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

The Directors are pleased to report that the company has had another year of improved turnover and occupancy. The continued after effects of the Covid-19 pandemic on the care-home sector, and the reduced occupancy this caused, are gradually being redressed. Occupancy across the company's care homes have continued to steadily increase throughout the year.

Throughout the year the Directors and staff have continued to maintain the important relationship between the company and the Local Councils, Regulatory Authorities, residents and their families and the company's staff. These relationships remain important to the company..

The long term effects of the pandemic continue to effect the company and the rest of the care industry. As always where the company has identified any problems it has ensured these were dealt with quickly and as soon as practical. The quality of care remains the driving force of the company.

The director's are please to report that the increases in occupancy during the year have been maintained and improved upon since the year end.

As disclosed previous years financial statements the director's had been continuing to work with the Trustees of the Defined Benefit Pension Scheme which was established for the employees who joined the company directly from the local authorities, from which the care homes were originally purchased. The most recent reports received from the Schemes Actuary indicate that the funded percentage has continue to increase due to the contributions made by the company and the increase in values of Gilts. The latest tri-annual review was concluded in the year to 2022. However, the directors of the company were concerned about the fees being charged to the pension fund by the Trustees. These were in the opinion of the directors excessive and depleting the value of the pension fund for the members. Therefore since the year end the directors have made the decision to change both the Pension Trustees and the Actuaries. The Actuaries previously engaged by the Pension Fund have not provided the usual FRS102 reports for inclusion within these financial statements, the director's have therefore reviewed the various other reports and information available to them to make the appropriate provisions within these financial statements. .

The company has now reached a settlement with a former consultant with whom it had been in dispute. The provisions for the cost of the settlement have been fully provided in these financial statements.

At the year end the company revalued its freehold properties following a recent independent valuation. The directors have reviewed the depreciation policy adopted by the company. This was previously charged at Nil%, however to unify the policy across the group the policy would be adjusted to write off the properties over 30 years.

Due to the continued high use of Gas and Electricity in order to keep the homes warm and welcoming for the residents the company has continually monitored its energy prices. This has more than doubled the company's energy costs over the past few years. The planned replacement of the heating systems within its care home portfolio to more energy efficient models is ongoing.

The directors have reviewed the risks and uncertainties which may effect the company's future performance. The company is dependent upon continuing to maintain its occupancy levels, in order to maintain the company's profitability. The directors and their staff are continuing to monitor the standard of care provided to ensure that it not only meets the standards required by any Regulatory Authority, but also exceeds the expectations of the residents and their families. Where any problems with regard to the standard of care are discovered, these are dealt with promptly and all measures, especially further staff training, put in place. This factor is the main influence behind maintaining the necessary occupancy levels.

The company has also continued its policy of ensuring any factors such as the previous Coronavirus pandemic are taken into consideration and the appropriate precautions are taken. Staff have been fully trained in the necessary procedures for infection control for the safety of the residents, the staff and any other professionals who work within the care homes.

The Key Performance Indicators for the company are its bed occupancy level and the proportion of the turnover spent on wages and agency costs. The directors monitor both of these indicators on an ongoing basis.

The bed occupancy rate is considered important as it indicates how full the care homes are, and therefore how efficiently the resources available to the home are being used. During the period under review the occupancy level of the company has gradually increased further. The whole care sector suffered a considerable fall in demand for new placements during the pandemic period as the families of potential residents were concerned about placing their relatives in any care home, due to the media reports about outbreaks of Covid-19 within the care home sector. These concerns are continuing to subside and since the year end the occupancy has increased to the pre pandemic levels.

Whilst the directors are pleased to report that the infection control measures put in place, have continued to prevent any major outbreak of any infectious disease, the fear of an outbreak previously curtailed the usual demand for placements of new residents.

The turnover to wages percentage is important as it indicates that each care home is working efficiently, whilst still ensuring the quality of care given to the residents is kept to a high standard, as expected by the directors. Previously the results of this had been distorted by the takeover of the homes from Leicestershire County Council and Leicester City Council. As part of the takeover the staff employed by the homes at that time were transferred under the Transfer of Undertakings Protection of Employment (TUPE) legislation. Hence it will take some time for the wages and other employment costs of these employees to settle into the terms normally associated with the private sector. The adoption of universal terms for staff who joined under TUPE and Non TUPE staff continues, as the directors strive to ensure all staff are treated equally. The directors are pleased to report that the high staff retention of staff who joined under TUPE has been maintained.

The turnover to wages and agency has also improved. The company has again avoided the need for the use of agency staff during the year by pooling of its staff resources across its portfolio of care homes.

The directors are satisfied that given the increased costs following the Autumn Budget of 2024, the turnover to wages percentage, whilst still higher than pre pandemic rates, were reasonable during the year under review. It is expected that this improvement in the turnover to wages percentage will continue through out the year to 31 December 2025, as the occupancy rates continue to increase to use the surplus capacity in the care homes, without the need for additional staff.

During the past years the company faced the need to purchase considerable extra Personal Protection Equipment (PPE), for use by its staff. The worldwide shortage of PPE and difficulties in the UK based supply-chain, have now ceased. However the costs of PPE have not reduced as much as expected. As well as this, the PPE volume requirements in order to protect the residents and staff of the homes also increased significantly.

The company and its directors continually review its short and long term plans together with any financial covenants it needs to take into consideration. Before any final decisions are made in respect of investment in the care homes currently operated by the company, or any proposed new care home, a further review is carried out to ensure that the investment is viable and will not adversely effect any other part of the group.

The company continues to strive to put "care" as the focus of its operations. The care of its residents, from both a Regulatory and a reputational aspect, is central to all decisions made by the directors. It is of upmost importance to the directors that the residents and their families are confident that they are receiving the appropriate and compassionate care.

The directors also ensure that all supplier contracts are properly procured and managed. This has been particularly important during the recent period of inflationary pressure on all supplies, especially the company's energy use.

The directors appreciate that they provide an important role within the local communities that each home serves. They use their best endeavors to provide their staff, their residents and the residents families, together with the local communities around the homes, with a positive experience of the homes. The after effects of the Covid 19 pandemic has made this task more difficult, but the directors continue to review these goals.

The company has taken this opportunity to review its energy efficiency policies and procedures. These reviews have taken place for both financial reasons, as the cost of energy through the year and after the year end have continued to rise, and to ensure that the company's operations cause as little impact on the environment, both locally and globally, as possible.

The directors appreciate that the company's greatest asset is its staff. The staff in the homes worked tirelessly through the pandemic and subsequently to ensure the best possible levels of care for the residents. The staff's wellbeing is therefore of great importance to the directors.

In this regard the directors are trying to ensure that they liaise with the staff and take on board the staff's feedback in respect of the care homes and the local communities they serve.

Likewise the directors have been trying to ensure that all staff are treated equally in terms their pay and benefits. In this respect the directors have been working with the staff to ensure there are uniform staff contracts and terms of employment across the company.

The directors appreciate the need to ensure a high standard of business conduct. This has a direct impact on the reputation of the company and a failure to follow a high standard could effect the reputation of the company and its future growth and sustainability.

When making decisions the directors are always mindful of any potential reputational risk, and try to ensure this is minimalised.

The company is wholly owned by its holding company and so all views are fairly represented in key decision making processes.

On behalf of the board

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

The principal activity of the company and group continued to be that of providing residential care services to the elderly. The company also provides day care services from certain properties. Its current overall capacity was 489 beds at the year end.

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

During the year the company did not vote any dividends. It remains the intention of the company to continue to reinvest all surplus funds into the upgrading and increasing the number of beds within its housing stock.

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

The company has maintained its traditional approach to financing its activities using only bank borrowings when necessary. During the previous year the company refinanced its operation with a new lender. During the following year the company has changed its finance provider to enhance the facilities available to funds its growth program. The directors are constantly reviewing the facility and similar products in the market, to ensure it remains the most suitable product for the company and the group.

The company will continue to maintain its low risk approach to funding its asset purchases and working capital requirements. It will use traditional bank finance wherever possible. The company will also continue in its policy of reinvesting surplus funds in its care homes.

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 company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The company's policy is to consult and discuss with employees, through staff meetings and at manager meetings, any matters likely to affect employees' interests.

The company uses its best endeavours to provide employees with the information regarding the company's performance and in particular the performance of the home in which that particular employee works. Where practical the employees are consulted about the matters which effect them in the development of the company and in particular the home in which they work.

The company operates an equal opportunities policy with regard to its employees. It seeks to ensure that no member of staff is discriminated against because of sex, age, race, sexual orientation, disability, religious beliefs or any other factor. All members of staff are offered the same opportunities for training and development.

The directors also ensure that all supplier contracts are properly procured and managed. This has been particularly important during the recent period of inflationary pressure on all supplies, especially the company's energy use.

The company also works closely with its suppliers to ensure that terms are agreed in advance that they are appropriate to both parties.

The company has continued with its programme of upgrading the building stock under its control, as best it could during the pandemic. There is a phased five year plan with regard to the improvement programme. This programme includes the modernisation of the homes and the reconfiguration of certain homes to increase their capacity and the quality of the rooms available to the residents.

The moth-balled care home has been re-purposed as staff accommodation.

In accordance with the company's articles, a resolution proposing that Francis James & Partners LLP be reappointed as auditor of the company will be put at a General Meeting.

We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2021 UK Government’s Conversion Factors for Company Reporting.

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per bed.

The company has been continuing its in depth analysis of its energy use. It is reviewing each of its sites to ensure that the any improvements in energy efficiency are considered when carrying out any refurbishment works. Due to the nature of the sites its operates, it is not possible to compare the energy usage directly to industry standards.

The company has also extended its use of video and internet based procedures for training and other meetings in order to reduce its staff travel between sites.

The above measures have all been taken to aim to reduce the company's carbon footprint, whilst also reducing the ongoing financial cost of its energy usage.

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.

During the year the various companies within the group have continued to support each other. The assistance has been in various forms, including;

- shared knowledge and assistance

- financial support

- sharing staff and administration support

- other operational support.

By pooling its resources with its fellow group companies, the directors believe that this makes all of the companies within the group stronger.

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;

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

Qualified opinion

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

In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its loss 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

We were unable to obtain sufficient appropriate audit evidence regarding the defined benefit pension scheme liability, because actuarial reports supporting valuations of the scheme assets and liabilities as at the accounting year-end have not been provided.

As a result we were unable to determine whether any adjustments might have been necessary in respect of the defined benefit pension scheme liability and its corresponding note to the financial statements, being note 17.

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 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 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.

Opinions 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 audit 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.

In respect solely of the limitation on our work relating to the defined benefit pension scheme, described above:

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

• we were unable to determine whether adequate accounting records had been maintained.

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.

Except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, 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.

• The nature of the industry and sector, control environment and business performance including the design of the company's policies, key drivers for directors remuneration;

• results of our enquiries of management about their own identification and assessment of the risks of irregularities;

• any matters we identified having obtained and reviewed the company's documentation of their policies and procedures relating to:

• identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance;

• detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

• the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;

The matters discussed among the audit engagement team including significant component audit teams and involving relevant internal specialists, regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on laws and regulations that could give rise to a material misstatement in the financial statements, including, but not limited to, the company's regulator the Care Quality Commission, UK tax legislation and equivalent local laws and regulations.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty.

Our procedures to respond to risks identified included the following:

• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

• enquiring of management and external legal counsel concerning actual and potential litigation and claims;

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

• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the rationale of any significant transactions that are unusual or outside the normal course of operations.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit.

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 profit and loss account has been prepared on the basis that all operations are continuing operations.

Leicestershire County Care Limited is a private company limited by shares incorporated in England and Wales. The registered office is 57-59 Avenue Road, Westcliff On Sea, Essex, England, SS0 7PJ.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Johnson Care Limited. These consolidated financial statements are available from its registered office, 57-59 Avenue Road, Westcliff-on-Sea, Essex, SS0 7PJ,

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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.

Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of any sales related taxes.

Turnover in respect of the provision of care beds is recognised on the basis of the contractual commitment from the company's customers. All necessary adjustments in respect of prepaid beds, or beds paid for in arrears are made in the financial statements.

The company recognises revenue from the following major sources:

• Provision of care services

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

Rental income is accounted for in the period to which the rental income relates.

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 credited or charged to profit or loss.

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 losses are recognised in profit or loss.

The company has adopted a policy of continually upgrading and developing its freehold properties, thus maintaining a value in excess to the original cost of the freehold properties. The company has now amended its depreciation policy to ensure it is consistent with its fellow group companies. Freehold properties are now depreciated over 30 years.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.

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 balance sheet when the company becomes party to the contractual provisions of the instrument.

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

Basic financial assets, 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 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 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 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 profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

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

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

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.

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

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.

When the company acts as a lessor, a lease is classified as a finance lease whenever it transfers substantially all the risks and rewards of ownership of the underlying asset to the lessee, either at the end of the lease term or for the major part of the economic life of the asset. All other leases are classified as operating leases. If an arrangement contains both lease and non-lease components, the company allocates the consideration in the contract to the two elements.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

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.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

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 following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

The valuation of freehold property is a key critical judgement. This is the directors estimate of the fair value of the properties which is based upon the external valuations provided by a qualified surveyor.

When calculating the appropriate depreciation and amortisation rates, it is necessary to make judgements about the useful economic life of the assets. The future income streams those assets can assist the company in producing and the likely residual value of the assets.

When calculating the pension assets and liabilities the directors have previously taken the advice of the Schemes Actuaries when estimating discount rates, life expectancies and inflation. Variations in these rates can effect the valuation of the assets and liabilities.

With regard to the year ended 31 December 2025 the Scheme Actuaries have not provided the usual FRS 102 reports. The directors have therefore made provision for the pension scheme assets and liabilities based upon the information available to them and the assumptions made in the similar scheme of a fellow group company.

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

All turnover and profit before tax are attributable to the one principal activity of the company, and was all derived from the United Kingdom.

Government grants relate to monies received in regards to the LCC Hardship Grant and the Digital Social Care Records Grant. A requirement of these grants is that they are spent on a strict set of criteria and there is also a requirement for periodic reports to be submitted to ensure compliance.

Included within the Profit and Loss charge for the year is an under-provision for prior years

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 1 (2023 - 1).

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

In addition to the amount (credited)/charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

Freehold land and buildings with a carrying amount of £47,376,334 were revalued at 20 February 2025 by Anderson Wilde & Harris, independent surveyors who are not connected with the company, on the basis of open market value. The valuation conforms to International Valuation Standards with valuations based on market value as a a fully equipped operational entity having regard to trading potential.

Freehold land and buildings are carried at valuation. If freehold land and buildings were measured using the cost model, the carrying amounts would have been approximately £5,126,201 (2023 - £5,095,982), being cost £5,126,201 (2023 - £5,095,982) and depreciation £nil (2023 - £nil).

During the previous year the group adopted a policy of reclassifying all inter company balances as being due to or due from the ultimate holding company Johnson Care Limited to simplify the disclosure within the financial statements.

During the previous year the group adopted a policy of reclassifying all inter company balances as being due to or due from the ultimate holding company Johnson Care Limited to simplify the disclosure within the financial statements.

The long-term loan of £9m of the company is secured by fixed charges over the 12 operating care homes owned by the company.

The additional loan of £175,415 is secured on properties owned personally by the directors.

The loan of £9m is secured on the 12 operating properties of the company and is on an interest only. The interest rate to be charged is at a fixed rate of 6.25% for the duration of the agreement.

The loans of £175,415 are short-term loans originally of between 3 and 5 years on which interest is charged at 17.1% for the duration of the agreements.

All loans were repaid during 2025, by way of a new short term loan secured on group assets. The bank loans existing at the balance sheet date have all been treated as being repayable within 1 year on this basis.

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

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The current funding of the deficit is to be paid by cashflows and profits of the company.

The company operates a defined benefit scheme for qualifying employees. Under the scheme the employees are entitled to retirement benefits varying between 50% and 75% of final salary on attainment of a retirement age of 65. No other post retirement benefits are provided.

The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out at 31st December 2023 by Mercers Limited, Actuaries. The present value of the defined benefit obligation, the related current service cost and past service cost were measured using the projected unit credit method at this time.

No further valuations have been carried out since this date. The directors have made provision for the pension scheme assets and liabilities based upon the information available to them..

Assumed life expectations on retirement at age 65:

The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:

The defined benefit obligations arise from plans which are wholly or partly funded.

The actual return on plan assets was £-157,000 (2023 - £39,000).

None of the schemes assets consists of equity or debt in the company.

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

During the year the company shared certain overhead expenses with Strathmore Care Group, which is under common ownership and control along with the company. The sharing of these expenses is in respect of both, expenses paid by the company, but partly used by Strathmore Care Group, and expenses paid by Strathmore Care Group partly used by the company and its fellow subsidiaries.

The directors believe that the net cost to both parties is Nil, however both parties benefit from the economies of scale the sharing of expenses is able to give them.

The company received the sum of £7,172 in interest from Kananda Care Limited a fellow group company.

During the year the group consolidated all monies due to directors of the company, within the ultimate holding company balance sheet.

The following amounts were outstanding at the reporting end date:

At the balance sheet date the company was owed the sum of £7,673,573 by businesses under common control which are not part of the Johnson Care Group.

These sums are due to be settled by the transfer of freehold properties to the group in the year to 31 December 2025.

Johnson Care Limited is regarded by the company's directors as being the ultimate parent company.

Dr D S Vive-Kananda is a director and controlling shareholder of Johnson Care Limited the parent company.

These financial statements are included within the consolidated accounts of Johnson Care Limited. The consolidated statements are available from its registered office, 57-59 Avenue Road, Westcliff-on-Sea, Essex, SS0 7PJ.

Johnson Care Limited is considered to be the largest and small group into which these financial statements are consolidated.