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 2020

for

Combine Asset Limited

Page

Company Information

1

Strategic Report

2

Report of the Director

3

Report of the Independent Auditors

4

Income Statement

8

Other Comprehensive Income

9

Statement of Financial Position

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12

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 2020.

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.

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.

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.

The coronavirus pandemic plunged the world economy into a deep recession in 2020 and will continue to impact the global economy in 2021. However, leading institutions and organizations are more optimistic about the development of the global economy now than at any time in 2020. Other primary risks for the future development of the economy besides the coronavirus pandemic include possible geopolitical shocks and the uncertainty emanating from international trade conflicts.

The Aurelius management promptly analyses the situation of its portfolio companies in close consultation with the operating management teams of the group companies. The closeness to the group companies made it possible to devise and implement comprehensive action plans to protect the health of employees, minimise the risks to our business processes and soften the blow of the challenging external conditions at the different levels of holding companies and group companies.

ON BEHALF OF THE BOARD:

J N Rouch - Director

23 September 2021

The director presents his report with the financial statements of the company for the year ended 31 December 2020.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2020.

DIRECTORS

The directors who have held office during the period from 1 January 2020 to the date of this report are as follows:

G Engleder - resigned 27 October 2020

J N Rouch - appointed 27 October 2020

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

23 September 2021

Opinion

We have audited the financial statements of Combine Asset Limited (the 'company') for the year ended 31 December 2020 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 2020 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.

Material uncertainty relating to going concern

We draw your attention to note 14, 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.

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

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 this gives rise to a material misstatement in the financial statements themselves. 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 three, 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Discussions were held with, and enquiries made of, management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

The laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation,

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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.

Shoolin Yagnik (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

28 September 2021

REVENUE

714,000

357,000

Administrative expenses

217,000

225,500

OPERATING PROFIT

497,000

131,500

Interest payable and similar expenses

4

876,171

817,512

LOSS BEFORE TAXATION

5

(379,171

)

(686,012

)

Tax on loss

6

-

LOSS FOR THE FINANCIAL YEAR

(379,171

)

(686,012

)

LOSS FOR THE YEAR

(379,171

)

(686,012

)

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

(686,012

)

Note

Prior year adjustment

7

357,000

TOTAL COMPREHENSIVE INCOME
SINCE LAST ANNUAL REPORT

(22,171

)

FIXED ASSETS

Property, plant and equipment

8

8,232,499

8,449,499

8,674,999

CURRENT ASSETS

Debtors

9

622,201

357,001

1

Cash at bank

530,400

-

1,152,601

357,001

1

CREDITORS

Amounts falling due within one year

10

(12,305,787

)

(11,348,016

)

(10,530,504

)

NET CURRENT LIABILITIES

(11,153,186

)

(10,991,015

)

(10,530,503

)

TOTAL ASSETS LESS CURRENT
LIABILITIES

(2,920,687

)

(2,541,516

)

(1,855,504

)

NET LIABILITIES

(2,920,687

)

(2,541,516

)

(1,855,504

)

CAPITAL AND RESERVES

Called up share capital

11

1

Retained earnings

12

(2,920,688

)

(2,541,517

)

(1,855,505

)

SHAREHOLDERS' FUNDS

(2,920,687

)

(2,541,516

)

(1,855,504

)

The financial statements were approved by the director and authorised for issue on 23 September 2021 and were signed by:

J N Rouch - Director

Called up

share

Retained

Total

capital

earnings

equity

£

Balance at 1 January 2019

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

)

Prior year adjustment

-

357,000

As restated

1

(2,541,517

)

(2,541,516

)

Changes in equity

Total comprehensive income

-

(379,171

)

(379,171

)

Balance at 31 December 2020

1

(2,920,688

)

(2,920,687

)

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 exemption 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.

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.

Turnover

Turnover is rent charged to another group company.

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

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. The 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.

Going concern

It is the intention of the company and its parent that it will continue to trade for at least twelve months from the date of the audit report. To this regard the ultimate parent company intends to offer such support as may be necessary to ensure this. This intention has been documented in a letter. Therefore the financial statements have been prepared on a going concern basis.

3.	EMPLOYEES AND DIRECTORS

There were no staff costs for the year ended 31 December 2020 nor for the year ended 31 December 2019.

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

31.12.20

31.12.19

as

restated

1

31.12.20

31.12.19

as

restated

£

Directors' remuneration

-

The director is deemed an employee.

4.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.12.20

31.12.19

as

restated

£

Interest on inter group loan

876,171

817,512

5.	LOSS BEFORE TAXATION

The loss is stated after charging:

31.12.20

31.12.19

as

restated

£

Depreciation - owned assets

217,000

225,500

31.12.20

31.12.19

£

Auditors' remuneration

2,250

Auditors' remuneration for non audit work

3,500

The above fees were borne by another group company.

6.

TAXATION

Analysis of the tax charge

No liability to UK corporation tax arose for the year ended 31 December 2020 nor for the year ended 31 December 2019.

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:

31.12.20

31.12.19

as

restated

£

Loss before tax

(379,171

)

(686,012

)

Loss multiplied by the standard rate of corporation tax in the UK of
19% (2019 - 19%)

(72,042

)

(130,342

)

Effects of:

Losses carried forward

72,042

130,342

Total tax charge

-

7.	PRIOR YEAR ADJUSTMENT

The prior year accounts have been restated to include £357,000 of accrued revenue in relation to the initial rent free period when the hospital was leased to Transform Hospital Group Limited. The lease commenced in July 2019 and there was an initial rent free period of 9 months. £357,000 represents the accrual of rent to the year end date.

8.	PROPERTY, PLANT AND EQUIPMENT

Freehold

property

£

COST

At 1 January 2020

and 31 December 2020

8,899,999

DEPRECIATION

At 1 January 2020

450,500

Charge for year

217,000

At 31 December 2020

667,500

NET BOOK VALUE

At 31 December 2020

8,232,499

At 31 December 2019

8,449,499

9.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.20

31.12.19

as

restated

£

Amounts owed by group undertakings

163,201

1

Prepayments and accrued income

459,000

357,000

622,201

357,001

£459,000 relates to an initial rent free period which will wind down over the term of the lease to the first breakclause.

10.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.20

31.12.19

as

restated

£

Amounts owed to group undertakings

12,224,187

11,348,016

VAT

81,600

-

12,305,787

11,348,016

Amounts owed to group undertakings is a loan with interest is accrued at 7.5%. The loan is repayable on demand. During the year the loan was assigned to another group company.

A charge has been registered over the property by TFHC Limited, Aurelius Eta UK Investments Limited and Aurelius Equity Opportunities SE & Co KGaA, all group companies.

11.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.12.20

31.12.19

value:

as
restated

£

1

ordinary

£1

1

12.

RESERVES

Retained

earnings

£

At 1 January 2020

(2,898,517

)

Prior year adjustment

357,000

(2,541,517

)

Deficit for the year

(379,171

)

At 31 December 2020

(2,920,688

)

13.	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 Strasse 6, 82031 Grunwald, Germany.

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.

14.	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.

The coronavirus pandemic plunged the world economy into a deep recession in 2020 and will continue to impact the global economy in 2021. However, leading institutions and organizations are more optimistic about the development of the global economy now than at any time in 2020. Other primary risks for the future development of the economy besides the coronavirus pandemic include possible geopolitical shocks and the uncertainty emanating from international trade conflicts.

The Aurelius management promptly analyses the situation of its portfolio companies in close consultation with the operating management teams of the group companies. The closeness to the group companies made it possible to devise and implement comprehensive action plans to protect the health of employees, minimise the risks to our business processes and soften the blow of the challenging external conditions at the different levels of holding companies and group companies.