Abbey Healthcare (Westmoreland) Limited Company accounts

ABBEY HEALTHCARE (WESTMORELAND) LIMITED - Company Information

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COMPANY REGISTRATION NUMBER: 07883470

Abbey Healthcare (Westmoreland) Limited

Financial Statements

For the year ended

31 December 2019

Abbey Healthcare (Westmoreland) Limited

Financial Statements

Year ended 31 December 2019

Contents	Page

Officers and professional advisers	1

Strategic report	2

Directors' report	4

Independent auditor's report to the members	6

Statement of income and retained earnings	9

Statement of financial position	10

Statement of cash flows	11

Notes to the financial statements	12

Abbey Healthcare (Westmoreland) Limited

Officers and Professional Advisers

The board of directors	P Sodhi (Resigned 9 September 2019)
	A Taylor
	M Cloonan

Registered office	Abbey Healthcare
	Sutherland House
	70 - 78 West Hendon Broadway
	London
	NW9 7BT

Auditor	Streets Audit LLP
	Chartered accountants & statutory auditor
	Beaumont Business Centre
	6 Snow Hill
	London
	EC1A 2AY

Abbey Healthcare (Westmoreland) Limited

Strategic Report

Year ended 31 December 2019

The directors present the strategic report and the financial statements for the year ended 31 December 2019. Business review Abbey Healthcare (Westmoreland) Limited operates an 120 bed care home regulated by the Care Quality Commission and was rated as Good throughout the year. Revenue increased in the year from £3,464,000 to £4,098,000 as a result of increased fee rates, while occupancy increased form 60% to 68%. This translated into an increase in operating profit to £465,000, (2018 £372,000). There are no significant future developments planned for the Company. Principal risks and uncertainties Management monitors risks on a weekly and monthly basis. The primary concern of the management is the quality of care. There are dedicated regional managers and Operational Directors responsible for supporting the Home in provision of high quality care services. The major financial risk to the company is the increase in its cost base, often exceeding the rate of inflation, primarily relating to the National Living Wage. The Company is exposed to credit risk with its customers, albeit major customers are public sector, and therefore with limited credit risk. Pricing risk is limited to the risk associated with negotiating annual price increases. Liquidity and cashflow risk could arise in the event of a downturn in trading. However, in this event, sister companies in the group can provide liquidity if required. The potential impact of Brexit remains uncertain, however, it is likely to reduce the pool of staff available, and there are risks related to the cost of supplies including food and energy. Financial and other key performance indicators The key financial and operational performance indicators monitored by management include regulatory reviews, internal quality reviews, occupancy ratios, average weekly fees and cost to revenue ratios. During 2020 the worldwide spread of Coronavirus occurred and from March 2020 impacted the UK and the care home industry in particular. This had a significant impact on the market and company. Occupancy decreased and costs increased through increased PPE and sickness costs, as well as the investments we made to make our homes more resilient to future waves of the virus. We received support from government in terms of grants and other additional funding which helped offset the negative financial impact of the virus. The overall effect of the virus remains unclear, but it will last into 2021.

This report was approved by the board of directors on 23 February 2021 and signed on behalf of the board by:

A Taylor

Director

Registered office:

Abbey Healthcare

Sutherland House

70 - 78 West Hendon Broadway

London

NW9 7BT

Abbey Healthcare (Westmoreland) Limited

Directors' Report

Year ended 31 December 2019

The directors present their report and the financial statements of the company for the year ended 31 December 2019 .

Directors

The directors who served the company during the year were as follows:

A Taylor
M Cloonan
P Sodhi	(Resigned 9 September 2019)

Dividends

The directors do not recommend the payment of a dividend.

Disclosure of information in the strategic report

The company has chosen to include several items in the strategic report which would otherwise be required to be disclosed in the directors report. These include information on the exposure to financial risk, price risk, credit risk, liquidity risk and cash flow risk and an indication of the likely future developments in the business of the company.

Directors' responsibilities statement

The directors are responsible for preparing the strategic report, directors' 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 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 judgments and accounting estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Auditor

Each of the persons who is a director at the date of approval of this report confirms that:

- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.

This report was approved by the board of directors on 23 February 2021 and signed on behalf of the board by:

A Taylor

Director

Registered office:

Abbey Healthcare

Sutherland House

70 - 78 West Hendon Broadway

London

NW9 7BT

Abbey Healthcare (Westmoreland) Limited

Independent Auditor's Report to the Members of Abbey Healthcare (Westmoreland) Limited

Year ended 31 December 2019

Opinion

We have audited the financial statements of Abbey Healthcare (Westmoreland) Limited (the 'company') for the year ended 31 December 2019 which comprise the statement of income and retained earnings, statement of financial position, statement of cash flows and the related notes, 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; - 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 auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

- the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

- the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

- the information given in the strategic report and the directors' report for the financial 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.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. 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 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.

Jonathan Day

(Senior Statutory Auditor)

For and on behalf of

Streets Audit LLP

Chartered accountants & statutory auditor

Beaumont Business Centre

6 Snow Hill

London

EC1A 2AY

24 February 2021

Abbey Healthcare (Westmoreland) Limited

Statement of Income and Retained Earnings

Year ended 31 December 2019

		2019	2018
Note		£	£
Turnover	4	4,098,430	3,464,320

Cost of sales	2,600,646	2,316,670
	------------	------------
Gross profit	1,497,784	1,147,650

Administrative expenses		1,032,469	775,378
		------------	------------
Operating profit	5	465,315	372,272

Other interest receivable and similar income	9	3,944	950
Interest payable and similar expenses	10	37,432	52,525
		------------	------------
Profit before taxation		431,827	320,697

Tax on profit	11	( 9,937)	–
		---------	---------
Profit for the financial year and total comprehensive income		441,764	320,697
		---------	---------

Retained losses at the start of the year	( 853,371)	( 1,174,068)
	---------	------------
Retained losses at the end of the year	( 411,607)	( 853,371)
	---------	------------

All the activities of the company are from continuing operations.

Abbey Healthcare (Westmoreland) Limited

Statement of Financial Position

31 December 2019

	2019	2018
Note	£	£

Fixed assets

Tangible assets	12	108,646	111,187

Current assets

Debtors	13	8,318,002	4,905,657
Cash at bank and in hand		38,092	88,630
		------------	------------
		8,356,094	4,994,287

Creditors: amounts falling due within one year	14	8,876,346	5,958,844
		------------	------------
Net current liabilities		520,252	964,557
		---------	---------
Total assets less current liabilities		( 411,606)	( 853,370)
		---------	---------
Net liabilities		( 411,606)	( 853,370)
		---------	---------

Capital and reserves

Called up share capital	16	1	1
Profit and loss account		( 411,607)	( 853,371)
		---------	---------
Shareholders deficit		( 411,606)	( 853,370)
		---------	---------

These financial statements were approved by the board of directors and authorised for issue on 23 February 2021 , and are signed on behalf of the board by:

A Taylor

Director

Company registration number: 07883470

Abbey Healthcare (Westmoreland) Limited

Statement of Cash Flows

Year ended 31 December 2019

	2019	2018
	£	£

Cash flows from operating activities

Profit for the financial year	441,764	320,697

Adjustments for:
Depreciation of tangible assets	37,129	20,196
Other interest receivable and similar income	( 3,944)	( 950)
Interest payable and similar expenses	37,432	52,525
Tax on profit	( 9,937)	–
Accrued expenses	90,037	159,176

Changes in:
Trade and other debtors	( 3,412,345)	( 1,834,564)
Trade and other creditors	150,394	( 1,081,184)
	------------	------------
Cash generated from operations	( 2,669,470)	( 2,364,104)

Interest paid	( 37,432)	( 52,525)
Interest received	3,944	950
Tax received	9,937	–
	------------	------------
Net cash used in operating activities	( 2,693,021)	( 2,415,679)
	------------	------------

Cash flows from investing activities

Purchase of tangible assets	( 34,588)	( 46,922)
	------------	------------
Net cash used in investing activities	( 34,588)	( 46,922)
	------------	------------

Cash flows from financing activities

Proceeds from loans from group undertakings	2,677,071	2,378,508
	------------	------------
Net cash from financing activities	2,677,071	2,378,508
	------------	------------

Net decrease in cash and cash equivalents	( 50,538)	( 84,093)
Cash and cash equivalents at beginning of year	88,630	172,723
	--------	---------
Cash and cash equivalents at end of year	38,092	88,630
	--------	---------

Abbey Healthcare (Westmoreland) Limited

Notes to the Financial Statements

Year ended 31 December 2019

1. General information

The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Abbey Healthcare, Sutherland House, 70 - 78 West Hendon Broadway, London, NW9 7BT.

2. Statement of compliance

These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.

3. Accounting policies

Basis of preparation

The financial statements have been prepared on the historical cost basis.The financial statements are prepared in sterling, which is the functional currency of the entity.

Going concern

The company has net liabilities at the statement of financial position date however has made a profit in the year. The controlling party has the ability to and will continue to provide financial support so that the company can continue to meet its financial liabilities as they fall due for payment for at least 12 months from the date of signing the financial statements. For these reasons, the directors have prepared the financial statements on a going concern basis. Subsequent to the year-end, the UK has experienced a pandemic of the coronavirus. The company is experiencing disruption from the pandemic and the full impact cannot be fully quantified but the directors remain committed to the protection of the business and have access to sufficient resources to meet ongoing operations. This is being regularly reviewed by the directors. In addition the directors are mindful of the significant ongoing support being offered by the Government. Accordingly the financial statements have been prepared on a going concern basis.

Judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In preparing these financial statements, the directors have made the following judgements:- 1 Determine whether there are indicators of impairment of the tangible and intangible assets, including goodwill. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit. Other key sources of estimation uncertainty:- 1 Tangible fixed assets Tangible fixed assets, other than investment properties, are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

Revenue recognition

Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.

Income tax

The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in respect of all material timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.

Depreciation

Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:

	Fixtures and fittings	-	20% straight line

Finance leases and hire purchase contracts

Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.

Financial instruments

The company holds basic financial instruments as defined in FRS102. The financial assets and financial liabilities of the company and their measurement basis are as follows: Financial assets - trade and other debtors are basic financial instruments and are debt instruments measured at amortised cost. Prepayments are not financial instruments. Cash at bank is classified as a basic financial instrument and is measured at amortised cost. Financial liabilities - trade creditors, accruals and other creditors are financial instruments, and are measured at amortised cost. Taxation and social security are not included in the financial instruments disclosure definition.

Defined contribution plans

Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.

4. Turnover

Turnover arises from:

	2019	2018
	£	£
Rendering of services	4,098,430	3,464,320
	------------	------------

The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.

5. Operating profit

Operating profit or loss is stated after charging:

	2019	2018
	£	£
Depreciation of tangible assets	37,129	20,196
	--------	--------

6. Auditor's remuneration

	2019	2018
	£	£
Fees payable for the audit of the financial statements	7,200	7,200
	-------	-------

7. Staff costs

The average number of persons employed by the company during the year, including the directors, amounted to:

	2019	2018
	No.	No.
Production staff	96	115
Management staff	3	1
	----	----
	99	116
	----	----

The aggregate payroll costs incurred during the year, relating to the above, were:

	2019	2018
	£	£
Wages and salaries	2,308,344	1,954,821
Social security costs	98,550	109,615
Other pension costs	16,727	19,969
	------------	------------
	2,423,621	2,084,405
	------------	------------

8. Directors' remuneration

The directors' aggregate remuneration in respect of qualifying services was:

	2019	2018
	£	£
Remuneration	25,352	8,673
	--------	-------

9. Other interest receivable and similar income

	2019	2018
	£	£
Interest on cash and cash equivalents	421	392
Interest from group undertakings	3,523	558
	-------	----
	3,944	950
	-------	----

10. Interest payable and similar expenses

	2019	2018
	£	£
Interest on obligations under finance leases and hire purchase contracts	2,615	2,841
Interest due to group undertakings	34,817	49,684
	--------	--------
	37,432	52,525
	--------	--------

11. Tax on profit

Major components of tax income

	2019	2018
	£	£

Current tax:

Adjustments in respect of prior periods	( 9,937)	–
	-------	----
Tax on profit	( 9,937)	–
	-------	----

Reconciliation of tax income

The tax assessed on the profit on ordinary activities for the year is lower than (2018: lower than) the standard rate of corporation tax in the UK of 19 % (2018: 19 %).

	2019	2018
	£	£
Profit on ordinary activities before taxation	431,827	320,697
	---------	---------
Profit on ordinary activities by rate of tax	82,047	60,932
Adjustment to tax charge in respect of prior periods	( 9,937)	–
Effect of expenses not deductible for tax purposes	( 38)	( 113)
Effect of capital allowances and depreciation	( 2,022)	( 4,751)
Utilisation of tax losses	( 79,987)	( 56,068)
	---------	---------
Tax on profit	( 9,937)	–
	---------	---------

12. Tangible assets

	Fixtures and fittings
	£
Cost
At 1 January 2019	163,883
Additions	34,588
	---------
At 31 December 2019	198,471
	---------
Depreciation
At 1 January 2019	52,696
Charge for the year	37,129
	---------
At 31 December 2019	89,825
	---------
Carrying amount
At 31 December 2019	108,646
	---------
At 31 December 2018	111,187
	---------

13. Debtors

	2019	2018
	£	£
Trade debtors	365,825	376,675
Amounts owed by group undertakings	7,896,134	4,406,949
Prepayments and accrued income	31,043	122,033
Other debtors	25,000	–
	------------	------------
	8,318,002	4,905,657
	------------	------------

14. Creditors: amounts falling due within one year

	2019	2018
	£	£
Trade creditors	401,952	248,319
Amounts owed to group undertakings	8,123,534	5,446,463
Accruals and deferred income	304,434	214,397
Social security and other taxes	34,022	46,921
Other creditors	12,404	2,744
	------------	------------
	8,876,346	5,958,844
	------------	------------

15. Employee benefits

Defined contribution plans

The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 16,727 (2018: £ 19,969 ).

16. Called up share capital

Issued, called up and fully paid

	2019		2018
	No.	£	No.	£
Ordinary shares of £ 1 each	1	1	1	1
	----	----	----	----

17. Analysis of changes in net debt

	At 1 Jan 2019	Cash flows	At 31 Dec 2019
	£	£	£
Cash at bank and in hand	88,630	(50,538)	38,092
Debt due within one year	(5,446,463)	(2,677,071)	(8,123,534)
	------------	------------	------------
	( 5,357,833)	( 2,727,609)	( 8,085,442)
	------------	------------	------------

18. Related party transactions

The company operated a loan account with P Sodhi. The company advanced £25,000 in the year and this was the balance outstanding at the year end. No interest was charged and the loan is repayable on demand. The company paid key management remuneration totalling £25,352 (2018 - £22,125). The company has taken exemption under FRS102 from disclosing transactions with wholly owned members of the same group.

19. Controlling party

The company was under the control of the Trustees of the Prabhdyal Sodhi Overseas Settlement throughout the year, an entity based in Gibraltar. The immediate parent company is Lansbury Limited, a company incorporated in Gibraltar.