Company Registration No. 06378013 (England and Wales)
AFFINITY CARE MANAGEMENT LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
PAGES FOR FILING WITH REGISTRAR
AFFINITY CARE MANAGEMENT LIMITED
CONTENTS
Page
Statement of financial position
1
Notes to the financial statements
2 - 11
AFFINITY CARE MANAGEMENT LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2023
31 May 2023
- 1 -
2023
2022
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
5
704
5,800
Current assets
Trade and other receivables - deferred tax
8
4,504
3,894
Trade and other receivables - other
6
79,485
261,305
Cash and cash equivalents
10,205
8,744
94,194
273,943
Current liabilities
7
(110,598)
(653,624)
Net current liabilities
(16,404)
(379,681)
Net liabilities
(15,700)
(373,881)
Equity
Called up share capital
10
2
2
Retained earnings
11
(15,702)
(373,883)
Total equity
(15,700)
(373,881)

The directors of the company have elected not to include a copy of the income statement within the financial statements.true

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 11 November 2024 and are signed on its behalf by:
Mr C Bialan
Director
Company Registration No. 06378013
AFFINITY CARE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 2 -
1
Accounting policies
Company information

Affinity Care Management Limited is a private company limited by shares incorporated in England and Wales. The registered office is 31/33 Commercial Road, Poole, Dorset, BH14 0HU.

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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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.

1.2
Going concern

The Board has carefully considered those factors likely to affect the future development, performance and financial position of the company in relation to the ability of the company to operate within its current and foreseeable financial and operational resources.

 

The company is reliant on its parent company, fellow subsidiaries, directors and its wider group to provide continued financial support in order to remain a going concern. The company provides administrative support to the other members of the group and related parties. The company was sold by its parent company on 30 May 2024 and, post this date, the company’s directors have continued to provide financial support in order to remain a going concern.

 

The company is facing various ongoing challenges including rising inflation, rising interest rates, staff shortages as a result of Brexit, the 9.8% increase in the National Living Wage from 1 April 2023, the cost of living crisis and higher insurance premiums, however, the Board has put in place a number of strategies to mitigate the effect of these challenges as far as possible.

 

A number of the above factors indicate the existence of a material uncertainty which may cast doubt about the company’s ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company were unable to trade as a going concern on the basis that the directors consider that, on balance, having committed to provide financial support to the company for at least 12 months from the date of signing of its financial statements, the company would be in a position to meet its liabilities as they fall due. As such, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Revenue

Revenue is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the supply of care home management services represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the fair value of the consideration received or receivable. Where payments are received from customers in advance of services provided the amounts are recorded as deferred income and included as part of payables due within one year.

AFFINITY CARE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 3 -

Interest income is recognised when it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliability. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.

1.4
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Website
3 years straight line

Amortisation is charged when the intangible asset is available for use, i.e. when it is in the location and condition necessary for it to be usable in the manner intended by management.

1.5
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Fixtures, fittings & equipment
20% straight line
Computer equipment
20% straight line

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 non-current 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.

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.

AFFINITY CARE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 4 -

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. Bank overdrafts are shown within borrowings in current liabilities.

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 statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future 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 payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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.

AFFINITY CARE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 5 -
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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
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 non-current assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the income statement so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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.

AFFINITY CARE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 6 -
2
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Total
11
12
3
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
(610)
73
Changes in tax rates
-
0
(991)
Total deferred tax
(610)
(918)
4
Intangible fixed assets
Website
£
Cost
At 1 June 2022 and 31 May 2023
6,500
Amortisation and impairment
At 1 June 2022 and 31 May 2023
6,500
Carrying amount
At 31 May 2023
-
0
At 31 May 2022
-
0
AFFINITY CARE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 7 -
5
Property, plant and equipment
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
Cost
At 1 June 2022
4,483
53,033
57,516
Additions
-
0
1,689
1,689
Disposals
(3,783)
(49,533)
(53,316)
At 31 May 2023
700
5,189
5,889
Depreciation and impairment
At 1 June 2022
4,146
47,570
51,716
Depreciation charged in the year
198
3,228
3,426
Eliminated in respect of disposals
(3,783)
(46,174)
(49,957)
At 31 May 2023
561
4,624
5,185
Carrying amount
At 31 May 2023
139
565
704
At 31 May 2022
337
5,463
5,800

Property, plant and equipment with a carrying amount of £704 (2022: £5,800) have been pledged to secure borrowings of the Group. Details of these borrowings are given in note 13.

 

6
Trade and other receivables
2023
2022
Amounts falling due within one year:
£
£
Trade receivables
5,426
13,107
Amounts owed by group undertakings
31,261
219,198
Other receivables
546
2,384
Prepayments and accrued income
42,252
26,616
79,485
261,305
2023
2022
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 8)
4,504
3,894
Total debtors
83,989
265,199

Trade and other receivables with a carrying amount of £83,989 (2022: £265,199) have been pledged to secure borrowings of the Group. Details of these borrowings are given in note 13.

AFFINITY CARE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 8 -
7
Current liabilities
2023
2022
£
£
Trade payables
18,849
3,997
Amounts owed to group undertakings
-
0
580,510
Taxation and social security
28,103
19,313
Other payables
19,261
24,997
Accruals and deferred income
44,385
24,807
110,598
653,624
8
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Assets
Assets
2023
2022
Balances:
£
£
Accelerated capital allowances
4,504
3,894
2023
Movements in the year:
£
Asset at 1 June 2022
(3,894)
Credit to profit or loss
(610)
Asset at 31 May 2023
(4,504)

Of the deferred tax asset set out above, an amount of £617 is expected to reverse within 12 months and relates to accelerated capital allowances.

9
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
20,283
10,078

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 balance sheet date, unpaid contributions of £6,320 (2022: £1,682) were due to the fund. They are included in other creditors.

AFFINITY CARE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 9 -
10
Called up share capital
2023
2022
£
£
Ordinary share capital
Issued and fully paid
2 Ordinary of £1 each
2
2

Ordinary shares carry voting rights but have no right to fixed income or fixed repayment of capital.

11
Reserves
Retained earnings

Retained earnings represents cumulative profits or losses, including unrealised profit on the remeasurement of investment properties, net of dividends paid and other adjustments.

12
Audit report information

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified.

In their report, the auditors emphasised the folowing matter without qualifying their report:

We draw attention to note 1.2 in the financial statements, which indicates that the company continues to rely on its directors for financial support and it continues to be loss making having incurred a net trading loss of £24,397 during the year ended 31 May 2023. As stated in note 1.2, these events or conditions, along with other matters as set forth in note 1.2, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern.  It therefore maybe unable to realise its assets and discharge its liabilities in the normal course of business and it is therefore dependent on the continued financial support from the directors. The financial statements do not include the adjustments that would result if the company were unable to continue as a going concern. Our opinion is not modified in respect of this matter.

The senior statutory auditor was Michelle Pettifer.
The auditor was Morris Lane.
13
Financial commitments, guarantees and contingent liabilities

At 31 May 2023, the company had secured borrowings of its fellow subsidiary company, Alum Care Limited, by way of fixed and floating charge over all its assets, a debenture and an intercompany guarantee up to a maximum amount of £5,200,000 (2022: £600,000). At 31 May 2023, the maximum exposure of the company in respect of amounts drawn by the parent company was £5,135,000 (2022: £570,000).

 

At 31 May 2022, the company had secured borrowings of its parent company, The Buckinghamshire Group Limited by way of fixed and floating charge over all its assets, a debenture and an intercompany guarantee up to a maximum amount of £13,000,000. At 31 May 2022, the maximum exposure of the company in respect of amounts drawn by the parent company were £8,883,755. During the year, the borrowings on which security had been provided were repaid and the company has subsequently been released from the charge.

AFFINITY CARE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 10 -
14
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

2023
2022
£
£
Within one year
-
0
1,466
-
0
1,466
15
Events after the reporting date

Subsequent to the year end, the shareholders of the ultimate parent company had entered into an agreement for the company to be sold, which completed on 30 May 2024.

16
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2023
2022
£
£
Aggregate compensation
13,332
14,487

Included in the above are amounts totalling £13,332 (2022: £14,487) paid by the company on behalf of its ultimate parent company and its fellow subsidiaries.

Transactions with related parties

During the year the company entered into the following transactions with related parties:

Services provided
Services received
2023
2022
2023
2022
£
£
£
£
Other related parties
183,518
259,231
37,230
31,213
183,518
259,231
37,230
31,213
AFFINITY CARE MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
16
Related party transactions
(Continued)
- 11 -

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
-
0
580,510
Other related parties
10,993
6,186
10,993
586,696

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Fellow subsidiary undertakings
31,261
219,198
Other related parties
5,426
4,960
36,687
224,158

No guarantees have been given or received.

The following amounts were recognised as an expense in the period in respect of bad and doubtful debts due from related parties:

2023
2022
£
£
Other related parties
1,303
-
17
Parent company

The ultimate parent company is The Buckinghamshire Group Limited, whose registered office is 31/33 Commercial Road, Poole, Dorset, BH14 0HU.

The ultimate controlling parties are the directors by virtue of their 80% shareholding in the ultimate parent company, The Buckinghamshire Group Limited.

The smallest and largest group into which the company is consolidated is The Buckinghamshire Group Limited.

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