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| Name | Symbol | Market | Type |
|---|---|---|---|
| Newhosp. 1.7774 | LSE:49FI | London | Bond |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0 | - |
TIDM49FI
RNS Number : 9738K
NewHospitals (St.Helens & Knowsley)
30 September 2016
Hot Features
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Company Registration No. 05610559 (England and Wales)
NEWHOSPITALS (ST HELENS & KNOWSLEY) FINANCE PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEARED 31 MARCH 2016
Directors Mr N Crowther
Mr D Brooking
Secretary HCP Social Infrastructure (UK) Ltd
Company number 05610559
Registered office 8 White Oak Square
London Road
Swanley
Kent
BR8 7AG
Auditor KPMG LLP
66 Queen Square
Bristol
BS1 4BE
Page
Strategic report 1 - 4
Directors' report 5
Directors' responsibilities statement 6
Independent auditor's report to the
members of NewHospitals (St Helens
& Knowsley) Finance Plc 7
Profit and loss and other comprehensive
income 8
Balance sheet 9
Notes to the financial statements 10 - 20
The directors present the strategic report and financial
statements for the year ended 31 March 2016.
Business Review
The Company's principal activities are the raising
of finance through the issue of index-linked bonds,
an index-linked bank loan and unsecured subordinated
loan stock and the onward loan of the proceeds,
with identical terms for the payment of interest
and principal, to a fellow subsidiary undertaking
of the Company's immediate parent undertaking, NewHospitals
(St Helens & Knowsley) Limited. The directors are
not aware, at the date of this report, of any likely
major changes in the Company's activities in the
next year.
On 7 June 2006, the Company authorised the creation
of GBP178,300,000 of 1.7774% Index-Linked Guaranteed
Secured Bonds due 2047 of which GBP153,000,000 were
issued. It also entered into a loan agreement with
the European Investment Bank (the "EIB") under which
the EIB granted GBP149,186,000 of a 1.743% index-linked
guaranteed secured bank loan due 2038. The bond
and bank loan are index-linked to movements in the
UK All Items Retail Prices Index (the "UK RPI").
The bonds and bank loan have the benefit of an unconditional
and irrevocable financial guarantee as to all payments
of interest and principal issued by the monoline
insurer Assured Guaranty (Europe) Limited (formerly
Financial Security Assurance (UK) Limited).
On 7 June 2006, NewHospitals (St Helens & Knowsley)
Limited entered into a Project Agreement with the
St Helens & Knowsley Teaching Hospitals NHS Trust
(the "Trust"), together with an associated construction
contract, funding agreements, hard and soft services
contracts, a medical equipment supplies contract
and other ancillary project related agreements.
The Project Agreement requires NewHospitals (St
Helens & Knowsley) Limited to provide and maintain
two new hospital facilities for the Trust, and to
deliver certain non-clinical services in the existing
and new facilities over a 41 year concession term
under the Government's Private Finance Initiative
("PFI").
On 28 March 2008, GBP6,800,000 of the remaining
GBP25,300,000 Index-Linked Guaranteed Secured Bonds
created but not issued, the "Committed Variation
Bonds", were cancelled as they expired on 31 December
2007 in accordance with the terms of the Bond Trust
Deed and Collateral Deed.
On 26 May 2009 the shareholders of the Company's
immediate parent commenced subscription for tranches
of unsecured 11.96% fixed interest subordinated
loan stock created, constituted and issued by the
Company, on 7 June 2006. This subordinated loan
stock totalled GBP29,490,000 and was fully subscribed
as at 31 March 2011. During the year to 31 March
2016 two loan stock redemptions were paid to the
Company's shareholders leaving a balance of subordinated
loan stock as at 31 March 2016 totalling GBP20,914,000.
Key performance indicators
Historical performance
The Group is obliged to meet the conditions laid
down in the Bond Trust Deed and Collateral Deed
with Assured Guaranty, European Investment Bank
and Deutsche Trustee Company Limited. To the best
of the directors' knowledge the Group has met all
of the obligations contained within these Deeds
and there have been no Events of Default, Potential
Events of Default or Trigger Events with regard
to the Collateral Deed in the year to 31 March 2016.
Financial performance and financial position
The loss for the year, after taxation, amounted
to GBPnil (2015: GBPnil). The directors are unable
to recommend the payment of a dividend (2015: GBPnil).
Financial penalties are levied by the St Helens
& Knowsley Teaching Hospitals NHS Trust (the "Trust")
on the Group in the event of performance standards
not being achieved in accordance with the detailed
criteria as set out in the Project Agreement. All
deductions are passed on to the contracted service
providers and the quantum of the penalties is an
indication of the level of performance. During the
year ended 31 March 2016 service performance deductions
totalling GBP38,683 were levied for Steady State
services (2015: GBP58,753).This represents 0.19%
(2015: 0.29%) of the total revenues on the Group
from the service providers for the provision of
the services.
The directors have modelled the anticipated financial
outcome of the Project over the 41 year concession
term and this has shown the project to be profitable
and cash generative. The directors monitor actual
financial performance against this anticipated performance.
Financial covenants have been met during the year
and, having considered the anticipated future performance
and position of the Company, the directors are of
the opinion that the covenants will continue to
be met in the future, and the Company will therefore
continue in business.
Principal risks and uncertainties
The risk management policy of the Company is designed
to identify and manage risk at the earliest possible
point. The Company maintains a detailed risk register
which is formally reviewed on a quarterly basis.
The Company recognises that effective risk management
is fundamental to achieving its business objectives
in order to meet its commitments in fulfilling the
PFI contract and in delivering a safe and efficient
service. Risk management contributes to the success
of the business by identifying opportunities and
anticipating risks in order to improve business
performance and fulfil the Company's contractual
obligations.
Financial instrument risks
The Company's financial instruments comprise index-linked
bonds, an index-linked bank loan, a fixed rate subordinated
loan, and a fixed rate intercompany debtor and an
index-linked intercompany debtor, both due from
NewHospitals (St Helens & Knowsley) Limited. NewHospitals
(St Helens & Knowsley) Limited services these intercompany
loans with cash flows generated under the Project
Agreement.
The financial structure has been established to
ensure that the cash flows from NewHospitals (St
Helens & Knowsley) Limited's PFI hospital concession
assets are sufficient to meet all interest and principal
payments due on the index-linked and fixed rate
debt. During the year NewHospitals (St Helens &
Knowsley) Limited met its debt service obligations
to the Company. Based upon the projected future
cash flows of NewHospitals (St Helens & Knowsley)
Limited, the directors consider that it will be
able to meet its obligations to the Company as they
fall due for the foreseeable future. Further details
are given in note 9 to the financial statements.
The Company does not undertake financial instrument
transactions which are speculative or unrelated
to the Company's trading activities. Board approval
is required for the use of any new financial instrument,
and the Company's ability to enter into any new
transaction is constrained by covenants in its existing
funding agreements. Exposure to market related interest
rate risk, cash flow risk, credit risk and liquidity
risk arises in the normal course of the Company's
business. The Company's exposure to, and the management
of, these risks is described in further detail as
follows:
Market related interest rate risk
The Company is exposed to market related interest
rate risk in relation to its index-linked debt through
movements in the UK RPI. This is mitigated as the
onloans due from NewHospitals St Helens & Knowsley)
Limited are also index-linked through movements
in the UK Retail Price Index published by the Office
of National Statistics. NewHospitals (St Helens
& Knowsley) Limited can service these onloans as
the majority of the cash flows generated from the
Trust increase in line with movements in the UK
RPI. An analysis of the Company's financial instruments
which are subject to interest rate risk is detailed
in note 7 to the financial statements.
Cash flow risk
The Company is exposed to cash flow risk in relation
to variability in long term cash inflows due under
the onloan agreements with NewHospitals (St Helens
& Knowsley) Limited. This is mitigated as the cash
inflows due under the onloan agreements with NewHospitals
(St Helens & Knowsley) Limited exactly match the
cash outflows required to service the Company's
financial liabilities. NewHospitals (St Helens &
Knowsley) Limited's exposure to variability in long
terms cash inflows generated under the concession
with the Trust is mitigated as performance and availability
deductions are passed on to the relevant service
providers and the majority of revenues and costs
which the Company receives and pays are index-linked
to movements in the UK RPI.
Principal risks and uncertainties (continued)
Credit risk
Credit risk is the risk that one party to a financial
instrument will cause a financial loss to the other
party by failing to discharge an obligation under
the contract giving rise to the financial instrument.
The Company's long term exposure to credit risk,
which exists predominantly until the end of the
Project Agreement, is principally dependent on the
credit worthiness of the account bank, Lloyds Bank
Plc ("Lloyds"), which holds the Group's cash balances.
Lloyds must hold a minimum short term debt rating
of A-1 (or better) issued by Standard & Poor's and
P-1 (or better) issued by Moody's. Should the ratings
fall below these levels the Company and its senior
lenders each have the right to request that an acceptable
replacement bank be appointed. The Company actively
monitors the credit ratings of its account bank
and reports are issued on a monthly basis. The Company's
maximum credit risk exposure relating to its financial
assets is represented by their carrying value at
the balance sheet date.
The Company's other long term exposure to credit
risk is principally dependent on the creditworthiness
of the Trust as the Group's sole client. The risk
associated with this is mitigated as the cash flows
are secured under the Project Agreement, which is
a long term contract with the Trust, whose obligations
and liabilities are effectively underwritten by
UK Government.
Interest rate risk/inflation risk
All borrowings are at a fixed rate other than index-linking,
and therefore no interest rate risk arises on them.
Interest rate risk arises on the Company's cash
and short term deposits. The majority of the Company's
borrowings comprise an index-linked secured bond
and an index-linked secured loan. Repayment of these
loans, and meeting operational expenditure commitments,
will be made from income which is itself subject
to indexation. The Company thereby mitigates any
exposure to movements in the UK All Items Retail
Prices Index.
Liquidity risk
Liquidity risk is the risk that an entity will encounter
difficulties in meeting obligations associated with
its financial liabilities. The Company's liquidity
risk is principally managed through financing by
means of long term borrowings which are tailored
to match the expected cash flows arising. In addition
the Group maintains a debt service reserve bank
account to provide short term liquidity against
future debt service requirements.
On behalf of the board
Mr N Crowther
Director
21 September 2016
The directors present their annual report and financial
statements for the year ended 31 March 2016.
Principal activities
The Company's principal activities are the raising
of finance through the issue of index-linked bonds,
an index-linked bank loan and unsecured subordinated
loan stock and the onward loan of the proceeds,
with identical terms for the payment of interest
and principal, to a fellow subsidiary undertaking
of the Company's immediate parent undertaking, NewHospitals
(St Helens & Knowsley) Limited.
Directors
The directors who held office during the year and
up to the date of signature of the financial statements
were as follows:
Mr N Crowther
Mr D Brooking
Results and dividends
The results for the year are set out on page 8.
Directors' interests
No director had any share interest in the issued
share capital of the Company at 31 March 2016 (2015:
GBPnil)
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity
provisions for the benefit of its directors during
the year. These provisions remain in force at the
reporting date.
Auditor
The auditor, KPMG LLP, is deemed to be reappointed
under section 487(2) of the Companies Act 2006.
Statement of disclosure to the 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 directors have reviewed the Company's projected
cash flows contained in the financial model covering
accounting periods up to 31 March 2048. The directors
have also examined the current status of the Company's
principal contracts and likely developments in the
foreseeable future. Having reviewed the forecast
cashflow and financial facilities available to the
Company, the directors consider the Company will
be able to meet its loan covenant requirements and
settle its liabilities as they fall due and accordingly
the financial statements have been prepared on a
going concern basis.
Registered office
The Company's registered office is 8 White Oak Square,
London Road, Swanley, Kent, BR8 7AG.
On behalf of the board
Mr N Crowther
Director
21 September 2016
The directors are responsible for preparing the
strategic report, the directors' report and the
financial statements in accordance with applicable
law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law
the directors have prepared the financial statements
in accordance with applicable law and United Kingdom
Accounting Standards (United Kingdom Generally Accepted
Accounting Practice), including The Financial Reporting
Standard Applicable in the UK and Republic of Ireland
(FRS 102).
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 United Kingdom Accounting
Standards, including FRS 102 have been followed,
subject to any material departures disclosed and
explained in the financial statements;
* 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.
We have audited the financial statements of NewHospitals
(St Helens & Knowsley) Finance Plc for the year
ended 31 March 2016 set out on pages 8 to 20. The
financial reporting framework that has been applied
in their preparation is applicable law and United
Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice), including FRS 102
The Financial Reporting Standard applicable in the
UK and Republic of Ireland.
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.
Respective responsibilities of
directors and auditor
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. Our responsibility is to audit and express
an opinion on the financial statements in accordance
with applicable law and International Standards
on Auditing (UK and Ireland). Those standards require
us to comply with the Auditing Practices Board's
Ethical Standards for Auditors.
Scope of the audit of the financial
statements
A description of the scope of an audit of financial
statements is provided on the Financial Reporting
Council's website at www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion the financial statements:
* give a true and fair view of the state of the
company's affairs as at 31 March 2016 and of its
result 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.
Opinion on other matter prescribed by the Companies
Act 2006
In our opinion 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.
Matters on which we are required to report by exception
We have nothing to report in respect of the following
matters where 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.
Huw Brown (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
66 Queen Square
Bristol
BS1 4BE
27 September 2016
2016 2015
Notes GBP000 GBP000
Interest receivable
and similar income 4 16,214 18,621
Interest payable and
similar charges 5 (16,214) (18,621)
Profit before taxation - -
Taxation 6 - -
Total comprehensive
profit for the financial
year - -
The profit and loss account has been prepared on
the basis that all of the results relate to continuing
operations.
There was no other comprehensive income recognised
in either the current year of previous year.
The notes on pages 10 to 20 form part of these financial
statements.
2016 2015
Notes GBP000 GBP000 GBP000 GBP000
Current assets
Debtors falling due
after one year 8 347,920 357,936
Debtors falling due
within one year 8 12,500 11,771
360,420 369,707
Creditors: amounts
falling due within
one year
Loans and borrowings 9 12,500 11,771
Net current assets 347,920 357,936
Creditors: amounts
falling due after
more than one year
Loans and borrowings 9 344,707 354,438
Other creditors 10 3,163 3,448
(347,870) (357,886)
Net assets 50 50
Capital and reserves
Called up share capital 11 50 50
The notes on pages 10 to 20 form part of these financial
statements.
The financial statements were approved by the board
of directors and authorised for issue on 21 September
2016 and were signed on its behalf by:
Mr N Crowther
Director
Company Registration No. 05610559
1 Accounting policies
Company information
NewHospitals (St Helens & Knowsley) Finance Plc
("The Company") is a limited company domiciled
and incorporated in England and Wales. The registered
office is 8 White Oak Square, London Road, Swanley,
Kent, BR8 7AG.
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 presentation currency of these financial statements
is sterling. All amounts in the financial statements
have been rounded to the nearest GBP1,000.
These financial statements for the year ended
31 March 2016 are the first financial statements
of NewHospitals (St Helens & Knowsley) Finance
Plc prepared in accordance with FRS 102, The Financial
Reporting Standard applicable in the UK and Republic
of Ireland. The date of transition to FRS 102
was 1 April 2014. The reported financial position
and financial performance for the previous period
are not affected by the transition to FRS 102.
The accounting policies set out below have, unless
otherwise stated, been applied consistently to
all periods presented in these financial statements.
On first time adoption of FRS 102, the Company
has not retrospectively changed its accounting
under old UK GAAP for accounting estimates.
The Company's parent undertaking, NewHospitals
(St Helens & Knowsley) Holdings Limited includes
the Company in its consolidated financial statements.
The consolidated financial statements of NewHospitals
(St Helens & Knowsley) Holdings Limited are prepared
in accordance with FRS102 and are available to
the public and may be obtained from Companies
House, Crown Way, Cardiff, CF14 3UZ.
In these financial statements, the company is
considered to be a qualifying entity (for the
purposes of this FRS) and has applied the exemptions
available under FRS 102 in respect of the preparation
and disclosure of the Cash Flow Statement and
related notes.
The company proposes to continue to adopt FRS102
in its next financial statements.
1.2 Going concern
The Company is reliant on the operations of its
fellow subsidiary NewHospitals (St Helens and
Knowsley) Limited to be able to meet its liabilities
as they fall due. Taking into account reasonable
possible risks in operations to NewHospitals (St
Helens and Knowsley) Limited and the fact that
the obligations of NewHospitals (St Helens and
Knowsley) Limited's sole customer are underwritten
by the Secretary of State for Health, the directors
have a reasonable expectation that the Company
will be able to settle its liabilities as they
fall due for the foreseeable future and therefore
it is appropriate to prepare these financial statements
on the going concern basis.
1 Accounting policies (continued)
1.3 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.
Trade and other debtors / creditors
Trade and other debtors are recognised initially
at transaction price less attributable transaction
costs receivable within one year. Trade and other
creditors are recognised initially at transaction
price plus attributable transaction costs payable
within one year. Subsequent to initial recognition
they are measured at amortised cost using the
effective interest method, less any impairment
losses in the case of trade debtors. If the arrangement
constitutes a financing transaction, for example
if payment is deferred beyond normal business
terms, then it is measured at the present value
of future payments discounted at a market rate
of instrument for a similar debt instrument.
Interest-bearing borrowings classified as basic
financial instruments
Senior secured bonds and term loans are initially
stated at the amount of the net proceeds after
deduction of related issue costs. The carrying
amount is increased by the finance cost in respect
of the accounting period and reduced by payments
made in that period. The index-linked secured
bonds and index-linked secured term loan are each
valued at amortised cost, using the effective
interest rate method, taking account of projected
indexation across the term of the liability.
Issue costs are written off to the profit and
loss account, over the term of the debt on an
amortised cost basis.
2 Auditor's remuneration
2016 2015
Fees payable to the company's auditor GBP000 GBP000
and its associates:
For audit services
Audit of the company's financial
statements 5 5
The auditor's remuneration was borne by NewHospitals
(St Helens & Knowsley) Limited.
Amounts receivable by the Company's auditor and
its associates in respect of services to the Company,
other than the audit of the Company's financial
statements, have not disclosed as the information
is required instead to be disclosed on a consolidated
basis in the consolidated financial statements
of the Company's parent, NewHospitals (St Helens
& Knowsley) Holdings Limited.
3 Employees
The Company operates through subcontracting services
and there were no persons employed by the Company
during the year (2015: none).
4 Interest receivable and similar
income
2016 2015
GBP000 GBP000
Interest income
Interest on loans to NewHospitals
(St Helens & Knowsley) Limited 16,214 18,621
5 Interest payable and similar charges
2016 2015
GBP000 GBP000
Interest on financial liabilities measured at
amortised cost:
Interest and indexation on bank
overdrafts and loans 4,763 7,499
Interest and indexation on bonds 5,106 7,965
Interest on subordinated loans 5,662 2,468
Amortisation of finance arrangement
costs 683 689
16,214 18,621
6 Taxation
The results for the year do not give rise to a
tax charge (2015: GBPnil).
7 Financial instruments
2016 2015
GBP000 GBP000
Carrying amount of financial assets
Debt instruments measured at amortised
cost 360,420 369,707
Carrying amount of financial liabilities
Measured at amortised cost 360,370 369,657
7 Financial instruments (continued)
The Company's financial instruments comprise index-linked
bonds, an index-linked bank loan, a fixed rate
subordinated loan, and, a fixed rate intercompany
debtor and an index-linked intercompany debtor,
both due from NewHospitals (St Helens and Knowsley)
Limited. NewHospitals (St Helens and Knowsley)
Limited services these loans with cash flows generated
under the Project Agreement.
The financial structure has been established to
ensure that the cash flows from NewHospitals (St
Helens and Knowsley) Limited's PFI hospital concession
assets are sufficient to meet all interest and
principal payments due on the index-linked and
fixed rate debt. During the year, NewHospitals
(St Helens and Knowsley) Limited met its debt
service obligations to the Company. Based upon
the projected future cash flows of NewHospitals
(St Helens and Knowsley) Limited, the directors
consider that it will be able to meet its obligations
to the Company as they fall due for the foreseeable
future.
The Company does not undertake financial instrument
transactions which are speculative or unrelated
to the Company's trading activities. Board approval
is required for the use of any new financial instrument,
and the Company's ability to enter into any new
transaction is constrained by covenants in its
existing funding agreements. Exposure to market
related interest rate risk, cash flow risk, credit
risk, and liquidity risk arises in the normal
course of the Company's business. The Company's
exposure to, and the management of, these risks
is described in further detail as follows:
Market related interest rate risk
The Company is exposed to market related interest
rate risk in relation to its index-linked debt
through movements in the UK RPI. This is mitigated
as the onloans due from NewHospitals (St Helens
and Knowsley) Limited are also index-linked through
movements in the UK RPI. NewHospitals (St Helens
and Knowsley) Limited can service these onloans
as the majority of the cash flows generated from
its PFI hospital concession assets increase in
line with movements in the UK RPI.
Interest rate risk profile of financial assets
and liabilities
The disclosures below set out the carrying amount,
by maturity, of the Company's floating interest
rate financial instruments that are exposed to
interest rate risk.
Floating
Rate:
Loan to Loans
NewHospitals to NewHospitals
(St Helens (St Helens
& Knowsley) Bank & Knowsley)
Bond Bank loan Limited Bond loan Limited
2016 2016 2016 2015 2015 2015
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Within
1 year (5,602) (6,208) 11,810 (5,552) (6,219) 11,771
1-2 years (5,418) (7,888) 13,306 (5,751) (6,374) 12,125
2-3 years (4,159) (8,225) 12,384 (4,704) (6,534) 11,238
3-4 years (2,809) (8,576) 11,385 (3,611) (6,697) 10,308
4-5 years (2,877) (8,943) 11,820 (2,439) (6,864) 9,303
Over 5
years (221,350) (187,687) 409,037 (162,451) (141,695) 304,146
Unamortised
transaction
costs 8,426 5,345 (13,771) 8,717 5,715 (14,432)
Total (233,789) (222,182) 455,971 (175,791) (168,668) 344,459
7 Financial instruments (continued)
Floating rate
The floating rate financial liabilities comprise
a 1.7774% Index-linked Guaranteed Secured Bond
and a 1.743% Index-Linked Guaranteed Secured European
Investment Bank Loan. The floating rate financial
asset comprises an amount due from NewHospitals
(St Helens and Knowsley) Limited. The return on
the amount due from NewHospitals (St Helens and
Knowsley) Limited exactly matches the interest
and indexation payable on the Company's bond and
bank loan. Interest on financial instruments classified
as floating rate is repriced at intervals of less
than one year. The disclosures below set out the
carrying amount, by maturity, of the Company's
fixed interest rate financial instruments.
Fixed
Rate:
Loan to Loan
NewHospitals to NewHospitals
(St Helens (St Helens
Subordinated & Knowsley) Subordinated & Knowsley)
Loan Stock Limited Total Loan Stock Limited Total
2016 2016 2016 2015 2015 2015
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Over 5
years (20,914) 20,914 - (22,490) 22,490 -
Unamortised
transaction
costs 717 (717) - 741 (741) -
(20,197) 20,197 - (21,749) 21,749 -
Fixed rate
The fixed rate financial liability comprises an
11.96% unsecured subordinated loan. The fixed
rate financial asset comprises an amount due from
NewHospitals (St Helens and Knowsley) Limited.
The return on the amount due from NewHospitals
(St Helens and Knowsley) Limited exactly matches
the interest payable on the Company's subordinated
loan stock. Interest on financial instruments
classified as fixed rate is fixed until the maturity
of the instrument. The Company also has an amount
due from NewHospitals (St Helens and Knowsley)
Limited of GBP50,000 which is not included in
the above table as it is non-interest bearing
and not subject to interest rate risk.
A sensitivity analysis showing the effects of
reasonably possible changes in the UK RPI on the
Company's results is not disclosed as the financing
costs of the bond and bank loan are matched exactly
by the return on the amount due from NewHospitals
(St Helens and Knowsley) Limited, whatever the
prevailing rate of the UK RPI. Therefore the Company's
results are unaffected by any changes in the UK
RPI
7 Financial instruments (continued)
Cash flow risk
The Company is exposed to cash flow risk in relation
to variability in long term cash inflows due under
the onloan agreements with NewHospitals (St Helens
and Knowsley) Limited. This is mitigated as the
cash inflows due under the onloan agreements with
NewHospitals (St Helens and Knowsley) Limited
exactly match the cash outflows required to service
the Company's financial liabilities. NewHospitals
(St Helens and Knowsley) Limited's exposure to
variability in long term cash inflows generated
under the concession with the Trust is mitigated
as performance and availability deductions are
passed on to the relevant service providers and
the majority of revenues and costs which the Company
receives and pays are index-linked to movements
in the UK RPI.
Credit risk
Credit risk is the risk that one party to a financial
instrument will cause a financial loss to the
other party by failing to discharge an obligation
under the contract giving rise to the financial
instrument. The Company's credit risk is concentrated
as its cash inflows due under the onloan agreements
are received from NewHospitals (St Helens and
Knowsley) Limited. This concentration of risk
is mitigated as the cash flows generated from
the PFI hospital concession assets held by NewHospitals
(St Helens and Knowsley) Limited are secured under
contract with the Trust, whose obligations and
liabilities under the Project Agreement are effectively
underwritten by the UK Government.
Maximum exposure to credit risk
The maximum credit risk exposure relating to financial
assets is represented by their carrying value
at the balance sheet date.
The Company's risk management policies and contractual
protections in place for monitoring and preserving
the credit quality of the financial assets detailed
above are disclosed in the directors' report and
in this note 7 to the financial statements. None
of the financial assets are past due or subject
to any impairment as at the balance sheet date.
Liquidity risk
The Company's liquidity risk is principally managed
through financing the Company by means of long
term borrowings which are tailored to match the
expected cash inflows due under the onloan agreements
from NewHospitals (St Helens and Knowsley) Limited.
NewHospitals (St Helens and Knowsley) Limited's
liquidity risk is principally managed through
financing by means of the onloan agreements which
are tailored to match the expected cash flows
arising from its PFI hospital concession assets.
In addition NewHospitals (St Helens and Knowsley)
Limited maintains a debt service reserve bank
account to provide short term liquidity against
future debt service requirements under the onloan
agreements. The maturity profile of the anticipated
undiscounted future cash flows including interest
and inflation and based on the earliest date on
which the Company can be required to pay its financial
liabilities, is as follows:
Subordinated Bank Subordinated
Bond* Bank loan* Loan Stock Bond* loan* Loan Stock
Interest
rate 4.28% 4.24% 11.96% 4.28% 4.24% 11.96%
2016 2016 2016 2015 2015 2015
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Within
1 year 8,916 9,462 3,939 8,867 9,368 3,660
1-2 years 7,870 9,697 4,500 9,047 9,601 3,540
2-3 years 6,792 9,938 5,255 7,985 9,840 3,421
3-4 years 5,659 10,185 4,375 6,892 10,084 3,301
4-5 years 5,753 10,438 3,254 5,742 10,335 3,182
Over 5
years 371,622 225,565 69,602 382,920 239,470 36,308
406,612 275,285 90,925 421,453 288,698 53,412
7 Financial instruments (continued)
*After 6 months following each period end date,
this assumes a long run average of the future
UK RPI of
2.5% per annum. This long term assumed rate, taken
together with the fixed interest rate elements
of the
bond and bank loan as detailed in note 9, gives
the assumed long term combined interest rate as
disclosed above.
Set out below is a comparison of carrying amounts
and fair values of all the Company's financial
assets and liabilities.
2016 2016 2015 2015
Book
Book value Fair value value Fair value
Bank loan (164,561) (227,527) (168,667) (231,768)
Bond (172,449) (242,215) (175,792) (245,226)
Subordinated loan stock (23,361) (54,856) (25,198) (35,049)
Loans to NewHospitals
(St Helens & Knowsley)
Limited 360,371 524,598 369,657 512,043
8 Debtors
2016 2015
Amounts falling due GBP000 GBP000
within one year:
Loans to NewHospitals (St Helens
& Knowsley) Limited 12,500 11,771
Amounts falling due
after one year:
Loans to NewHospitals (St Helens
& Knowsley) Limited 347,920 357,936
Total debtors 360,420 369,707
9 Loans and borrowings
2016 2015
GBP000 GBP000
Bank loans 164,561 168,668
Bonds 172,449 175,791
Subordinated loans 20,197 21,750
357,207 366,209
Payable within one year 12,500 11,771
Payable after one year 344,707 354,438
Terms and debt repayment schedule:
Nominal Year of Repayment 2016 2015
interest maturity schedule GBP000 GBP000
rate
Bond 1.7774% 2047 Semi-annual 172,449 175,791
Bank loan 1.7430% 2038 Semi-annual 164,561 168,668
Subordinated
loan stock 11.96% 2047 Semi-annual 20,197 21,750
357,207 366,209
9 Loans and borrowings (continued)
Index-Linked Guaranteed Secured Bonds due 2047
The Company has created GBP178,300,000 of 1.7774%
Index-Linked Guaranteed Secured Bonds due 2047
pursuant to a Bond Trust Deed and Collateral Deed
dated 7 June 2006, of which GBP153,000,000 were
issued for cash on 7 June 2006 at 99.99% of par.
On 20 March 2008, GBP6,800,000 of the remaining
GBP25,300,000 Index-Linked Guaranteed Secured
Bonds created but not issued, the "Committed Variation
Bonds", were cancelled as they expired on 31 December
2007 in accordance with the Terms of the Bond
Trust Deed and Collateral Deed.
The bonds bear interest at 1.7774%, which together
with its principal repayment, is subject to indexation
based on movements in the UK RPI in accordance
with the terms of the Bond Trust Deed. The interest
is payable semi-annually in arrears on 31 March
and 30 September each year. The principal on the
bonds is repayable in instalments which commence
on 31 March 2012 and end in February 2047.
The bonds have the benefit of an unconditional
and irrevocable financial guarantee issued by
Assured Guaranty (Europe) Limited (formerly Financial
Security Assurance (UK) Limited) in favour of
Deutsche Trustee Company Limited as security trustee
over all of the undertakings and assets of the
Company.
Index-Linked Guaranteed Secured Bank Loan due
2038
The Company has drawn GBP149,186,000 of a 1.743%
Index-Linked Guaranteed Secured Bank Loan due
2038 pursuant to a Loan Agreement dated 1 June
2006 and a Collateral Deed dated 7 June 2006.
The loan has an interest rate of 1.743%, which
together with its principal repayment, is subject
to indexation based on movements in the UK RPI
in accordance with the terms of the Loan Agreement.
The interest is payable semi-annually in arrears
on 31 March and 30 September each year. The loan
principal is repayable in instalments which commence
on 30 September 2011 and end in June 2038.
The index linked bank loan has the benefit of
an unconditional and irrevocable financial guarantee
issued by Assured Guaranty (Europe) Limited (formerly
Financial Security Assurance (UK) Limited) in
favour of Deutsche Trustee Company Limited as
security trustee over all of the undertakings
and assets of the Company.
9 Loans and borrowings (continued)
Fixed rate unsecured subordinated loan stock due
2047
On 24 May 2006, the Company authorised and approved
the issue of GBP30,090,000 unsecured 11.96% fixed
interest loan notes which were constituted in
a Deed Poll dated 7 June 2006. Under the terms
of an Equity Subscription Agreement dated 7 June
2006, the Company's shareholders undertook to
subscribe for the loan notes in separate tranches
up to a total value of GBP30,090,000 over the
period from 31 May 2009 to 31 March 2011. In the
year ended 31 March 2011 the total amount of loan
notes subscribed for by the Company's shareholders
was GBP29,490,000. On the 30 March 2012 an early
redemption payment of GBP5,000,000 (at par) was
made to the Company's shareholders and during
the year to 31 March 2016 two further redemptions
of principal have been paid to the Company's shareholders,
leaving the balance of subordinated loan stock
as at the year-end of GBP20,914,000. The 11.96%
fixed interest accrues from 1 April 2011 and interest
is paid semi-annually in arrears every 30 September
and 31 March thereafter. Of the total GBP30,090,000
loan notes constituted, GBP600,000 relates to
a commitment to subscribe for Contingent Equity
Tranche loan notes as detailed in the Equity Subscription
Agreement. The commitment to subscribe for this
tranche of the loan notes is no longer required
as the matching Committed Variation Bonds to which
the amount relates were cancelled on 20 March
2008, as they expired on 31 December 2007, in
accordance with the Terms of the Bond Trust Deed
and Collateral Deed.
Under the terms of an Intra group Loan Agreement
entered into on 7 June 2006, NewHospitals (St
Helens and Knowsley) Finance plc undertook to
onward loan the proceeds of the issue of the subordinated
loan stock to NewHospitals (St Helens and Knowsley)
Limited, on exactly the same payment terms for
interest and principal.
The proceeds of the loan stock issue are being
used by the Group to finance its obligations under
its Project Agreement with the Trust.
The loan notes are redeemable at any time in line
with the provisions of Clause 3 of the Deed Poll
Constituting Unsecured Subordinated Loan Notes
for the Company and in accordance with condition
3 (Redemption) of the aforementioned Deed.
10 Creditors: amounts falling
due after more than one year
2016 2015
GBP000 GBP000
Accruals 3,163 3,448
11 Share capital
2016 2015
GBP000 GBP000
Equity
Allotted, called up and fully paid
50,000 ordinary shares of GBP1 each 50 50
12 Controlling party
At 31 March 2016, the Company's immediate parent
undertaking is NewHospitals (St Helens and Knowsley)
Holdings Limited. NewHospitals (St Helens and
Knowsley) Holdings Limited was owned 74.4% by
Innisfree PFI Secondary Fund 2 LP and 25.6% by
Innisfree PFI Secondary Fund. Both entities are
registered in England and Wales.
The largest and smallest group in which the results
of the Company are consolidated is NewHospitals
(St Helens and Knowsley) Holdings Limited, a Company
registered and incorporated in England and Wales.
The consolidated financial statements of the Group
are available to the public and may be obtained
from 8 White Oak Square, London Road, Swanley,
Kent, BR8 7AG, United Kingdom.
In the directors' opinion, the Company's ultimate
parent undertaking and controlling party is Innisfree
PFI Secondary Fund 2 LP a limited partnership
registered in England and Wales.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACSSEEFEWFMSELU
(END) Dow Jones Newswires
September 30, 2016 02:00 ET (06:00 GMT)
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