Company registration number 02683437 (England and Wales)
CAPITA INTERNATIONAL LIMITED
ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CAPITA INTERNATIONAL LIMITED
COMPANY INFORMATION
Directors
Capita Corporate Director Limited
Y N Doshi
Secretary
Capita Group Secretary Limited
Company number
02683437
Registered office
65 Gresham Street
London
England
EC2V 7NQ
Banker
Barclays Bank PLC
1 Churchill Place
London
United Kingdom
E14 5HP
CAPITA INTERNATIONAL LIMITED
CONTENTS
Page
Strategic report
1 - 6
Directors' report
7 - 8
Income statement
9
Balance sheet
10 - 11
Statement of changes in equity
12
Notes to the financial statements
13 - 32
CAPITA INTERNATIONAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The Directors present their Strategic report and financial statements for the year ended 31 December 2023.

 

Capita International Limited ('the Company') is a wholly owned subsidiary of Capita plc. Capita plc, along with all its subsidiaries' is hereafter referred to as 'the Group'. The Company operates within the Capita Experience division of the Group.

Principal activities

The principal activity of the Company is to provide back office services to Group companies and external clients, this includes services such as voice, customer service, web development etc. Such contracts are serviced by the Group's Global Delivery Centre which includes offshore centers of South Africa, India and Poland. The Company also acts as an intermediate holding company for the Group.

 

As a part of a legal entity reorganisation, the Company transferred its Experience, Group & Technology and Software Solutions business to Capita Customer Management Limited during the year. Refer to note 19 of the financial statements for more information on business transfer.

Review of the business

As shown in Company's income statement on page 9, revenue has decreased from £116,657,950 in 2022 to £92,331,576 in 2023. The decrease is mainly on account of transfer of business during the year.

The Company's Operating profit has increased from £15,929,980 in 2022 to £16,793,398 in 2023 mainly on account of realised foreign exchange gains recorded in the current year.

 

Towards the end of 2022, the Group reorganised its technology software and solutions business and group support services business by transferring the underlying trade and assets from various Group companies in the UK into Capita Shared Services Limited (‘CSSL’).

 

CSSL’s principal activity is the provision of certain head office and shared services, such as finance and HR support, payroll, IT and software services, to other companies within the Group. CSSL recovers the cost of providing these shared services by charging the Group companies that benefit from them, including the Company. Prior to the aforementioned reorganisation, the charges for the provision of these services were lower.

 

The balance sheet on pages 10 to 11 of the financial statements shows the financial position at the year end. Net assets have increased from £127,314,303 in 2022 to £145,595,373 in 2023 primarily due to profits for the year.

Details of the amounts owed by/to its parent company and fellow subsidiary companies are shown in notes 13, 16 and 22 to the financial statements.

 

The key financial performance indicators used by the Group, on a consolidated basis, are adjusted revenue, adjusted profit before tax, adjusted basic/diluted earnings per share, free cash flow excluding business exits, and gearing ratios. The Group manages its operations on a divisional basis and consequently, some of these indicators are monitored at a divisional level. The performance of the Experience and Public Service divisions of the Group are discussed in the Group’s annual report which does not form part of this report.

CAPITA INTERNATIONAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties

The Company is exposed to a wide range of risks that, should they materialise, could have a detrimental impact on financial performance, reputation or operational resilience. The Company’s risk management framework provides a consistent approach to the identification, assessment, monitoring and reporting of risks and opportunities. The risk management process is based on risk registers and risk reporting at the established risk governance committees. Key risks are documented in the risk registers and have assigned risk owners who review them regularly, and report on them at least quarterly, as part of the risk reporting process. The strength of existing controls is evaluated to determine whether any further mitigating actions are needed to manage the risk level to within the risk appetite set by the Board.

 

The principal risks for the Company are:

 

Profitable growth

Attract new clients and retain existing clients on appropriate commercial terms.

 

Contract performance

Deliver services to clients in line with contractual and legal obligations.

 

Innovation

Innovate and develop new customer value propositions with speed and agility.

 

People attraction and retention

Attract, develop, engage and retain the right talent.

 

Financial stability

Maintain financial stability and achieve financial targets.

 

Cyber security

Protect our systems, networks and programs from unauthorised use and access.

 

ESG

Comply with regulatory and contractual requirements to drive a purpose driven organisation with the right focus on governance.

 

Safety and Health

Protect the safety, health and duty of care of all Capita’s employees, the people we work with and those affected by our acts and omissions.

 

Data governance and data privacy

Manage our data effectively (both clients and Capita) as a strategic asset across the organisation.

 

As a subsidiary of Capita plc, the Company is subject to controls and risk governance techniques applied across all the Group's businesses. Details of the specific risk assessments and mitigating actions are outlined on pages 57-63 of the Group's 2023 Annual Report.

CAPITA INTERNATIONAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Section 172 statement
Capita plc's section 172 statement applies to its Divisions and the Company to the extent it relates to the Company's activities. Common policies and practices are applied across the Group through divisional management teams and a common governance framework. The following disclosure describes how the Directors have regard to the matters set out in section 172(1)(a) to (f) and forms the Directors' statement as required under section 414CZA of the Companies Act 2006.

Further details of the Group's approach to each stakeholder are provided in Capita plc's section 172 statement on pages 45, 46 and 47 of Capita plc's 2023 Annual Report.

Our People

 

Why they are important

They deliver our business strategy; they support the organisation to build a values-based culture; and they deliver our products and services ensuring client satisfaction.

 

What matters to them

Flexible working; learning and development opportunities leading to career progression; fair pay and benefits as a reward for performance; and two-way communication and feedback.

 

How we engaged

 

Topics of engagement

 

Outcomes and actions

The 2023 employee survey showed key indices had either improved or remained steady with a five-point increase in the eNPS compared with 2022. 63% of colleagues who responded felt proud to work at Capita. We are developing and delivering a range of action plans, including ensuring our leaders feel confidence in, and ownership of Capita’s strategy, plans and successes, developing inclusive opportunities for internal career mobility.

 

In December 2023, the Board agreed that while the appointment of employee directors had been successful, it was appropriate for the Board to consider a wider level of engagement with colleagues, including site visits arranged for individual directors to meet with local management and colleagues at Capita’s businesses. In addition, the Board has appointed Nneka Abulokwe as the designated non-executive director to engage with colleagues. Adolfo Hernandez, our new CEO, has also commenced a series of breakfast sessions to meet with colleagues of differing seniority and at different locations throughout the Group. Janine Goodchild stepped down from the Board as an employee director on 31 December 2023.

 

The UK real living wage increase was applied from 1 April 2023. At the end of 2023, we took the difficult decision to withdraw from the UK’s real living wage. Since 2020, the Group has increased the salaries of our lowest earners by 22% and the 2024 real living wage increase of 10.1% was not something we could commit to given the need for Capita to remain cost competitive and reflecting the fact that this is not a cost we are able to pass on to clients.

 

The global career path framework which defines career levels, career job content, and reward framework within Capita was launched during the year.

CAPITA INTERNATIONAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Section 172 statement (continued)

Our people (continued)

 

Outcomes and actions (continued)

In October 2023, Capita was recognised by Forbes, as being one of the top companies for women, ranking at number 18 out of 400 global companies on their list.

 

We continued to promote our Speak Up policy throughout the organisation.

 

Risks to stakeholder relationship

 

Key metrics

Voluntary attrition, employee NPS, employee engagement Index and people survey completion level.

 

Clients and customers

 

Why they are important

They are recipients of Capita’s services; and Capita’s reputation depends on consistent and timely delivery of the services they need from us.

 

What matters to them

High-quality service delivery; delivery of transformation projects within agreed timeframes; and responsible and sustainable business credentials.

 

How we engaged

 

Topics of engagement

 

Outcomes and actions

Feedback provided to business units to address any issues raised; client value proposition teams supporting divisions with co-creation ideas; direct customer and sector feedback; and senior client partner programme undertaking client-focused growth sprints to build understanding of client issues and ideas to help address them.

 

Risks to stakeholder relationship

 

Key metrics

Customer NPS; specific feedback on client engagements.

CAPITA INTERNATIONAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Section 172 statement (continued)

Suppliers and Partners

 

Why they are important

They share our values and help us deliver our purpose; maintain high standards in our supply chain; and achieve social, economic and environmental benefits aligned to the Social Value Act. Our suppliers and partners provide additional expertise, skill and technology, elevating our offering.

 

What matters to them

Payments made within agreed payment terms; clear and fair procurement process; building lasting commercial relationships; and working inclusively with all types of business.

 

How we engaged

 

Topics of engagement

 

Outcomes and actions

Our supplier charter, which is available on our website, remains at the core of strengthening our commitments and sets out how we conduct business in an open, honest and transparent manner, and what we expect of our suppliers. This year, it was refreshed and relaunched.

 

To understand Capita’s Scope 3 carbon footprint, a supplier engagement programme was also undertaken with suppliers accounting for £1bn annual spend (over 50% of the supply chain by spend) to ask them to disclose their carbon emissions to CDP.

 

During 2023, 99% of our suppliers were paid within 60 days.

 

Risks to stakeholder relationship

 

Key metrics

99% of supplier payments within agreed terms; SME spend allocation; and supplier diversity profile.

CAPITA INTERNATIONAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
Section 172 statement (continued)

Society

 

Why they are important

Capita is a provider of key services to government impacting a large proportion of the population.

 

What matters to them

Social mobility; youth skills and jobs; digital inclusion; diversity and inclusion; climate change; business ethics; accreditations and benchmarking; and cost of living crisis.

 

How we engaged

 

Topics of engagement

 

Outcomes and actions

Youth and employability programme such as Social Shifters; ranked 18 on the Forbes Global list of top employers for women; a 5% reduction in our gender pay gap (compared with 2022); awarded Employer’s Network for Equality and Inclusion; achieved a silver Tidemark and an A CDP (Carbon Disclosure Project) score as well as a silver medal in EcoVadis for Capita plc.

 

Risks to stakeholder relationship

 

Key metrics

Community investment, workforce diversity and ethnicity data, including pay gaps.

On behalf of the board

Y N Doshi
Director
14 May 2024
CAPITA INTERNATIONAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -

The Directors present their Directors' Report and Financial statements for the year ended 31 December 2023.

Results and dividends

The results for the year are set out on page 9.

Directors

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

Capita Corporate Director Limited
Y N Doshi
Qualifying third party indemnity provisions

The Company has granted indemnity to the Directors of the Company against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. This qualifying third party indemnity provision remains in force as at the date of approving the Directors' report.

Political donations

The Company made no political donations and incurred no political expenditure during the year (2022: £nil).

Business relationships

Details regarding relationships with suppliers, clients and others, together with further cross-references, are provided in the section 172 statement on pages 3 to 6.

Post balance sheet date events

There are no significant events which have occurred after the reporting period.

Environment

The Company recognises the importance of its environmental responsibilities, monitors its impact on the environment, and designs and implements policies to reduce any damage that might be caused by the it’s activities. The Company operates in accordance with Group policies, which are described in the Group’s 2023 annual report that does not form part of this report. Initiatives designed to minimise the Company’s impact on the environment include safe disposal of waste, recycling and reducing energy consumption.

CAPITA INTERNATIONAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
Statement of Directors' responsibilities

The Directors are responsible for preparing the Strategic report, the Directors’ 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 they have elected to prepare the financial statements in accordance with United Kingdom ('UK') accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 101 Reduced Disclosure Framework.

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 its profit or loss 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.

 

Strategic report

In accordance with s414c(11) of the Companies Act 2006, the Company has set out certain information in its Strategic report that is otherwise required to be disclosed in the Directors' report. This includes information regarding results and activities and a description of the principle risks and uncertainties facing the Company.

On behalf of the board
Y N Doshi
Director
14 May 2024
CAPITA INTERNATIONAL LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Revenue
3
92,331,576
116,657,950
Cost of sales
(78,840,595)
(101,348,218)
Gross profit
13,490,981
15,309,732
Administrative income
3,302,417
620,248
Operating profit
4
16,793,398
15,929,980
Investment income
5
7,102,510
87,413,032
Other income
6
3,448,384
-
0
Impairments
7
(8,193,647)
(3,582,217)
Net finance income
8
4,618,951
7,213,128
Profit before tax
23,769,596
106,973,923
Income tax charge
9
(5,488,526)
(4,643,663)
Profit and total comprehensive income for the year
18,281,070
102,330,260

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

The notes and information on pages 13 to 32 form an integral part of these financial statements.

CAPITA INTERNATIONAL LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
Non-current assets
Property, plant and equipment
10
-
0
2,122
Investments in subsidiaries
11
52,032,950
89,040,785
Deferred tax assets
9
-
0
129,975
52,032,950
89,172,882
Current assets
Trade and other receivables
13
118,233,020
82,897,913
Cash and cash equivalents
14
168,231
-
0
118,401,251
82,897,913
Total assets
170,434,201
172,070,795
Current liabilities
Trade and other payables
16
15,298,374
35,310,771
Deferred income
17
-
0
503,600
Financial liabilities
15
-
0
1,942,651
Income tax payable
9,540,454
6,999,470
Total liabilities
24,838,828
44,756,492
Net assets
145,595,373
127,314,303
CAPITA INTERNATIONAL LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2023
31 December 2023
2023
2022
Notes
£
£
- 11 -
Capital and reserves
Issued share capital
18
3
3
Retained earnings
145,595,370
127,314,300
Total equity
145,595,373
127,314,303

The notes and information on pages 13 to 32 form an integral part of these financial statements.

For the financial year ended 31 December 2023 the company was entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies.

The Directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

These financial statements were approved by the board of directors and authorised for issue on
14 May 2024
14 May 2024
and are signed on its behalf by:
Y N Doshi
Director
Company registration number 02683437 (England and Wales)
CAPITA INTERNATIONAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Retained earnings
Total equity
£
£
£
At 1 January 2022
3
24,984,040
24,984,043
Profit for the year
-
102,330,260
102,330,260
At 31 December 2022
3
127,314,300
127,314,303
Profit for the year
-
18,281,070
18,281,070
At 31 December 2023
3
145,595,370
145,595,373
Share capital

The balance classified as share capital is the nominal proceeds on issue of the Company's equity share capital, comprising 3 ordinary shares of £1.00 each.

Retained earnings

Net profits accumulated in the Company after dividends are paid.

The notes and information on pages 13 to 32 form an integral part of these financial statements.

CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
1.1
Basis of preparation

Capita International Limited is a private company limited by shares incorporated in England and Wales. The registered office is 65 Gresham Street, London, England, EC2V 7NQ. The company's principal activities and nature of its operations are disclosed in the Directors' report.

The financial statements have been prepared under the historical cost basis except where stated otherwise and in accordance with applicable accounting standards.

In determining the appropriate basis of preparation for the annual report and financial statements for the year ended 31 December 2023, the Company’s Directors (‘the Directors’) are required to consider whether the Company can continue in operational existence for the foreseeable future, being a period of at least 12 months following the approval of these financial statements. The Directors have concluded that it is appropriate to adopt the going concern basis, having undertaken a rigorous assessment of the financial forecasts, key uncertainties, sensitivities, and mitigations as set out below.

 

Accounting standards require that ‘the foreseeable future’ for going concern assessment covers a period of at least twelve months from the date of approval of these financial statements, although those standards do not specify how far beyond twelve months the Directors should consider. In its going concern assessment, the Directors have considered the period from the date of approval of these financial statements to 30 June 2025 (‘the going concern period’) and which aligns to the period considered by the Directors of the ultimate parent company, Capita plc.

 

Board assessment

The financial forecasts used for the going concern assessment are derived from financial projections for 2024-2025 for the Company which have been subject to review and challenge by management and the Directors. The Directors have approved the projections.

 

Inter-dependency with Capita plc ('the Group')

The Director’s assessment of going concern has considered the extent to which the Company’s ability to remain a going concern is inter-dependent with that of the Group. The Company has dependency with the Group in respect of the following:

 

Given the inter-dependency the Company has with the Group, the Directors have considered the financial position of the ultimate parent undertaking as disclosed in its most recent consolidated financial statements, being for the year ended 31 December 2023.

 

Ultimate parent undertaking – Capita plc

The Capita plc Board (‘the Board’) concluded that it was appropriate to adopt the going concern basis, having undertaken a rigorous assessment of the financial forecasts, key uncertainties, sensitivities, and mitigations when preparing the Group’s consolidated financial statements at 31 December 2023. These consolidated financial statements were approved by the Board on 5 March 2024 and are available on the Group’s website (www.capita.com/investors). Below is a summary of the position at 5 March 2024:

CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -

Basis of preparation (continued)

 

Accounting standards require that ‘the foreseeable future’ for going concern assessment covers a period of at least twelve months from the date of approval of these consolidated financial statements, although those standards do not specify how far beyond twelve months a Board should consider. In its going concern assessment, the Board has considered the period from the date of approval of these consolidated financial statements to 30 June 2025, which aligns with a period end and covenant test date for the Group, and has also allowed the Board to assess the liquidity impact of the borrowings that mature in January 2025 and April 2025. There are no other debt maturities in the period to 30 June 2025.

 

The base case financial forecasts used in the going concern assessment are derived from financial projections for 2024-2025 as approved by the Board in December 2023. Under the base case scenario, the Group’s transformation programme and completion of the Portfolio non-core business disposal programme in January 2024 has simplified and strengthened the business and facilitates further efficiency savings enabling sustainable growth in revenue, profit and cash flow over the medium term.

 

The base case projections used for going concern assessment purposes reflect business disposals completed up to the date of approval of these financial statements. The liquidity headroom assessment in the base case projections reflects the Group’s existing committed financing facilities and debt redemptions and does not reflect any potential future refinancing. The base case financial forecasts demonstrate liquidity headroom and compliance with all debt covenant measures throughout the going concern period to 30 June 2025.

 

In considering severe but plausible downside scenarios, the Board has taken account of the potential adverse financial impacts resulting from the following risks:

 

The likelihood of simultaneous crystallisation of the above risks is considered by the directors to be low. Nevertheless, in the event that simultaneous crystallisation were to occur, the Group would need to take action to mitigate the risk of insufficient liquidity and covenant headroom. In its assessment of going concern, the Board has considered the mitigations, under the direct control of the Group, that could be implemented including reductions or delays in capital investment, substantially reducing (or removing in full) bonus and incentive payments. Taking these mitigations into account, the Group’s financial forecasts, in a severe but plausible downside scenario, demonstrate sufficient liquidity headroom and compliance with all debt covenant measures throughout the going concern period to 30 June 2025.

 

Adoption of going concern basis by the Group:

Reflecting the continued benefits from the transformation programme delivered over the last few years and the Portfolio non-core business disposal programme completed in January 2024, coupled with the Board’s ability to implement appropriate mitigations should the severe but plausible downside materialise, the Group continues to adopt the going concern basis in preparing these consolidated financial statements. The Board has concluded that the Group will be able to continue in operation and meet its liabilities as they fall due over the period to 30 June 2025.

 

Conclusion

Although the Company has a reliance on the Group as detailed above, even in a severe but plausible downside for both the Company and the Group, the Directors are confident the Company will continue to have adequate financial resources to continue in operation and discharge its liabilities as they fall due over the period to 30 June 2025 (the ‘going concern period’). Consequently, the annual report and financial statements have been prepared on the going concern basis.

CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.2
Guarantor group

The Company forms part of a group of subsidiary companies owned directly or indirectly by Capita plc each of which guarantee the obligations under certain funding arrangements of Capita plc and Capita Holdings Limited. These funding arrangements are: Capita plc's principal bank credit facilities, and private placement loan notes issued by both Capita plc and Capita Holdings Limited. These arrangements are subject to ongoing compliance with covenants that include the Group’s maximum ratio of adjusted net debt to adjusted Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) and minimum interest cover. The covenant threshold tests are required to be carried out twice a year and the Group was in compliance with all debt covenants.

1.3
Compliance with accounting standards

The Company has applied FRS101 – Reduced Disclosure Framework in the preparation of its financial statements.

 

The Company has prepared and presented these financial statements by applying the recognition, measurement and disclosure requirements of international accounting standards in conformity with the requirements of the Companies Act 2006.

 

The Company's ultimate parent company, Capita plc, includes the Company in its consolidated statements. The consolidated financial statements are prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and with UK-adopted International Financial Reporting Standards ('IFRSs') and the Disclosure and the Transparency Rules of the UK's Financial Conduct Authority. They are available to the public and may be obtained from Capita plc’s website on https://www.capita.com/investors.

 

In these financial statements, the Company has applied the disclosure exemptions available under FRS 101 in respect of the following disclosures:

 

Since the consolidated financial statements of Capita plc include equivalent disclosures, the Company has also taken the disclosure exemptions under FRS 101 available in respect of the following disclosure:

CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.4
Change in accounting policies

The Company has adopted the new amendments to standards detailed below but they do not have a material effect on the Company's financial statements.

New amendments or interpretations

Effective date

IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts

1 January 2023

Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)    

1 January 2023

Definition of Accounting Estimates (Amendments to IAS 8)

1 January 2023

Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)

1 January 2023

International Tax Reform - Pillar Two Model Rules (Amendments to IAS 12)

1 January 2023

CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.5
Revenue

The Company operates a diverse range of businesses and accordingly applies a variety of methods for revenue recognition, based on the principles set out in IFRS 15.

 

The revenue and profits recognised in any period are based on the delivery of performance obligations and an assessment of when control is transferred to the customer.

 

Revenue is recognised either when the performance obligation in the contract has been performed (so ‘point-in-time’ recognition) or ‘over-time’ when control of the performance obligation is transferred to the customer.

 

For all contracts, the Company determines if the arrangement with a customer creates enforceable rights and obligations. This assessment results in certain Master Service Agreements ('MSAs') or frameworks not meeting the definition of a contract under IFRS 15 and as such the individual call-off agreements, linked to the MSA, are treated as individual contracts.

 

The Company enters into contracts which contain extension periods, where either the customer or both parties can choose to extend the contract or there is an automatic annual renewal, and/or termination clauses that could impact the actual duration of the contract. Judgement is applied to assess the impact that these clauses have when determining the appropriate contract term. The term of the contract impacts both the period over which revenue from performance obligations may be recognised and the period over which contract fulfilment assets and capitalised costs to obtain a contract are expensed.

 

For contracts with multiple components to be delivered, for example transformation; transitions and the delivery of outsourced services; management applies judgement to consider whether those promised goods and services are:

 

At a contract's inception the total transaction price is estimated, being the amount to which the Company expects to be entitled and has rights to under the contract. This includes an assessment of any variable consideration where the Company’s performance may result in additional revenues based on the achievement of agreed Key Performance Indicators ('KPIs'). Such amounts are only included based on the expected value or the most likely outcome, and only to the extent that it is highly probable that no revenue reversal will occur.

 

The transaction price does not include estimates of consideration resulting from change orders for additional goods and services unless these are already agreed.

 

Once the total transaction price is determined, the Company allocates this to the identified performance obligations in proportion to their relative standalone selling prices and recognises revenue when (or while) those performance obligations are satisfied.

 

The Company infrequently sells standard products with observable standalone prices due to the specialised services required by customers, consequently the Company applies judgement to determine an appropriate standalone selling price. More frequently, the Company sells customers bespoke solutions, and in these cases the Company typically uses the expected cost-plus margin or a contractually stated price approach to estimate the standalone selling price of each performance obligation.

 

The Company may offer price step downs during the life of a contract, but with no change to the underlying scope of services to be delivered. In general, any such variable consideration, price step down or discount is included in the total transaction price to be allocated across all performance obligations unless it relates to only one performance obligation in the contract.

CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
Revenue (continued)

For each performance obligation to be recognised over-time, the Company applies a revenue recognition method that faithfully depicts the Company’s performance in transferring control of the goods or services to the customer. This decision requires assessment of the real nature of the goods or services that the Company has promised to transfer to the customer. The Company applies the relevant output or input method consistently to similar performance obligations in other contracts.

 

Contract modifications

The Company’s contracts are often amended for changes in contract specifications and requirements. Contract modifications exist when the amendment either creates new or changes existing, enforceable rights and obligations.

 

The effect of a contract modification on the transaction price and the Company’s measure of progress for the performance obligation to which it relates, is recognised as an adjustment to revenue in one of the following ways:

a) prospectively as an additional separate contract;

b) prospectively as a termination of the existing contract and creation of a new contract;

c) as part of the original contract using a cumulative catch up; or

d) as a combination of (b) and (c).

 

In respect of contracts for which the Company has decided there is a series of distinct goods and services that are substantially the same and have the same pattern of transfer where revenue is recognised over-time, the modification will always be treated under either (a) or (b); (d) may arise when a contract has a part-termination and a modification of the remaining performance obligations.

 

The facts and circumstances of any contract modification are considered individually because the types of modifications will vary contract by contract and may result in different accounting outcomes. Judgement is applied in relation to the accounting for such modifications where the final terms or legal contracts have not been agreed prior to the period end. In these cases management need to determine if a modification has been approved and if it either creates new or changes existing, enforceable rights and obligations of the parties. Depending upon the outcome of such negotiations, the timing and amount of revenue recognised may be different in the relevant accounting periods. Modification and amendments to contracts are undertaken through an agreed formal process. For example, if a change in scope has been approved but the corresponding change in price is still being negotiated, management uses its judgement to estimate the change to the total transaction price. Importantly, any variable consideration is only recognised to the extent that it is highly probable that no revenue reversal will occur. For example, if pricing is subject to indexation based on an external metric (such as the Consumer Price Index ('CPI') or such as the Retail Price Index ('RPI')) then revenue related to the indexation will only be recognised after the relevant indexation is confirmed. Future indexation will not be recognised because it is not highly probable that a significant reversal of an indexation adjustment will not occur.

CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
Revenue (continued)

Contract types

The Company disaggregates revenue from contracts with customers by contract type, because management believe this best depicts how the nature, amount, timing, and uncertainty of the Company’s revenue and cash flows are affected by economic factors. Categories are: long-term contractual – greater than two years; short-term contractual – less than two years; and transactional. The years being measured from the service commencement date.

 

Long-term contractual - greater than two years

The Company provides a range of services under contracts with a duration of more than two years. The nature of contracts or performance obligations within this revenue type includes:

(i) long-term outsourced service arrangements in the public and private sectors; and

(ii) active software license arrangements.

 

The majority of long-term contractual contracts form part of a series of distinct goods and services because they are substantially the same service; and have the same pattern of transfer since the series constitutes services provided in distinct time increments (e.g. daily, monthly, quarterly or annually services) and therefore treats the series as one performance obligation.

 

Short-term contractual - less than two years

The nature of contracts or performance obligations within this revenue type includes:

(i) short-term outsourced service arrangements in the public and private sectors; and

(ii) software maintenance contracts.

 

The Company has assessed that maintenance and support (i.e., on-call support, remote support) for software licences is a performance obligation that can be considered capable of being distinct and separately identifiable in a contract if the customer has a passive licence. These recurring services are substantially the same because the nature of the promise is for the Company to ‘stand ready’ to perform maintenance and support when required by the customer.

 

Each day of ‘standing ready’ is distinct from each subsequent day and is transferred in the same pattern to the customer.

Deferred and accrued income

The Company’s customer contracts include a diverse range of payment schedules dependent upon the nature and type of goods and/or services being provided. This can include performance-based payments or progress payments and regular monthly or quarterly payments for ongoing service delivery. Payments for transactional goods and services may be at delivery date, in arrears or part payment in advance. The long-term service contracts tend to have higher cash flows early in the contract to cover transformational activities.

 

Where payments received are greater than the revenue recognised up to the balance sheet date, the Company recognises a deferred income contract liability for this difference. Where payments received are less than the revenue recognised up to the balance sheet date, the Company recognises an accrued contract income asset for this difference

 

 

 

 

 

 

CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.6
Property, plant and equipment

Property, plant and equipment are stated at cost less depreciation. Depreciation is provided at rates calculated to write-off the cost less estimated residual value of each asset over its expected useful life, as follows:

Tangible fixed assets are stated at cost less accumulated depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:

Computer equipment
3 - 5 years

 

The carrying values of property, plant and equipment are reviewed for impairment if events or changes in circumstance indicate that the carrying value may not be recoverable, and are written down immediately to their recoverable amount. Useful lives and residual values are reviewed annually and where adjustments are required these are made prospectively.

1.7
Investments

All investments are initially recorded at their cost. Subsequently they are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable.

 

At each reporting period, the Company assesses whether there are indicators to reverse the previously recognised impairment loss. The reversals of impairment are only recognised where there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised.

1.8
Financial instruments

Investments and other financial instruments

 

Classification

The Company classifies its financial instruments in the following measurement categories:

 

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.

CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -

Financial instruments (continued)

 

Trade and other receivables

Trade receivables are initially recognised at cost (being the same as fair value) and subsequently at amortised cost less any provision for impairment, to ensure the amounts recognised represent their recoverable amount.

 

For trade receivables, the Company applies the simplified approach permitted by IFRS 9 Financial instruments, resulting in trade receivables recognised and carried at original invoice amount less an allowance for any uncollectible amounts based on expected credit losses. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

 

The Company monitors the level of trade receivables on a monthly basis, continually assessing the risk of default by any counterparty. Each customer has an external credit score which determines the level of credit provided.

 

Derecognition: A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised (i.e., removed from the Company’s balance sheet) when (i) the rights to receive the cash flows from the asset have expired; or, (ii) the Company has transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risk and rewards of the asset; or, (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

 

Trade and other payables

Trade and other payables are recognised initially at cost (being same as fair value). Subsequent to initial recognition they are measured at amortised cost using the effective interest method.

 

Cash and cash equivalents

Cash in the balance sheet comprise cash at bank. Bank overdrafts are shown within current financial liabilities.

1.9
Taxation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -

Taxation (continued)

 

Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

 

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax assets and unused tax losses can be utilised, except where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

 

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

 

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

1.10
Foreign exchange

Monetary assets and liabilities denominated in foreign currencies are translated into British pounds sterling at the rates of exchange ruling at the balance sheet date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Transactions in foreign currencies are recorded at the rate of exchange ruling at the date of the transaction. All foreign exchanges gains/losses are recognised in the income statement.

1.11
Group accounts

The financial statements present information about the Company as an individual company and not about its Group. The Company has not prepared Group accounts because it is fully exempt from the requirement to do so by section 400 of the Companies Act 2006 since it is a subsidiary company of Capita plc, a company incorporated in England and Wales, and is included in the consolidated financial statements of that company.

1.12
Guarantee

Where the Company enters into financial guarantee contracts, the Company recognises the financial guarantee as an asset or liability at fair value. The fair value is the present value of the quantified benefit of the financial guarantee contract over the term of the financial guarantee contract plus or minus transaction costs directly attributable to the issue of the financial guarantee contract. The amount initially recognised is amortised to profit and loss in line with the underlying asset or liability, resulting in the fair value of the financial guarantee contract being zero at the point the underlying exposure is zero. In the event of a renewal or extension of the financial guarantee contract, the fair value at the point of renewal or extension is determined as at initial recognition and the resulting asset or liability is amortised to the profit and loss in line with the renewed or extended underlying asset or liability. Where the Company enters into financial guarantee contract in respect of a subsidiary, the Company recognises a corresponding increase or decrease in its investment in the subsidiary.

CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 23 -
1.13
Current vs Non-current classification

The Company presents assets and liabilities in the balance sheet based on whether they are current or non-current.

 

An asset is current when it is:

All other assets are classified as non-current.

 

A liability is current when:

The Company classifies all other liabilities as non-current.

1.14
Common control transactions

Where a business is transferred from one legal entity to another legal entity within the Capita Group under a Business Transfer Agreement ('BTA'), this is treated as a business combination under common control, and would therefore fall outside of the scope of IFRS 3 Business Combinations. As such, an accounting policy choice has been made for how common control transactions are dealt with across the Group, as follows:

2
Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with generally accepted accounting principles requires the Directors to make judgements and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of the financial statements and the reported income and expense during the reported periods. Although these judgements and assumptions are based on the Directors' best knowledge of the amount, events or actions, actual results may differ.

 

The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

 

The Company determines whether investments in subsidiaries are impaired based on impairment indicators. If an indicator is identified, an impairment test is performed. This involves estimation of the enterprise value of the investee which is determined based on the greater of discounted future cash flows at a suitable discount rate or through the recoverable value of the investments held by the investee company. Given the level of judgement and estimation involved in assessing future cash flows, it is reasonable possible that outcomes within the next financial year may be different from management's assumptions and require a material adjusting to the carrying value of investments.

CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
3
Revenue

The total revenue of the Company for the year has been derived from its principal activity largely undertaken in the United Kingdom.

4
Operating Profit
Notes
2023
2022
Operating Profit for the year is stated after charging/(crediting):
£
£
Income from foreign exchange differences
(3,634,439)
(1,000,244)
Depreciation of property, plant and equipment
10
2,122
8,374
Short term lease rentals
-
0
82,824
5
Investment income
2023
2022
£
£
Dividend income from shares in subsidiary companies
7,102,510
87,413,032
7,102,510
87,413,032

During the year, the Company received a dividend of £7,102,510 from its subsidiary Capita (South Africa) Pty Limited.

6
Other income
2023
2022
£
£
Intercompany write back
3,448,384
-
3,448,384
-
0
7
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in the income statement:

2023
2022
£
£
Impairment of investments in subsidiaries (refer to note 11)
8,193,647
3,582,217
8,193,647
3,582,217
CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
8
Net finance income
2023
2022
£
£
Interest income
Interest income on bank balance
74,028
-
0
Interest receivable from Group companies
4,544,923
298,985
Gain on settlement of internal hedging arrangements*
-
0
1,903,861
Mark to market gain on forward contracts
-
0
5,020,820
4,618,951
7,223,666
Interest expense
Interest expense on bank overdrafts and loans
-
0
(10,538)
-
0
(10,538)
Total net finance income
4,618,951
7,213,128

*Gain on settlement of internal hedging arrangements is in relation to back-to-back arrangement. In 2022, the Company had entered into internal hedges with its parent, Capita plc, in accordance with the Group’s risk management strategy. The Company did not have a direct relationship with third-party banks and was not party to the external derivatives but hedged its foreign exchange exposure through back-to-back arrangements with Capita plc. As a result of that arrangement Capita plc recognised a financial asset/liability in its balance sheet in respect of the fair value of the external derivative instrument and an equal, separate, and opposing intercompany balance with the Company in respect to the back-to-back arrangement.

 

9
Income tax
The major components of income tax charge are:
2023
2022
£
£
Current tax
UK corporation tax
5,090,151
4,407,054
Adjustments in respect of prior periods
43,249
67,430
Non-UK taxes
355,126
51,570
5,488,526
4,526,054
Deferred tax
Origination and reversal of temporary differences
764
(2,093)
Adjustment in respect of prior periods
(764)
119,702
-
0
117,609
Total tax charge
5,488,526
4,643,663
CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Income tax
(Continued)
- 26 -

The charge for the year can be reconciled to the profit per the income statement as follows:

2023
2022
£
£
Profit before taxation
23,769,596
106,973,923
Expected tax charge based on a corporation tax rate of 23.50% (2022: 19.00%)
5,585,855
20,325,045
Expenses not deductible for tax purpose
1,925,507
689,054
Non-taxable income
(2,479,956)
(16,608,635)
Adjustments in respect of current income tax of prior years
43,249
67,430
Adjustments in respect of deferred income tax of prior years
764
119,702
Impact of changes in statutory tax rates
(1,701)
(503)
Non-UK taxes
355,126
51,570
Tax on apportioned profits of controlled foreign company
59,682
-
Total adjustments
(97,329)
(15,681,382)
Total tax charge reported in the income statement
5,488,526
4,643,663

A change to the main UK corporation tax rate was substantively enacted on 24 May 2021. The rate applicable from 1 April 2023 increased from 19% to 25%.

10
Property, plant and equipment
Computer equipment
£
Cost
At 1 January 2023
19,086
Asset retirement
(19,086)
At 31 December 2023
-
0
Accumulated depreciation and impairment
At 1 January 2023
16,964
Charge for the year
2,122
Asset retirement
(19,086)
At 31 December 2023
-
0
Net book value
At 31 December 2023
-
0
At 31 December 2022
2,122
CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
11
Investments
Subsidiaries
£
Cost
At 1 January 2023
192,236,710
Disposals ◄
(29,159,251)
At 31 December 2023
163,077,459
Impairment
At 1 January 2023
103,195,925
Impairment charges ◙
8,193,647
Disposals ◄
(345,063)
At 31 December 2023
111,044,509
Net book value
At 31 December 2023
52,032,950
At 31 December 2022
89,040,785
CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Investments
(Continued)
- 28 -

During the year, the Company disposed it's investments in ThirtyThree USA Inc to Inspirit Pine Bidco Limited. The Company also sold it's investments in Capita Customer Solutions Limited to Capita Customer Management Limited at carrying value of £28,778,091.

 

The Company considered whether there was an indicator of impairment in investments in subsidiaries at 31 December 2023. At 31 December 2023 the Company’s ultimate parent company, Capita plc, identified an indicator of impairment existed due to the market capitalisation of the Group being below the carrying value of Capita plc’s net assets. As a key trading and holding company for the Group, this indicator of impairment is also considered to be relevant for the Company, and so an impairment test was carried out for the Company.

 

Impairment test was performed at the balance sheet date, comparing the carrying value of each subsidiary investment held by the Company with its recoverable amount. The recoverable amount has been determined using fair value less costs of disposal. For non-trading subsidiaries this is based on the net asset value of the entity as at 31 December 2023, which is considered to not be materially different to the fair value derived by other means. For all other entities, recoverable amount is estimated on a discounted cash flow basis. Recoverable amounts will also factor in the the recoverable amount of an entity’s direct and indirect subsidiaries.

 

For discounted cash flow calculations, the cash flow projections used for the impairment test are derived from the 2024-2026 business plans approved by the Board of Directors. Key assumptions in the BP include the delivery of planned revenue growth and the benefits that the cost reduction programme is anticipated to deliver. The enterprise value is then calculated based on the present value of estimated future cash flows discounted at the current market rate of return.

 

The long-term growth rate is based on economic growth forecasts by recognised bodies, and this has been applied to the forecast cash flows for the terminal period. The 2023 long-term growth rate is 1.7% (2022: 2.2%). The average pre-tax discount rate used for the impairment test is 11.0% (2022: 11.8%). Management estimates discount rates using pre-tax rates that reflect the latest market assumptions for the risk-free rate, the equity risk premium and the cost of debt, which are all based on publicly available external sources. Other than the impairment set out below, using this approach, the Company did not recognise any impairment during the year.

 

The Company, has impaired its investment in Capita Customer Services (Germany) Gmbh by £7,875,436 and its investment in Capita (210568) Limited (formerly known as AMT-Sybex Group Limited) by £318,211 on the basis of the recoverable value.

12
List of Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of company
Address
Nature of business
Class of
% Held
shares held
Direct
Indirect
Capita (South Africa) Pty Limited
1
Outsourcing Company
100.00
-
Capita Cyprus Holdings Limited
2
Holding Company
100.00
-
Capita Customer Services (Germany) GmbH
3
Outsourcing Company
100.00
-
Capita (Polska) sp. z o.o
4
Outsourcing Company
100.00
-
Capita (210568) Limited
5
Holding Company
100.00
-
Capita West GmbH
3
Management
and support
services
-
100.00
Full Circle Contact Centre
Services (Proprietary) Limited
1
Outsourcing Company
-
90.00
Capita (USA) Holdings Inc.
6
Holding Company
100.00
-
Capita Offshore Services Private Limited*
7
Dormant Company
100.00
-
CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
List of Subsidiaries
(Continued)
- 29 -

Registered office addresses:

1
8th Floor, Union Castle Building, 55 St Georges Mall, Cape Town, 8001, South Africa.
2
Themistokli Dervi, 3, Julia House, 1066, Nicosia, Cyprus.
3
Rudower Chaussee 4, 12489 Berlin, Germany.
4
Centrum Biurowe Lubicz Iul. Lubicz 23, , Krakow, 31-503, Poland, Poland.
5
Unit B, West Cork Business & Technology Park, Clonakilty, Co. Cork, P85 YH98, Ireland.
6
850 New Burton Road, Suite 201, Dover, DE 19904, United States.
7
Plant 6, Godrej & Boyce Complex LBS Marg, Pirojshahnagar, Vikhroli (West) Mumbai MH 400079, India.

*In liquidation

13
Trade and other receivables
Current
2023
2022
£
£
Trade receivables
-
0
161,755
Amounts due from Group companies
118,233,020
82,646,990
Other receivables
-
0
89,168
118,233,020
82,897,913

Amounts due to group companies are repayable on demand. These are not chargeable to interest except for the amounts due to Capita Plc, on which interest is charged as per the prevailing Bank of England rates.

 

In 2022, amounts due from parent and fellow subsidiary undertakings includes £4,675,308 arising from the back to back hedging arrangement undertaken with the Company's parent Capita plc.

14
Cash and cash equivalents
2023
2022
£
£
Cash at bank and in hand
168,231
-
0
168,231
-
0
15
Financial liabilities
Current
2023
2022
£
£
Bank overdrafts
-
0
1,942,651
-
0
1,942,651
CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
16
Trade and other payables
Current
2023
2022
£
£
Trade payables
3,896
5,075
Amount due to Group companies
15,294,478
34,524,399
Accruals
-
0
691,511
Other taxes and social security
-
0
89,786
15,298,374
35,310,771

Amounts due to group companies are repayable on demand.

17
Deferred income
2023
2022
£
£
Current
Deferred income
-
0
503,600
-
0
503,600
18
Share capital
2023
2022
2023
2022
Number
Number
£
£
Allotted, called up and fully paid
Ordinary of £1 each
At 1 January and 31 December
3
3
3
3
19
Common control transactions

As a part of the on-going legal entity reorganisation programme within the Capita Group, the trade and assets related to Experience, Group & Technology and Software Solutions business were transferred out of the Company by way of a Business Transfer Agreement ('BTA'). As both transferor and transferee companies for these BTAs were ultimately controlled by Capita plc, these are deemed to be business combinations under common control, with an accounting policy choice made as detailed in note 1.14. The following table shows the gross assets transferred and gross liabilities transferred as part of each BTA; consideration received by the Company:

Name of Company

Date of transfer

Assets

Liabilities

Consideration

Capita Customer Management Limited

1-Nov-23

(1,108,696)

811,771

296,925

 

 

 

 

 

 

 

-----------

-----------

-----------

Total

 

(1,108,696)

811,771

296,925

 

 

======

======

======

CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
20
Employees

The average monthly number of employees were:

2023
2022
Number
Number
Admin
1
1

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
186,894
148,426
Social security costs
11,950
20,133
Pension costs
4,202
5,058
203,046
173,617
21
Directors' remuneration

All Directors are paid by other companies within the Capita Group. The Company has not paid any fees or other remuneration to the Group based Directors related to the directorship role they provided to the Company as a part of their Group-wide executive management role. The Company has estimated that allocation of the qualifying services that these Group based Directors provided to the Company is inconsequential.

CAPITA INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
22
Related party transactions

The following table provides the total amount of transactions that have been entered into with related parties, other then fellow wholly owned subsidiaries of Capita plc for the relevant financial year:

Nature of Transaction
Relationship
Year
Amount
£
Purchase of goods/ services
Full Circle Contact Centre Services Proprietary Limited
Subsidiary
2023
7,335,800
2022
46,809,176
Entrust Support Services Limited
Subsidiary
2023
7,997
2022
20
Total
2023
7,343,797
2022
46,809,196
Closing balance of Related parties- Trade payables
Full Circle Contact Centre Services Proprietary Limited
Subsidiary
2023
2,866,361
2022
9,575,399
Total
2023
2,866,361
2022
9,575,399
23
Contingent liabilities

The Company forms part of a group of subsidiary companies to Capita plc which guarantee the obligations of the core funding arrangements of Capita group. These are: Capita plc’s principal bank facilities, issued by Capita plc, and US private placement loan notes issued by Capita Holdings Limited and Capita plc.

 

At 31 December 2023, the RCF commitment was £260.7m (31 December 2022: £288.4m). The RCF expires on 31 December 2026 and was not drawn upon at 31 December 2023 (31 December 2022: undrawn).

 

At 31 December 2023, the total exposure under these guarantees undertaken for the benefit Capita plc and other subsidiary undertakings was £262.5m (2022: £285.5m).

 

The Company also forms part of a cross-guarantee in respect of the overdrafts of its fellow subsidiary companies under a notional cash-pool bank arrangement.

24
Controlling party

The Company is a wholly owned subsidiary undertaking of Capita plc, a company incorporated in England & Wales. The consolidated financial statements of Capita plc are available from the registered office at 65 Gresham Street, London, EC2V 7NQ.

25
Post balance sheet date events

There are no significant events which have occurred after the reporting period.

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