Company registration number 04299157 (England and Wales)
WILLCARE (MIM) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
WILLCARE (MIM) LIMITED
COMPANY INFORMATION
Directors
D W Davies
J P George
Secretary
G M Gatty
Company number
04299157
Registered office
128 Buckingham Palace Road
London
United Kingdom
SW1W 9SA
Auditor
Johnston Carmichael LLP
7-11 Melville Street
Edinburgh
EH3 7PE
WILLCARE (MIM) LIMITED
CONTENTS
Page
Directors' report
1 - 2
Statement of Directors' responsibilities in respect of the Directors' Report
3
and the Financial Statements
Independent auditor's report to the members of Willcare (MIM) Limited
4 - 7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Notes to the financial statements
11 - 22
WILLCARE (MIM) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 1 -

The directors present their annual report and financial statements for the year ended 30 September 2023.

Principal activities

The principal activity of the company continued to be that of maintaining and providing building management for NHS Property Services on a 30-year contract. The company is a Special Purpose Vehicle for a development under the Private Finance Initiative.

Directors

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

D W Davies
J P George

Indemnity provisions

Indemnity provisions are in place whereby the directors are entitled to be indemnified out of the assets of the Company against claims from third parties in respect of certain liabilities arising in connection with the performance of their functions, in accordance with the provisions of the UK Companies Act 2006. Indemnity provisions of this nature have been in place during the financial year, but have not been utilised by the directors.

Results and dividends

The results for the year are set out on page 8. Ordinary dividends totalling £560,000 were paid in the year (2022: £1,033,000). The directors do not recommend payment of any further dividend.

Financial risk management policy

The Company recognises that effective risk management is fundamental to achieving its business objectives in order to meet its commitments in fulfilling the PFI contract and in delivering a safe and efficient service. Risk management contributes to the success of the business by identifying opportunities and anticipating risks in order to improve business performance and fulfil the Company’s contractual obligations.

 

Major maintenance

There is a risk that maintenance costs exceed those forecasted in the financial model agreed at Financial Close (and updated through later reprofiling as appropriate). This risk is mitigated by regular management review of actual expenditure against budget and technical evaluations of the physical condition of the facilities.

 

Availability

Investment in the project is funded by debt. During the operational phase the principal source of funds available to meet its liabilities is from the unitary charge received from the Authority. Failure to achieve the forecast levels of availability would result in lower than forecast revenues and this may adversely affect the company’s ability to make payments to debt holders. Availability is forecast to be high, with no anticipated interruptions.

 

Service performance

Performance risk under the Project Agreement and related contracts are passed on to the service providers. The obligations of these subcontractors are underwritten by parent company guarantees. Ultimately, poor performance may result in the Authority having the right to terminate the Project Agreement. There is no history of high levels of poor performance and none anticipated.

WILLCARE (MIM) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 2 -
Credit risk

The Company’s credit risk is primarily attributable to its trade and other receivables and the finance debtor. With the exception of relatively small trade receivables for activities ancillary to the PFI contracts recharged to other parties, the receivables arise from NHS Property Services. The credit and cash flow risks are not considered significant as the client is a quasi-governmental organisation.

 

For cash and short-term deposits, where they do occur, are subject to terms under the Credit Facility Agreement, notably ‘Authorised Investments’, which restrict the maximum aggregate Authorised Investment with any one institution and with a maximum maturity of six months.

Interest rate risk/ Inflation risk

All borrowings are at a fixed rate, due to a corresponding hedge in place for the long term debt finance, to mitigate interest rate risk. The majority of the Company’s borrowings comprise the debt finance of £10,757,293 and subordinated loan notes of £1,169,476. Repayment of this debt, in addition to meeting operational expenditure commitments, will be made from income which is itself subject to indexation. The Company therefore mitigates any exposure to movements in the retail price index.

 

Tax risk

The Company is exposed to changes in tax rates, as an increase in tax rate will increase the tax charge for the year, increasing tax outflow in future years of the concession. 

Liquidity risk

The Company’s liquidity risk is principally managed through financing the Company by means of long-term borrowings with an amortising profile that matches the expected availability of funds from the Company’s operating activities.

Claims/ disputes

The Company is exposed to the risk of claims and disputes from contractual requirements not being met. The Directors have considered whether any such potential claims exist and have not identified any material issues.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

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

On behalf of the board
D W Davies
Director
12 March 2024
WILLCARE (MIM) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 3 -

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 UK accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.

 

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:

 

 

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 responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the company and to prevent and detect fraud and other irregularities.

WILLCARE (MIM) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF WILLCARE (MIM) LIMITED
- 4 -
Opinion

We have audited the financial statements of Willcare (MIM) Limited (the 'company') for the year ended 30 September 2023 which comprise the statement of comprehensive income, the statement of financial position, 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 the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

WILLCARE (MIM) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WILLCARE (MIM) LIMITED
- 5 -
Matters on which we are required to report by exception

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 directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in their statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; 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 they either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's 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 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: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

WILLCARE (MIM) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WILLCARE (MIM) LIMITED
- 6 -

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:

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 Company’s 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:

 

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:

WILLCARE (MIM) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WILLCARE (MIM) LIMITED
- 7 -

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 are to 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.

Irvine Spowart (Senior Statutory Auditor)
For and on behalf of Johnston Carmichael LLP
Statutory Auditor
7-11 Melville Street
Edinburgh
EH3 7PE
13 March 2024
WILLCARE (MIM) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
5,465,426
3,923,069
Cost of sales
(3,357,304)
(2,356,754)
Gross profit
2,108,122
1,566,315
Administrative expenses
(367,238)
(378,475)
Other operating income
50,000
50,000
Operating profit
1,790,884
1,237,840
Interest receivable and similar income
7
907,000
953,363
Interest payable and similar expenses
6
(842,717)
(839,725)
Fair value movement on derivatives
(108,041)
2,183,334
Profit before taxation
1,747,126
3,534,812
Tax on profit
8
(293,935)
(593,418)
Profit for the financial year
1,453,191
2,941,394

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

 

No other comprehensive income has been presented as there have been no other comprehensive income in either current or previous years.

The notes on pages 11 to 22 form part of these financial statements.

WILLCARE (MIM) LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2023
30 September 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Financial assets
10
17,467,907
18,173,475
Current assets
Debtors
12
547,869
514,787
Cash at bank and in hand
2,980,771
2,811,150
3,528,640
3,325,937
Creditors: amounts falling due within one year
13
(2,568,967)
(2,889,883)
Net current assets
959,673
436,054
Total assets less current liabilities
18,427,580
18,609,529
Creditors: amounts falling due after more than one year
14
(11,390,327)
(12,465,467)
Net assets
7,037,253
6,144,062
Capital and reserves
Called up share capital
16
10,000
10,000
Profit and loss reserves
7,027,253
6,134,062
Total equity
7,037,253
6,144,062

The notes on pages 11 to 22 form part of these financial statements.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 12 March 2024 and are signed on its behalf by:
D W Davies
Director
Company Registration No. 04299157
WILLCARE (MIM) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2021
10,000
4,225,668
4,235,668
Year ended 30 September 2022:
Profit and total comprehensive income for the year
-
2,941,394
2,941,394
Dividends
9
-
(1,033,000)
(1,033,000)
Balance at 30 September 2022
10,000
6,134,062
6,144,062
Year ended 30 September 2023:
Profit and total comprehensive income for the year
-
1,453,191
1,453,191
Dividends
9
-
(560,000)
(560,000)
Balance at 30 September 2023
10,000
7,027,253
7,037,253

The notes on pages 11 to 22 form part of these financial statements.

WILLCARE (MIM) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 11 -
1
Accounting policies
Company information

Willcare (MIM) Limited is a private company limited by shares incorporated in England and Wales and the registered number is 04299157. The registered office is 128 Buckingham Palace Road, London, United Kingdom, SW1W 9SA.

1.1
Accounting convention

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 investment properties and certain financial instruments at fair value. 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:

 

 

The financial statements of the company are consolidated in the financial statements of Willcare Holdings Limited. These consolidated financial statements are available from its registered office, 128 Buckingham Palace Road, London, SW1W 9SA.

WILLCARE (MIM) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.2
Going concern

The financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons.true

 

The Directors have prepared cash flow forecasts covering a period of at least 12 months from the date of approval of these financial statements which indicate that, the Company will have sufficient funds to meet its liabilities as they fall due for that period and to operate within the covenants on its external borrowings.

 

Specifically, the directors have considered if, in modelled severe but plausible downside scenarios, the level of operational performance of the Company would lead to service failure points being awarded against the Company in accordance with the terms of the Company’s contract with Brent Primary Care Trust (now NHS Property Services) (the "Trust") sufficient to cause an event of default under the terms of the Company’s external borrowings. To date, there has been no material adverse impact on the Company’s cashflows, or the service levels provided and no indication of heightened risk of subcontractor failure. As a result, the cashflow forecasts indicate that, even in downside scenarios, the Company will be able to meet its liabilities as they fall due.

 

Consequently, the Directors are confident that the Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.

1.3
Turnover

Public to private concession arrangements

A substantial portion of the company's assets are used within the framework of concession contracts granted by public sector customers ('grantors'). Under these contracts, the company constructs primary care centres that are leased to the NHS on a 30 year lease.

 

There is additional turnover received for pass through costs recovered from NHS Property Services for direct purchasing of consumables as well as minor works undertaken by the FM contractor that are outside both the Principal and FM Contract.

 

To be classified as a Service Concession Arrangement under section 34 of FRS 102, a contract must satisfy the following two criteria:

 

 

Pursuant to section 34 of FRS 102, such infrastructure is not recognised as assets of the operator as property, plant and equipment but as financial assets ( 'financial asset model').

WILLCARE (MIM) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 13 -

Turnover (continued)

Financial asset model

The financial asset model applies when the operator has an unconditional right to receive cash or other financial asset from the grantor.

 

In the case of concession services the operator has an unconditional right if the grantor contractually guarantees the payment of:

 

 

Financial assets resulting from the application of section 34 of FRS 102 are recorded in the balance sheet under the heading financial assets and measured at amortised cost.

 

Pursuant to section 23 of FRS 102, revenue associated with this financial model comprises of service remuneration which relates to the lifecycle maintenance and facilities income and ad hoc property related services income.

 

1.4
Financial assets

The financial asset is stated at amortised cost using the effective rate of interest. The effective rate of interest method is a method of calculating the amortised costs of a financial asset and of allocating interest expense over the relevant period. The effective interest rate is the rate which exactly discounts estimated future cash payments through the expected life of the financial asset.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its financial 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.

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.

1.6
Cash and cash equivalents

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.

 

Cash and cash equivalents includes £2,194,040 (2022: £1,904,040) restricted from use in the business as held in the company's reserve accounts under the terms of its senior loan facility.

WILLCARE (MIM) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.7
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

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.

Classification of financial liabilities

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

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies, 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.

Other financial liabilities

Derivatives, including interest rate swaps, 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 separately recognised in profit or loss in finance costs or finance income as appropriate.

 

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.

1.8
Equity instruments

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.

WILLCARE (MIM) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.9
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

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

 

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

1.10

Finance issue costs

The costs incurred directly in connection with the financing of the project undertaken by the company are deducted from the proceeds raised and amortised over the period of the financing, in accordance with Section 11 of FRS 102.

WILLCARE (MIM) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.11

Service Concession Accounting

The company is an operator of a Public Finance Initiative ("PFI") contract. The company entered into a project agreement (the "contract") with Brent Primary Care Trust (now NHS Property Services) (the "Trust") to design, build, finance, operate and maintain community hospitals. The contract negotiations were successfully completed on 6th December 2002 and construction commenced on 6th January 2003. The project has been fully operational since April 2005. The concession period is for 30 years (post Construction), during this period the company has contracted to provide soft services to the Trust. The company has passed these obligations down to a subcontractor via a subcontract. The obligation to provide major maintenance works (lifecycle) is undertaken by the Facilities Management Provider, however the risk that the costs exceed those forecast (and the benefit in the case of savings) in the financial model is borne by the company. The timing and extent of the major maintenance works is a key assumption that will affect the cashflows of the company, further information is shown in Note 2. The contract does not entitle the Trust to any share of the profits of the company.

 

The Trust are entitled to terminate the Contract at any time by giving 12 months written notice. If the Trust exercise this right they are liable to pay the company compensation as set out in the Contract, which would include the senior debt, redundancy costs and other Facilities Management provider losses and the market value of the subordinated debt and shareholder equity.

 

During the construction phase of the project, all attributable expenditure was included in amounts recoverable on contracts and turnover. Upon becoming operational, the costs were transferred to the financial asset. During the operational phase income is allocated between interest receivable and the financial asset using a project specific interest rate. The remainder of the PFI unitary charge income is included within turnover in accordance with FRS102 section 23. The company recognises income in respect of the services provided as it fulfils its contractual obligations in respect of those services and in line with the fair value of the consideration receivable in respect of those services.

2
Judgements and key sources of estimation uncertainty

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.

Critical judgements

There are not deemed to be any critical judgements within these financial statements.

WILLCARE (MIM) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Service concession arrangement

Accounting for the service concession contract and financial asset requires of estimation of service margins, interest rates and associated amortisation profile which is based on forecasted results of the service concession contract. Lifecycle maintenance costs are a significant proportion of future expenditure. Given the length of the Company's service concession contract, the forecast of lifecycle maintenance costs is subject to significant estimation uncertainty and changes in the amount and timing of expenditure could have a significant impact on the Company. As a result, there is a significant level of judgement applied in estimating future lifecycle costs. To reduce the risk of misstatement, future estimates of expenditure are prepared by maintenance experts on an asset by asset basis and periodic technical evaluations of the physical condition of the facilities are undertaken. Comparisons of actual expenditure are compared to the lifecycle maintenance forecast, and in the current year, the forecast was for a total spend of £464,360. The actual spend was £359,177. If lifecycle costs cumulatively, over the remainder of the concession increased or decreased by 5%, the impact would be a decrease or increase in profit of £112,020 and £109,391 respectively.

 

3
Turnover and other revenue

The turnover and profit before taxation are attributable to the one principal activity of the company.

 

All turnover originates in the United Kingdom.

 

All turnover relates to services provided under the Service Agreement including all variations to the contract since the date of commencement.

 

2023
2022
£
£
Turnover analysed by class of business
Service revenue
4,112,516
3,388,641
Other revenue
1,352,910
534,428
5,465,426
3,923,069
4
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
24,035
15,350

Auditors remuneration is payable to Johnston Carmichael LLP.

 

No non audit services have been provided in either year.

WILLCARE (MIM) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 18 -
5
Employees

The average monthly number of persons (including directors) employed by the group and the company during the year was none (2022: none). The directors did not receive any remuneration from the group during the year (2022: £nil). During the year the Group paid £100,000 (2022: £100,000) to Infrastructure Investments Holdings Limited, a related entity, for provision of two directors.

6
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
671,560
659,100
Interest payable to group undertakings
171,157
180,625
842,717
839,725
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Financial asset interest receivable
907,000
953,363
Interest on financial assets not measured at fair value through profit or loss
907,000
953,363
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
293,935
593,418

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

2023
2022
£
£
Profit before taxation
1,747,126
3,534,812
Expected tax charge based on the standard rate of corporation tax in the UK of 22.00% (2022: 19.00%)
384,368
671,614
Tax effect of income not taxable in determining taxable profit
(90,433)
(78,196)
Taxation charge for the year
293,935
593,418
WILLCARE (MIM) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
8
Taxation
(Continued)
- 19 -

Factors impacting the tax charge:

 

The March 2021 Budget announced that a rate of 25% would apply from 1 April 2023. This has increased the group’s current tax charge accordingly.

9
Dividends
2023
2022
£
£
Final paid
560,000
1,033,000
10
Financial assets
Financial assets
£
Cost
At 1 October 2022
18,173,475
Income recognised in the profit or loss
Service revenue
4,112,516
Interest income
907,000
5,019,516
Other movements
Cash received
(5,725,084)
(705,568)
At 30 September 2023
17,467,907
Fair Value
At 30 September 2023
17,467,907
At 30 September 2022
18,173,475
11
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
14,324
12,503
Instruments measured at fair value through profit or loss
-
4,348
Carrying amount of financial liabilities
Measured at fair value through profit or loss
103,693
-
Measured at amortised cost
13,166,002
14,168,792
WILLCARE (MIM) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
11
Financial instruments
(Continued)
- 20 -

Financial assets measured at amortised cost relate to trade debtors.

 

Financial liabilities measured at fair value through profit and loss relate to interest rate swap, which has been determined by reference to prices available from the markets on which the instruments involved are traded. The cashflows arising from the interest rate swap will continue until their maturity 31 March 2031, coincidental with the repayment of the term loan.

 

Financial liabilities measured at amortised cost comprise subordinated loans, bank loans, trade creditors and other creditors.

12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
14,324
12,503
Derivative financial instruments
-
4,348
Prepayments and accrued income
533,545
497,936
547,869
514,787
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Subordinated loans
15
113,448
68,285
Bank loans
15
947,994
856,994
Trade creditors
318,461
251,245
Corporation tax
471,656
964,435
Other taxation and social security
217,943
222,123
Derivative financial instruments
103,693
-
0
Other creditors
20,188
-
0
Accruals and deferred income
375,584
526,801
2,568,967
2,889,883

Subordinated loans are shown net of issue costs £3,333 (2022: £3,333).

14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Subordinated loans
15
1,056,028
1,132,687
Bank loans and overdrafts
15
9,809,299
10,757,780
Accruals and deferred income
525,000
575,000
11,390,327
12,465,467

Subordinated loans are shown net of issue costs £35,008 (2022: £38,339).

WILLCARE (MIM) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
14
Creditors: amounts falling due after more than one year
(Continued)
- 21 -
Amounts included above which fall due after five years (excluding derivative financial instruments and gross of issue costs) are as follows:
Payable by instalments
5,512,808
6,839,702
15
Loans and overdrafts
2023
2022
£
£
Subordinated loans - Series 1
706,334
730,915
Subordinated loans - Series 2
475,190
482,824
Subordinated loans - Series 3
26,293
28,905
Subordinated loans - issue costs
(38,341)
(41,672)
Bank loans
10,757,293
11,614,774
11,926,769
12,815,746
Payable within one year
1,061,442
925,279
Payable after one year
10,865,327
11,890,467

The bank loan £10,757,293 (2022: £11,614,773) is secured over the company's financial asset and by a fixed and floating charge over all of the remaining assets of the company.

 

The term loan represents amounts drawn down on an available facility of up to £26,080,000. Interest is chargeable on the loan at a rate of LIBOR plus 1.05%. The terms of the loan provides for repayment by instalments every six months commencing from September 2005 until the termination date, which is defined as March 2032.

The subordinated loan notes are stated net of issue costs of £38,341 (2022: £41,672). The Series 1 subordinated loan notes of £1,395,000 attract interest at 14% per annum from the date of building services completion, which was March 2005.

 

The Series 2 subordinated loan notes of £500,000 attract interest at 7% per annum from commencement of the loan in December 2002 until date of completion and 14% thereafter.

 

The Series 3 subordinated loan notes of £59,580 attract interest at 7% per annum from the date of building services completion, which was March 2005.

 

The loan notes are repayable in six monthly instalments commencing from September 2005 until the termination date, which is defined as March 2032. All loan notes are held by the parent undertaking, Willcare Holdings Limited.

 

16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
10,000
10,000
10,000
10,000
WILLCARE (MIM) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
16
Share capital
(Continued)
- 22 -

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meeting of the company.

17
Related party transactions
Transactions with related parties

The company is wholly owned by Infrastructure Investment Holdings Limited and has taken advantage of the exemption in section 33 of FRS 102 'Related Party Disclosures', that allows it not to disclose transactions with wholly owned members of a group. Balances held with related parties are disclosed in notes 13 and 14.

 

During the year, directors fees of £100,000 (2022: £100,000) were paid to Infrastructure Investment Holdings Limited, an intermediate holding company. At the balance sheet date, the company owed £50,000 (2022: £50,000) as accrued expenditure to Infrastructure Investment Holdings Limited.

18
Ultimate controlling party

The company is a wholly owned subsidiary of Willcare Holdings Limited, a company registered in England and Wales. Willcare Holdings Limited is a wholly owned subsidiary of Infrastructure Investments Holdings Limited, a company registered in England and Wales.

 

Infrastructure Investments Holdings Limited is a subsidiary undertaking of Infrastructure Investments Limited Partnership (acting by its general partner, Infrastructure Investments General Partner Limited), which is incorporated in England and Wales.

 

The ultimate controlling party is HICL Infrastructure Company Limited, a company incorporated in Guernsey, Channel Islands. The accounts are available from 1 Le Truchot, St Peter Port, GY1 1WD, Guernsey.

 

On 1 April 2019, HICL Infrastructure Company Limited transferred all of its assets to HICL Infrastructure Plc. As a result, the ultimate beneficial owner of the company changed from HICL Infrastructure Company Limited to HICL Infrastructure Plc, a company listed on the London Stock Exchange and Registered at 12 Charles II Street, London, SW1Y 4QU.

The smallest group in which the results of the company are consolidated is that headed by Willcare Holdings Limited. The consolidated accounts are available from Companies House, Crown Way, Cardiff, CF14 3UZ.

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