The directors present their strategic report on the affairs of the company for the year ended 31 March 2024.
During the year ended 31 March 2024 the company's results are in line with management expectations. The company saw a significant increase in the value of interest generated through cash balances held at the bank compared to the prior year. This was due to a combination of moving to an interest generating bank account late in 2022/23, and the increase in interest rates during the year.
The company entered into twelve-year contract for the provision of a fully managed service to provide radiology equipment and maintenance to support the hospital services. This is shown under note 10 of the accounts.
The directors are confident that these results together with the strong balance sheet and secure contractual position with Airedale NHS Foundation Trust mean that the company is well positioned for the future.
AGH Solutions Board review key risks monthly. The company is required to ensure that any key risks are aligned with the risk management arrangements for Airedale NHS Foundation Trust to ensure that compliance with national regulation is adhered to on a consolidated level.
Financial Risk Management
The company's activities expose it to a variety of financial risks, such as market risk, credit risk and liquidity risk.
Market risk
The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return on risk.
Foreign exchange risk
The company does not hold any balances at year end in currencies other than Sterling, the presentational and functional currency of the company, and therefore does not have an exposure to foreign exchange risk.
Price risk
The company does not actively trade in markets and therefore is not exposed to either commodity price or equity price risks.
Interest rate risk
Interest rate risk is the possibility that changes in interest rates will result in higher financing costs or reduced income from the company's interest bearing financial assets and liabilities. As the loan is fixed interest there is no risk associated with changes in interest rates. The interest rate risk arising on interest income is immaterial and the company does not currently consider it necessary to actively manage interest rate risk.
Credit risk
Credit risk is the risk of suffering financial loss should the company's customers, clients or counterparties fail to fulfil their contractual obligations to the company. The company's core business is primarily the supply of an Operated Healthcare Facility to its parent company. As a result, the company is not exposed to any material third party credit risk as the majority of receivables are from related companies.
Liquidity risk
Liquidity risk is the risk that the company is unable to meet its obligations when they fall due as a result of cash requirements from contractual commitments or other cash flows. The company manages liquidity by maintaining sufficient cash with banks to meet its on-going commitments.
During 2024/25, the company will continue to work with Airedale NHS Foundation Trust on the multi-year remedial work to maintain the hospital buildings, along with supporting its long term Estates strategy. The company will also support bidding for any substantial capital money that becomes available from the government or other bodies, particularly in support of sustainability. It was also announced in May 2023 that Airedale Hospital would be rebuilt as part of the government’s New Hospital Programme. AGH Solutions continue to support the Trust as required to facilitate the delivery of this new provision, and work is now underway to provide technical and other professional support into a variety of individual programmes of work as part of the enabling works for the New Hospital Programme, along with support for the long-term plans for the new hospital.
Further relevant service tenders will be explored to provide similar services to other NHS bodies, along with comprehensive and ongoing profit improvement plan focused on margin enhancement. A further key strategic aim of the company is to grow its footprint outside the current major contracts, and this will be explored further through strategic discussions with both local authorities and other NHS organisations in the local area regarding future shared developments and provision of facilities. The establishment of local Integrated Care Systems (ICS) also provides potential opportunities, through collaboration with other local service providers and the potential for development of shared-use facilities.
The financial results for the period are set out in detail in the following accounts. All results relate to the year ended 31 March 2024.
The focus of the Board of Directors is balanced across several key metrics to assess financial performance against expectations monthly. These are Gross Profit Margin, Net Profit, Net Profit Margin, Current Ratio and Liquidity Days.
| 2023/24 | 2022/23 |
Gross Profit Margin | 8.04% | 7.10% |
Net Profit (£'000) | 1,391 | 851 |
Net Profit Margin | 4.21% | 2.90% |
Current Ratio | 2.19 | 2.11 |
The gross profit of £2,657,673 (2023: £2,082,060) resulted from turnover of £33,071,243 (2023: £29,380,024) and cost of sales of £30,413,570 (2023: £27,297,964). Corporation tax charge for the year was £744,017 (2023: £345,541) and profit for the year was £1,390,961 (2023: £851,198). The final cash position was a balance of £8,167,927 (2023: £10,208,800) at the end of the year.
The directors also consider key non-financial Key Performance Indicators, including staff vacancy rates and absence rate reports.
On behalf of the board
The directors present their audited financial statements of AGH Solutions Limited for the year ended 31 March 2024.
The results for the year ended 31 March 2024 are set out on page 11. The profit for the year ended 31 March 2024 amounted to £1,390,961 (2023: £851,198) per the profit and loss account.
The directors do not recommend the payment of a dividend (2023: £nil).
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The directors endeavour to forge strong relationships with suppliers built on honesty, fairness, and mutual respect. We meet with key suppliers on a regular basis and take reasonable steps to ensure our suppliers comply with our standards, such as those relating to environmental responsibility, modern slavery, data protection, human rights, and ethics. We also aim to act responsibly in our engagement with regulators and insurers, we respond quickly and fully to any queries.
Community and environment
The company’s approach is to use its position of strength to create positive change for the people and communities with which we interact, giving back wherever it can. We want to leverage our expertise and enable our people to support the communities around us. We recognise our responsibilities to achieve good environmental practice and to continue to strive for improvement in areas of environmental impact. We are committed to energy efficiency improvement and continue to take steps in a continuous improvement strategy.
Culture and values
The directors recognise the importance of having the right corporate culture. Our long-term success depends on achieving our strategic goals in the right way, so we look after the best interests of our employees, customers, and other stakeholders. Our mission for transforming the standards within the healthcare environment across the globe through innovation and manufacturing excellence and our vision of reducing risk and enhancing dignity. We have carefully developed a common set of expected behaviours based on our corporate values which are embedded within the day-to-day activities of the company.
Going concern
The company is funded primarily by loans from its parent undertaking, Airedale NHS Foundation Trust. The company has long term contracts in place which are expected to generate income and cash will be more than sufficient to pay its liabilities as they are due.
The directors review the financial forecasts over a rolling 12 month period into the future and they remain consistent with the performance expected as part of its financial plan. The directors are confident that it will continue to generate sufficient income to offset its liabilities over the rolling 12 month period and into the future.
The directors, therefore, after making enquiries, have a reasonable expectation that the company has adequate resources to continue in operational existence for the near future. Accordingly, they continue to prepare the annual report and accounts on a going concern basis.
Azets Audit Services Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
During the 2023-24 financial period, AGH Solutions produced 6,296.909 Tonnes of co2 through the usage of gas, electricity and work related travel. This gives an intensity ratio of 0.097 Tonnes co2 per m2 of AGH Solutions site. This is shown below.
The basis for these calculations are from metered usage for utilities, plus details of miles travelled, for both company owned, and private vehicles used for work related journeys. The carbon emissions of the company owned vehicles is based on vehicle type, with a private vehicle usage based on that of an average car, split between petrol and diesel.
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2 per m2.
During the year, further work has been undertaken to look at the most carbon efficient way of replacing works vehicles. Further EV vehicles have been ordered and delivered to replace smaller, lower range EV vehicles. Further efficiencies are planned as and when vehicles become due for replacement.
AGH Solutions has overseen the completion of an additional admin block on the hospital site. This has been built to modern building standards, including high levels of insulation, solar generating capacity and heating/cooling through heat pumps. This is a considerable improvement when compared to the rest of the hospital site, which in the main dates to the 1970s.
AGH Solutions have lobbied and amended the group travel policy to include sustainable travel for all educational travel, where mileage is needed for ICE vehicles this is scrutinised to minimise travel. The 2024 travel survey is currently out during the months of July and August and will feed the active travel plan for 2024/25, the plan will monitor the views of all commuting staff as well as facilities to promote active travel. An active travel day was completed in June last year and saw additional take up in the cycle to work schemes and use of public transport for commuting. Additional to active travel the group has completed its guidance on agile working and promotes agile working where applicable to roles, reducing the overall commuting to Airedale sites.
During the year, more meetings have been set up using video technology, meaning a considerable reduction in miles travelled compared to the previous year. Plans include a review of the car parking provision to incentivise more active travel to site. AGH Solutions continue to chair and coordinate the group EcoawAire group, providing a voice to all staff employed by both the company and the wider group and have seen many sustainable projects being presented and encouraged through the group, such as: regular updates on the two year energy efficiency programme, application for funding for additional bike shelters and maintenance, applications for funding for electric bike facilities on site, onsite staff herb garden, public transport discounts, provision of staff lockers for active travellers, sustainability training for managers and consideration of sustainability within corporate induction programme, contribution towards the trusts climate change and adaption risk assessments and plans, plastic free and zero waste initiatives.
We have audited the financial statements of AGH Solutions Limited (the 'company') for the year ended 31 March 2024 which comprise the profit and loss account, 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 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
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.
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 directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information 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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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.
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.
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
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.
Use of our report
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.
The Statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
AGH Solutions Limited is a private company limited by shares incorporated in England and Wales. The registered office is Airedale General Hospital, Skipton Road, Steeton, Keighley, BD20 6TD. The company's principal activities and nature of its operations are disclosed in the directors' report.
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 £1.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
inclusion of an explicit and unreserved statement of compliance with IFRS;
presentation of a statement of cash flows and related notes;
disclosure of the objectives, policies and processes for managing capital;
disclosure of key management personnel compensation;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
the effect of financial instruments on the statement of comprehensive income;
comparative period reconciliations for the number of shares outstanding and the carrying amounts of property, plant and equipment, intangible assets, investment property and biological assets;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
comparative narrative information;
related party disclosures for transactions with the parent or wholly owned members of the group.
Where required, equivalent disclosures are given in the group accounts of Airedale NHS Foundation Trust.The group accounts of Airedale NHS Foundation Trust are available to the public and can be obtained as set out in note 22.
The company recognises revenue from the following major sources:
Income from Patient Care Services - This relates to the OHCF contract that has been assessed as recognised over time.
Service Provision - This relates to the EMSA contract and has been assessed as recongised over time.
Support Services - This includes the contracts with Bradford District Care NHS Foundations Trust and Integrated Laboratory Solutions LLP and has been assessed as recognised over time.
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.
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.
Stocks held include medicial equipment, parts held for maintenance of equipment and items used for the provision of patient care in a healthcare setting. At each reporting date, stocks are assessed for impairment. Stocks are impaired if they have become obsolete and have no net realisable value. At this point the carrying value is reduced to zero, and the impairment loss is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
All borrowings are initially recorded at the amount of proceeds received, net of transaction costs. Borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on the redemption being recognised as a charge to the Profit and loss account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in finance costs.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The tax expense represents the sum of the tax currently payable and deferred tax.
b) Full actuarial (funding) valuation
The purpose of this valuation is to assess the level of liability in respect of the benefits due under the schemes (taking into account their recent demographic experience), and to recommend contribution rates payable by employees and employers.
The last actuarial valuation undertaken for the NHS Pension Scheme was completed as at 31 March 2016. The results of this valuation set the employer contribution rate payable from April 2019. The Department of Health and Social Care have recently laid Scheme Regulations confirming that the employer contribution rate will increase to 20.6% of pensionable pay from this date.
The 2016 funding valuation was also expected to test the cost of the Scheme relative to the employer cost cap set following the 2012 valuation. Following a judgment from the Court of Appeal in December 2018 Government announced a pause to that part of the valuation process pending conclusion of the continuing legal process.
c) Scheme provisions
The NHS Pension Scheme provides defined benefits, which are illustrated below. This list is an illustrative guide only, and is not intended to detail all the benefits provided by the scheme or the specific conditions that must be met before these benefits can be obtained.
Annual pensions
The 1995 and 2008 schemes are 'final salary' schemes. Annual pensions are normally based on 1/80th for the 1995 section and on the best of the last three years pensionable service and 1/60th for the 2008 section of reckonable pay per year of membership. Members who are practitioners as defined by the Scheme regulations have their annual pensions based upon total pensionable earnings over the relevant pensionable service.
With effect from 1 April 2008 members can choose to give up some of their annual pension for an additional tax free lump sum, up to a maximum amount permitted under HMRC rules. This new provision is known as 'pension commutation'.
With effect from 1 April 2015 the 2015 Pension scheme was introduced for all employees currently in the NHS pension Scheme. Except for employees who at 1 April 2012 were already over their normal pension age or 10 years or less from their normal pension age and in active membership on both 1 April 2012 and 31 March 2015 who received full protection in their previous scheme. For employees who were more than 10 years but less than 13 years and 5 months from their normal pension age at the 1 April 2012 and in active membership on both 1 April 2012 and 31 March 2015, tapering relief was applied. The Scheme is based on a 1/54th of the annual salary index linked to the employees State retirement age.
Pensions indexation
Annual increases are applied to pension payments at rates defined by the Pensions (Increase) Act 1971.
Lump sum allowance
A lump sum is payable dependent on the scheme or schemes the employee is a member of at the date of retirement.
Ill health retirement
Early payment of a pension, with enhancement in certain circumstances, is available to members of the scheme who are permanently incapable of fulfilling their duties or regular employment effectively through illness or infirmity.
Death benefits
A death gratuity for death in service will be paid dependent on the scheme or schemes the employee is a member of at the date of death.
Transfer between funds
Scheme members have the option to transfer their pension between the NHS Pension Scheme and another scheme when they move into or out of NHS employment.
Alternative Pension Scheme - National Employment Savings Trust
Following the Pensions Act 2008, AGH Solutions had a duty to provide a pension scheme for employees who are ineligible to join the NHS Pension Scheme. This includes all employees who did not transfer under TUPE at the formation of the company.
AGH Solutions has selected NEST as its partner to meet the duty. The scheme operated by NEST on the AGH Solution's behalf is a defined contribution scheme, employers contributions are charged to operating expenses as and when they become due. The combined contribution rate is 8% from 1st April 2019.
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Tangible fixed assets are included within right-of-use assets, apart from those that meet the definition of investment property.
Initial application
The company assesses whether a contract is or contains a lease, at inception of the contract. The company recognises a right of use asset and a corresponding lease liability with respect of all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a term of 12 months or less) and leases of low value assets (such as mobile phones and photocopiers). For these leases, the company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
Lease liability
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The company remeasures the lease liability (and makes a corresponding adjustment to the related right of use asset) whenever:
The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment if excercise of a purchase option, in which case the lease liability is remeausred by discounting the revised lease payments using a revised discount rate.
The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeaured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
The company did not make any such adjustments during the periods presented.
Right of use asset
The right of use asset compromise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Whenever the company incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms in of the lease, a provision is recognised and measured under IAS37. To the extend that costs relate to a right of use asset, the costs are included in the related right-of-use asset.
Depreciation starts at the commencement date of the lease.
When the company acts as a lessor, leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees, over the major part of the economic life of the asset. All other leases are classified as operating leases. If an arrangement contains lease and non-lease components, the company applies IFRS 15 to allocate the consideration in the contract. When the company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately, classifying the sub-lease with reference to the right-of-use asset arising from the head lease instead of the underlying asset.
The company applies IAS 36 to determine whether a right of use asset is impaired and accounts for any identified impairment loss as described in the 'Property, Plant and Equipment' policy.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liabiltiy and the right of use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and are included in 'Administrative expenses' in the income statement.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components as a single arrangement. The company has not used this practical expedient. For a contract that contains a lease component and one or more additional lease or non-lease components, the company allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.
In the application of the company’s accounting policies, the directors are 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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
The recognition of a deferred tax asset in relation to the accumulated tax losses across the group was an area in which management had to utilise their judgement. When an entity has suffered losses in the current or prior reporting periods and recognises a deferred tax asset in excess of the amount of taxable temporary differences that are expected to reverse, this implies that the utilisation of this asset is dependent on the probability of future taxable profits of which is this based on the assumptions made by management.
An analysis of the company's turnover is as follows:
All revenue is derivied from sales in the UK.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 2).
The charge for the year can be reconciled to the profit per the profit and loss account as follows:
Finance lease receivables are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
The group enters into finance leasing arrangements for certain of its buildings and equipment. The average term of finance leases entered into is 25 years.
The interest rate inherent in the leases is fixed at the contract date for all of the lease term. The average effective interest rate contracted approximates 3.3% per annum.
The directors of the company estimate the loss allowance on finance lease receivables at the end of the reporting period to an amount equal to lifetime ECL. None of the finance lease receivables at the end of the reporting period is past due, and taking into account the historical default experience and future prospects of the industries in which the lessees operate, together with the value of collaterals held over these finance lease receivables, the directors of the company consider that no finance lease receivables is impaired.
There has been no change in the estimation techniques or significant assumptions made during the current reporting period in assessing the loss allowance for finance lease receivables.
Amounts owed by group undertakings are unsecured, repayable on demand and do not bear interest. The directors consider the carrying value and the fair value of the above receivables to be the same.
This reflects a loan held with the parent organisation, secured against the lease held by AGH Solutions Limited. The loan is to be repaid over a period of 25 years, and incurs a fixed interest rate of 3.5% per annum.
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
As at the year end, the immediate and ultimate controlling parent of the company is Airedale NHS Foundation Trust. Airedale NHS Foundation Trust, is the smallest and largest group of undertakings into which AGH Solutions Limited is consolidated. Copies of Airedale NHS Foundation Trust financial statements can be obtained from Airedale General Hospital, Skipton Road, Steeton, Keighley, West Yorkshire, BD20 6TD.