REGISTERED NUMBER: 11215907 (England and Wales)

A & L CARE GROUP LIMITED

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2025

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Income Statement

10

Consolidated Other Comprehensive Income

11

Consolidated Balance Sheet

12

Company Balance Sheet

13

Consolidated Statement of Changes in Equity

14

Company Statement of Changes in Equity

15

Consolidated Cash Flow Statement

16

Notes to the Consolidated Cash Flow Statement

17

Notes to the Consolidated Financial Statements

18

DIRECTORS:

L Webb

A Webb

SECRETARY:

L Webb

REGISTERED OFFICE:

7 Sandy Court

Ashleigh Way

Langage Business Park

Plymouth

Devon

PL7 5JX

REGISTERED NUMBER:

11215907 (England and Wales)

AUDITORS:

WP Audit Services LLP

Chartered Accountant & Statutory Auditor

Chancery House

30 St Johns Road

Woking

Surrey

GU21 7SA

The directors present their strategic report of the company and the group for the year ended 31 August 2025.

REVIEW OF BUSINESS

The group owns and operates two care homes, Amberley House and Mayflower House. Both properties are owned by A & L Care Homes Holdings Limited, with Amberley House trading through A & L Care Homes Limited and Mayflower House trading through Mayflower House Limited.

The consolidated accounts for 2025 show a pre-tax profit of £175k (2024: £224k). This balance is inclusive of one off pension contributions totalling £160k for 2025 (2024: Nil). Excluding these, pre-tax profit totals £335k (2024: £224k). The year has been challenging for the business. Both homes required repairs, in order to maintain the quality of the properties and accommodation for residents, while the interest rate on the bank loan also increased slightly, rates are expected to fall post year end. These factors combined have led to a small decline in profitability. While these issues are beyond the Directors' control, she has worked diligently to address them, and as a result, performance has returned to normal levels in 2026.

A & L Care Homes Limited reported trading profits of £228k (2024: £283k) with a gross profit margin of 50% (2024: 48%) and a net profit margin before tax of 14% (2024: 19%). The home achieved an occupancy rate of 92% (2024: 90%) during the year. Within the year are £70k of one off pension contributions impacting net profit.

Mayflower House Limited reported trading profits of £147k (2024: £154k) with a gross profit margin of 45% (2024: 42%) and a net profit margin before tax of 10% (2024: 12%). This home had an occupancy rate of 95% (2024: 91%) during the year. Within the year are £90k of one off pension contributions impacting net profit.

The group’s key performance indicators (KPIs) are primarily occupancy rates (as noted above) and maintainable EBITDA, which was £827k (2024: £731k).

Looking ahead, the care home sector faces challenges with the recent rise in the national minimum wage and employer National Insurance contributions following the government’s recent budget. The Director has agreed to fee increases where feasible to help ensure ongoing profitability.

STRATEGY

Costs will continue to be managed carefully, and occupancy rates will be closely monitored to optimize revenue.

New opportunities will continue to be sought where these will make a return for the group.

PRINCIPAL RISKS AND UNCERTAINTIES

A & L Care Group Limited, like all businesses, faces a number of operating risks and uncertainties. The most fundamental issues faced by the Group are:

- Dealing with increasing National minimum wage and National insurance;

- meeting bank covenants;

- maximising occupancy levels;

- dealing with increasing inflation and interest rates;

- complying with the stringent regulations of the Care Quality Commission under which Care Homes operate;

- achieving quality standards; and

- attracting and retaining high quality qualified and other staff.

However, the director feels that the management team in place and current performance means they are able to face these risks and mitigate them accordingly.

GOING CONCERN

The director has, at the time of preparing the financial statements, a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, she has continued to adopt the going concern basis of accounting in preparing the financial statements.

The Group has maintained strong cash reserves, and although there is bank debt and other amounts due for payment, the group retains the confidence of its bankers. As a result, the director is confident that the group could survive a substantial financial impact and is a going concern for well beyond the next 12 months of trading.

ON BEHALF OF THE BOARD:

L Webb - Director

27 May 2026

The directors present their report with the financial statements of the company and the group for the year ended 31 August 2025.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of running two residential care homes via the two trading subsidiaries.

DIVIDENDS

The total distribution of dividends in the year ended 31 August 2025 were £35,500 (2024: £35,500).

DIRECTOR

L Webb held office during the whole of the period from 1 September 2024 to the date of this report.

Other changes in directors holding office are as follows:

A Webb was appointed as a director after 31 August 2025 but prior to the date of this report.

FINANCIAL INSTRUMENTS

The group's principal financial instruments comprise bank balances/overdrafts, trade creditors and bank loans. The main purpose of each of these instruments is to raise funds for ongoing operations and to facilitate the buyout of a previous shareholder.

Due to the nature of the financial instruments used by the group there is not considered to be significant exposure to price risk. The approach to managing other risks applicable to the financial instruments concerned is explained below:

In respect of bank balances/overdrafts the liquidity risk is managed by maintaining a balance between the various elements of working capital.

The interest rate on the bank loan is variable with monthly cash repayments being fixed. The group manages the liquidity risk by ensuring there are sufficient funds to meet the cash repayments due. At the current levels, interest charges are manageable, and rates are predicted to fall.

Trade creditors' liquidity risk is managed by ensuring there is sufficient funds available from working capital to meet amounts due.

DISCLOSURE IN THE STRATEGIC REPORT

Certain disclosures surrounding future developments and risks and uncertainties have been disclosed in the Strategic Report, rather than the Directors Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 the group 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;

-	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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that she ought to have taken as a director in order to make herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

ON BEHALF OF THE BOARD:

L Webb - Director

27 May 2026

Opinion

We have audited the financial statements of A & L Care Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 August 2025 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 August 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 opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the 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 directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where 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; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Objectives

The objectives of our audit in respect of fraud, are;

- to identify and assess the risks of material misstatement of the financial statements due to fraud;

- to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and

- to respond appropriately to instances of fraud or suspected fraud identified during the audit.

However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company and group.

Audit Approach

Our approach was as follows:

- We obtained an understanding of the legal and regulatory requirements applicable to the Company and Group and considered that the most significant are the Health and Social Care Act, Companies Act 2006, FRS 102, and UK taxation legislation.

- We obtained an understanding of how the Company and Group complies with these requirements by discussions with management and those charged with governance, as well a review of relevant correspondence and certifications.

- We assessed the risk of material misstatement of the financial statements and how it might occur (including the risk of material misstatement due to fraud), by holding discussions with management and those charged with governance. We used our knowledge of the Company and Group and the industry in which it operates to determine if management's explanations were consistent with our own conclusions.

- Based on our understanding developed from the above, we designed specific appropriate audit procedures to identify instances of non-compliance with the key laws and regulations which may result in potential fraud. This included making enquiries of management and those charged with governance, investigating unusual or unexpected relationships or movements in figures disclosed in the accounts and remaining alert for any transactions that appeared to be outside the normal course of business. Furthermore, as required by auditing standards, and taking into account our overall knowledge of the control environment, we have performed procedures to address the risks of management override of controls and the risk of fraudulent revenue recognition. Procedures such as a review of journal entries and assessing estimates for management bias have enabled us to conclude in this area.

No instances of fraud, non-compliance or suspected non-compliance with laws and regulations were identified from the above procedures.

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Obtain an understanding of internal control environment relevant to the audit, in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company's and Group's internal control.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the director.

- Conclude on the appropriateness of the director's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's and Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company or Group to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Context of the ability of the audit to detect fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remains a risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect noncompliance with all laws and regulations.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Stephanie Williams (Senior Statutory Auditor)

for and on behalf of WP Audit Services LLP

Chartered Accountant & Statutory Auditor

Chancery House

30 St Johns Road

Woking

Surrey

GU21 7SA

29 May 2026

TURNOVER

3,178,424

2,817,178

Cost of sales

(1,663,811

)

(1,541,513

)

GROSS PROFIT

1,514,613

1,275,665

Administrative expenses

(1,169,286

)

(866,664

)

345,327

409,001

Other operating income

500

500

OPERATING PROFIT

5

345,827

409,501

Interest receivable and similar income

-

181

345,827

409,682

Interest payable and similar expenses

6

(170,217

)

(185,205

)

PROFIT BEFORE TAXATION

175,610

224,477

Tax on profit

7

(115,878

)

(121,601

)

PROFIT FOR THE FINANCIAL YEAR

59,732

102,876

Profit attributable to:

Owners of the parent

59,732

102,876

PROFIT FOR THE YEAR

59,732

102,876

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

59,732

102,876

Total comprehensive income attributable to:

Owners of the parent

59,732

102,876

FIXED ASSETS

Intangible assets

10

867,283

1,156,377

Tangible assets

11

4,516,620

4,543,255

Investments

12

-

-

5,383,903

5,699,632

CURRENT ASSETS

Debtors

13

175,760

88,397

Cash at bank and in hand

253,176

243,118

428,936

331,515

CREDITORS

Amounts falling due within one year

14

500,165

565,644

NET CURRENT LIABILITIES

(71,229

)

(234,129

)

TOTAL ASSETS LESS CURRENT LIABILITIES

5,312,674

5,465,503

CREDITORS

Amounts falling due after more than one year

15

(2,125,267

)

(2,304,326

)

PROVISIONS FOR LIABILITIES

19

(58,938

)

(56,940

)

NET ASSETS

3,128,469

3,104,237

CAPITAL AND RESERVES

Called up share capital

20

100

100

Share premium

21

2,309,901

2,309,901

Retained earnings

21

818,468

794,236

SHAREHOLDERS' FUNDS

3,128,469

3,104,237

The financial statements were approved by the Board of Directors and authorised for issue on 27 May 2026 and were signed on its behalf by:

L Webb - Director

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

-

-

Investments

12

4,965,100

4,965,100

4,965,100

4,965,100

CURRENT ASSETS

Debtors

13

2,096,461

1,929,095

CREDITORS

Amounts falling due within one year

14

1,466,168

1,523,302

NET CURRENT ASSETS

630,293

405,793

TOTAL ASSETS LESS CURRENT LIABILITIES

5,595,393

5,370,893

CAPITAL AND RESERVES

Called up share capital

20

100

100

Share premium

21

2,309,901

2,309,901

Retained earnings

21

3,285,392

3,060,892

SHAREHOLDERS' FUNDS

5,595,393

5,370,893

Company's profit for the financial year

260,000

370,000

The financial statements were approved by the Board of Directors and authorised for issue on 27 May 2026 and were signed on its behalf by:

L Webb - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 September 2023

100

726,860

2,309,901

3,036,861

Changes in equity

Dividends

-

(35,500

)

-

(35,500

)

Total comprehensive income

-

102,876

-

102,876

Balance at 31 August 2024

100

794,236

2,309,901

3,104,237

Changes in equity

Dividends

-

(35,500

)

-

(35,500

)

Total comprehensive income

-

59,732

-

59,732

Balance at 31 August 2025

100

818,468

2,309,901

3,128,469

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 September 2023

100

2,726,392

2,309,901

5,036,393

Changes in equity

Dividends

-

(35,500

)

-

(35,500

)

Total comprehensive income

-

370,000

-

370,000

Balance at 31 August 2024

100

3,060,892

2,309,901

5,370,893

Changes in equity

Dividends

-

(35,500

)

-

(35,500

)

Total comprehensive income

-

260,000

-

260,000

Balance at 31 August 2025

100

3,285,392

2,309,901

5,595,393

Cash flows from operating activities

Cash generated from operations

1

678,655

747,433

Interest paid

(170,217

)

(185,205

)

Tax paid

(114,423

)

(108,738

)

Net cash from operating activities

394,015

453,490

Cash flows from investing activities

Purchase of tangible fixed assets

(6,582

)

(76,602

)

Interest received

-

181

Net cash from investing activities

(6,582

)

(76,421

)

Cash flows from financing activities

Loan repayments in year

(211,541

)

(210,428

)

Amount withdrawn by directors

(130,334

)

(161,839

)

Equity dividends paid

(35,500

)

(35,500

)

Net cash from financing activities

(377,375

)

(407,767

)

Increase/(decrease) in cash and cash equivalents

10,058

(30,698

)

Cash and cash equivalents at beginning of year

2

243,118

273,816

Cash and cash equivalents at end of year

2

253,176

243,118

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2025

2024

£

£

Profit before taxation

175,610

224,477

Depreciation charges

321,537

321,823

Loss on disposal of fixed assets

774

-

Increase/(decrease) in provisions

7,843

1,024

Finance costs

170,217

185,205

Finance income

-

(181

)

675,981

732,348

Increase in trade and other debtors

(31,300

)

(5,370

)

Increase in trade and other creditors

33,974

20,455

Cash generated from operations

678,655

747,433

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 August 2025

31.8.25

1.9.24

£

£

Cash and cash equivalents

253,176

243,118

Year ended 31 August 2024

31.8.24

1.9.23

£

£

Cash and cash equivalents

243,118

273,816

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.9.24

Cash flow

At 31.8.25

£

£

£

Net cash

Cash at bank and in hand

243,118

10,058

253,176

243,118

10,058

253,176

Debt

Debts falling due within 1 year

(201,309

)

32,483

(168,826

)

Debts falling due after 1 year

(2,304,326

)

179,059

(2,125,267

)

(2,505,635

)

211,542

(2,294,093

)

Total

(2,262,517

)

221,600

(2,040,917

)

1.	STATUTORY INFORMATION

A & L Care Group Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

The financial statements have been prepared under the historical cost convention.

Despite one off repair costs and a one off director's pension contribution being incurred within the year causing profitability to decrease, the director believes that the group is experiencing good levels of sales and profitability, and that it is well placed to manage it's business risks successfully. Accordingly, she has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus, the group continues to adopt the going concern basis of accounting in preparing the financial statements.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of all the group undertakings. These are adjusted, where appropriate, to conform to group accounting policies. Acquisitions are accounted for under the acquisition method and goodwill on consolidation is capitalised and written off in line with the group accounting policy in this area. The results of companies acquired or disposed of are included in the profit and loss account after or up to the date that control passes respectively.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Significant judgements and estimates

In the application of the group's accounting policies, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

However there has been some judgement made relating to the following:

(i) Valuation of property

Property is reviewed annually for impairment. The cash and profit levels generated by each home are taken into consideration when carrying out this review, as is a multiple to obtain an appropriate estimate of future maintainable earnings. The property is not depreciated as the director has considered that the cumulative effects of growth in the sector, and the offsetting effect of discounting over a useful life of 50 years, would result in a residual value that is not significantly different to current value.

(ii) Investments in subsidiaries

Investments in subsidiaries are reviewed annually for impairment by considering their expected future cashflow, returns and profitability.

(iii) Goodwill

Goodwill is reviewed annually for impairment by reviewing the position and performance of the group. The cash and profit levels generated by each home are taken into consideration when carrying out this review, as is a multiple to obtain an appropriate estimate of future maintainable earnings for each subsidiary. The value of goodwill is reviewed in combination with the value of the property, to ensure no double counting of value is recognised

The value of goodwill is reviewed in combination with the value of the property, to ensure no double counting of value is recognised.

(iv) Provisions for liabilities

Provisions are made in the accounts for expenses not yet invoiced where it is anticipated that a charge may arise in future years. This is estimated from the total expected cost multiplied by a probability factor. The expected cost comes from the most recent known costs for the same goods or service. The probability factor works on the full costs incurred within the last 12 months and then a sliding scale on any older amounts.

(v) Useful economic lives of tangible assets:

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.

(vi) Impairment of debtors:

The management team makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors, and historical experience.