The directors present the strategic report for Charnwood Group Holdings Ltd ("Midlands Care") for the year ended 31 May 2025.

As of May 2025, Midlands Care operates eleven care homes and one day centre, specialising in residential and dementia care across the East and West Midlands. The group demonstrated resilience, maintaining strong occupancy and staffing levels. A post-tax profit of £427,804 was achieved compared to a £572,082 profit in 2024, with net assets rising to £11,445,820 from £11,038,972.

Strategic Growth & Investments

Since year-end May 2024, Midlands Care has further expanded its portfolio with the acquisition of A L A Care Limited, a group of three purpose-built care homes located in Leicestershire, offering a total of 116 beds. This acquisition strengthens the group’s presence across the county, enhances capacity for high-quality residential and nursing care, and aligns with Midlands Care’s strategy of investing in purpose-built facilities that meet the evolving needs of local communities.

Quality Approach & Corporate Governance

Midlands Care has continued to strengthen its reputation for delivering high-quality, person-centred care across its portfolio. The company remains committed to empowering residents to live with dignity and independence, supported by a robust quality assurance framework that goes beyond statutory requirements and reflects the group’s values of excellence, inclusivity, and accountability.

During the year, three care homes underwent unannounced inspections by the Care Quality Commission (CQC), with all achieving an overall rating of Good. These results highlight the consistency of standards across the group and the dedication of staff in providing safe, effective, and compassionate care.

The Board has continued to reinforce strong governance structures, ensuring operational and financial decisions are carefully aligned with the long-term vision of the company. Resident, family, and staff feedback remain central to the continuous improvement cycle, enabling the group to adapt services and further enhance the care experience.

Midlands Care enters the next year well-positioned for sustainable growth, with a clear focus on operational excellence, investment in people, and maintaining the trust and confidence of the communities it serves.

Regulatory & Stakeholder Engagement

Midlands Care continues to adopt a proactive approach to engagement with regulators, employees, customers, suppliers, creditors, and community groups. The Board ensures that stakeholder perspectives remain carefully considered in decision-making, supporting inclusive and effective relationships.

All homes, regulated by the Care Quality Commission (CQC), continue to undergo regular inspections and compliance reviews. Inspection outcomes are reviewed in regulatory meetings, with action plans implemented and monitored to uphold the highest standards of care.

Resident and family feedback continues to play a central role in maintaining service quality. The group remains committed to transparency, with an open approach to addressing any issues that arise. While not bound by a payment code, Midlands Care continues to follow fair payment practices, ensuring suppliers are paid within agreed terms.

A skilled and motivated workforce remains central to the success of the group. Employee well-being is supported through established initiatives such as staff surveys, listening groups, counselling, and Occupational Health Services. Recruitment challenges persist across the industry, and Midlands Care remains committed to attracting and retaining the best talent.

Training & Professional Development

Midlands Care continues to place strong emphasis on continuous learning and career development, recognising the direct link between staff development and the quality of care delivered. Training opportunities are consistently made available to all employees, ensuring they remain equipped with up-to-date skills and knowledge of best practices.

The group has maintained its proactive approach to innovative learning, with interactive and digital training resources continuing to support a dynamic and engaging learning environment.

Education and professional development remain embedded in the organisation’s culture, with structured training programmes, regular appraisals, and ongoing internal communications reinforcing key messages. This sustained commitment builds staff confidence and competence, directly contributing to the consistently high standards of care provided across all services.

During the year, Midlands Care launched the Midlands Care Training Academy, a state-of-the-art facility providing all residential and dementia care-related training on site and face to face. The Academy delivers structured programmes immediately post-recruitment, prior to on-site induction, ensuring new employees are fully prepared for their roles. It also offers existing staff opportunities to refresh and develop their skills in a professional learning environment.

Education and professional development remain embedded in the organization's culture, with structured training programmes, regular appraisals, and ongoing internal communications reinforcing key messages. This sustained commitment builds staff confidence and competence, directly contributing to the consistently high standards of care provided across all services.

The Board remains focused on long-term value creation, with regular assessment of risks and opportunities that could affect business operations. Strategic decision-making and risk management processes continue to cover financial, reputational, and operational risks, all of which are overseen at board level.

Key risks remain consistent with prior years, including regulatory scrutiny, media attention, staff shortages, and fluctuations in occupancy levels. While the company has further reduced reliance on agency staffing, workforce management remains a critical priority. Rising operational costs and cost-of-living pressures continue to be closely monitored, with strong internal controls and a dynamic marketing strategy supporting business resilience.

Looking ahead, Midlands Care will continue to seek opportunities for growth through the acquisition of standalone homes and/or care home groups, where such opportunities align with the company’s commitment to quality and sustainable long-term development.

The directors continue to consider gross profit margin and occupancy levels as the principal key performance indicators for assessing business performance. In 2025, Midlands Care achieved a gross profit margin of 42.5%, compared to 40.5% in the previous year. Occupancy levels have remained in line with the directors’ expectations, reflecting stable demand in the current operating climate.

Financial oversight continued to be maintained through quarterly reporting by Dains, complemented by robust internal monthly monitoring. This disciplined approach ensures that Midlands Care remains financially resilient while continuing to deliver high-quality, person-centred care.

Achievements & Remuneration

Midlands Care is proud to maintain its Investors in People accreditation, reflecting its ongoing commitment to excellence in people management. The group has continued to invest in resources and head office functions to further drive quality across its portfolio. This has included the expansion of the Quality Assurance Team, the appointment of a dedicated Recruitment Manager, and the addition of an Estates Manager to oversee property, maintenance, and compliance. Together, these roles strengthen oversight, improve operational consistency, and support the delivery of high standards of care.

Professional development opportunities, career pathways, and staff engagement initiatives remain central to fostering a workplace culture that empowers employees and enhances overall service quality.

The company’s remuneration structure continues to align with its core values, business performance, and strategic goals. Workforce conditions, including fair pay practices and gender pay gap considerations, are actively monitored to ensure equity and fairness across all levels of the organisation.

Post-Year-End Growth

Following the end of the 2025 financial year, Midlands Care remains focused on expanding its footprint and strengthening its portfolio of high-quality care homes. The group is actively exploring new opportunities for growth that align with its values of quality, community, and compassion.

This ongoing commitment to thoughtful and sustainable expansion ensures that more families across the region will benefit from trusted, person-centred care in environments that blend comfort with modern standards.

The director considers that he has acted in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in S172 (1) (a-f) of the Act) in the decisions taken during the year ended 31 December 2024.

The following paragraphs summarise how the director fulfils his duties:

Our purpose, strategy and consideration of the consequences of decisions in the long term

Our purpose is to be a high-quality provider of care, supporting those in our care to lead their best lives with the intention of our homes being the first choice for our service users, their relevant families, commissioners that we work with, together with all of our fellow colleagues.

The group's strategy is reviewed on an annual basis and discussed with all the senior management team.

Engaging with our stakeholders

The director recognises his responsibility to act fairly between all stakeholders and all decisions are made with a view to protecting all the major stakeholders.

Residents and relatives

Residents come at the fore of the group's reason for operating and we pride ourselves on looking after those residents on a 24 hour basis, 7 days a week and we look to maintain continuous dialogue with our service users and their families.

Our people

Our colleagues are critical to the business and for ensuring that the business provides the best possible care to our service users. The director and senior management team meet regularly with our wider colleagues, and we always look to maintain an inclusive workplace, where colleagues can make sure that they work with the full support of the director.

Lenders

The group has a strong relationship with its lenders and has a transparent and open relationship, ensuring that the company always has the resources available to provide the best possible care.

Commissioners

Our commissioners are clearly imperative to the group and its ability to execute its strategy. The group aims always to be the first choice for commissioners and is committed to maintaining and developing relationships with said commissioners.

Our suppliers

The group strives to maintain strong relationships with all of its suppliers and to have an open dialogue with all of them at all times. They are key to the strategy of the business to make sure that the company can fulfil its service provision to service users.

Community and environment

The group is keen to have an active involvement in the local community and environment and regular open days are held, when it is safe to do so, to encourage local communities to be one of our key supporters.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 May 2025.

The principal activity of the company and group continued to be that of providing care to the elderly in residential homes.

The results for the year are set out on page 13.

Ordinary dividends were paid amounting to £14,000. 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 group's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).

The group's current policy concerning the payment of trade creditors is to:

• settle the terms of payment with suppliers when agreeing the terms of each transaction;

• ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and

• pay in accordance with the group's contractual and other legal obligations.

Trade creditors of the group at the year end were equivalent to 30 day's purchases, based on the average daily amount invoiced by suppliers during the year.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

In accordance with the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, Midlands Care reports on the energy consumption and carbon emissions associated with its operations.

Reporting Boundary and Scope

The reporting boundary covers all care homes and head office operations under Midlands Care. Emissions are categorized in line with the Greenhouse Gas Protocol Corporate Standard:

●    Scope 1: Direct emissions from the combustion of gas in boilers and other heating sources at care homes.

●    Scope 2: Indirect emissions from purchased electricity at care homes and head office locations.

●    Scope 3: Not mandatory under SECR. Selected categories (such as business travel in vehicles not owned

by the company and waste management) may be reported in future years where relevant and material.

Energy Consumption (kWh)

●    Scope 1: 3,222,380 kWh (combustion of gas at care homes)

●    Scope 2: 768,000 kWh (purchased electricity at care homes and head office)

●    Total energy consumption (Scope 1 + 2): 3,990,380 kWh

Carbon Emissions (tCO₂e)

●    Scope 1: 586.5 tCO₂e

●    Scope 2: 148.2 tCO₂e

●    Total emissions (Scope 1 + 2): 734.7 tCO₂e

Intensity Ratio

Midlands Care has selected tonnes of CO₂e per registered bed as its intensity ratio, reflecting the nature of its operations and providing a meaningful basis for year-on-year comparison.

●    Intensity ratio: 2.05 tCO₂e per bed

Methodology

Energy and carbon data has been compiled in accordance with the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, applying the principles of the Greenhouse Gas Protocol Corporate Standard.

Emissions have been calculated using the UK Government’s 2025 GHG Conversion Factors for Company Reporting. Energy consumption data has been collected from supplier invoices and meter readings across all care homes and head office locations. Where actual data was unavailable, reasonable estimates have been applied to ensure completeness.

Energy Efficiency Measures

During the year, Midlands Care introduced measures to improve energy efficiency and reduce emissions, including:

●    Expansion of the Finance Teams and Estates Manager function to monitor energy use and efficiency across

the portfolio.

●    Implementation of LED lighting upgrades across care homes.

●    Improved heating and hot water controls to optimise consumption.

●    Ongoing review of renewable and low-carbon energy sourcing opportunities.

Comparatives

As this is the company’s first year of reporting under SECR, no comparative figures are disclosed. Future reports will include prior year comparatives.

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 group and company, and of the profit or loss of the group 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;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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 auditor of the company 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 auditor of the company is aware of that information.

Qualified opinion on financial statements

We have audited the financial statements of Charnwood Group Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2025 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company 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, except for the possible effects of the matter described in the basis for qualified opinion section of our report, the financial statements:

• give a true and fair view of the state of the group's and the parent company's affairs as at 31 May 2025 and of the group's 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 qualified opinion

As at 31 May 2025 sufficient appropriate audit evidence was available in order to confirm the carrying value of freehold land and buildings (included within tangible fixed assets in the group statement of financial position), however as at 31 May 2024 the group statement of financial position included tangible fixed assets (freehold land and buildings) for which sufficient appropriate audit evidence was not available in order to confirm a carrying value of £3.72m. Therefore the value of such assets could not be determined with reasonable certainty at that date. Any appropriate revaluation adjustment or impairment could adversely affect the group result for that financial year, with a consequential affect on the group result for the year ended 31 May 2025, the value of which we have been unable to determine. In addition, should any adjustment affect the results of the group for the year ended 31 May 2025, the strategic report would also need to be amended.

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 group and parent 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 qualified 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 group's and parent 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.

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves as to the carrying value of fixed assets totaling £3.72m as at 31 May 2024 nor determine with reasonable certainty any related impact on the group result for that financial year or any consequential affect on the group result for the year ended 31 May 2025. We have concluded that references to the results for the year ended 31 May 2025 may be materially misstated for the same reason.

Qualified opinion on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, 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.

Except for the matter described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

Arising solely from the limitation on the scope of our work relating to fixed assets as at 31 May 2024, referred to above:

• we have not obtained all the information and explanations that we considered necessary for the purpose of our audit.

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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made.

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 group's and the parent 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 parent 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 considered the nature of the parent company and group's business and its control environment. We also enquired of management about their identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory framework in which the company and group operates and identified key laws and regulations that:

- Had a direct effect on the determination of material amounts and disclosures in the financial statements, which included the Companies Act 2006, tax legislation and payroll legislation; and

- Did not have a direct effect on the financial statements but compliance with which may be fundamental to the parent company and group's ability to operate.

We discussed among the audit engagement team the opportunities and incentives that may exist within the organisation for fraud and how / where fraud might occur in the financial statements.

In common with all audits under ISA's (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of accounting adjustments and journal entries, assessed whether accounting estimates were reasonable and accurate and reviewed the accounting records for any significant or unusual transactions.

In addition, our procedures to respond to the risks identified included:

- Reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provision of relevant laws and regulations described as having a direct effect on the financial statements;

- Performing analytical procedures to identify any unusual or unexpected variances that may indicate risks of material misstatement due to fraud;

- Enquiring of management about any instances of non-compliance with laws and regulations and any instances of known or suspected fraud; and

- Reviewing the latest available Care Quality Commission inspection reports for all registered homes operated by the group.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment forgery, collusion, omission or misrepresentation.

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.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £215,964 (2024 - £170,363 loss).

Charnwood Group Holdings Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 8 Grove Court, Enderby, Leicester, LE19 1SA.

The group consists of Charnwood Group Holdings Ltd and all of its subsidiaries.

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 and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

It was noted that amounts owed from group undertakings in subsidiary company Dwell Holdings Limited, totalling £220,165, had been incorrectly classified as a debtor in the year ended 31 May 2024. To correct this, the amount of £220,165 has been reclassified from debtors to creditors.

This adjustment has no effect on the profit or loss for the year ending 31 May 2024, and the net asset position remains unchanged.

In the parent company financial statements, 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. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

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 consolidated group financial statements consist of the financial statements of the parent company Charnwood Group Holdings Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 31 May 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group statement of financial position at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

The current liabilities of the group exceeded its current assets by £558,519 (2024: £619,501).

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

The turnover shown in the profit and loss account represents nursing and residential care services provided during the year. The turnover is recognised on the basis of days the service was provided.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

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:

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 recognised in the income statement.

Properties whose fair value can be measured reliably are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in profit or loss or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and loss are recognised in profit or loss.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

At each reporting period end date, the group 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.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

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 group 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 group's statement of financial position when the group becomes party to the contractual provisions of the instrument.

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

Other financial assets, 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 group 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 group after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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 group's contractual obligations expire or are discharged or cancelled.

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 group’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 if, and only if, there is 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 fixed assets.

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

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

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 leased asset are consumed.

In the application of the group’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 average monthly number of persons (including directors) employed by the group and company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3.

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:

Freehold land and buildings with a carrying amount of £25,973,626 (2024 - £17,025,908) have been pledged to secure borrowings of the group. The group is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.

Land and buildings with a carrying amount of £13,045,080 (2024: £13,305,441) were revalued at 31 May 2024 by the directors using the professional valuations done during the year by Colliers International Property Consultants Limited.

The revaluation surplus is disclosed in note 23.

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

Details of the company's subsidiaries at 31 May 2025 are as follows:

The following subsidiaries have claimed audit exemption for the year ended 31 May 2025 under S479A of the Companies Act 2006, as the parent company has provided a guarantee in accordance with S479C of the Companies Act 1986: Dwell Holdings Limited (registered number 04107829); Dwell Limited (registered number 01987431); S2 Care Ltd (registered number 12807088); S3 Care Ltd (registered number 11467527); S4 Care Ltd (registered number 11342523) and S5 Care Ltd (registered number 12223131); S6 Care Ltd (registered number 15235063); St Martin's Residential Homes Ltd (registered number 05836212); T&K Stevenson Ltd (registered number 08275885); A L A Care Limited (registered number 02554060).

The long-term loans of £13,453,745 (2024: £4,657,721) are secured by fixed charges over the properties and undertaking on the parent company.

Barclays Bank PLC hold a fixed and floating charge, and a negative pledge over the properties and undertakings of the parent company.

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

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

On 31 March 2025, the company subdivided its existing 100 ordinary shares of £1 each into 1,000 ordinary shares of £0.10 each. The subdivision did not affect the total issued share capital or shareholders’ equity of the company.

This reserve records the value of assets revaluations and fair value movements on assets recognised in other comprehensive income. Amounts representing the equivalent depreciation are transferred to retained earnings each year.

On 23 September 2024, the group acquired control of A L A Care Limited through the purchase of 100% of the share capital for total consideration of £7,778,316. A L A Care Limited has three purpose-built care homes located in Leicestershire, offering a total of 116 beds. This acquisition strengthens the group’s presence across the county, enhances capacity for high-quality residential and nursing care. The goodwill of £1,352,242 arising from the acquisition is attributable to the acquired customer base and economies of scale expected from combining the operations into the group.

Management have estimated the useful life of the goodwill to be 10 years. The acquired care homes are all established in their local communities. The following table summarises the consideration paid by the group, the fair value of assets acquired, liabilities assumed at the acquisition date.

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

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

The following amounts were outstanding at the reporting end date:

The following amounts were outstanding at the reporting end date: