Company registration number 04934390 (England and Wales)
NNT LIFT COMPANY (FUNDCO 1) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
NNT LIFT COMPANY (FUNDCO 1) LIMITED
COMPANY INFORMATION
Directors
MF Percy
I Betham
S McGhee
(Appointed 30 June 2023)
JA Fitch
(Appointed 24 November 2023)
PPC Stewart
(Appointed 20 November 2023)
PK Johnstone
(Appointed 29 January 2024)
Secretary
Resolis Limited
Company number
04934390
Registered office
1 Park Row
Leeds
United Kingdom
LS1 5AB
Auditor
Johnston Carmichael LLP
7-11 Melville Street
Edinburgh
EH3 7PE
NNT LIFT COMPANY (FUNDCO 1) LIMITED
CONTENTS
Page
Directors' report
1
Directors' responsibilities statement
2
Independent auditors' report
3 - 6
Statement of comprehensive income
7
Balance sheet
8
Notes to the financial statements
9 - 17
NNT LIFT COMPANY (FUNDCO 1) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present their audited annual report and financial statements of NNT Lift Company (Fundco 1) Limited ("the Company") for the year ended 31 March 2024.
Principal activities
The principal activities of the Company are the development and provision of high quality accommodation and services to the health and social care community in the Newcastle and North Tyneside area. The agreement was entered into under the Local Improvement Finance Trust Scheme.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
JS Gordon
(Resigned 29 January 2024)
MF Percy
N Arif
(Resigned 17 January 2024)
I Betham
M J Thurston
(Resigned 18 August 2023)
PK Johnstone
(Appointed 29 January 2024 and resigned 30 June 2023)
S McGhee
(Appointed 30 June 2023)
JA Fitch
(Appointed 24 November 2023)
PPC Stewart
(Appointed 20 November 2023)
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Auditor
The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
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
S McGhee
Director
30 September 2024
NNT LIFT COMPANY (FUNDCO 1) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
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.
NNT LIFT COMPANY (FUNDCO 1) LIMITED
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF NNT LIFT COMPANY (FUNDCO 1) LIMITED
- 3 -
Opinion
We have audited the financial statements of NNT Lift Company (Fundco 1) Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2024 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 Auditor responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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.
NNT LIFT COMPANY (FUNDCO 1) LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF NNT LIFT COMPANY (FUNDCO 1) 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:
Adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
The financial statements are not in agreement with the accounting records and returns; or
Certain disclosures of directors' remuneration specified by law are not made; or
We have not received all the information and explanations we require for our audit; or
The directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and from the requirement to prepare a strategic report.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement set out on page 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor 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 for the audit of the financial statements is located on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Extent to which 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.
NNT LIFT COMPANY (FUNDCO 1) LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF NNT LIFT COMPANY (FUNDCO 1) LIMITED
- 5 -
We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and the sector in which it operates, focusing on provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
United Kingdom Generally Accepted Accounting Practice, including FRS 102;
UK Companies Act 2006;
UK Corporation Tax legislation; and
VAT legislation.
We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of relevant correspondence with regulatory bodies and board meeting minutes.
We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. We have 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 lease payment received by taking the base charge per the lease agreement and uplifting for RPI;
Agreeing a sample of months' income receipts to invoice and bank statements;
Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;
Reviewing the level of and reasoning behind the company’s procurement of legal and professional services;
Performing audit work procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing judgements made by management in their calculation of accounting estimates for potential management bias;
Completion of appropriate checklists and use of our experience to assess the company's compliance with the Companies Act 2006; and
Agreement of the financial statement disclosures to supporting documentation.
Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
NNT LIFT COMPANY (FUNDCO 1) LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF NNT LIFT COMPANY (FUNDCO 1) LIMITED
- 6 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an 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 members as a body, for our audit work, for this report, or for the opinions we have formed.
Fiona Munro
Senior Statutory Auditor
For and on behalf of Johnston Carmichael LLP
30 September 2024
Chartered Accountants
Statutory Auditor
7-11 Melville Street
Edinburgh
EH3 7PE
NNT LIFT COMPANY (FUNDCO 1) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 7 -
2024
2023
£
£
Turnover
6,418,575
5,617,172
Cost of sales
(1,496,396)
(1,474,150)
Gross profit
4,922,179
4,143,022
Administrative expenses
(1,218,570)
(1,188,149)
Operating profit
3,703,609
2,954,873
Interest receivable and similar income
223,186
24,262
Interest payable and similar expenses
4
(1,731,081)
(1,792,314)
Profit before taxation
2,195,714
1,186,821
Tax on profit
(667,310)
(314,793)
Profit for the financial year
1,528,404
872,028
Other comprehensive income
Cash flow hedges gain arising in the year
271,304
2,180,040
Total comprehensive income for the year
1,799,708
3,052,068
The profit and loss account has been prepared on the basis that all operations are continuing operations.
NNT LIFT COMPANY (FUNDCO 1) LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
5
17,253,348
18,009,954
Current assets
Debtors falling due after more than one year
7
266,885
357,319
Debtors falling due within one year
7
173,998
378,232
Cash at bank and in hand
7,361,168
7,152,264
7,802,051
7,887,815
Creditors: amounts falling due within one year
8
(2,408,866)
(2,945,679)
Net current assets
5,393,185
4,942,136
Total assets less current liabilities
22,646,533
22,952,090
Creditors: amounts falling due after more than one year
9
(22,762,146)
(24,848,397)
Provisions for liabilities
Deferred taxation
(1,095,775)
(1,114,789)
Net liabilities
(1,211,388)
(3,011,096)
Capital and reserves
Called up share capital
10
100
100
Hedging reserve
(800,654)
(1,071,958)
Profit and loss reserves
(410,834)
(1,939,238)
Total equity
(1,211,388)
(3,011,096)
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 30 September 2024 and are signed on its behalf by:
S McGhee
Director
Company Registration No. 04934390
NNT LIFT COMPANY (FUNDCO 1) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
1
Accounting policies
Company information
NNT Lift Company (Fundco 1) 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 £.
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 financial statements are prepared on a going concern basis notwithstanding net liabilitiestrue of £1,211,388 (2023: £3,011,096) which the directors believe to be appropriate for the following reasons. The Company meets its capital expenditure requirements through long term bank loans agreed at the beginning of the project as part of the government sponsored Local Improvement Finance Trust (LIFT) initiatives.
The nature of the Company's business is such that there are considerable cash outflows during the construction phase of the project. Now operational, the fixed assets generate cash.
The company prepares a detailed financial model semi-annually which forecasts cashflows, financial results and the financial position of the company through to the end of the Local Improvement Finance Trust (LIFT) contract. In preparing these financial models, the directors include assumptions based upon expected future economic conditions, including forecast inflation and interest rates, and include costs profiled on known and expected expenditure. The company's operating cash flows are largely dependent upon lease payments from Community Health Partnerships Limited, North Tyneside Council and Newcastle City Council and the directors expect these amounts to be recovered even under the most severe economic conditions.
Based on these forecasts, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the remainder of the Local Improvement Finance Trust (LIFT) contract and continue to meet debt covenants and debt repayments as they fall due. In light of this, the directors continue to adopt the going concern basis of accounting in preparing the company's annual financial statements.
1.3
Turnover
Turnover represents lease income derived from leases of high quality accommodation and services to the health and social care community and services rendered, excluding VAT. Turnover is recognised in line with lease agreements and as services are provided.
NNT LIFT COMPANY (FUNDCO 1) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 10 -
1.4
Tangible fixed assets
The company is accounting for the concession asset based on the inability to substantially transfer all the risks and rewards of ownership to the customer with the cost incurred in the design and construction of the assets being treated as a fixed asset.
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.
General and specific borrowing costs, such as interest, directly attributable to the acquisition and construction of the land and buildings are capitalised and added to the cost until such time as the asset is ready for its intended use or sale.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
Straight line over the life of the project
Plant and equipment
Reducing balance over 7 years
Interest
Straight line over 25 years
Land and Buildings are depreciated until the point of reaching the estimated residual value at the end of the 25 year contract.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
NNT LIFT COMPANY (FUNDCO 1) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 11 -
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The company is obligated to keep cash reserves as at the balance sheet date in respect of requirements in the company's funding agreements. This restricted cash balance, which is shown within the "cash at bank and in hand" balance amounts to £1,154,438 (2023: £1,598,317).
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's 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 and loans from fellow group companies 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.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
NNT LIFT COMPANY (FUNDCO 1) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
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.
1.10
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.
1.11
The Company is responsible for the lifecycle costs associated with its principal activity, however risk here is mitigated by passing on lifecycle risk to a third party facilities management company. Lifecycle costs are fixed fees indexed annually as set out in the estate management contracts relating to the individual properties. There is no underspend held in the project.
NNT LIFT COMPANY (FUNDCO 1) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 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.
Hedge accounting and consideration of the fair value of derivative financial instruments
The Company uses derivative financial instruments to hedge certain economic exposures in relation to movements in interest rates as compared with the position that was expected at the date the underlying transaction being hedged was entered into. The Company fair values its derivative financial instruments and records the fair value of those instruments on its Balance Sheet. No market prices are available for these instruments and consequently the fair values are determined by calculating the present value of the estimated future cashflows based on observable yield curves. There is also a judgment on whether an economic hedge relationship exists in order to achieve hedge accounting. Appropriate documentation has been prepared detailing the economic relationship between the hedging instrument and the underlying loan being hedged.
Deferred taxation
Deferred tax is recognised on all timing differences at the reporting date except for certain exceptions. Judgment is required in the case of the recognition of deferred taxation assets, the Directors have to form an opinion as to whether it is probable that the deferred taxation asset recognised is recoverable against future taxable profits arising. This exercise of judgment requires the Directors to consider forecast information over a long time horizon having regard to the risks that the forecasts may not be achieved and then form a reasonable opinion as to the recoverability of the deferred taxation asset.
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.
Impairment of assets
The carrying value of those assets recorded in the Company's Balance Sheet, at amortised cost, could be materially reduced where circumstances exist which might indicate that an asset has been impaired and an impairment review is performed. Impairment reviews consider the fair value and/or value in use of the potentially impaired asset or assets and compares that with the carrying value of the asset or assets in the Balance Sheet. Any reduction in value arising from such a review would be recorded in the Profit and Loss Account. Impairment reviews involve the significant use of assumptions. Consideration has to be given as to the price that could be obtained for the asset or assets, or in relation to a consideration of value in use, estimates of the future cash flows that could be generated by the potentially impaired asset or assets, together with a consideration of an appropriate discount rate to apply to those cash flows.
Residual values
Residual value is calculated on prices prevailing at the reporting date, after estimated costs of handover, for the asset as if it were at the age and in the condition expected at the end of its useful life.
NNT LIFT COMPANY (FUNDCO 1) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 14 -
3
Employees
The average number of persons employed by the Company during the financial year, including the directors, amounted to nil (2023: nil). The directors did not receive any remuneration from the Company during the year (2023: £nil). Fees paid to investors in respect of their Directors are £68,300 (2023: £60,000) to NNT Lift Company Limited for the provision of directors services.
4
Interest payable and similar expenses
2024
2023
£
£
Interest payable and similar expenses includes the following:
Interest on bank overdrafts and loans
1,287,064
1,357,304
Interest payable to group undertakings
434,980
435,010
Other interest
9,037
1,731,081
1,792,314
5
Tangible fixed assets
Land and buildings
Plant and machinery etc
Interest
Total
£
£
£
£
Cost
At 1 April 2023 and 31 March 2024
20,468,176
9,268,798
5,785,817
35,522,791
Depreciation and impairment
At 1 April 2023
5,363,630
8,395,932
3,753,275
17,512,837
Depreciation charged in the year
400,478
124,695
231,433
756,606
At 31 March 2024
5,764,108
8,520,627
3,984,708
18,269,443
Carrying amount
At 31 March 2024
14,704,068
748,171
1,801,109
17,253,348
At 31 March 2023
15,104,546
872,866
2,032,542
18,009,954
6
Financial instruments
2024
2023
£
£
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
1,067,539
1,429,277
NNT LIFT COMPANY (FUNDCO 1) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
6
Financial instruments
(Continued)
- 15 -
i) Hedge accounting
Derivatives are financial instruments that derive their value from the price of an underlying item, such as interest rates or other indices. The Company's use of derivative financial instruments is described below.
ii) Interest rate swaps
The Company has entered into interest rate swaps with third parties for the same notional amount as all of the Company's variable rate borrowings with banks which has the commercial effect of swapping the variable rate interest coupon on those loans for a fixed rate coupon. The bank loans and related interest rate swaps amortise at the same rate over the life of the loan/swap arrangements. The interest rate swaps were entered into between May 2004 and January 2009 and expire between September 2030 to October 2033.
The Directors believe that the hedging relationship between the interest rate swaps and related variable rate bank loans is highly effective and as a consequence have concluded that these derivatives meet the definition of a cash flow hedge and have formally designated them as such.
iii) Carrying value of all derivative financial instruments
All of the Company's derivative financial instruments are carried at fair value. The net carrying value of all derivative financial instruments at 31 March 2024 amounted to net liabilities of £1,067,539 (2023: £1,429,277). All of the movements during the year in the fair value net of deferred tax of these derivative financial instruments have been recorded in the cash flow hedge reserve amounting to a debit of £271,304 (2023: £2,180,040).
7
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
40,676
347,992
Corporation tax recoverable
15,278
Other debtors
118,044
30,240
173,998
378,232
2024
2023
Amounts falling due after more than one year:
£
£
Deferred tax asset
266,885
357,319
Total debtors
440,883
735,551
NNT LIFT COMPANY (FUNDCO 1) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
8
Creditors: amounts falling due within one year
2024
2023
£
£
Bank loans
1,759,765
1,635,545
Trade creditors
141,436
110,167
Corporation tax
175,231
Other taxation and social security
52,797
254,619
Other creditors
15,112
44,966
Accruals and deferred income
439,756
725,151
2,408,866
2,945,679
Other creditors consist of amounts owed to group undertakings and are made up of £184 (2023: £184) relating to a group tax creditor and £14,928 (2023: £44,782) relating to trading balances. All amounts are unsecured and repayable on demand.
9
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
18,586,903
20,311,416
Other borrowings
3,107,704
3,107,704
Derivative financial instruments
1,067,539
1,429,277
22,762,146
24,848,397
The Company has four term loans with Barclays Bank PLC secured by a fixed and floating charge over the assets of the company and its immediate parent company.
Tranche 1 loan bears interest at 6.51% per annum under a swap agreement entered into by the company. The swap rate is fixed for the duration of the term loan. The term loan is repayable in quarterly instalments which commenced on 31 March 2006. The final repayment is due September 2030.
Tranche 2A loan bears interest at 5.55% per annum under a swap agreement entered into by the company. The swap rate is fixed for the duration of the term loan. The term loan is repayable in quarterly instalments which commenced July 2008. The final repayment is due April 2033.
Tranche 2B loan bears interest at 5.97% per annum under a swap agreement entered into by the company. The swap rate is fixed for the duration of the term loan. The term loan is repayable in quarterly instalments which commenced January 2009. The final repayment is due October 2033.
Tranche 2C loan bears interest at 5.74% per annum under a swap agreement entered into by the company. The swap rate is fixed for the duration of the term loan. The term loan is repayable in quarterly instalments which commence January 2009. The final repayment is due September 2033.
Other borrowings consist of amounts owed to group undertakings which comprise of a subordinated loan provided by NNT Lift Company Limited, the immediate parent company. It bears interest at 14% and is repayable between 2030 and 2034.
NNT LIFT COMPANY (FUNDCO 1) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
9
Creditors: amounts falling due after more than one year
(Continued)
- 17 -
Amounts included above which fall due after five years are as follows:
Payable by instalments
13,564,404
15,939,165
10
Called up share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 10p each
1,000
1,000
100
100
Shares rank pari passu in all respects
11
Related party transactions
The Company is wholly owned by NNT Lift Company Limited and has taken advantage of the exemption in section 33 of FRS 102 'Related Party Disclosures', that allows it not to disclose transactions with wholly owned members of a group.
12
Parent company
The immediate parent undertaking is NNT Lift Company Limited, a company incorporated in England.
NNT Lift Company Limited is owned by Elgin Lift Limited (60.01%), Community Health Partnerships Limited (27.37%), North Tyneside Council (6.81%) and The Council of the City of Newcastle upon Tyne (5.81%).
The accounts of Elgin Lift Limited can be obtained from Exchange Tower, 11th Floor, 19 Canning Street, Edinburgh, EH3 8EG.
Elgin Lift Limited is owned 99.996% by Elgin Infrastructure Limited, which is jointly owned between Cobalt Project Investments Limited and Ednaston Investments Limited. There is no ultimate controlling party
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