The directors present the strategic report for the year ended 31 October 2024.

Our objective is to maintain the principal trading asset which is a care home with nursing (including dementia) known as Herons Park in Kidderminster. We will achieve this by maintaining, our continued improvement of quality care standards, the care home’s environment and our commitment to high levels of training for our staff. We continue to introduce a number of technological solutions in order to improve our efficiency and compliance such as a computerised care planning system and digital document signing. Throughout the whole trading year, the directors have authorised expenditure on accommodation and equipment upgrades in the home in line with normal company policy. The continued commitment to providing the best quality care, accommodation and customer service is integral to the company’s on-going appeal to premium customers.

We also consider:

• The care and welfare of our staff; promoting self-development and career opportunities including training and promotion; supplying access to a counselling service and other healthcare support.

• The environment; using high energy efficiency building methods and the latest gas boilers.

• Diversity and equal opportunity and any Employment Law legislation.

• Social issues; our corporate social responsibility (CSR) page online gives a full breakdown of how the company helps with charitable concerns.

Herons Park Nursing Home and Dedicated Dementia Unit performed less well on occupancy, with the home’s occupancy achieving an annual average figure as at October 2024 of 69% and but with a higher average fee of £1,310 compared with the previous October 2023 yearly average figure of 76.69% and average fee of £1,243. The Herons Park occupancy figure is less than the Royal Bay Group’s 2024 annual average occupancy of 85% but both the Nursing Unit and the Dementia Unit with the addition of a further 24 beds are achieving satisfactory target figures of occupancy.

The 24-bed extension at Herons Park Nursing Home in Kidderminster was completed in September 2011. An accreditation audit was carried out in the first half of 2012 by Stirling University Dementia Service Development Centre and Herons Park was awarded the Gold Standard Award for Design. The dementia unit has improved in both occupancy and average fee, providing a steady financial contribution to the home’s overall profits.

The company’s profit for the year to 31 October 2024, before tax, amounted to £261,552 a 48.6% decrease on the previous year’s figure of £508,762. This was mainly due to a decrease in the fees received in the year as a result of lower occupancy. The total equity is £5,518,284. The directors consider the position and performance of the company to be satisfactory for the reported trading year.

The company monitors and analyses the home’s performance on a number of levels using indicators. These include; monthly fee income and occupancy, key internal spends such as wages, catering, repairs and renewal and energy. All financial data is amalgamated in a monthly management accounts report to show EBITDA. Comparisons with the previous year’s results and the current year’s budget to identify any significant variance. As a result, action is taken if required.

Principal risks and uncertainties

The care industry is facing fundamental changes to the public funding framework which commenced in April 2022, yet must also deal with external economic pressures such as inflation, cost increases and interest rate remaining at a higher level. Inflation across the year up to 31 October 2024 was approximately 3%, as well the rise in National Living Wage. We have had to counteract this by covering costs via fee increases, good occupancy and cost reductions.

Due to external global pressures, energy costs have risen considerably in earlier years and continue to contribute to a rising cost of living, care homes are particularly susceptible due to their costs being largely made up of energy, wages, as well as consumables such as food. Fortunately a large proportion of our energy costs can be mitigated by longer term energy contracts and, in conjunction, we continue to seek cost savings elsewhere.

There has also been a continuing effort in recent years to improve our cash flow by streamlining operations, reducing costs in turn increasing profitability, all of which will be carried forward for the next 12 months and beyond.

Notable instances include finding efficiencies, negotiating supplier contracts, taking advantage of group purchasing power, reducing out dated marketing expenses (traditional print) and maintaining our internet-based Payment Authorisation System for any purchase over £100.

Local Authority and CCGs continue to have a more pragmatic approach to fee increases, although there is still room for improvement in order to meet a more realistic market average. This, together with the company’s attention to both improving average fees whilst controlling costs and overheads, will allow the group to enhance its profitability.

There is a continuing drive to provide community care services to keep the elderly at home for as long as possible but this was not meeting all of the needs of the elderly in the U.K. Sheer numbers created by demographics show that residential care is still in demand and will continue to increase. Estimates quote that the number of over 85 year olds with high needs will almost double (2.5% of the UK population to 4.3%) in the next 20 years (ONS).

Development and performance

All of our decisions are made with conscientious attitude as to how our choices will benefit the business in the long term, in order to maintain and improve stability, profitability and on going success. At the forefront, the Directors have been actively looking to:

• Reducing unnecessary costs.

• Improving principal assets via refurbishment and capital expenditure.

• Improving our workforce.

Our staff are integral to our business model being our largest cost to our service. Maintaining their morale and keeping turnover to an acceptable level is always our aim whilst dealing with more macro business decisions. On a personal basis the company always remains flexible and understanding to individual’s circumstances. We have maintained a good reputation as being kind employers for years by:

• Maintaining a decent competitive wage plus good company sick pay.

• Providing a high standard of training whilst paying staff their training hours.

• Provision of a Healthcare Scheme/Staff Appreciation Week/Staff Christmas vouchers.

As part of our aims to reduce costs it has meant choosing new suppliers or renewing contracts with existing suppliers. Over the years, we have garnered great, long lasting relationships with almost all of our suppliers and so continue to foster these. When signing new contracts we also take reliability, professionalism and personability on board as well as price. We continue to include customers (service users and their relatives) where we can and as much as we can.

We also try to support local communities and charities, which can often be mutually beneficial. Actions the directors have taken include:

• Maintaining long term relationship of goods/services suppliers including a corporate contract across all homes, as well as in communications and energy.

• Considering the results of service user quality assurance questionnaires as well as day to day involvement in decision making.

• Supporting charities i.e. Macmillan Coffee Mornings.

In the care industry reputation is everything, therefore it is of our utmost desirability to maintain our already well-groomed reputation in our local areas. We have always conducted ourselves with the highest of standards and continue to do so through day to day business dealings, b2b relationships and with our clients. This is evidenced by:

• High number of 5* in all categories reviews via Carehome.co.uk, including above average rating scores.

We intentionally put emphasis on the need to act fairly between all members of staff or service users. Our company has a culture of understanding and impartiality as well as focusing on carrying out all duties accordingly and within the confines of law and regulation. This is achieved by:

• Maintaining compliance at all the homes i.e. fire, insurance, electrical, H&S.

• Where appropriate, use legal helpline advice to ensure good procedures/protocols.

• Ensuring staff are aware of company policies, including fair and transparent complaints procedure.

Ultimately it is an objective of the group to move toward a higher ratio of private to Local Authority clients, thus reducing some of the complications involved with dealing with a third party.

Work place pensions have now been in place for a number of years and all homes now make the 3% contribution and are able to manage the increased financial pressure. In recent years the rise of National Living Wage has been a significant cost that we have been required to budget for, however as a group we always aim to pay slightly more than the National Living Wage. National labour shortages and industry specific labour shortages continues to be the main significant hurdle to overcome, with recruitment becoming a bigger challenge than ever before. This continues to also push up wages in the industry and all care homes compete to retain and recruit care staff. This pressure can be reduced by accelerating fee increases and relying more on ‘costed care plans’ as the basis for fee determination with local authorities and the NHS. All homes are now required to pay a 0.5% Apprenticeship Levy.

The company is adjusting its budget expenditures and fee income decisions to make realistic forward plans to meet all of the pressure from the points outlined above and the directors are confident that the trading performance will improve over the next 12 months.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 October 2024.

The principal activity of the company continued to be that of care home operation.

The results for the year are set out on page 11.

Ordinary dividends were paid amounting to £600,000. The directors do not recommend payment of a further dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The company's activities expose it to a variety of financial risks. The Board reviews and agrees policies for managing these risks at regular intervals dependant on circumstances. The company's principal financial instruments include assets and liabilities such as trade receivables and trade payables arising directly from its operations. In accordance with company's treasury policy, derivative instruments are not entered into for speculative purposes.

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

The company is exposed to fair value interest rate risk on floating rate deposits, bank overdrafts and loans. The cash flow interest rate risk is managed within the company's business projections and planning, in the monitoring of financial covenants and through negotiation of facility terms with the provider of the borrowing facility at specified intervals.

Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board. All residents who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary. The company is not exposed to commodity price risk.

The auditor, Morris Lane, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the fair review of the business, and likely future developments.

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.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

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.

We have audited the financial statements of Regency Oldhomes Limited (the 'company') for the year ended 31 October 2024 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 October 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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.

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.

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.

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.

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.

We obtained an understanding of the legal and regulatory frameworks that are applicable to the company through discussion with the directors and from our general commercial experience. The identified laws and regulations were communicated to the audit team in order that they remained alert to any non-compliance throughout the audit.

The company is subject to laws and regulations which have a direct effect on the financial statements and the disclosures contained therein. These have been identified as: the financial reporting framework under which the company operates - Financial Reporting Standard 102; Statutory Instrument 2008/409 – The Large and Medium-sized Companies and Groups (Accounts and Directors’ Report) Regulations 2008; the Companies Act 2006; taxation legislation including pay as you earn and corporation tax and pensions legislation.

In addition to the above, the company is subject to other operational laws and regulations where non-compliance may have a material effect on the financial statements. Non-compliance of such laws and regulations may result in litigation, the imposition of fines or the closure of the business which could have a material impact on amounts or disclosures in the financial statements. We have identified the following laws and regulations which are more likely to have significant effect: compliance with the Care Quality Commission regulations; food hygiene laws; health and safety laws; General Data Protection Regulation (GDPR) and employment law.

In order to identify risks of material misstatement due to fraud, we assessed events and conditions where opportunities and incentives may exist within the company for fraud to occur. Our risk assessment procedures included enquiring of directors as to any instances of fraud, their procedures to identify fraud and by using analytical procedures to identify any unusual or unexpected relationships. We identified the greatest potential for fraud in the following areas: recognition of income; ghost employees and grant income. As required by auditing standards, we are also required to perform specific procedures to respond to the risk of management override.

The identified risks of material misstatement due to fraud were communicated to the audit team in order that they remained alert to any non-compliance throughout the audit.

As a result of performing our risk assessments as detailed above, we planned and performed our audit so as to identify non-compliance with such laws and regulations, including fraud by undertaking the following:

• Reviewing the disclosures contained within the financial statements and testing to supporting documentation in order to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements.

• Enquiring of the directors concerning actual and potential non-compliance of laws and regulations.

• Reviewing Care Quality Commission inspection reports in order to identify any potential non-compliance of laws and regulations.

• Performing substantive testing with regard to employees to ensure that identification and employment contracts are on file, the pay as you earn system is operating correctly, pension deductions are made where appropriate and valid right to work documentation is available where required.

• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.

• Revenue recognition was addressed by obtaining an understanding of relevant controls with regard to revenue recognition and undertaking substantive testing to ensure that revenue is recognised in line with the company’s accounting policy and in line with accounting standards.

• The risk relating to management override of controls was addressed by testing the appropriateness of journal entries and other adjustments, assessing whether accounting estimates are indicative of potential bias and evaluating the business rationale of any significant transactions that are considered unusual or outside the normal course of business.

Due to the inherent limitations of an audit, there is an unavoidable risk that, despite properly planning and performing our audit in accordance with accounting standards, some material misstatements may not have been detected.

Auditing standards limit the audit procedures required to identify non-compliance with other operational laws and regulations to enquiry of directors and management and inspection of any correspondence. If a breach of operational regulations is not evident from relevant correspondence or disclosed to us, an audit is unlikely to detect that breach. In addition, the further removed non-compliance with laws and regulations is from the events and transactions included in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, the risk of not detecting material misstatement from due to fraud is higher than the risk of one not being detected through error as fraud may involve deliberate concealment through collusion, forgery, misrepresentations and intentional omissions.

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.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in 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.

The income statement has been prepared on the basis that all operations are continuing operations.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

Regency Oldhomes Limited is a company limited by shares incorporated in England and Wales. The registered office is 31/33 Commercial Road, Poole, Dorset, BH14 0HU. The principal business address is Herons Park Nursing Home, Heronswood Road, Spennells Wood, Kidderminster, Worcestershire, DY10 4EX.

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 at fair value. The principal accounting policies adopted are set out below.

The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.

The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.

Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The directors have adopted the going concern basis in preparing these financial statements assessing the principal risks applicable to the company. These include rising inflation, staff shortages as a result of Brexit, the 9.8% increase in the National Living Wage for employees over the age of 21, the increase in National Insurance costs, the cost of living crisis and higher insurance premiums. They are satisfied that the company, with the support of other group companies, can meet its liabilities as they fall due, being a period of not less than 12 months from the date of approval of these financial statements, and to be well placed to manage its financing and business risks satisfactorily. Overall, the directors do not consider there to be a cause for material uncertainty regarding the company's going concern status as at the date of signing these financial statements.true

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 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.

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.

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 or valuation of assets less their residual values over their useful lives on the following bases:

Property, plant and equipment 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:

Freehold land is not depreciated.

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.

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.

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.

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell.

Cost is calculated using the weighted average method.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventories over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

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.

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, 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.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

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.

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, 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.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

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.

The tax expense represents the sum of the tax currently payable and deferred 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 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.

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.

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

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.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

Credit risk

The company implements appropriate credit checks on residents and service users prior to providing services. This reduces the exposure of the company in respect of credit risk.

Liquidity risk

The policy of the company is to maintain a mix of short and long term borrowings to effectively manage liquidity risk.

Cash flow and interest rate risk

The company's interest rate risk arises primarily from long-term borrowings issued at variable rates which exposes the company to cash flow interest rate risk. The cash flow interest rate risk is managed within the company's business projections and planning, in the monitoring of financial covenants and through negotiation of facility terms with the provider of the borrowing facility at specified intervals.

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.

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 property represents the company's most significant asset and is assessed to have a useful life of 35 years and is carried at a revalued amount, being its fair value at the date of revaluation less any subsequent depreciation.

The value of freehold property as at 31 October 2024 was determined by the directors based on an external valuation undertaken post year end by an independent third party. The valuation by the third party determined the market value as a fully operational entity by considering factors such as current and future projected income levels, location recent comparable sales and their knowledge of the sector.

An analysis of the company's revenue is as follows:

Amortisation of intangible assets is included in administrative expenses.

Government grants are the release of capital grants in line with the accounting policy, these relate to various Covid-19 support schemes.

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

Their aggregate remuneration comprised:

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

In addition to the amount charged to the income statement, the following amounts relating to tax have been recognised directly in other comprehensive income:

The carrying value of land, included in land and buildings above, comprises:

Freehold land and buildings were revalued on the 31 October 2024 based on the expected market value of the business as determined by the directors of the company. The valuation was established by reference to an independent valuation by Knight Frank LLP that took place on the 1 September 2025, on the basis of market value.

If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:

Property, plant and equipment with a carrying amount of £5,100,000 (2023: £5,883,936) have been pledged to secure borrowings of the company. Further information is provided in note 22.

Intangible fixed assets with a carrying amount of £682 (2023: £1,024) have been pledged to secure borrowings of the company. Further information is provided in note 22.

The carrying amount of inventories includes £10,265 (2023: £11,447) pledged as security for liabilities. Further information is provided in note 22.

The carrying amount of trade and other receivables includes £1,327,727 (2023: £1,667,843) pledged as security for liabilities. Further information is provided in note 22.

As at 31 October 2024, an amount of £102,076 (2023: £102,076) has not yet been fully utilised in respect of government grants, and so is recognised in accruals and deferred income. In addition, as at 31 October 2024 an amount of £6,161 (2023: £6,612) remains in accruals and deferred income to be released in line with the accounting policy for capital grants.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Of the deferred tax liability set out above, an amount of £4,970 is expected to reverse within 12 months and relates to accelerated capital allowances.

Of the deferred tax liability set out above, an amount of £33,910 is expected to reverse within 12 months and relates to the revaluation of freehold property.

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 £7,141 (2023: £6,117) were due to the fund. They are included in other creditors and in accruals.

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

The revaluation reserve represents the cumulative effect of revaluations of freehold land and buildings which are revalued to fair value. At the end of each reporting period a transfer is made to retained earnings to transfer the excess depreciation that has been charged in the income statement which relates to the revalued portion of the assets. In respect of revaluation gains, deferred tax is recognised and is initially debited to the revaluation reserve. The amount of deferred tax recognised is adjusted on an annual basis for any movement in amounts debited or credited to the revaluation reserve in the year. Current year corporation tax is not required to be recognised in respect of any amounts debited or credited to the revaluation reserve.

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

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

At 31 October 2024, the company had secured the Metro borrowings of the parent company, Royal Bay Care Homes Limited, by way of a first legal charge over the properties and a first debenture over all the assets and undertakings of the company. As at 31 October 2024, the maximum exposure of the company in respect of amounts drawn by the parent company was £4,896,621 (2023: £5,151,971).

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

The following amounts were outstanding at the reporting end date:

The loan is interest free and repayable on demand.

Dividends of £600,000 (2023: £500,000) were paid in the year in respect of shares held by Royal Bay Care Homes Limited.

The ultimate parent company is Royal Bay Care Homes Limited, whose registered office is 31/33 Commercial Road, Poole, Dorset, BH14 0HU.

The ultimate controlling party is Mrs C Wilson by virtue of her 64.021% shareholding of the issued share capital of Royal Bay Care Homes Limited.

The smallest and largest group into which the company is consolidated is Royal Bay Care Homes Limited.