Company registration number 04151453 (England and Wales)
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
COMPANY INFORMATION
Directors
JS Gordon
PR Hepburn
PK Johnstone
Secretary
Resolis Limited
Company number
04151453
Registered office
1 Park Row
Leeds
United Kingdom
LS1 5AB
Auditor
Johnston Carmichael LLP
7-11 Melville Street
Edinburgh
United Kingdom
EH3 7PE
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
CONTENTS
Page
Directors' report
1
Directors' responsibilities statement
2
Independent auditor's report
3 - 6
Statement of comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Notes to the financial statements
10 - 17
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -
The directors present their annual report and financial statements for the year ended 31 December 2024.
Principal activities
Victory Support Services (Portsmouth) Limited ("the Company") was established with the principal activity of undertaking a Private Finance Initiative (PFI) contract to design, build, finance, and operate, two new day care centres and a respite care centre in and around the Portsmouth area. This is on behalf of its customer, Portsmouth City Council ("PCC") with which it entered into the concession contract, the Project Agreement. The Company is also responsible for the facilities management of two other buildings over the life of the contract. In December 2004, construction of the three buildings was completed and since then, the Company has been providing facilities management services to them. The contract will run until 2032.
Results and dividends
The results for the Company are set out in the statement of comprehensive income on page 7.
The Company declared and paid dividends in the year of £60,000 (2023: £29,000).
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
PR Hepburn
PK Johnstone
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.
Going concern
The going concern disclosure for the Company can be found in note 1.2 of the financial statements.
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
26 June 2025
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 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; and
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.
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
- 3 -
Opinion
We have audited the financial statements of Victory Support Services (Portsmouth) Limited (the 'company') for the year ended 31 December 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:
give a true and fair view of the state of the company's affairs as at 31 December 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 and Financial Statements other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the Annual Report and Financial Statements. 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.
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED (CONTINUED)
- 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:
A
T
Cdirectors' remuneration specified by law are not made; or
W; 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 take advantage of the small companies exemption 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's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://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.
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED (CONTINUED)
- 5 -
We obtained an understanding of the legal and regulatory frameworks that are applicable to company and the sector in which it operates, focusing on provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of relevant correspondence with regulatory bodies and board meeting minutes.
We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:
In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:
Recalculating the unitary charge received by taking the base charge per the project agreement and uplifting for RPI;
Agreeing a sample of monthly income receipts to invoice and bank statements;
Reconciling the finance income and amortisation to the finance debtor reconciliation to ensure allocation methodology is in line with contractual terms and relevant accounting standards;
Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;
Reviewing the level of and reasoning behind the company’s procurement of legal and professional services;
Performing audit 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.
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED (CONTINUED)
- 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 auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Matthew Kaye (Senior Statutory Auditor)
For and on behalf of Johnston Carmichael LLP
26 June 2025
Chartered Accountants
Statutory Auditor
7-11 Melville Street
Edinburgh
United Kingdom
EH3 7PE
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 7 -
2024
2023
Notes
£'000
£'000
Turnover
3
642
596
Cost of sales
(374)
(365)
Gross profit
268
231
Administrative expenses
(166)
(164)
Operating profit
102
67
Interest receivable and similar income
3
237
235
Interest payable to group undertakings
(51)
(50)
Other interest payable and similar expenses
(83)
(97)
Profit before taxation
205
155
Tax on profit
(30)
(64)
Profit for the financial year
175
91
Other comprehensive income
Cash flow hedges gain arising in the year
24
7
Tax relating to other comprehensive income
(5)
(2)
Total comprehensive income for the year
194
96
The income statement has been prepared on the basis that all operations are continuing operations.
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2024
31 December 2024
- 8 -
2024
2023
Notes
£'000
£'000
£'000
£'000
Current assets
Debtors falling due after more than one year
7
2,584
2,776
Debtors falling due within one year
7
261
270
Investments
8
263
309
Cash at bank and in hand
171
60
3,279
3,415
Creditors: amounts falling due within one year
9
(543)
(517)
Total assets less current liabilities
2,736
2,898
Creditors: amounts falling due after more than one year
10
(1,153)
(1,397)
Provisions for liabilities
11
(806)
(858)
Net assets
777
643
Capital and reserves
Called up share capital
12
1
1
Hedging reserve
(16)
(35)
Profit and loss reserves
792
677
Total equity
777
643
The notes on pages 10 to 17 form part of these financial statements.
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 26 June 2025 and are signed on its behalf by:
PR Hepburn
Director
Company registration number 04151453 (England and Wales)
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 9 -
Share capital
Hedging reserve
Profit and loss reserves
Total
Notes
£'000
£'000
£'000
£'000
Balance at 1 January 2023
1
(40)
615
576
Year ended 31 December 2023:
Profit for the year
-
-
91
91
Other comprehensive income:
Cash flow hedges gains
-
7
-
7
Tax relating to other comprehensive income
-
(2)
(2)
Total comprehensive income for the year
-
5
91
96
Dividends
-
-
(29)
(29)
Balance at 31 December 2023
1
(35)
677
643
Year ended 31 December 2024:
Profit for the year
-
-
175
175
Other comprehensive income:
Cash flow hedges gains
-
24
-
24
Tax relating to other comprehensive income
-
(5)
(5)
Total comprehensive income for the year
-
19
175
194
Dividends
-
-
(60)
(60)
Balance at 31 December 2024
1
(16)
792
777
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 10 -
1
Accounting policies
Company information
Victory Support Services (Portsmouth) 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 have been prepared under the historical cost convention.
The financial statements are prepared in Pound Sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £000.
The financial statements are prepared on a going concern basis, under the historical cost convention, as modified by the revaluation of certain financial assets and liabilities.
The principal accounting policies adopted are set out below.
1.2
Going concern
The directors have prepared a detailed model forecast to project completion incorporating the relevant terms of the PFI contract, subcontracts and Credit Agreement and reasonably prudent economic assumptions. This forecast and associated business model, which is updated regularly, predicts that the company will remain profitable and will have sufficient cash resources to operate within the terms of the PFI contract, Subcontract and Credit agreement. true
Therefore, the directors, having considered the financial position of the company and its expected future cash flows for at least 12 months from the date of signing the financial statements, and have prepared the financial statements on a going concern basis. The directors confirm that they do not intend to liquidate the company or cease trading. At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Accounting for PFI contracts
In prior years the Company took advantage of exemptions made available under section 35 10 (i) of FRS 102, and as such there has been no substantial change to the treatment of the financial asset receivable due to the adoption of the standard.
Under the terms of the contract, substantially all the risks and rewards of ownership of the property remain with Portsmouth City Council.
During the period of construction, costs incurred as a direct consequence of financing, designing and constructing the care centres, including finance costs, are capitalised and shown as work in progress. On completion of the construction, credit is taken for the deemed sale, which is recorded within turnover. The construction expenditure and associated costs are reallocated to cost of sales. Amounts receivable are classified as a finance debtor.
Revenues received from the customer are apportioned between:
- capital repayments
- finance income; and
- operating revenue.
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 11 -
1.4
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash balances and short term deposits. Cash balances that are held in deposit accounts maturing over 3 months from the balance sheet date are classified as cash investments.
1.5
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Loans and receivables
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest rate method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of the interest would be immaterial. The effective interest rate method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the carrying amount on initial recognition.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
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.
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 12 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless they are included in a hedging arrangement.
1.6
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.7
Hedge accounting
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability, or a highly probable forecast transaction, the effective part of any gain or loss on the fair value of the derivative financial instrument is recognised directly in the statement of comprehensive income as other comprehensive income or expense. Any ineffective portion of the hedge is recognised immediately in profit or loss.
Where hedge accounting recognises a liability then an associated deferred tax asset is also recognised.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods in which the hedged item affects profit or loss or when the hedging relationship ends.
Hedge accounting is discontinued when the entity revokes the hedging relationship, the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Any gain or loss accumulated in equity at that time is reclassified to profit or loss when the hedged item is recognised in profit or loss. When a forecast transaction is no longer expected to occur, any gain or loss that was recognised in other comprehensive income is reclassified immediately to profit or loss.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 13 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
2
Judgements and key sources of estimation uncertainty
The preparation of the financial statements in conformity with FRS 102 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based upon historical experience and various other factors that are believed to be reasonable under the circumstances, the result of which form the basis of making judgements about carrying values of assets and liabilities that are not readily available from other sources. 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 if the revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods.
Critical judgements
Hedge Accounting
The Company’s borrowings are linked to SONlA and the Company has entered into interest rate swaps to restrict its exposure to future interest rate fluctuations.
In assessing whether the company is entitled to apply cash flow hedge accounting, the directors must apply judgment in considering whether there is appropriate matching between the hedged item (the loan balance) and the hedging instrument (the interest rate swap). The directors must prepare documentation to demonstrate this consideration.
In the director’s judgment, the Company has met the criteria for cash flow hedge accounting, accordingly the Company has therefore recognised fair value movements on derivatives in effective hedging relationships through other comprehensive income as well as deferred taxation thereon.
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 14 -
Key sources of estimation uncertainty
Accounting for service concessions and PFI contracts
The Company was established to provide services under certain private finance agreements with Portsmouth City Council. Under the terms of these Agreements, the Council (as grantor) controls the services to be provided by the Company over the contract term. Based on the contractual arrangements the Company has classified the project as a service concession arrangement, and has accounted for the principal assets, of and income streams from, the project in accordance with FRS 102, Section 34.12 Service Arrangements.
Accounting for the service concession contract and finance debtor requires estimation of finance debtor interest rates and the associated amortisation profile, which is based on projected trading results for the remainder of the contract term.
Derivative Financial Instruments
Derivative financial instruments are carried at fair value, which required estimation of various factors including future interest rates and credit risk.
Fair values for derivative contracts are based on mark-to-market valuations provided by the contract counterparty. Whilst these can be tested for reasonableness, the exact valuation methodology and forecast assumptions for future interest rates or inflation rates are specific to the counterparty.
3
Turnover and other revenue
The turnover and profit before taxation are attributable to the one principal activity of the Company.
2024
2023
£'000
£'000
Turnover analysed by class of business
Turnover from operations
570
556
Turnover from pass-throughs
72
40
642
596
2024
2023
£'000
£'000
Finance income
Interest income
237
235
Revenue, which is stated net of value added tax, represents amounts invoiced for services provided and is recognised each year as the applicable portions of the amounts receivable relating to finance and operating costs calculated on a consistent basis (see accounting policies).
Revenue is attributable to one geographical market, the United Kingdom. Revenue from pass throughs in the current year and previous year relates to variations and other pass through costs.
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 15 -
4
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£'000
£'000
For audit services
Audit of the financial statements of the company
20
19
For other services
Taxation compliance services
5
5
5
Employees
The company had no employees during the year (2023: none).
6
Directors' remuneration
2024
2023
£'000
£'000
Remuneration paid to directors
22
21
Service fees were paid to the Company's ultimate shareholder for the directors' services to the company during the year as above.
7
Debtors
2024
2023
Amounts falling due within one year:
£'000
£'000
Trade debtors
2
72
Finance debtor
186
155
Prepayments and accrued income
73
43
261
270
2024
2023
Amounts falling due after more than one year:
£'000
£'000
Finance debtor
2,578
2,765
Deferred tax asset
6
11
2,584
2,776
Total debtors
2,845
3,046
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 16 -
8
Current asset investments
2024
2023
£'000
£'000
Other investments
263
309
The Company is obligated to keep separate cash reserves in respect of future major maintenance costs and debt service commitments. These restricted cash balances amount to £277,000 at the year end (2023: £328,000).
Of this, £263,000 (2023: £309,000) was held on deposit at the balance sheet date, and as the deposits are fixed in term, and mature more than 3 months after the balance sheet date they are therefore classified as a current investment.
9
Creditors: amounts falling due within one year
2024
2023
£'000
£'000
Bank loans
225
226
Trade creditors
60
39
Amounts owed to group undertakings
17
41
Corporation tax
59
57
Other taxation and social security
22
13
Derivative financial instruments
5
9
Other creditors
64
63
Accruals and deferred income
91
69
543
517
The senior secured loan represents £3,727,000 borrowed under a facility agreement with Sumitomo Mitsui Banking Corporation. The loan bears interest at a margin over SONIA of 1.00% as at December 2024 and is repayable in instalments between 2004 and 2028. The loan is secured by fixed and floating charges over the property, assets and rights of the Company, and has certain covenants attached.
In order to hedge against interest rate variations on the loan, the Company has entered into an interest rate swap agreement with a bank whereby at six monthly intervals sums are exchanged reflecting the difference between floating and fixed interest rates, calculated on a predetermined notional principal amount.
10
Creditors: amounts falling due after more than one year
2024
2023
£'000
£'000
Bank loans
757
981
Other borrowings
379
379
Derivative financial instruments
17
37
1,153
1,397
The subordinated loan from the shareholder company bears interest at 13% and is repayable in instalments between 2028 and 2030. The loan is unsecured.
VICTORY SUPPORT SERVICES (PORTSMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
10
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
24
301
11
Provisions for liabilities
2024
2023
Notes
£'000
£'000
Deferred tax liabilities
806
858
12
Called up share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
of £1 each
1,000
1,000
1
1
13
Related party transactions
Transactions with related parties
The Company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
14
Parent company
At the balance sheet date, the immediate controlling party is Victory Support Services (Portsmouth) Holdings Limited. Copies of the financial statements of Victory Support Services (Portsmouth) Holdings Limited are available from Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ. The registered office is 1 Park Row, Leeds, LS1 5AB.
In the Directors' opinion there was no ultimate controlling party and the ultimate parent company during the
year and at year end was PPP Equity PIP LP, acting by its general manager Dalmore Capital Limited (whose registered office is 1 Park Row, Leeds, England, LS1 5AB).
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