ACCOUNTS - Final Accounts preparation
ACCOUNTS - Final Accounts preparation
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Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2020
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
COMPANY INFORMATION
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
CONTENTS
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The directors present their report and the financial statements for the year ended 31 December 2020.
The Company also manages the IT system for the library and 11 branches, the risk is managed by subcontracting to Allied Worldwide Limited. This IT contract is for a period of 5 years and at the expiry the service is tendered.
The directors who served during the year were:
The directors are responsible for preparing 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 elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to 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.
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
Key Milestone Events
The Company has a suite of project documents focused on delivering a library in Bournemouth that contains measurable and well-defined milestones that they must achieve to satisfy the requirements of the Company's single client Bournemouth Borough Council. Key Performance Indicators The key performance indicators of the Company are client and financially focused, including those listed below; • Senior debt draw down • Service delivery Financial Risk Review The Company manages liquidity through a senior debt facility with Helaba Landesbank, this loan has a fixed interest rate. The details of this loan are shown in notes 13 and 14. As explained in the Key Performance Indicator section of this report, the Company has a bank facilities agreement for senior debt that provides the Company with sufficient liquidity to meet payments to suppliers and sub-contractors. The interest rate risk exposure has been limited as the loan has a fixed interest rate as a result of an interest rate swap arrangement. The Company has adopted a policy of only dealing with creditworthy counterparties and PFI/PPP concessions are entered into with government authorities. Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Company's short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate cash reserves, banking facilities by continuously monitoring forecast and actual cash flows and matching maturity profiles of financial assets and liabilities.
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
The company has net liabilities of £1,374,439 (2019: net liabilities £1,799,462) which includes the fair value of the interest rate swaps of £2,894,155 (2019: £2,864,096) within liabilities and including cash of £2,692,476 (2019: £2,700,821).
The Directors have considered the available funding facilities, cash flow projections and financial projections that are agreed as part of the long term financial model for the project. In addition the Company has in place SWAP arrangements with the funder that protect against interest rate fluctuations. The current swap valuations are liabilities which give rise to a net liability position as at 31 December 2020, however, the cash flow forecasts demonstrate satisfactory headroom to enable the Company to meet the forecast cash outflows for the foreseeable future. The Directors have considered the potential impact to the business from the effects of the current pandemic (Covid–19) and have put in place plans to mitigate the currently known, and potential risks to the business continuity. The unitary charge income received from the local authority is highly predicable and the content of the Cabinet office Policy Note PPN 02/20 indicates the public bodies will continue to pay their suppliers upon which the Directors do not believe that there is any material risk to income or cashflows. The Directors have also looked at the effect of possible downside scenarios with reduced level of income and cashflows and are satisfied that no default on lending covenants would arise. On this basis, the Directors anticipate that the Company will continue to be able to meet its business obligations as they fall due over the coming twelve months. The Directors therefore consider it appropriate to continue to prepare the financial statements on a going concern basis in light of Covid-19. After considering these matters and in light of the current forecasts for the Company set out in the operational model along with the cash position, the Directors consider it appropriate to adopt the going concern basis in preparing the financial statements.
The Directors of the company are not aware of any circumstances by which the principal activity of the company would alter or cease.
The auditors, Ryecroft Glenton, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board on 27 May 2021 and signed on its behalf.
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
We have audited the financial statements of Information Resources (Bournemouth) Limited (the 'Company') for the year ended 31 December 2020, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of 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).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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.
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF INFORMATION RESOURCES (BOURNEMOUTH) LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the 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.
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.
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF INFORMATION RESOURCES (BOURNEMOUTH) LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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:
• Enquiries of management about their own identification and assessment of the risks of irregularities;
• Sample testing on the posting of journals; • Enquiries of management and those charged with governance around actual and potential litigation and claims; • Reviewing material financial statement disclosures and testing to supporting documentation to assess complaince with applicable laws and regulations, and; • Evaluating the business rationale of significant transactions outside the normal course of business.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF INFORMATION RESOURCES (BOURNEMOUTH) LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
32 Portland Terrace
NE2 1QP
27 May 2021
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
REGISTERED NUMBER: 03926854
BALANCE SHEET
AS AT 31 DECEMBER 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 27 May 2021.
The notes on pages 12 to 22 form part of these financial statements.
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Information Resources (Bournemouth) Limited is a company limited by shares and is incorporated in England and Wales (registered number 03926854). The Registered office is 3rd Floor (South), 200 Aldersgate Street, London, England, EC1A 4HD.
The company's principal activities and nature of it's operations are disclosed in the Director's Report.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
The company has net liabilities of £1,374,439 (2019: net liabilities £1,799,462) which includes the fair value of the interest rate swaps of £2,894,155 (2019: £2,864,096) within liabilities and including cash of £2,692,476 (2019: £2,700,821).
The Directors have considered the available funding facilities, cash flow projections and financial projections that are agreed as part of the long term financial model for the project. In addition the Company has in place SWAP arrangements with the funder that protect against interest rate fluctuations. The current swap valuations are liabilities which give rise to a net liability position as at 31 December 2020, however, the cash flow forecasts demonstrate satisfactory headroom to enable the Company to meet the forecast cash outflows for the foreseeable future. The Directors have considered the potential impact to the business from the effects of the current pandemic (Covid–19) and have put in place plans to mitigate the currently known, and potential risks to the business continuity. The unitary charge income received from the local authority is highly predicable and the content of the Cabinet office Policy Note PPN 02/20 indicates the public bodies will continue to pay their suppliers upon which the Directors do not believe that there is any material risk to income or cashflows. The Directors have also looked at the effect of possible downside scenarios with reduced level of income and cashflows and are satisfied that no default on lending covenants would arise. On this basis, the Directors anticipate that the Company will continue to be able to meet its business obligations as they fall due over the coming twelve months. The Directors therefore consider it appropriate to continue to prepare the financial statements on a going concern basis in light of Covid-19. After considering these matters and in light of the current forecasts for the Company set out in the operational model along with the cash position, the Directors consider it appropriate to adopt the going concern basis in preparing the financial statements.
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
Public to private concession arrangements:
A substantial portion of the company’s assets are used within the framework of concession contracts granted by public sector customers (‘grantors’). Under these contracts, the company has constructed a library that is leased to the council on a 30 year lease which expires in August 2032. To fall within the scope of section 34 of FRS 102, a contract must satisfy the following two criteria: - The grantor controls or regulates what services the operator must provide using the infrastructure, to whom, and at what price; and - The grantor controls, through ownership, beneficial entitlement or otherwise, any significant residual interest in the infrastructure at the end of the term of the arrangement. Pursuant to section 34 of FRS 102, such infrastructure is not recognised in assets of the operator as property, plant and equipment but as financial assets (‘financial asset model’) Financial asset model: The financial asset model applies when the operator has an unconditional right to receive cash or other financial asset from the grantor. In the case of concession services, the operator has such an unconditional right if the grantor contractually guarantees the payment of: - Amounts specified or determined in the contract - The shortfall, if any, between amounts received from users of the public service and amounts specified or determined in the contract Financial assets resulting from the application of section 34 of FRS 102 are recorded at the reporting date under the heading financial assets and measured at amortised cost. Pursuant to section 23 of FRS 102, revenue associated with the financial model comprises of service remuneration which relates to lifecycle maintenance and facilities income and ad hoc property related services income.
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
The financial asset is stated at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating the interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial asset.
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
The company classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.
Financial instruments are recognised on the trade date when the company becomes a party to the contractual provisions of the instrument. Financial instruments are recognised initially at fair value plus in the case of a financial instrument not at fair value through profit and loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument. Financial instruments are derecognised on trade date when the company is no longer a party to the contractual provisions of the instrument.
Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument. The capitalised fees are then released to the statement of comprehensive income on a straight line basis over the term of the loan.
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Financial asset interest rate – The financial asset interest income is based on the WACC of the project and is applied to the carrying value of the financial asset on a quarterly basis. The interest rate used in 2020 is 7.98% (2019: 7.98%) Service margin – After the property is constructed, the company provides property management services. The remuneration for these services is recognised at cost plus as estimated mark up for profit on property management services. The service margin rate used in 2020 is 24.38% (2019: 24.38%). It is the policy of the directors that the service margin is reviewed annually on 1st January each year to generate a new service margin rate, which is to be applied in the proceeding financial year. Critical judgements: Concession arrangements – The concession arrangements undertaken by the company are considered to fall within the scope of section 34 of FRS 102 “Service Concession Arrangements”, as described in the turnover policy. This judgement has been based on a consideration of the nature and terms of the agreements.
All turnover and profit on ordinary activities before taxation relates to one class of business, the company’s principal activity carried out in the UK
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
13. (continued)
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
14.Financial instruments (continued)
Other reserves
Profit and loss account
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INFORMATION RESOURCES (BOURNEMOUTH) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
As at 31 December 2020 the Company was a wholly owned subsidiary of Information Resources (Holdings) Limited, a company incorporated and registered in England and Wales. The share capital of Information Resources (Holdings) Limited was held 100% by Equitix Education 2 Limited, a company incorporated in the United Kingdom. The Company's ultimate parent and controlling entity, is Equitix Fund II LP, an English limited partnership.
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