The directors present the annual report and the audited financial statements for the year ended 31 March 2023.
The results for the year are set out in the Statement of Comprehensive Income on page 7. The directors are satisfied with the overall performance of the Company and do not foresee any significant change in the Company’s activities in the coming financial year.
The directors who held office during the year and after the year end are set out below.
J S Gordon
R W F Burge (resigned 25 May 2023)
J Band (appointed 9 August 2023)
Company Secretary
P Johnstone (resigned 1 April 2022)
Resolis Ltd (appointed 4 April 2022)
The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Basis for 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
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 Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The Directors’ Report have been prepared in accordance with applicable legal requirements.
As explained more fully in the Directors’ Responsibilities Statement set out on page 2 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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.
All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and the sector in which it operates, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
United Kingdom Generally Accepted Accounting Practice, including FRS 102;
UK Companies Act 2006; and
UK Corporation Tax legislation.
We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of relevant correspondence with regulatory bodies and board meeting minutes.
We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. We identified a heightened fraud risk in relation to:
Income recognition; and
Management override of controls.
In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:
Recalculating the finance income received to ensure amounts are in line with contractual terms and relevant accounting standards;
Agreeing a sample of income receipts to supporting documentation and bank statements;
Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;
Reviewing the level of and reasoning behind the company’s procurement of legal and professional services
Performing audit work procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing judgements made by management in their calculation of accounting estimates for potential management bias;
Completion of appropriate checklists and use of our experience to assess the company’s compliance with the Companies Act 2006; and
Agreement of the financial statement disclosures to supporting documentation.
Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The income statement has been prepared on the basis that all operations are continuing operations.
The notes on pages 10 to 15 form part of the financial statements.
Statement of compliance
The individual financial statements of Taycare Health (Holdings) Limited have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, ‘‘The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland’’ (‘‘FRS 102’’) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of Section 1A have been applied other than where additional disclosure is required to show a true and fair view.
General information
Taycare Health (Holdings) Limited (the “Company”) is a private company limited by shares and is incorporated and domiciled in Scotland. The address of its registered office is Exchange Tower, 11th Floor, 19 Canning Street, Edinburgh, Scotland, EH3 8EG.
The Company acts as holding company for Taycare Health Limited.
The principal activities of Taycare Health Limited are the design, build, finance, operation and maintenance of the mental health facilities at Murray Royal Hospital and Stracathro. The agreement was entered into under the Governments Private Finance Initiative Scheme.
The Company’s functional and presentation currency is the pound sterling. Monetary amounts in these financial statements are rounded to the nearest pound.
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 £'000.
Consolidation policy
The entity has taken advantage of the option not to prepare consolidated financial statement contained in section 398 of the Companies Act 2006 on the basis that the entity and its subsidiary undertakings comprise a small group.
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 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 are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant judgements
The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows:
Key sources of estimation uncertainty
Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty are as follows:
i) Impairment of assets
The carrying value of those assets recorded in the Company's Statement of Financial Position, at amortised cost, could be materially reduced where circumstances exist which might indicate that an asset has been impaired and an impairment review is performed. Impairment reviews consider the fair value and or value in use of the potentially impaired asset or assets and compares that with the carrying value of the asset or assets in the Statement of Financial Position. Any reduction in value arising from such a review would be recorded in the statement of comprehensive income. Impairment reviews involve the significant use of assumptions. Consideration has to be given as to the price that could be obtained for the asset or assets, or in relation to a consideration of value in use, estimates of the future cash flows that could be generated by the potentially impaired asset or assets, together with a consideration of an appropriate discount rate to apply to those cash flows.
ii) Market Rate of Interest
The directors have reviewed the interest rates applied to the unsecured subordinated loan stock and consider these to be at a market rate.
The Company’s audit fee is borne by its subsidiary company, Taycare Health Limited. Auditor’s remuneration is payable to Johnston Carmichael LLP.
The Company had no employees during the year (2022: £nil).
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
The investment in the subsidiary undertaking is held in the Statement of Financial Position at cost. The investment is held in Taycare Health Limited, a special purpose company which has entered into a 30 year contract with Tayside Health Board to finance, design, construct and maintain the mental health facilities at Murray Royal Hospital and Stracathro.
Details of the company's subsidiaries at 31 March 2023 are as follows:
The directors acknowledge the investment is in net liabilities, the cause of this is due to the derivative financial instruments being brought onto the Statement of Financial Position. The directors have reviewed the investment’s forecasts and projections and have a reasonable expectation that no impairment indicators exist and the investment will continue in operational existence for the foreseeable future.
Subordinated debt provided by Cobalt CPI Limited (50%) and Cobalt Project Investments (Taycare) Limited (50%) bears interest at 10% and is repayable in 2042.
The shareholding at 31 March 2023 is owned 50% by Cobalt CPI Limited and 50% by Cobalt Project Investments (Taycare) Limited.
The Company has granted a guarantee supported by a bond and floating charge over its assets and undertakings, as security to the Co-operative Bank plc for the senior debt provided to Taycare Health Limited, its 99% owned subsidiary.
During the year the interest of £939,000 (2022: £939,000) was receivable from Taycare Health Limited, a 99% owned subsidiary. £9,388,000 was due from Taycare Health Limited at the year end (2022: £9,388,000).
During the year interest of £939,000 (2022: £939,000) was payable to the joint shareholders Cobalt CPI Limited and Cobalt Projects Investments (Taycare) Limited.
There was no interest due at the year end to Cobalt CPI Limited and Cobalt Projects Investments (Taycare) Limited.
At the year end Taycare Health (Holdings) Limited is owned 50% by Cobalt CPI Limited and 50% by Cobalt Project Investments (Taycare) Limited, which is part of Dalmore Capital Ltd. There is no deemed ultimate controlling party.
The financial statements for Dalmore Capital Limited can be obtained from it's registered office, 1 Park Row, Leeds, England, LS1 5AB.