

NET BOOK VALUE

At 31 December 2019

8,449,499

At 31 December 2018

8,674,999

8.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.19

31.12.18

£

Amounts owed by group undertakings

1

9.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.19

31.12.18

£

Amounts owed to group undertakings

11,348,016

10,530,504

Included in creditors is a loan for £9,771,885 to a group undertaking. Interest is accrued at 7.5% and the loan is repayable on demand.

A charge has been registered over the property by Aurelius Eta UK Investments Limited and Aurelius Epsilon UK Investments Limited, both group companies.

10.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.12.19

31.12.18

value:

£

1

ordinary

£1

1

11.

RESERVES

Retained

earnings

£

At 1 January 2019

(1,855,505

)

Deficit for the year

(1,043,012

)

At 31 December 2019

(2,898,517

)

12.	ULTIMATE PARENT COMPANY

Aurelius Equity Opportunities SE & Co. KGaA (incorporated in Germany ) is regarded by the director as being the company's ultimate parent company.

The Company is included in the group accounts prepared by the ultimate parent company, copies of which can be obtained from Ludwig-Ganghofer Stasse 6, 82031 Grunwald.

Combine Holdings Limited is the immediate parent company.

The smallest and largest group preparing consolidated accounts in which the Company's results are included is that headed by Aurelius Equity Opportunities SE & Co KGaA.

13.	GOING CONCERN

There is a risk that without continued use and maintenance the value of the property may fall. The current tenant has the confirmed financial support of the group to assist it through difficult trading post occupation of the site.

The lender has indicated its willingness not to seek repayment of interest or capital to the detriment of the company for a period of twelve months from the date of the audit report.

According to experts, the continuing and worsening coronavirus crisis at the time of this report will have considerable effects on the development of the global economy. In an economic forecast published in early March 2020, the Organization for Economic Cooperation and Development (OECD) concludes that the continuing coronavirus crisis represents the greatest risk to the global economy since the global financial crisis and that economic activity will decline sharply throughout the world in the first half of the year. The coronavirus crisis poses currently not yet quantifiable risks for general economic conditions and therefore also for AURELIUS. It is not possible to estimate the actual medium-term and long-term effects of the coronavirus crisis on the AURELIUS Group at the present time. Therefore, there is a risk that it may not be possible to meet the targets set in the companies' business plans. There is a risk that impairments may need to be recognized in intangible assets, property, plant and equipment or trade receivables and a risk that the portfolio companies may require additional funding. There is also a risk that potential sales of companies cannot be realized or only realized at a later time than planned. In view of the fluid state of developments, the Executive Board will continually re-assess the strategy and orientation of AURELIUS and its portfolio companies.