Company registration number SC210173 (Scotland)
ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
COMPANY INFORMATION
Directors
PR Hepburn
JS Gordon
PK Johnstone
(Appointed 19 December 2023)
Secretary
Resolis Limited
Company number
SC210173
Registered office
Exchange Tower
11th Floor
19 Canning Street
Edinburgh
Scotland
EH3 8EG
Auditor
Johnston Carmichael LLP
7-11 Melville Street
Edinburgh
EH3 7PE
ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
CONTENTS
Page
Directors' report
1 - 2
Directors' responsibilities statement
3
Independent auditors' report
4 - 7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present their report and the audited Annual Report and Financial Statements of Elgin Healthcare (Findlay House) Limited ("the Company") for the year ended 31 March 2024.

Principal activities

The principal activities of the Company are the finance, operation and maintenance of Findlay House geriatric care facility, in Edinburgh, through an agreement with Lothian Primary Care National Health Service Trust. The agreement was entered into under the Governments Private Finance Initiative Scheme.

Results and dividends

The profit for the financial year, after taxation, amounted to £306,923 (2023: £316,150).

 

The profit for the financial year will be transferred to reserves.

 

The directors are satisfied with the overall performance of the Company and do not foresee any significant change in the Company's activities in the coming financial year.

 

Key Performance Indicators

 

The performance of the Company from a cash perspective is assessed six monthly by the testing of the covenants of the senior debt provider. The key indicator being the debt service cover ratio. The Company has been performing well and has been compliant with the covenants laid out in the Group loan agreement. At the year end the ratio was 1.35 (2023: 1.82).

Dividends

 

Particulars of dividends paid are detailed in note 9 to the financial statements.

Directors

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

PR Hepburn
JS Gordon
J McDonagh
(Resigned 19 December 2023)
PK Johnstone
(Appointed 19 December 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.

Financial instruments

Due to the nature of the Company's business, the financial risks the directors consider relevant to this Company are credit, interest rate, cash flow and liquidity risk. The credit risk is not considered significant as the client is a quasi governmental organisation.

Cash flow and liquidity risk

Many of the cash flow risks are addressed by means of contractual provisions. The Company's liquidity risk is principally managed through financing the Company by means of long-term borrowings.

Interest rate risk

The financial risk management objectives of the Company are to ensure that financial risks are mitigated by the use of financial instruments. The Company uses interest rate swaps to reduce its exposure to interest rate movements. Financial instruments are not used for speculative purposes.

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Auditor

The auditor, Johnston Carmichael LLP, is deemed to have been re-appointed in accordance with section 487 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
PR Hepburn
Director
31 July 2024
ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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:

 

 

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.

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
- 4 -
Opinion

We have audited the financial statements of Elgin Healthcare (Findlay House) Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

 

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

 

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

Other information

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:

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
- 5 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report.

 

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

 

• 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.

• 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 3, 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 is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Extent 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.

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
- 6 -

We obtained an understanding of the legal and regulatory frameworks that are applicable to company and the sector in which it operates, focusing on provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:

 

We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of relevant correspondence with regulatory bodies and board meeting minutes.

We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. We identified a heightened fraud risk in relation to:

In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:

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.

 

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
- 7 -

 

 

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an 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
31 July 2024
Chartered Accountants
Statutory Auditor
7-11 Melville Street
Edinburgh
EH3 7PE
ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
1,286,381
889,905
Cost of sales
(812,818)
(418,556)
Gross profit
473,563
471,349
Administrative expenses
(107,762)
(124,333)
Operating profit
365,801
347,016
Interest receivable and similar income
7
223,790
213,184
Interest payable and similar expenses
6
(155,078)
(159,315)
Profit before taxation
434,513
400,885
Tax on profit
8
(127,641)
(84,735)
Profit for the financial year
306,872
316,150
Other comprehensive income
Cash flow hedges gain arising in the year
24,563
134,221
Total comprehensive income for the year
331,435
450,371

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

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2024
31 March 2024
- 9 -
2024
2023
Notes
£
£
£
£
Current assets
Debtors falling due after more than one year
11
2,331,572
2,542,171
Debtors - deferred tax
15
14,662
22,849
Debtors falling due within one year
11
1,217,157
768,164
Cash at bank and in hand
1,118,911
1,171,365
4,682,302
4,504,549
Creditors: amounts falling due within one year
12
(1,319,876)
(1,080,358)
Net current assets
3,362,426
3,424,191
Creditors: amounts falling due after more than one year
13
(1,857,610)
(2,157,199)
Provisions for liabilities
Deferred tax liability
15
281,712
303,842
(281,712)
(303,842)
Net assets
1,223,104
963,150
Capital and reserves
Called up share capital
16
430
430
Share premium account
42,570
42,570
Hedging reserve
(43,985)
(68,548)
Profit and loss reserves
1,224,089
988,698
Total equity
1,223,104
963,150

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 31 July 2024 and are signed on its behalf by:
PR Hepburn
Director
Company registration number SC210173 (Scotland)
ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
Share capital
Share premium account
Hedging reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 April 2022
430
42,570
(202,769)
884,958
725,189
Year ended 31 March 2023:
Profit for the year
-
-
-
316,150
316,150
Other comprehensive income:
Fair value movements on cash flow hedging instruments, net of tax
-
-
134,221
-
134,221
Total comprehensive income for the year
-
0
-
0
134,221
316,150
450,371
Dividends
9
-
-
-
(212,410)
(212,410)
Balance at 31 March 2023
430
42,570
(68,548)
988,698
963,150
Year ended 31 March 2024:
Profit for the year
-
-
-
306,872
306,872
Other comprehensive income:
Fair value movements on cash flow hedging instruments, net of tax
-
-
24,563
-
24,563
Total comprehensive income for the year
-
0
-
0
24,563
306,872
331,435
Dividends
9
-
-
-
(71,481)
(71,481)
Balance at 31 March 2024
430
42,570
(43,985)
1,224,089
1,223,104
ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
1
Accounting policies
Company information

Elgin Healthcare (Findlay House) Limited ("the Company") is a private company limited by shares and is incorporated and domiciled in Scotland. The address of its registered office is Exchange Tower, 11th Floor, 19 Canning Street, Edinburgh, Scotland, EH3 8EG.

 

The principal activities of the Company are the finance, operation and maintenance of Findlay House geriatric care facility, in Edinburgh, through an agreement with Lothian Primary Care National Health Service Trust. The agreement was entered into under the Governments Private Finance Initiative Scheme.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The Company has taken advantage of the exemption in FRS 102 Section 7 'Statement of Cash Flows' part 1B, which states that a small company is not required to prepare a cash flow statement.

 

The Company has also 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.

1.2
Going concern

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 concession. 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 unitary charge receipts from Lothian Primary Care National Health Service Trust and the directors expect these amounts to be recovered even under the most severe economic conditions.true

 

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 concession 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

Finance debtor

The Company has taken the transition exemption in FRS 102 Section 35.10(i) that allows the Company to continue the service concession arrangement accounting policies from previous UK GAAP.

 

The Company is accounting for the concession asset based on the ability to substantially transfer all the risks and rewards of ownership to the customer, with this arrangement the costs incurred by the Company on the design and construction of the assets have been treated as a finance debtor within these financial statements.

1.4
Revenue recognition

Turnover represents the services' share of the management services income received by the Company for the provision of a PFI (Private Finance Initiative) asset to the customer. This income is received over the life of the concession period. Management service income is allocated between turnover, finance debtor interest and reimbursement of finance debtor so as to generate a constant rate of return in respect of the finance debtor over the life of the contract.

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 12 -
1.5

Lifecycle

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 accounted for on an accrual basis as disclosed in the indicative lifecycle works program or lifecycle tracker as used by all parties through the operating phase of the concession period, with any underspend included within accruals and creditors due less than one year.

1.6
Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of six 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 and 30th September 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 £817,000 (2023: £865,000) as at the balance sheet date.

1.7
Financial instruments

The Company has elected to apply the provisions of Section 11 "Basic Financial Instruments" and Section 12 "Other Financial Instrument Issues" of FRS102, in full, to all of its financial instruments.

 

A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument.

 

Basic financial instruments are initially recognised at the transaction price and subsequently at amortised cost, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 

Debt instruments are initially recognised at the present value of cash payable to the lender and are subsequently measured at amortised cost using the effective interest rate method, less impairment. The effective interest rate method is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument. The effective interest rate amortisation is included in interest payable and similar charges in the Statement of Comprehensive Income.

 

Other financial instruments are subsequently measured at fair value, with any changes recognised in the Statement of Comprehensive Income, with the exception of hedging instruments in a designated hedging relationship.

 

Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in the Statement of Comprehensive Income immediately.

 

For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics.

 

Any reversals of impairment are recognised in the Statement of Comprehensive Income immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised. 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 entity after deducting all of its financial liabilities.

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -

Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the Statement of Financial Position. Finance costs and gains or losses relating to financial liabilities are included in the Statement of Comprehensive Income. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

 

Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

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
Hedge accounting

The Company has entered into an arrangement with third parties that is designed to hedge future cash flows arising on variable rate interest loan arrangements, with the net effect of exchanging the cash flows arising under those arrangements for a stream of fixed interest cash flows ("interest rate swaps").

 

To qualify for hedge accounting, documentation is prepared specifying the hedging strategy, the component transactions and methodology used for effectiveness measurement. Changes in the carrying value of financial instruments that are designated and effective as hedges of future cash flows ("cash flow hedges") are recognised directly in a hedging reserve in equity and any ineffective portion is recognised immediately in the Statement of Comprehensive Income. Amounts deferred in equity in respect of cash flow hedges are subsequently recognised in the Statement of Comprehensive Income in the same period in which the hedged item affects net profit or loss or the hedging relationship is terminated and the underlying position being hedged has been extinguished.

 

The Company has elected to early adopt the FRS 102 Interest Rate Benchmark Reform Amendment.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

For derivatives that are designated and qualify as cash flow hedges, the effective portion of changes in the fair value of the hedge is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.

 

Any gain or loss previously recognised in other comprehensive income is reclassified to profit or loss when the hedge relationship ends. This occurs when the hedging instrument expires or no longer meets the hedging criteria, the forecast transaction is no longer highly probable, the hedged debt instrument is derecognised, or the hedging instrument is terminated.

1.10
Taxation

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

Current tax

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

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
Deferred tax

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

 

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

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 15 -
2
Judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

Significant judgements

 

The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows:

 

i) 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 Statement of Financial Position. 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 judgement 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.

 

ii) Deferred taxation

 

Deferred tax is recognised on all timing differences at the reporting date except for certain exceptions. Judgement 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 judgement 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

 

Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty are as follows:

 

i) Impairment of assets

 

The carrying value of those assets recorded in the Company's Statement of Financial Position, at amortised cost, could be materially reduced where circumstances exist which might indicate that an asset has been impaired and an impairment review is performed. Impairment reviews consider the fair value and/or value in use of the potentially impaired asset or assets and compare that with the carrying value of the asset or assets in the Statement of Financial Position. Any reduction in value arising from such a review would be recorded in the Statement of Comprehensive Income. Impairment reviews involve the significant use of assumptions. Consideration has to be given as to the price that could be obtained for the asset or assets, or in relation to a consideration of value in use, estimates of the future cash flows that could be generated by the potentially impaired asset or assets, together with a consideration of an appropriate discount rate to apply to those cash flows.

 

ii) Accounting for service concession arrangements

 

Accounting for the service concession contract and finance debtors requires estimation of service margins, finance debtor interest rates and associated amortisation profile which is based on forecast results of the contract. These were forecast initially within the operating model at financial close and are closely monitored throughout the duration of the project.

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Rendering of services
1,286,381
889,905
2024
2023
£
£
Other revenue
Interest income
223,790
213,184

The whole of the turnover is attributable to the principal activity of the Company wholly undertaken in the United Kingdom.

4
Auditors' remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
12,435
12,250

Included in the fee above is £4,200 (2023: £3,800 for taxation compliance services). Included in the fee above is £1,000 (2023: £1,000) for the audit of the immediate parent entity Elgin Healthcare (Findlay House) Holdings Limited. Auditors' remuneration is payable to Johnston Carmichael LLP.

 

5
Employees

The average number of persons employed by the Company during the financial year amounted to nil (2023: nil). The directors, who are also key management personnel, received remuneration from the Company during the year of £19,106 (2023: £16,784).

 

6
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
137,532
135,391
Interest payable to group undertakings
15,356
22,064
Other interest
2,190
1,860
155,078
159,315
ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
7
Interest receivable and similar income
2024
2023
£
£
Interest receivable on finance debtor
178,178
190,681
Interest on cash and cash equivalents
45,612
22,503
Total income
223,790
213,184
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
149,771
105,216
Deferred tax
Origination and reversal of timing differences
(22,130)
(20,481)
Total tax charge
127,641
84,735

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

2024
2023
£
£
Profit before taxation
434,513
400,885
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
108,628
76,168
Tax effect of expenses that are not deductible in determining taxable profit
50
-
0
Adjustment to tax charge in respect of prior periods
48,678
34,619
Effect of capital allowances and depreciation
(23,036)
(16,379)
Amortisation of deferred revenue
(6,679)
(4,758)
Remeasurement of deferred tax for changes in tax rates
-
0
(4,915)
Taxation charge for the year
127,641
84,735

The main rate of corporation tax will be 25% from 1 April 2023, substantively enacted on 24 May 2021. This will impact the rate of corporation tax the company pays in future periods.

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
9
Dividends
2024
2023
2024
2023
Per share
Per share
Total
Total
£
£
£
£
Ordinary shares
Interim paid
1.67
4.94
71,481
212,410
10
Financial instruments
2024
2023
£
£
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
58,646
91,397

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.

 

Interest rate swaps

 

The Company has entered into interest rate swaps with third parties for the same notional amount as 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 with a base rate of 5.73%, on 15 August 2003 and expire on 16 July 2029.

 

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.

 

The Company's derivative financial instruments are carried at fair value. The net carrying value of the derivative financial instruments at 31 March 2024 amounted to net liabilities of £58,646 (2023: £91,397). 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 credit of £24,563 (2023: £134,221).

 

11
Debtors
2024
2023
Amounts falling due within one year:
£
£
Finance debtor
208,099
192,208
Other debtors
1,000,015
572,658
Prepayments and accrued income
9,043
3,298
1,217,157
768,164
ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
11
Debtors
(Continued)
- 19 -
2024
2023
Amounts falling due after more than one year:
£
£
Finance debtor
2,331,572
2,542,171
Deferred tax asset (note 15)
14,662
22,849
2,346,234
2,565,020
Total debtors
3,563,391
3,333,184

Included within Other debtors is £995,337 (2023: £568,443) relating to the unitary charge control account, of which £995,337 is forecast to be received within the next 12 months via Unitary Charge receipts with amounts received being offset by service concession accounting adjustments.

 

The finance debtor represents payments due from Lothian Primary Care National Health Service Trust in respect of the Project Agreement. These payments are received over the remaining life of the agreement.

 

The movement in the finance debtor is analysed as follows:

 

2024
2023
£
£
At beginning of year
2,734,739
2,916,586
Amortisation
(195,068)
(182,207)
At end of year
2,539,671
2,734,739
12
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
14
250,179
187,912
Loans from group undertakings
14
20,431
20,200
Trade creditors
38,943
64,419
Corporation tax
72,827
42,356
Other taxation and social security
30,355
33,125
Other creditors
3,690
80,482
Accruals and deferred income
903,451
651,864
1,319,876
1,080,358

Included within accruals and deferred income are amounts recognised in respect of future payments due on lifecycle underspends of £861,477 (2023: £602,000), the timing of which are uncertain. Loans from Group undertakings relate to subordinated debt and interest payable on it.

 

Included within other creditors is group relief of £nil (2023: £77,943)

 

 

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
13
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
14
1,716,272
1,966,450
Loans from group undertakings
14
82,692
99,352
Derivative financial instruments
10
58,646
91,397
1,857,610
2,157,199

Included within creditors: amounts falling due after more than one year is an amount of £418,457 (2023: £809,310) in respect of liabilities payable or repayable by instalments which fall due for payment after more than five years from the reporting date.

 

The Company has a term loan with Bank of Scotland plc secured by fixed and floating charges over its assets and undertakings. The term loan is also secured by a guarantee supported by fixed and floating charges over the assets and undertakings of Elgin Healthcare (Findlay House) Holdings Limited, the immediate parent company. The loan bears interest at 5.73% plus LIBOR 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 stated net of finance costs of £6,837 (2023: £9,027) and is repayable in quarterly instalments which commenced 15 October 2003. The final repayment date is 15 January 2030.

 

Subordinated debt provided by Elgin Healthcare (Findlay House) Holdings Limited bears interest at 12% and is repayable semi-annually in equal instalments until 2030.

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
14
Loans and overdrafts
An analysis of the maturity of loans is given below:
2024
2023
£
£
Amounts falling due within one year or on demand:
Senior secured loan
250,179
187,912
Loans from group undertakings
20,431
20,200
270,610
208,112
Amounts falling due between one and two years:
Senior secured loan
285,205
250,179
Loans from group undertakings
16,615
16,550
301,820
266,729
Amounts falling due between two and five years:
Senior secured loan
1,028,842
940,112
Loans from group undertakings
49,846
49,651
1,078,688
989,763
Amounts falling due after more than five years:
Repayable by instalments
Senior secured loan
402,225
776,159
Loans from group undertakings
16,231
33,151
418,456
809,310
The total cash repayable on the loan is as follows :
Bank loans
1,966,451
2,154,362
Loans from group undertakings
103,123
119,552
2,069,574
2,273,914
Payable within one year
270,610
208,112
Payable after one year
1,798,964
2,065,802

 

 

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
15
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Balances:
£
£
£
£
Accelerated capital allowances
281,712
303,465
-
-
Short term timing differences
-
377
-
-
Derivative financial instruments
-
-
14,662
22,849
281,712
303,842
14,662
22,849
2024
Movements in the year:
£
Liability at 1 April 2023
280,993
Credit to profit or loss
(22,130)
Charge to other comprehensive income
8,187
Liability at 31 March 2024
267,050

£22,130 of the deferred tax balance is likely to be recovered or settled in the 12 months following the Balance Sheet date.

 

16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
43,000
43,000
430
430
17
Reserves

Share premium account - this reserve records the amount above the nominal value received for shares sold, less transaction costs.

 

Hedging reserve - this reserve records fair value movements on cash flow hedging instruments.

 

Retained earnings - this reserve records retained earnings and accumulated losses

ELGIN HEALTHCARE (FINDLAY HOUSE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
18
Related party transactions

The Company is wholly owned by Elgin Healthcare (Findlay House) Holdings Limited and has taken advantage of the exemption in section 33 of FRS 102 'Related Party Disclosures', that allows it not to disclose transactions with wholly owned members of a group.

19
Ultimate controlling party

The immediate parent undertaking is Elgin Healthcare (Findlay House) Holdings Limited, a company incorporated in Scotland.

 

The accounts of Elgin Healthcare (Findlay House) Holdings Limited can be obtained from Exchange Tower, 11th Floor, 19 Canning Street, Edinburgh, Scotland, EH3 8EG.

 

At the year end Elgin Healthcare (Findlay House) Holdings Limited is owned 100% by Elgin Infrastructure Limited, which is jointly owned between Cobalt Project Investments Limited and Ednaston Project Investments Limited. There is no ultimate controlling party.

2024-03-312023-04-01falseCCH SoftwareCCH Accounts Production 2023.300PR HepburnJS GordonJ McDonaghPK JohnstoneResolis Limitedfalse0SC2101732023-04-012024-03-31SC210173bus:Director12023-04-012024-03-31SC210173bus:Director22023-04-012024-03-31SC210173bus:Director42023-04-012024-03-31SC210173bus:CompanySecretary12023-04-012024-03-31SC210173bus:Director32023-04-012024-03-31SC210173bus:RegisteredOffice2023-04-012024-03-31SC2101732024-03-31SC2101732022-04-012023-03-31SC210173core:RetainedEarningsAccumulatedLosses2022-04-012023-03-31SC210173core:RetainedEarningsAccumulatedLosses2023-04-012024-03-31SC210173core:HedgingReserve2023-04-012024-03-31SC210173core:HedgingReserve2022-04-012023-03-31SC210173core:ShareCapital2022-04-012023-03-31SC210173core:SharePremium2022-04-012023-03-31SC210173core:ShareCapital2023-04-012024-03-31SC210173core:SharePremium2023-04-012024-03-31SC210173core:Non-currentFinancialInstrumentscore:AfterOneYear2024-03-31SC210173core:Non-currentFinancialInstrumentscore:AfterOneYear2023-03-31SC210173core:CurrentFinancialInstruments2024-03-31SC210173core:CurrentFinancialInstruments2023-03-31SC210173core:Non-currentFinancialInstruments2024-03-31SC210173core:Non-currentFinancialInstruments2023-03-31SC2101732023-03-31SC210173core:CurrentFinancialInstrumentscore:WithinOneYear2024-03-31SC210173core:CurrentFinancialInstrumentscore:WithinOneYear2023-03-31SC210173core:ShareCapital2024-03-31SC210173core:ShareCapital2023-03-31SC210173core:SharePremium2024-03-31SC210173core:SharePremium2023-03-31SC210173core:HedgingReserve2024-03-31SC210173core:HedgingReserve2023-03-31SC210173core:RetainedEarningsAccumulatedLosses2024-03-31SC210173core:RetainedEarningsAccumulatedLosses2023-03-31SC210173core:ShareCapital2022-03-31SC210173core:SharePremium2022-03-31SC210173core:HedgingReserve2022-03-31SC210173core:RetainedEarningsAccumulatedLosses2022-03-31SC2101732022-03-31SC21017312023-04-012024-03-31SC21017312022-04-012023-03-31SC210173core:UKTax2023-04-012024-03-31SC210173core:UKTax2022-04-012023-03-31SC21017322023-04-012024-03-31SC21017322022-04-012023-03-31SC21017332023-04-012024-03-31SC21017332022-04-012023-03-31SC21017342023-04-012024-03-31SC21017342022-04-012023-03-31SC210173bus:OrdinaryShareClass12023-04-012024-03-31SC210173bus:OrdinaryShareClass12022-04-012023-03-31SC210173core:CurrentFinancialInstrumentscore:FinancialInstrumentsAmortisedCost2024-03-31SC210173core:FinancialInstrumentsIncludingThoseHeldForSale2024-03-31SC210173core:FinancialInstrumentsIncludingThoseHeldForSale2023-03-31SC210173bus:PrivateLimitedCompanyLtd2023-04-012024-03-31SC210173bus:FRS1022023-04-012024-03-31SC210173bus:Audited2023-04-012024-03-31SC210173bus:FullAccounts2023-04-012024-03-31xbrli:purexbrli:sharesiso4217:GBP