Company registration number 04738635 (England and Wales)
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
COMPANY INFORMATION
Directors
JS Gordon
CT Solley
KA Cunningham
(Appointed 25 May 2023)
G Connelly
(Appointed 27 June 2023)
MHBG Gansey
(Appointed 31 January 2024)
Secretary
Resolis Limited
Company number
04738635
Registered office
1 Park Row
Leeds
United Kingdom
LS1 5AB
Auditor
Johnston Carmichael LLP
Bishop's Court
29 Albyn Place
Aberdeen
AB10 1YL
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
CONTENTS
Page
Directors' report
1 - 2
Independent auditors' report
3 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 18
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the Company is to design, build, finance and operate new courts and offices in Bristol and Worle in accordance with an agreement with the Lord Chancellor on behalf of Her Majesty's Court Service.
Financial close was achieved on 23 August 2004. The concession period is until 18 March 2034. The completion certificate for the initial construction works was received on 28 September 2007.
There have not been any significant changes in the Company's principal activities in the year under review. The Directors are not aware, at the date of this report, of any major changes in the Company's activities in the next year.
In September 2007, the Company completed construction on Bristol Courts, the final phase. Full unitary revenue has been received from Her Majesty's Court Service in monthly instalments since the site became fully operational, with only minor performance deductions suffered during the year.
Results and dividends
The profit for the year after taxation amount to £777,000 (2022: £510,000).
Ordinary dividends were paid amounting to £163,181. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
T Ryan
(Resigned 31 January 2024)
JS Gordon
CT Solley
R Burge
(Resigned 25 May 2023)
KA Cunningham
(Appointed 25 May 2023)
N Kaznacheieva
(Resigned 27 June 2023)
G Connelly
(Appointed 27 June 2023)
MHBG Gansey
(Appointed 31 January 2024)
Auditor
The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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.
Going Concern
These financial statements have been prepared on the going concern basis for the reasons set out in the Accounting Policies.
Small companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
On behalf of the board
KA Cunningham
Director
24 June 2024
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
INDEPENDENT AUDITORS' REPORT
TO THE MEMBER OF SERVICES SUPPORT (AVON & SOMERSET) LIMITED
- 3 -
Opinion
We have audited the financial statements of Services Support (Avon & Somerset) Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, balance sheet, 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 FRS 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 company's affairs as at 31 December 2023 and of its 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.
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 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.
The other information comprises the information included in the annual report other than the financial statements and our auditors' 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:
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 has been prepared in accordance with applicable legal requirements.
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBER OF SERVICES SUPPORT (AVON & SOMERSET) LIMITED
- 4 -
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 the directors' responsibilities statement set out on , 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.
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 an auditors' 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 is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBER OF SERVICES SUPPORT (AVON & SOMERSET) LIMITED
- 5 -
We obtained an understanding of the legal and regulatory frameworks that are applicable to company and the sector in which it operates, focusing on 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 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:
Recalculating the unitary charge received by taking the base charge per the project agreement and uplifting for RPI;
Agreeing a sample of months' income receipts to invoice and bank statements;
Performing an assessment on the service margins used in the year and agreeing margins used to the active financial models;
Reconciling the finance income and amortisation to the finance debtor reconciliation to ensure allocation methodology is in line with contractual terms and relevant accounting standards;
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 are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBER OF SERVICES SUPPORT (AVON & SOMERSET) LIMITED
- 6 -
This report is made solely to the company's member 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 member those matters we are required to state to the member in an auditors' 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 member for our audit work, for this report, or for the opinions we have formed.
Jenny Junnier
Senior Statutory Auditor
For and on behalf of Johnston Carmichael LLP
24 June 2024
Chartered Accountants
Statutory Auditor
Bishop's Court
29 Albyn Place
Aberdeen
AB10 1YL
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£'000
£'000
Turnover
5,027
4,039
Cost of sales
(3,393)
(2,804)
Gross profit
1,634
1,235
Administrative expenses
(413)
(312)
Operating profit
1,221
923
Interest receivable and similar income
3,080
3,186
Interest payable and similar expenses
6
(3,285)
(3,480)
Profit before taxation
1,016
629
Tax on profit
7
(239)
(119)
Profit for the financial year
777
510
Other comprehensive income
Cash flow hedges (loss)/gain arising in the year
(387)
7,490
Tax relating to other comprehensive income
96
(1,872)
Total comprehensive income for the year
486
6,128
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£'000
£'000
£'000
£'000
Current assets
Debtors falling due after more than one year
39,880
42,604
Debtors falling due within one year
3,694
2,996
Investments
10
2,750
Cash at bank and in hand
2,077
5,375
48,401
50,975
Creditors: amounts falling due within one year
11
(4,683)
(5,284)
Net current assets
43,718
45,691
Creditors: amounts falling due after more than one year
12
(40,316)
(42,412)
Provisions for liabilities
13
(200)
Net assets
3,402
3,079
Capital and reserves
Called up share capital
14
50
50
Hedging reserve
15
(1,916)
(1,625)
Profit and loss reserves
16
5,268
4,654
Total equity
3,402
3,079
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 24 June 2024 and are signed on its behalf by:
KA Cunningham
Director
Company registration number 04738635 (England and Wales)
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Hedging reserve
Profit and loss reserves
Total
Notes
£'000
£'000
£'000
£'000
Balance at 1 January 2022
50
(7,243)
4,144
(3,049)
Year ended 31 December 2022:
Profit
-
-
510
510
Other comprehensive income:
Cash flow hedges gains
-
7,490
-
7,490
Tax relating to other comprehensive income
-
(1,872)
(1,872)
Total comprehensive income
-
5,618
510
6,128
Balance at 31 December 2022
50
(1,625)
4,654
3,079
Year ended 31 December 2023:
Profit
-
-
777
777
Other comprehensive income:
Cash flow hedges gains
-
(387)
-
(387)
Tax relating to other comprehensive income
-
96
96
Total comprehensive income
-
(291)
777
486
Dividends
-
-
(163)
(163)
Balance at 31 December 2023
50
(1,916)
5,268
3,402
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information
Services Support (Avon & Somerset) Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1 Park Row, Leeds, United Kingdom, LS1 5AB.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The directors note the company's net assets of £3,402,000 (2022: £3,079,000).true
In assessing the going concern status of the company the directors have reviewed the company's projected cash flows by reference to a financial model covering accounting periods up to March 2034. The financial model has been prepared on the basis of a detailed analysis of the company's finances and contracts.
Having examined the current status of the Company's principal contracts and likely developments in the foreseeable future, the directors consider that the company will be able to settle its liabilities as they fall due and accordingly the financial statements have been prepared on a going concern basis. More information is provided in the notes to the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.4
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.
The Company is obligated to keep a separate cash reserves in respect of future maintenance costs, a lifecycle reserve and change in law reserve. This restricted cash balance, which is shown at the reporting date within the "cash at bank and in hand" and "short term deposits" balance, amounts to £3,619,000 at the year end (2022: £3,089,000)
1.5
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 balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
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 and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.6
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.
1.7
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.8
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.9
Costs relating to lifecycle expenditure are expensed on actual spend on lifecycle costs, and an accrual is recognised for profiled lifecycle expenditure which was included as part of the financial close modelling.
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
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
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
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.
3
Auditors' remuneration
2023
2022
Fees payable to the company's auditor and associates:
£'000
£'000
For audit services
Audit of the financial statements of the company
14
13
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was nil (2022: nil).
5
Directors' remuneration
No directors received any remuneration for services to the Company during the year (2022: £nil)
Fees for directors services were paid to Aberdeen Infrastructure Limited £60,994 (2022: £53,735), Jura Acquisition Limited £60,994 (2022: £53,735) and DIF Infra Yield 1 UK Limited £30,504 (2022: £22,188)
The Company is managed by an external Management Service Provider that reports to the Directors.
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
6
Interest payable and similar expenses
2023
2022
£'000
£'000
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
2,235
659
Interest payable to group undertakings
1,051
1,071
Commitment fee on undrawn loan facility
18
29
3,304
1,759
Other finance costs:
Finance costs for financial instruments measured at fair value through profit or loss
(36)
1,703
Amortised debt issue costs
17
18
3,285
3,480
7
Taxation
2023
2022
£'000
£'000
Current tax
UK corporation tax on profits for the current period
239
119
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2023
2022
£'000
£'000
Reclassifications from equity to profit or loss:
Relating to cash flow hedges
(96)
1,872
Corporation tax remained at 19% until March 2023. From 2023 the main rate increased to 25% for business profits made by the company over £250,000. A small profit rate was also introduced for companies with profits of £50,000 or less so that they will continue to pay corporation tax at 19%. Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective corporation tax rate. The company has assessed the impact of this change and consider that the full rate of 25% will apply. The deferred tax asset at 31 December 2023 has been calculated based on the rate of 25%.
8
Financial instruments
2023
2022
£'000
£'000
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
2,750
-
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
2,556
2,170
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Financial instruments
(Continued)
- 15 -
Financial instruments measured at fair value
The fair value of interest rate swaps is based on broker quotes. Those quotes are tested for reasonableness by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for a similar instrument the measurement date.
Hedge accounting
Derivative financial instruments designated as hedges of variable interest rate risk on an interest rate swap.
To hedge the potential movement in the interest cash flows associated with the SONIA rate used for the bank term loan, the Company has entered into fixed interest rate swap with a nominal value equal to the initial borrowings with the same term as the loans and interest payment dates. These results in the Company paying 5.37% per annum and receiving SONIA.
The derivatives are accounted for as a cash flow hedge in accordance with FRS 102 section 1A small entities and have the fair values. The cashflows arising from the interest rate swaps will continue until their maturity in 2032, coincidental with the repayment of the term loans. The change in fair value in the period was an increase of £386,000 (2022: an decrease of £7,490,000) with the entire change being recognised in other comprehensive income as the swaps are considered to be 100% effective.
Debtors
2023
2022
Amounts falling due within one year:
£'000
£'000
Trade debtors
1,038
962
Finance debtor
2,599
1,997
Prepayments and accrued income
57
37
3,694
2,996
2023
2022
Amounts falling due after more than one year:
£'000
£'000
Finance debtor
39,241
42,062
Deferred tax asset (note )
639
542
39,880
42,604
Total debtors
43,574
45,600
The finance debtor represents payments due from in respect of the Project Agreement. These payments are received over the remaining life of the agreement.
10
Current asset investments
2023
2022
£'000
£'000
Short term deposits
2,750
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
11
Creditors: amounts falling due within one year
2023
2022
£'000
£'000
Bank loans
2,482
2,332
Trade creditors
576
402
Corporation tax
112
17
Other taxation and social security
285
312
Accruals and deferred income
1,228
2,221
4,683
5,284
12
Creditors: amounts falling due after more than one year
2023
2022
Notes
£'000
£'000
Bank loans and overdrafts
30,946
33,428
Other borrowings
6,814
6,814
Derivative financial instruments
2,556
2,170
40,316
42,412
The secured senior loan represents amounts borrowed under the Facility Agreement with a syndicate of banks in order to finance the construction of the project.
The loan is secured by a fixed and floating charge over all the shares of the Services Support (Avon & Somerset) Limited.
The loan is repayable in instalments based on an agreed percentage amount of the total facility per annum until September 2032.
Interest on the facility is charged at rates linked to SONIA.
Amounts included above which fall due after five years are as follows:
Payable by instalments
18,159
21,824
Payable other than by instalments
6,814
6,814
24,973
28,638
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
13
Provisions for liabilities
2023
2022
£'000
£'000
-
200
A provision has previously been made in respect of fire stopping remedial works to the car park and other floors of the Bristol Magistrates Court. The provision is directors' best current estimate of the cost for the implied works. The process for a formal tender has started at the end of which the true costs bill be known.
At 31 December 2022 the provision stood at £200,000 and during the year the directors, based on updated information on the cost of works, released the provision to £nil as the works were completed and paid for through Lifecycle.
Movements on provisions:
£'000
At 1 January 2023
200
Reversal of provision
(200)
At 31 December 2023
-
14
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
Ordinary shares of £1 each
50,000
50,000
50
50
15
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred net of the deferred tax impact provided.
16
Profit and loss reserves
The profit and loss reserve contains the retained earnings carried forward.
17
Related party transactions
As a wholly owned subsidiary of Services Support (Avon & Somerset) Holdings Limited, the Company has taken advantage of the exemption under Financial Reporting Standard 102 not to provide information on related party transactions with other undertakings within the Services Support (Avon & Somerset) Holdings Limited Group.
SERVICES SUPPORT (AVON & SOMERSET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
18
Parent company
As a wholly owned subsidiary of Services Support (Avon & Somerset) Holdings Limited.
The Company’s ultimate and immediate parent company and controlling entity, and the largest and smallest group in which its results are consolidated is Service Support (Avon & Somerset) Holdings Limited, a company incorporated and registered in England and Wales. Copies of the parent company accounts are available from Companies House, Crown Way, Cardiff, CF14 3UZ.
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