Company registration number 07413577 (England and Wales)
HFH HEALTHCARE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
HFH HEALTHCARE LIMITED
COMPANY INFORMATION
Director
S A Yandle
Company number
07413577
Registered office
Tuition House
27-37 St George's Road
Wimbledon
London
United Kingdom
SW19 4EU
Auditor
Azets Audit Services
2nd Floor
Regis House
45 King William Street
London
EC4R 9AN
HFH HEALTHCARE LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Director's responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 21
HFH HEALTHCARE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The director presents the strategic report for the year ended 31 December 2023.
The company is a provider of care in the home for both adults and children with complex healthcare needs. Support is provided by highly trained carers and is overseen by a qualified nursing team.
Funding streams include the NHS, Local Authorities, Medico Legal companies and private payers.
Fair review of the business
The results of the company are set out on page 8. The UK has seen the steepest rise in inflation in 40 years and the Bank of England expects further rises in the year ahead. The increased cost of living affecting fuel, energy and food will continue to have an impact on the staff and businesses within the health and social care sector that have already suffered from staff shortages due to years of under investment by Central Government.
Principal risks and uncertainties
There is no doubt that there are ongoing and significant pressures on the budgets for health and social care however the government have not as yet made any improvements.
What we do know is that there is a growing demand for our specialist services and this will continue due to the nature of the care that we deliver and the life expectancy of our clients that we care for. Complex care in the home is far more cost effective than expensive ITU care in a hospital setting and the bed that it blocks long term.
Key performance indicators
The financial key performance indicators to which the director refers are set out below:
Year ended
Year ended
31 December 2023
31 December 2022
Turnover
13,323,733
13,892,245
Turnover change on prior year
(4.09)%
(9.34)%
Profit after tax for the year
924,600
858,824
Profit change on prior year
30.00%
(5.32)%
Gross profit margin
33.90%
31.25%
Other performance indicators
Other key performance indicators to which the director refers include client numbers and employee recruitment and training.
Future Developments
The director does not anticipate significant change to the operation of the company and it is expected that we will continue to operate in the provision of complex care in the home for the foreseeable future.
We will continue and are confident that we can scale the business through the frameworks of Clinical Commissioning Groups, Local Authorities and private funders both in and around London as well as from our satellite office based in Hampshire that supports the Southeast of the country.
S A Yandle
Director
19 August 2024
HFH HEALTHCARE LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The director presents her annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of the provision of domiciliary complex care. The company supports acute and chronically ill people in their own homes. Support is provided by highly trained healthcare assistants and is overseen by a clinical nursing team.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
S A Yandle
Qualifying third party indemnity provisions
The director benefits from a qualifying indemnity provision in the form permitted by the Section 234 of the Companies Act 2006 in respect of certain third party actions against directors. No claim or notice of claim in respect of these indemnities has been received in the year. The qualifying indemnity provision was in force throughout the financial year and up to the date of approval of the Director's Report.
Employee involvement
The company places considerable value on the involvement of its employees and has continued to keep them informed of matters affecting them as employees, and of the various factors affecting the performance of the company. This is achieved through formal and informal meetings and mailings. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interest. Employees are also eligible for various benefits (e.g. target-related bonuses, pension plan, staff discount).
Going concern
Management complete and review budgets on a regular basis and these are reviewed by the directors, who are involved in the running of the business. In their assessment of the going concern position, the directors take into account the forecast availability of cash to meet liabilities as they fall due, the financial position of the group of which the company is a member, the covenants and terms attached to the company's loan agreement, and any risk of those loans becoming repayable before their due dates, should financial covenants not be met. The group is currently in a net liability position, but this is primarily due a loan showing as due within 12 months that was extended after the year end and the interest accrued on loans.
The formulation of strategies that include developing what we know best i.e. the London market, scaling this to a wider geographical footprint and introducing additional specialist services assures us that we cannot only satisfy our financial obligations but allows us to forge ahead by shaping the business for sustainable growth. This year we have successfully opened an office in Basingstoke that supports the Southeast of the country and added in “complex care with learning disabilities”. The office is performing well for the first year. Our plan for the year ahead will be to continue to expand on these much needed services.
At the time of approving the financial statements, the director had a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
Auditor
In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the company will be put at a General Meeting.
HFH HEALTHCARE LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
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 the fair review of the business and the future developments.
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
S A Yandle
Director
19 August 2024
HFH HEALTHCARE LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The director is responsible for preparing the annual report 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 she 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 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 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 them to ensure that the financial statements comply with the Companies Act 2006. She 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.
HFH HEALTHCARE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF HFH HEALTHCARE LIMITED
- 5 -
Opinion
We have audited the financial statements of HFH Healthcare Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including 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 2023 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
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. 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. 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 course of 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 our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
HFH HEALTHCARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF HFH HEALTHCARE LIMITED
- 6 -
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 director's 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 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 director's responsibilities statement, 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 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 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.
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 is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
HFH HEALTHCARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF HFH HEALTHCARE LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Toby Mason
Senior Statutory Auditor
For and on behalf of Azets Audit Services
19 August 2024
Chartered Accountants
Statutory Auditor
2nd Floor
Regis House
45 King William Street
London
EC4R 9AN
HFH HEALTHCARE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
13,323,733
13,892,245
Cost of sales
(8,806,630)
(9,551,109)
Gross profit
4,517,103
4,341,136
Administrative expenses
(3,358,260)
(3,449,728)
Profit before taxation
1,158,843
891,408
Tax on profit
7
(234,243)
(32,584)
Profit for the financial year
924,600
858,824
The profit and loss account has been prepared on the basis that all operations are continuing operations.
HFH HEALTHCARE LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
50,456
68,596
Current assets
Debtors
10
10,005,310
9,256,993
Cash at bank and in hand
2,839,375
2,723,902
12,844,685
11,980,895
Creditors: amounts falling due within one year
11
(2,138,638)
(2,217,588)
Net current assets
10,706,047
9,763,307
Net assets
10,756,503
9,831,903
Capital and reserves
Called up share capital
14
100
100
Profit and loss reserves
10,756,403
9,831,803
Total equity
10,756,503
9,831,903
The financial statements were approved and signed by the director and authorised for issue on 19 August 2024
S A Yandle
Director
Company Registration No. 07413577
HFH HEALTHCARE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
100
8,972,979
8,973,079
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
858,824
858,824
Balance at 31 December 2022
100
9,831,803
9,831,903
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
924,600
924,600
Balance at 31 December 2023
100
10,756,403
10,756,503
HFH HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
HFH Healthcare Limited is a private company limited by shares incorporated in England and Wales. The registered office is Tuition House, 27-37 St George's Road, Wimbledon, London, United Kingdom, SW19 4EU.
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 amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of HFH Complex Care Limited. These consolidated financial statements are available from its registered office, Tuition House, St George's Road, Wimbledon, London, England, SW19 4EU.
1.2
Going concern
Management complete and review budgets on a regular basis and these are reviewed by the directors, who are involved in the running of the business. In their assessment of the going concern position, the directors take into account the forecast availability of cash to meet liabilities as they fall due, the financial position of the group of which the company is a member, the covenants and terms attached to the company's loan agreement, and any risk of those loans becoming repayable before their due dates, should financial covenants not be met. The group is currently in a net liability position, but this is primarily due a loan showing as due within 12 months that was extended after the year end and the interest accrued on loans.
The formulation of strategies that include developing what we know best i.e. the London market, scaling this to a wider geographical footprint and introducing additional specialist services assures us that we cannot only satisfy our financial obligations but allows us to forge ahead by shaping the business for sustainable growth. This year we have successfully opened an office in Basingstoke that supports the Southeast of the country and added in “complex care with learning disabilities”. The office is performing well for the first year. Our plan for the year ahead will be to continue to expand on these much needed services.
At the time of approving the financial statements, the director had a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
HFH HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.3
Turnover
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, values added tax and other sales taxes. The following criteria must also be met before revenue is recognised.
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied.
the amount of revenue can be reliably measured;
it is probable that the company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be reliably measured.
1.4
Intangible fixed assets
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
At each reporting date, the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Amortisation 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:
Software
20% on cost
1.5
Tangible fixed assets
Tangible fixed assets 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:
Improvements to property
4% on cost
Fixtures and fittings
20% on cost
Motor vehicles
20% on cost
Office equipment
20% on cost
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.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.
HFH HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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
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.
1.8
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 balance sheet 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 debtors 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.
HFH HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
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 creditors, 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 payments 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 creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts 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 creditors 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 subsequently 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 through 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.
HFH HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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 profit and loss account, 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.
1.11
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 fixed 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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately form the company in independently administered funds.
1.13
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 leases asset are consumed.
HFH HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Assessing indicators of impairment
In assessing whether there have been any indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no indicators of impairments identified during the current financial year.
Holiday pay accrual
In assessing the holiday pay accrual for the year end, the calculation is based on the UK government standard entitlement of 5.6 weeks paid annual leave, equating to 12.07% of the hours worked. This percentage has been used to calculate the holiday pay accrual for each employee and is the basis for the accrual included at year end.
Key sources of estimation uncertainty
The directors consider that there are no key assumptions concerning the future, or other key sources of estimation uncertainty, that present a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Provision of domiciliary complex care
13,323,733
13,892,245
All turnover arose within the United Kingdom.
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration
55
50
Carers
384
406
Total
439
456
HFH HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
4
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
9,977,281
10,640,964
Social security costs
868,300
994,213
Pension costs
181,189
196,551
11,026,770
11,831,728
5
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
138,900
164,800
Company pension contributions to defined contribution schemes
43,701
1,431
182,601
166,231
The directors are considered to be key management personnel.
6
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
39,120
38,380
Depreciation of owned tangible fixed assets
16,403
50,172
(Profit)/loss on disposal of tangible fixed assets
(5,375)
4,167
Amortisation of intangible assets
-
8,073
Operating lease charges
166,684
147,393
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
233,539
32,584
Deferred tax
Origination and reversal of timing differences
704
Total tax charge
234,243
32,584
HFH HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Taxation
(Continued)
- 18 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,158,843
891,408
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
289,711
169,368
Tax effect of expenses that are not deductible in determining taxable profit
90
215
Effect of change in corporation tax rate
(11,817)
240
Group relief
(89,749)
(120,462)
Under/(over) provided in prior years
45,670
(15,248)
Provisions adjustment
338
(1,529)
Taxation charge for the year
234,243
32,584
8
Intangible fixed assets
Software
£
Cost
At 1 January 2023 and 31 December 2023
174,450
Amortisation and impairment
At 1 January 2023 and 31 December 2023
174,450
Carrying amount
At 31 December 2023
At 31 December 2022
HFH HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Tangible fixed assets
Improvements to property
Fixtures and fittings
Motor vehicles
Office equipment
Total
£
£
£
£
£
Cost
At 1 January 2023
118,373
116,916
35,750
98,589
369,628
Additions
3,888
3,888
Disposals
(11,250)
(11,250)
At 31 December 2023
118,373
116,916
24,500
102,477
362,266
Depreciation and impairment
At 1 January 2023
72,154
116,585
13,704
98,589
301,032
Depreciation charged in the year
9,643
331
6,213
216
16,403
Eliminated in respect of disposals
(5,625)
(5,625)
At 31 December 2023
81,797
116,916
14,292
98,805
311,810
Carrying amount
At 31 December 2023
36,576
10,208
3,672
50,456
At 31 December 2022
46,219
331
22,046
68,596
10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,077,813
1,169,644
Amounts owed by group undertakings
8,413,348
7,759,851
Other debtors
41,301
32,270
Prepayments and accrued income
468,162
289,838
10,000,624
9,251,603
Deferred tax asset (note 12)
4,686
5,390
10,005,310
9,256,993
Amounts owed by group undertakings are unsecured, interest-free and repayable on demand.
HFH HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
40,358
65,062
Amounts owed to group undertakings
48,000
Corporation tax
233,539
56,761
Other taxation and social security
516,903
493,337
Other creditors
947,847
1,039,959
Accruals and deferred income
351,991
562,469
2,138,638
2,217,588
Amounts owed to group undertakings are unsecured, interest-free and repayable on demand.
12
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2023
2022
Balances:
£
£
Accelerated capital allowances
4,686
5,390
2023
Movements in the year:
£
Asset at 1 January 2023
(5,390)
Charge to profit or loss
704
Asset at 31 December 2023
(4,686)
13
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
181,189
196,551
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.
At the year end, there were outstanding pension contributions of £76,474 (2022: £77,889).
HFH HEALTHCARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
14
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
Fully paid ordinary shares carry one vote per share and carry a right to dividends as and when declared by the company.
15
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
112,232
29,404
Between two and five years
379,945
546
492,177
29,950
16
Related party transactions
The Company is a wholly owned subsidiary of HFH Complex Care Limited, and as such has taken advantage of the exemption permitted by FRS 102 section 33 'Related party disclosures' not to provide disclosures of transactions entered into with wholly owned members of the group.
17
Controlling party
The immediate parent of the Company is Home From Hospital Limited, a company registered and incorporated in England.
The ultimate parent company is HFH Complex Care Limited, a company registered and incorporated in England. HFH Complex Care Limited is the largest and smallest group into which the financial statements of the Company are consolidated. The financial statements of HFH Complex Care Limited may be obtained from Tuition House, St. George's Road, Wimbledon, London, England, SW19 4EU
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