Company registration number 08932657 (England and Wales)
HIGHPOINT CARE (WEST DERBY) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
HIGHPOINT CARE (WEST DERBY) LIMITED
COMPANY INFORMATION
Directors
Dr H K Patel
Dr K M Patel
Company number
08932657
Registered office
Damfield Gardens
1 Bournehurst Drive
Off Damfield Lane, Maghull
Liverpool
Auditor
Barlow Andrews LLP
Carlyle House
78 Chorley New Road
Bolton
HIGHPOINT CARE (WEST DERBY) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
HIGHPOINT CARE (WEST DERBY) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 1 -
The directors present the strategic report for the year ended 30 September 2024.
Our purpose
To provide the quality of care that we would want for our loved ones.
Our mission
To provide quality of life for our residents in a safe and caring home at the heart of the community. We invest in our workforce to ensure our residents receive excellent care from a skilled, engaged and passionate team. Our values enhance the experience of those to whom we deliver care.
Fair review of the business
The turnover of the business has continued to increase. The company has again been profitable during the year and continues to have a positive balance sheet.
Management believes the consistent investments made into staff, training, operational processes and systems during the last financial period places the company in a strong position to meet market challenges and drive future growth.
As a result of the controlled environment, trading outcomes have improved, with higher occupancy rates and reduced staff sickness. It is anticipated that trading results will continue to improve over the next financial year.
Principle risks and uncertainties
The directors see the key business risk being the level of funding provided by the councils compared to the increase in costs required to ensure the requisite level of care continues to be provided. The company is looking to move toward private resident funding rather than local authority funding.
The directors believe that as local authorities will increasingly be limited to small annual increases in the weekly rates they are able to pay care providers, such a strategy will substantially lessen the price risk.
The continued challenge of workforce, including costly recruitment, a prolonged national shortage of appropriately qualified care staff and increased agency dependency, has led to increased costs during the year. The company has been, and is keeping a close watch on these matters and management are looking to mitigate any increased costs by increasing admissions of self funding residents.
The directors refinanced at the end of last year, the financing arrangements are subject to an element of variable interest rates and any increase in interest rates in the future could increase costs and reduce cash flow.
Development and performance
The company’s key financial performance indicators are those that communicate the financial performance of the company, these being turnover and gross profit margin.
Turnover in 2024 was £3,348,036 (2023: £3,085,018)
Gross profit margin in 2024 was 51.50% (2023: 49.98%)
The company plans to continue investing time, money and resources in staff, training and operational systems, with a continued focus on delivering high-quality person centred, specialist care and support.
We are satisfied with the trading results but are mindful of keeping our focus on the coming year's activities.
Dr K M Patel
Director
7 April 2025
HIGHPOINT CARE (WEST DERBY) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 2 -
The directors present their annual report and financial statements for the year ended 30 September 2024.
Principal activities
The principal activity of the company continued to be that of a care home.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Dr H K Patel
Dr K M Patel
Financial instruments
Objectives and policies
The company's income derives partly from the private funds of the residents and partly from councils providing funding for care. The company is aware that with budget cuts, the amounts received from councils is unlikely to keep up with inflation and continue to actively look to attract residents with private funding. Billing is completed on a regular cycle, both to the residents and to the councils, and amounts outstanding are pursued.
Regular management figures are prepared to assess the profitability of the business and review cash flow.
Price risk, credit risk, liquidity risk and cash flow risk
The price risk stems from the weekly funding levels set by councils for residents who are not totally self-funding. The company is attempting to manage this risk by actively seeking more self-funding residents due to the high level of care they seek to provide.
The credit risk is the risk of a council or resident being unable or refusing to settle a debt with the company. Regular checks on amounts owed are carried out and pursued as appropriate to minimise this risk.
Liquidity and cash flow risks are managed by regular review of the financial information and future income streams to ensure that the business is profitable and debts are being paid on time. Insurance costs are regularly reviewed to ensure that all assets are properly insured in the event of a catastrophe. Ongoing staff training and overview are undertaken to further enhance the business' reputation thus ensuring future income streams.
Future developments
There are no plans to further develop the care home. As the care home is near full capacity, the directors are looking to continue to increase the private paying residents to help profitability.
Auditor
The auditor, Barlow Andrews LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
HIGHPOINT CARE (WEST DERBY) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 3 -
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
Dr K M Patel
Director
7 April 2025
HIGHPOINT CARE (WEST DERBY) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HIGHPOINT CARE (WEST DERBY) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HIGHPOINT CARE (WEST DERBY) LIMITED
- 5 -
Opinion
We have audited the financial statements of Highpoint Care (West Derby) Limited (the 'company') for the year ended 30 September 2024 which comprise the profit and loss account, 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 30 September 2024 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 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.
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.
HIGHPOINT CARE (WEST DERBY) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HIGHPOINT CARE (WEST DERBY) LIMITED (CONTINUED)
- 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 directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below,
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006 and taxation legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
HIGHPOINT CARE (WEST DERBY) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HIGHPOINT CARE (WEST DERBY) LIMITED (CONTINUED)
- 7 -
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions; and
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
reviewing documents from relevant regulators.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Alison Cornes (Senior Statutory Auditor)
For and on behalf of Barlow Andrews LLP, Statutory Auditor
Carlyle House
78 Chorley New Road
Bolton
7 April 2025
HIGHPOINT CARE (WEST DERBY) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 8 -
2024
2023
£
£
Turnover
3
3,348,036
3,085,018
Cost of sales
(1,623,633)
(1,543,267)
Gross profit
1,724,403
1,541,751
Administrative expenses
(1,013,094)
(895,778)
Other operating income
3
1,368
40,723
Operating profit
4
712,677
686,696
Interest payable and similar expenses
8
(351,893)
(357,628)
Amounts written off loans
9
(214,267)
-
Profit before taxation
146,517
329,068
Tax on profit
10
(57,825)
15,435
Profit for the financial year
88,692
344,503
The profit and loss account has been prepared on the basis that all operations are continuing operations.
HIGHPOINT CARE (WEST DERBY) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 9 -
2024
2023
£
£
Profit for the year
88,692
344,503
Other comprehensive income
Revaluation of tangible fixed assets
550,000
Tax relating to other comprehensive income
(137,500)
Total other comprehensive income for the year
412,500
Total comprehensive income for the year
88,692
757,003
HIGHPOINT CARE (WEST DERBY) LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2024
30 September 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
8,376,202
8,281,297
Current assets
Debtors falling due after more than one year
12
160,000
150,000
Debtors falling due within one year
12
317,129
516,558
Cash at bank and in hand
251,614
220,660
728,743
887,218
Creditors: amounts falling due within one year
13
(2,533,295)
(2,417,501)
Net current liabilities
(1,804,552)
(1,530,283)
Total assets less current liabilities
6,571,650
6,751,014
Creditors: amounts falling due after more than one year
14
(3,251,394)
(3,519,450)
Provisions for liabilities
Deferred tax liability
17
(595,776)
(595,776)
(595,776)
(595,776)
Net assets
2,724,480
2,635,788
Capital and reserves
Called up share capital
20
100
100
Revaluation reserve
21
2,449,640
2,449,640
Profit and loss reserves
274,740
186,048
Total equity
2,724,480
2,635,788
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 7 April 2025 and are signed on its behalf by:
Dr K M Patel
Director
Company registration number 08932657 (England and Wales)
HIGHPOINT CARE (WEST DERBY) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 11 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 October 2022
100
2,037,140
(158,455)
1,878,785
Year ended 30 September 2023:
Profit
-
-
344,503
344,503
Other comprehensive income:
Revaluation of tangible fixed assets
-
550,000
-
550,000
Tax relating to other comprehensive income
-
(137,500)
(137,500)
Total comprehensive income
-
412,500
344,503
757,003
Balance at 30 September 2023
100
2,449,640
186,048
2,635,788
Year ended 30 September 2024:
Profit and total comprehensive income
-
-
88,692
88,692
Balance at 30 September 2024
100
2,449,640
274,740
2,724,480
HIGHPOINT CARE (WEST DERBY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 12 -
1
Accounting policies
Company information
Highpoint Care (West Derby) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Damfield Gardens, 1 Bournehurst Drive, Off Damfield Lane, Maghull, Liverpool.
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, modified to include the revaluation of freehold properties. 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 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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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 Highpoint Care Holdings LLP. These consolidated financial statements are available from its registered office, Colliers Croft, Clipsley Lane, Haydock, St Helens.
1.2
Going concern
The directors and management team have prepared truebudgets and cashflow forecasts which show that the company has the necessary liquidity and profitability to continue trading for the foreseeable future.
Income and expenditure is being monitored on a monthly basis and both the directors and management team are aware of the need to maintain a vigilant stance in regard to the cash flow of the company. The care home remains near full capacity which only promotes further positive cash flow for the company.
Based on the assessment made by the directors, the directors are confident that the company can continue in operational existence for the foreseeable future and therefore have prepared the financial statements on the going concern basis.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business.
Revenue from contracts for the provision of services is recognised by reference to the delivery of care to the home residents. Income which is invoiced in advance or arrears is apportioned so that only that relating to the period of the financial statements is included in turnover.
HIGHPOINT CARE (WEST DERBY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 13 -
1.4
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:
Plant and equipment
10% straight line
Fixtures and fittings
15%-33% reducing balance
Motor vehicles
25% reducing balance
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.
No depreciation is charged on the freehold land and building as the residual value is deemed to be the value of the property as included within the financial statements. The latest third party revaluation was undertaken in June 2023.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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).
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand.
1.7
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, cash and bank balances and amounts due from fellow group companies are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method. Financial assets classified as receivable within one year are not amortised.
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.
HIGHPOINT CARE (WEST DERBY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 14 -
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 and loans from fellow group companies are initially recognised at transaction price. Financial liabilities classified as payable within one year are not amortised.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
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.
HIGHPOINT CARE (WEST DERBY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 15 -
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
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 balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
2
Judgements and key sources of estimation uncertainty
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 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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Freehold land and buildings
The fair value of the company's property has been arrived at on the basis of a valuation carried out by the directors at the year end, based on a formal third party valuation undertaken in June 2023.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Fee income - Local Authority and private residents
3,348,036
3,085,018
2024
2023
£
£
Other revenue
Other operating income
1,368
40,723
HIGHPOINT CARE (WEST DERBY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 16 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
25,104
14,880
Depreciation of tangible fixed assets held under finance leases
19,392
5,981
Profit on disposal of tangible fixed assets
-
(9,959)
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
10,374
10,500
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Nursing staff
45
48
Administration and ancillary
18
15
Management
5
5
Total
68
68
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,553,955
1,480,415
Social security costs
130,371
114,153
Pension costs
23,165
26,652
1,707,491
1,621,220
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
39,890
35,702
HIGHPOINT CARE (WEST DERBY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 17 -
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
333,618
339,135
Interest on finance leases and hire purchase contracts
3,023
-
Other interest
15,252
18,493
351,893
357,628
9
Amounts written off loans
2024
2023
£
£
Amounts written off related party loans
214,267
-
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
67,825
16,158
Deferred tax
Origination and reversal of timing differences
(10,000)
(31,593)
Total tax charge/(credit)
57,825
(15,435)
The actual charge/(credit) 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:
2024
2023
£
£
Profit before taxation
146,517
329,068
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 22.01%)
36,629
72,422
Tax effect of expenses that are not deductible in determining taxable profit
58,578
5,002
Tax effect of utilisation of tax losses not previously recognised
(31,983)
Permanent capital allowances in excess of depreciation
(27,382)
(29,282)
Reversal of timing differences to the profit and loss
(10,000)
(31,594)
Taxation charge/(credit) for the year
57,825
(15,435)
HIGHPOINT CARE (WEST DERBY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
10
Taxation
(Continued)
- 18 -
In addition to the amount charged/(credited) to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2024
2023
£
£
Deferred tax arising on:
Revaluation of property
-
137,500
11
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 October 2023
8,100,000
98,061
53,450
77,569
8,329,080
Additions
127,613
11,788
139,401
At 30 September 2024
8,100,000
225,674
65,238
77,569
8,468,481
Depreciation and impairment
At 1 October 2023
25,535
22,248
47,783
Depreciation charged in the year
18,501
6,603
19,392
44,496
At 30 September 2024
44,036
28,851
19,392
92,279
Carrying amount
At 30 September 2024
8,100,000
181,638
36,387
58,177
8,376,202
At 30 September 2023
8,100,000
72,526
31,202
77,569
8,281,297
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Motor vehicles
58,177
77,569
Land and buildings with a carrying amount of £8,100,000 were revalued at 1 June 2023 by Christie & Co, independent valuers, not connected with the company, on the basis of market value. The valuation conforms to International Valuation Standards.
The following assets are carried at valuation. If the asset was measured using the cost model, the carrying amounts would be as follows:
HIGHPOINT CARE (WEST DERBY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
11
Tangible fixed assets
(Continued)
- 19 -
2024
2023
£
£
Cost
5,716,898
5,716,898
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
102,352
63,299
Amounts owed by group undertakings
19,312
59,241
Other debtors
572
174,903
Prepayments and accrued income
194,893
219,115
317,129
516,558
2024
2023
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 17)
160,000
150,000
Total debtors
477,129
666,558
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
15
10,752
26,890
Obligations under finance leases
16
11,175
11,175
Other borrowings
15
180,000
267,027
Trade creditors
278,137
299,714
Amounts owed to group undertakings
1,746,744
1,607,873
Corporation tax
67,825
16,158
Other taxation and social security
27,639
26,130
Deferred income
18
27,244
26,903
Other creditors
12,052
11,604
Accruals
171,727
124,027
2,533,295
2,417,501
HIGHPOINT CARE (WEST DERBY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 20 -
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
3,081,934
3,092,686
Obligations under finance leases
16
48,762
59,006
Other borrowings
15
51,340
313,652
Accruals
69,358
54,106
3,251,394
3,519,450
15
Loans and overdrafts
2024
2023
£
£
Bank loans
3,092,686
3,119,576
Other loans
231,340
580,679
3,324,026
3,700,255
Payable within one year
190,752
293,917
Payable after one year
3,133,274
3,406,338
The bank loan is denominated in Sterling and bears at an effective interest rate of 9.41% (2023:9.49%) subject to changes in the base rate and is repayable in monthly instalments. For the initial period of 12 months, repayments consist of interest only, after the concessionary period has expired, repayments will consist of both interest and capital.
The bank loan is secured with a first legal charge over the freehold property together with a debenture creating a fixed and floating charge over all the assets, business undertakings and rights of Highpoint Care (West Derby) Limited.
In addition, the bank loan is secured by an unlimited cross guarantee and debentures creating a fixed and floating charge over all the assets, business, undertakings and rights for Highpoint Care Limited, Highpoint Care Group Limited and Highpoint Care Holdings LLP.
The bank loan is also supported by a joint and several guarantee from both directors up to a maximum of £1,500,000.
The other loans have a fixed interest rate of 16.9% and 4% per annum, see note 24.
HIGHPOINT CARE (WEST DERBY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 21 -
16
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
11,175
11,175
In two to four years
48,762
59,006
59,937
70,181
Obligations under the finance lease are secured on the asset which it relates to. Finance lease payments represent rentals payable by the company for a motor vehicle. The lease includes a purchase option at the end of the lease period, and no restriction is placed on the use of the asset. The lease term is 4 years. The lease is on a fixed repayment basis.
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Balances:
£
£
£
£
Fixed asset timing differences
-
-
142,768
136,474
Revaluations
595,776
595,776
-
-
Other timing differences
-
-
17,232
13,526
595,776
595,776
160,000
150,000
2024
Movements in the year:
£
Net liability at 1 October 2023
445,776
Credit to profit or loss
(10,000)
Net liability at 30 September 2024
435,776
The deferred tax asset set out above is expected to reverse within future periods and relates to the utilisation of entitled capital allowances against future expected profits of the same period. The deferred tax liability relates to the revaluation uplift of the property held within the financial statements.
18
Deferred income
2024
2023
£
£
Other deferred income
27,244
26,903
Deferred income relates to income received from residents in advance.
HIGHPOINT CARE (WEST DERBY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 22 -
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
23,165
26,652
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.
The pension cost for the year represents contributions payable by the company to the scheme.
Contributions totalling £7,921 (2023: £8,959) were payable to the scheme at the end of the year and are included in creditors.
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
All shares rank pari passu with respect to having the right to attend and vote at general meetings and right to dividends.
21
Revaluation reserve
The cumulative revaluation gains are in respect of land and buildings, net of deferred taxation.
22
Financial commitments, guarantees and contingent liabilities
The company is party to cross guarantees given to its banker in respect of loan facilities.
The terms of the agreement provide an unlimited cross guarantee and debentures creating a fixed and floating charge over all the assets, business undertakings and rights for Highpoint Care Limited, Highpoint Care Group Limited and Highpoint Care Holdings LLP.
The amount outstanding under this facility at 30 September 2024, excluding the amount included in creditors in this company was £4.18 million.
23
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Salary recharge
2024
2023
£
£
Entities over which the entity has control, joint control or significant influence
-
40,723
HIGHPOINT CARE (WEST DERBY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
23
Related party transactions
(Continued)
- 23 -
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due from related parties
£
£
Entities over which the entity has control, joint control or significant influence
-
174,338
Other information
During the year total wages of £37,124 were paid to a connected party of the directors.
24
Directors' transactions
Included within other borrowings is a total balance owing to the directors of £231,340 (2023: £381,340). The loans from the directors are unsecured and they are subject to a general repayment of £15,000 per month. Interest is accrued at 4%. No accrued interest has yet been paid and the total accrued loan interest at the year end of £69,358 (2023: £54,106) is included within creditors due after more than one year.
25
Ultimate controlling party
The immediate parent company is Highpoint Care Group Limited.
The ultimate parent undertaking is Highpoint Care Holdings LLP. The company is included in the consolidated accounts of Highpoint Care Holdings LLP. The registered office of this entity is Colliers Croft, Clipsley Lane, Haydock, St. Helens, Merseyside, United Kingdom.
The ultimate controlling parties are Dr K M Patel and Dr H K Patel, members of Highpoint Care Holdings LLP.
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