The directors present the strategic report for the year ended 31 March 2025.

The company was established on 15 March 2001 to issue £71,000,000 Index-linked guaranteed secured bonds due September 2038 and to borrow funds from European Investment Bank for the purpose of lending funds to Summit Healthcare (Dudley) Limited ("Projectco"). These funds were arranged to fund a Private Finance Initiative (PFI) concession contract with the Dudley Group of Hospitals NHS Trust to design, build, refurbish, finance and operate various hospital facilities in Dudley, West Midlands.

The company was incorporated in Great Britain, registered in England and Wales and is domiciled in the United Kingdom.

There have not been any changes in the company's activities in the year under review, and the directors are not aware, at the date of this report, of any likely changes in the next year.

As shown in the company's statement of comprehensive income on page 14, the company made no profit or loss in the year and this result was unchanged from last year. The statement of financial position on page 15 of the financial statements also shows that the company's financial position at the year end has not changed.

The company's operations are managed under the supervision of its shareholders and lenders and are largely determined by the detailed terms of the PFI contract.

In addition, the company has credit agreements in place with its lenders which state the level of borrowing and repayments due, subject to RPI inflation, until the loan and bonds are fully repaid by 2038. These agreements subject the company to various covenants. The PFI contract and related subcontracts are fixed subject to RPI inflation for the life of the contract and this enables the company to have reasonable certainty over its income and expenditure for this period. The company remains in compliance with all covenants.

However, as noted in previous years, the decline in the credit rating of AMBAC (the Monoline Guarantor) during November 2008 led to its 'Loss of Qualifying Status' under the agreement with the European Investment Bank (EIB) and also represents a 'Guarantor Event of Default'. The EIB continues to hold the right to request a replacement guarantor. If a replacement were requested and not provided within 45 days of the request, the EIB would have the right to call in their loan. The EIB has been levying an additional 'default' interest charge since the downgrade of AMBAC but has not made any request for a replacement guarantor. Whilst the EIB has reserved its right to request a replacement guarantor, the directors have not received any indication that this right would be exercised.

Going Concern

As the underlying project outlook is profitable and revenue is being generated from a long-term government contract, the directors are confident that there will be no changes to the situation outlined above and in any event are confident that alternative replacement funding could be arranged if required.

Therefore, the directors, having considered the financial position of the company and its expected future cash flows, have prepared the financial statements on the going concern basis.

The company's principal activity as detailed above is risk averse as the group's trading relationships with its customer and funders are determined by the terms of their respective detailed PFI contracts. Its main exposure is to financial risks as detailed in the financial instruments and financial risk management sections below.

One of the risks of the company is that the group's services may not be able to continue due to the financial failure of one of the group's subcontractors. The financial stability of the facilities management company is being monitored. The directors have reviewed the benchmarking information on the facilities management contract fee and are comfortable that this is a market rate which would enable replacement of the subcontractor for a similar fee.

The company does not have any key performance indicators as it is a financing company. The sister company monitors key performance indicators as follows:

The level of performance and availability deductions arising from failures to achieve specified levels of contract service is a key performance indicator. These are reported quarterly to the Board. Key indicators of performance revolve around penalties imposed for unavailability of hospital areas or for sub-standard delivery of operational services. Performance in this area during the year was deemed to be satisfactory.

Another key indicator is the ratio of the operating cash flow to the senior debt service amount as the lenders seek confirmation that there is no risk to the ability of the company to meet its debt obligations, both currently and in the future. The ratio is tested at six-monthly intervals and each time it has been to the satisfaction of the senior debt provider.

The group's operations are managed under the supervision of its shareholders and funders and are largely determined by the detailed terms of the PFI contract. For this reason the directors believe that further key performance indicators of the group are not necessary or appropriate for an understanding of the performance or position of the business.

Financial instruments and financial risk management

The company's financial instruments comprise guaranteed secured bonds and a committed term loan facility. The proceeds of both the bonds and the loan, net of issue costs, were loaned to Summit Healthcare (Dudley) Limited, a fellow subsidiary undertaking of Summit Holdings (Dudley) Limited. The main purpose of these investments is to finance the design, build and operation of various hospital buildings under the Government's Private Finance Initiative.

The main risks arising from the company's financial instruments are interest rate, liquidity, and credit risk. The board has policies for managing each of these risks and they are summarised below.

Interest rate and liquidity risk

The company has mitigated its interest rate and liquidity risk by the loan of the proceeds to its fellow subsidiary company. The company borrows at a fixed rate of interest, subject to RPI inflation, and receives interest at the same rate from its fellow subsidiary. Due to the nature of the project, cash flows are reasonably predictable and so, subject to the matter regarding the downgraded credit rating of AMBAC and the impact on the EIB loan as detailed on page 1, this is not a major risk area for the company.

Credit risk

The company's credit risk is primarily attributable to the ability of its fellow subsidiary to service its debt obligations. As the fellow subsidiary receives the bulk of its revenue from an NHS Trust its own credit risk is significantly reduced, resulting in reduced risk for this company. Cash investments held by the fellow subsidiary are with institutions of a suitable credit quality.

The Board of Directors of the company, both individually and collectively, consider they have acted appropriately and in such a way as to promote the long-term success of the company for the benefit of its members as a whole.

Neither the company nor Projectco have any direct employees as the companies are managed under a Managed Service Agreement. The Board of Directors is satisfied that those people employed under the MSA are appropriately qualified and have the support systems in place to carry out their role. The directors are engaged with each team under the MSA to ensure the ongoing management of the underlying contracts of the company and they work collaboratively with the teams to achieve success.

Projectco is a special purpose company which has a finite lifespan with a defined set of obligations under Concession Agreements. The project company delivers its objectives through effective relationships with the group's stakeholders including lenders, suppliers and customers. This is affected by regular reporting and reviews with suppliers and customers to ensure delivery of the project company's objectives, whilst considering those stakeholders' needs. The directors of Projectco meet regularly to review strategies for effective risk mitigation and service delivery in the context of its impact on all stakeholder interests, including shareholders, lenders, suppliers, customers and the wider community.

Due to the nature of Projectco's operations, their impact on the community and environment is of paramount importance to Projectco's success. Operating safely is the company and Projectco's primary objective and is as such integrated in everything they undertake. A safe environment is managed through effective leadership, implementation of robust policies, procedures and instructions, safety management review processes both internally and externally with relevant stakeholders, reporting, audit and monitoring. An independent safety advisor is appointed by Projectco, who reports directly to the Board of Directors.

Projectco delivers contracts to support essential services to the public sector and takes its responsibility for ensuring that an appropriate environment is managed and maintained extremely seriously, ensuring the highest quality service is delivered from the assets under its management.

Post balance sheet events

There have been no significant events since the statement of financial position date.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 March 2025.

The principal activity of the company continued to be that of provision of finance to other group companies to operate certain facilities and to provide non-clinical services at hospital facilities in Dudley, West Midlands.

The results for the year are set out on page 14.

No ordinary dividends were paid (2024: £Nil). The directors do not recommend payment of a final dividend (2024: £Nil).

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

None of the directors during the year or at 31 March 2025 held any interests in the share capital of the company.

In accordance with Section 485 of the Companies Act 2006, a resolution proposing that Johnston Carmichael LLP be reappointed as auditor to the company will be put to a General Meeting.

The company recognises the importance of its environmental responsibilities, monitors its impact on the environment, and implements policies via its subcontractors to reduce any damage that might be caused by the company's activities. The company itself has no direct employees, and all work is carried out via contracts with third parties. As such, the company has not consumed more than 40,000 kWh of energy in this reporting period and qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of Financial instruments and financial risk management, and Post balance sheet events.

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.

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;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; 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.

Opinion

We have audited the financial statements of Dudley Summit PLC (“the Company”), for the year ended 31 March 2025, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, 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 2025 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.

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 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, as applied to listed public interest entities, 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.

Our approach to the audit

We planned our audit by first obtaining an understanding of the company and its environment, including its key activities delegated by the Board to relevant approved third-party service providers and the controls over provision of those services.

We conducted our audit using information maintained and provided by Resolis Limited (the “Management Service Provider”) to whom the company has delegated the provision of services.

We tailored the scope of our audit to reflect our risk assessment, taking into account such factors as the business model and activities, the accounting processes and controls, and the industry and geography in which the company operates.

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in the evaluation of the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

We summarise below the key audit matter in arriving at our audit opinion above, together with how our audit addressed this matter and the results of our audit work in relation to this matter.

Our application of materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality in determining the nature and extent of our work and in evaluating the results of that work.

During the course of the audit, we reassessed initial materiality and found no reason to alter the basis of calculation used at year-end.

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. Our evaluation of the Directors’ assessment of the company’s ability to continue to adopt the going concern basis of accounting included:

• Evaluating management's method of assessing going concern, including consideration of market conditions and macro-economic uncertainties such as interest rates and inflation rates;

• Assessing and challenging the forecast cashflows and associated sensitivity modelling used by management in support of their going concern assessment by reference to supporting documentation, Board approved budgets, our own understanding of the company and the economic environment in which it operates, and the results of other audit work, including specific evaluation of the Directors’ assessment of continuance of receipt of debt service income from Summit Healthcare (Dudley) Limited (“Projectco”), which is dependent on Projectco’s continuing receipt of unitary charge income receivable from Dudley Group of Hospitals NHS Trust;

• Assessing the plausibility of mitigating actions identified by management as available to them to continue as a going concern if downside uncertainties were to crystallise;

• Assessing the accuracy of management's forecasting by comparing the reliability of past forecasts to actual results;

• Performing arithmetical and consistency checks on management's base forecast;

• Obtaining documentary evidence of the existence of security and financial guarantees via Deed of Safeguard in place;

• Reviewing the adherence to covenants in place based on the forecasts and considered the likelihood of these being breached in the future via the sensitivity analyses performed; and

• Assessing the adequacy of the company’s going concern disclosures included in the Annual Report and Financial Statements.

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 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 the audit:

• The information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• The Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.

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 Strategic Report or 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 by the Company, 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.

Responsibilities of Directors

As explained more fully in the Directors’ responsibilities statement set out on page 6, 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 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.

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 those 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:

• Companies Act 2006;

• Financial Conduct Authority (FCA) listing and Disclosure Guidance and Transparency Rules (DTR); and

• UK Generally Accepted Accounting Practice.

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 legal and professional service expenditure incurred and through our review of 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:

• Management override of controls

Audit procedures performed in response to the heightened fraud risk identified are included in the following procedures, which were performed to provide reasonable assurance that the financial statements were free of material fraud or error:

• 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 assessing 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 the Listing Rules; 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 would become aware of it.

Other matters which we are required to address

Following the recommendation of the Board, we were appointed by the Board on 2 May 2019 to audit the financial statements for the year ending 31 March 2019 and subsequent financial periods. The period of our total uninterrupted engagement is 7 years, covering the years ended 31 March 2019 to 31 March 2025.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the company and we remain independent of the company in conducting our audit.

Our audit opinion is consistent with the additional report to the Board of Directors.

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 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.

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

Dudley Summit PLC is a public company limited by shares incorporated in England and Wales. The registered office is 1 Park Row, Leeds, United Kingdom, LS1 5AB.

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 thousand.

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

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:    

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Summit Holdings (Dudley) Limited. These consolidated financial statements are available from its registered office, 1 Park Row, Leeds, United Kingdom, LS1 5AB.

The financial statements are prepared on a going concern basis. As disclosed in the Strategic Report the directors consider that the company has adequate resources to continue in operational existence for the remainder of the concession.true

As noted in the Strategic Report on page 1, the company was established for the purpose of lending funds to Projectco. The company's ability to meet its obligations is therefore closely connected to Projectco's financial position and cash flows. When forming the opinion, the directors have therefore prepared a detailed model forecast within Projectco to the remainder of the concession incorporating the relevant terms of the PFI contract, subcontracts and Credit Agreement and reasonably prudent economic assumptions, including the repayment of all sums due to this company. This forecast and associated business model, which is updated regularly, predicts that Projectco will be profitable and will have sufficient cash resources to operate within the terms of the PFI contract, Subcontract and Credit Agreement. Consequently the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for a period of at least 12 months from the date of approval of the financial statements and have therefore prepared the financial statements on a going concern basis.

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.

Finance costs

Finance costs of financial liabilities are recognised in the statement of comprehensive income over the term of such instruments at a constant rate on the carrying amount.

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 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 method, less any impairment.

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest 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 net carrying amount on initial recognition.

Financial assets 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.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

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 are bank loans that are classified as debt and 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.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Interest-bearing bonds and bank loans are initially recorded at the proceeds received, net of direct issue costs. The outstanding balance is periodically adjusted for inflation based on RPI to arrive at the carrying value. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the statement of comprehensive income using the effective interest method, and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Issue costs are amortised over the period of the borrowings in proportion to the scheduled principal repayments.

Financial liabilities are derecognised when, and only when, the company’s contractual obligations expire or are discharged or cancelled.

Current tax, including UK corporation tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is provided in full on timing differences which result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items or income and expenditure in taxation computations in periods different from those in which they are included in the financial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted.

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.

In the opinion of the directors there are no critical judgements or key sources of estimation uncertainty.

The £16k fee (2024: £11k) for the statutory audit of these financial statements is payable by Summit Healthcare (Dudley) Limited in both the current and prior years. Auditor's remuneration is paid to Johnston Carmichael LLP.

The company had no employees during the year (2024: none).

No director received any payment during the year in respect of their services to the company (2024: £nil). Directors are appointed by the shareholders of the Company and are remunerated by the relevant shareholder.

There is no current or deferred tax liability for the year as the company incurred neither a taxable profit nor a loss (2024: £nil).

The terms of the bonds and of the loan are such that all payments of principal and interest are indexed to retail price inflation. The payment schedule above is based on the net cost indexed principal outstanding at 31 March 2025 and the issue costs. The bond and loan are each secured under the terms of a Security Trust Deed on the assets and liabilities of the group. The bond costs are net of all issue costs of £525,000 (2024: £537,000). The loan costs are net of all issue costs of £345,000 (2024: £378,000).

During late 2008 the credit rating of AMBAC (the Monoline Guarantor) declined which led to a 'Loss of Qualifying Status' under the finance agreement and represents a 'Guarantor Event of Default'. As disclosed on page 1, since November 2008 the European Investment Bank, the loan provider, whilst reserving the right to request a replacement guarantor, have not done so and therefore to date there is no default on the loan. EIB continues to make the loan available, but have levied additional 'default' interest charges.

An explanation of the company's objectives, policies and strategies for the role of other financial instruments can be found in the Strategic Report and Accounting Policies.

The company issued the Guaranteed Secured Bonds in order to finance the design, build and operation of various hospital buildings under the Government's PFI initiative.

Financial assets

The company's financial asset is the outstanding balance on its loan to its fellow subsidiary undertaking of £155.9m (2024: £158.5m). The floating rate financial asset comprises a 3.7772% RPI linked loan and a 3.0716% RPI linked committed term loan facility. Indexation is applied to the outstanding loan balances in March and September of each year.

Financial liabilities

The company's financial liabilities are its listed bonds and a committed term loan facility as described elsewhere in these financial statements, all of which are denominated in sterling.

The bonds and loan are floating rate financial liabilities comprising a 3.7772% RPI linked guaranteed secured bond, and a 3.0716% RPI linked commercial term loan facility.

Financial risk management

The book value of the listed bonds and committed term loans are matched against the amount due from a fellow subsidiary undertaking. As such the company is not directly exposed to credit, liquidity, market, currency or capital risks; any exposure to these risks is solely through its transactions with other group entities. These risks have been considered in detail for the group as a whole in the financial statements of the parent company Summit Holdings (Dudley) Limited.

The company is a 100% subsidiary of Summit Holdings (Dudley) Limited, which is the largest and smallest company to consolidate the financial statements of the company. The registered office of the parent company is shown in note 1.

Summit Holdings (Dudley) Limited is jointly owned and jointly controlled in equal shares by Browning PFI Holdings Limited, Aberdeen Infrastructure (No.3) Limited and Crimson Project Investments Limited.

Copies of the financial statements of Summit Holdings (Dudley) Limited can be obtained from Companies House, Crown Way, Cardiff CF14 3UZ.

The company has taken advantage of the exemptions available to subsidiary undertakings under FRS 102 by not disclosing transactions with 100% wholly owned group qualifying companies as related parties.