DocuSign Envelope ID: 44D0A0C6-FA08-4547-97AA-3764DB166805
Company registration number: 5903364 Charity number: 1141784
TRUSTEES' REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED
31 MARCH 2022
THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
DocuSign Envelope ID: 44D0A0C6-FA08-4547-97AA-3764DB166805
## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## CONTENTS
||Page|
|---|---|
|**Reference and administrative details of the Company, its Trustees and advisers**|1|
|**Trustees' report**|2 - 12|
|**Independent auditors' report on the financial statements**|13 - 16|
|**Statement of financial activities**|17|
|**Balance sheet**|18|
|**Statement of cash flows**|19|
|**Notes to the financial statements**|20 - 33|
DocuSign Envelope ID: 44D0A0C6-FA08-4547-97AA-3764DB166805
## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
REFERENCE AND ADMINISTRATIVE DETAILS OF THE COMPANY, ITS TRUSTEES AND ADVISERS FOR THE YEAR ENDED 31 MARCH 2022
|**Trustees**|G A R Ball, Chair|
|---|---|
||H E Bradbury|
||A R Cooke|
||J A Hamblin|
||M A Matthews|
||P D Willson|
|**Company registered**
**number**
5903364
**Charity registered number**
1141784
**Registered office**
184 Coombe Lane West
Kingston Upon Thames
Surrey
KT2 7EG
**Chief Executive Officer**
**Finance Director**
**Director of Clinical**
**Services**
**Medical Director**
D Marshall
C Twomey (up to May 2022)
N Shah (from May 2022)
G Welch
Mr P Willson
**Independent auditors**
Menzies LLP
Chartered Accountants
Centrum House
36 Station Road
Egham
Surrey
TW20 9LF
**Bankers**
HSBC Bank plc
54 Clarence Street
Kingston Upon Thames
Surrey
KT1 1NS
**Solicitors**
Stone King LLP
Boundary House
91 Charterhouse Street
Clerkenwell
London
EC1M 6HR||
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## TRUSTEES' REPORT FOR THE YEAR ENDED 31 MARCH 2022
The Trustees are pleased to present their report and the audited accounts of the Company for the year ended 31 March 2022.
The Company has chosen, in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, to set out within the company’s strategic report the Company’s Strategic Report Information required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulation 2008. This includes information that would have been included in the business review and details of the principal risks and uncertainties.
The financial statements comply with the Charities Act 2011, the Companies Act 2006, the Memorandum and Articles of Association and Accounting and Reporting Statement of Recommended Practice applicable in the UK and Republic of Ireland, FRS 102 which was effective from 1st January 2015.
## **Principal activity and history**
The Company, which is a registered charity, owns and operates The New Victoria Hospital, a private independent hospital in Kingston upon Thames, Surrey. The Company is wholly owned by another registered charity, The Victoria Foundation.
As a limited company the Charity’s governing document is its Articles of Association. The Company adopted new Articles of Association in March 2011 when it applied for registration as a charity and as a result it now shares the same objects as The Victoria Foundation, namely:
“to promote good health and to relieve ill-health, particularly (without limitation) by providing, or assisting in the provision of, medical and surgical advice and treatment, medical and surgical equipment, and the training and education of medical, nursing, and para-medical staff.”
The New Victoria Hospital, located in Kingston upon Thames, has had a long and distinguished history as a voluntary and charitable institution. The original Victoria Hospital was established as a voluntary hospital in 1898 and, after serving the local population for 50 years, was incorporated into the National Health Service upon its creation in 1948.
As a result of popular demand, The New Victoria Hospital was constituted as a charity in 1951 to establish a new independent hospital with the same charitable aims as the original hospital. Coombe Manor, the original site of which is still occupied by the Hospital, was purchased in 1955 and the Hospital was opened in 1958.
Thereafter, The Victoria Foundation (TVF) (then named The New Victoria Hospital Limited) owned and operated the Hospital as a charitable institution for almost 50 years until 2007 when it was sold to a commercial operator to enable significant investment. This promised investment however was not forthcoming. Nevertheless, the proceeds raised were used for it to become a significant grant-giving healthcare charity (ultimately named The Victoria Foundation) and in 2011 The Victoria Foundation re-purchased the Hospital and the Hospital re-registered as a charity in May 2011.
Following the refurbishment of the Wards in 2013, the second phase of the redevelopment opened in October 2016, consisting of a fourteen bed day surgery unit, four new theatres, a dedicated high dependency unit and a new 128 slice CT scanning facility, replacing the obsolete scanner. The third and final phase of the Hospital’s redevelopment programme, the building of a new Outpatient Department and Main Reception was completed in April 2019. The funding was provided by the Victoria Foundation and by HSBC plc, who continue to be supportive of the Hospital’s trading.
The Trustees have due regard to the Charity Commission’s guidance on public benefit.
The New Victoria Hospital continues to play a significant role in the local healthcare economy relieving pressure on local NHS facilities. In addition, the Hospital provides agreed free and heavily subsidised hospital services for local groups and explores new avenues in the provision of healthcare for public benefit. During the year the Hospital provided cardiac screening to the players and members of Richmond Rugby Club at a reduced rate giving a benefit of £12,645.
As a charitable organisation, the Hospital prides itself in providing “excellent care for your health” delivered through the recruitment and retention of excellent staff and consultants, supported by private medical insurers and competitive fixed price self–pay packages and significant investment in infrastructure and technology.
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# THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022
The Hospital’s vision statement is:
To provide outstanding treatment and individual patient care, delivered by the most dedicated professionals, whilst achieving our charitable and commercial objectives and retaining our independence.
To be the hospital of choice.
The provision of excellent care and staff is enhanced by the Hospital’s core values which are embraced throughout the organisation:
## **Compassionate**
Caring for patients and each other.
## **Exceptional**
We believe in nothing less than excellence.
## **Ethical**
We act with integrity and are committed to safety.
## **Charitable**
We support those in need.
## **Strategic Report**
## **Achievements and performance**
The Hospital has continued to provide excellent patient care, with average patient satisfaction scores of the highest ratings during 2021/22. In total 99.8% of patients rated their overall quality of care, nursing care and consultant care as excellent, very good or good whilst 99% would be likely or extremely likely to recommend the Hospital to family and friends.
Overall, the Hospital admitted 6,145 patients in the year, with the proportion of day cases to inpatients being 78%
During the year the Hospital has enjoyed a growth in patient numbers especially outpatients, to a large extent vindicating the decision to expand our facilities. In addition, it has developed its relationship with Kingston Hospital NHS Foundation Trust to our mutual benefit. As mentioned below during the year under review we signed a five year contract to perform gender realignment (female to male) for NHSE. The impact during the year under review from a financial perspective was minimal but nevertheless once the work has bedded in it has the potential to make significant improvements to the financial performance of our Hospital.
The Hospital has continued to raise its marketing profile during the year with local advertising, website improvements and engagement with consultants and GPs as well as through Hospital communications and events which have been well received.
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022
To ensure that the Hospital’s Executive Management Team remains effective, well led and focussed on achieving financial and clinical targets, the Hospital has continued with the development of its Heads of Departments to enable them to meet the evolving working practices required. The Hospital has developed a five year strategy, embracing its Vision and Values, aligned to six key pillars:
- Growth and Profitability
- Customer Experience
- Resource Utilisation
- Marketing and Brand Awareness
- Governance and Quality
- People and Culture.
The Hospital surveys its staff which provides the opportunity for constructive feedback to ensure that the highest levels of engagement are maintained.
## **Financial review**
The Trustees of The Victoria Foundation are fully committed to safeguarding the character and ethos of the Hospital for the benefit of patients, consultants and staff to meet the Charity’s objects and have contributed significantly to the funding required. The Victoria Foundation Trustees waived their interest charge on the intragroup loan, from April 2017 and have reduced to £100k the interest payable per annum on the deferred consideration.
In March 2017, HSBC granted forbearance on capital payments on the initial loan and second loan following completion of phase 3 of the redevelopment. At 31 March 2022, an agreement was in place granting forbearance of both loans and the overdraft facility until December 2022, making the loans short term creditors. However, a further agreement was received in November 2022, granting continued support of the Hospital in the form of forbearance on the loans and the overdraft facility until November 2023.
Interest payments of both loans and overdraft facility were suspended from August 2018 until March 2020, reverting to monthly payment terms from April 2020. Interest payments recommenced with effect from April 2020. The arrangement fees for the increased facility have also been deferred until November 2023. Repayment of the loans, arrangement fees and accrued interest are due on 30 November 2023.
The Statement of Financial Activities on page 17 provides the detail of financial performance.
The Charity recognised incoming resources of £25.1m in the year (2021 - £25.2m), a reduction of 1%.
Total resources expended were £25.2m (2021 - £21.7m).
Interest costs associated with the borrowings for the redevelopment, were £1,295,000 (2021 - £1,426,000) because of the fact that no bank loan interest was transferred to the costs of the build in the year.
Total net expenditure was £93,000 (2021 Net income £3,597,000).
A Trustees’ valuation of the Hospital was carried out in April 2021, which was supported by professional independent advisors, at £40m. The Hospital has been valued at £54m when trading at full capacity.
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022
## **Reserves and going concern**
The movement in reserves in the year is set out in note 17 to the accounts. The total deficits on reserves at 31st March 2022 were (£33,397,000), (2021 - £ (33,304,000)).
The aim of the Trustees is to maintain cash and free reserves at a level sufficient to fund capital expenditure, meet liabilities as and when they fall due, and provide an appropriate level of risk protection in the event of an unforeseen emergency. The Hospital’s reserves policy is considering the annual operating budget and the long-term projections prepared to support the refurbishment and redevelopment of the Hospital and presented to the Trustees.
HSBC continued to support the redevelopment of the Hospital which is now complete. In addition, they have provided an overdraft facility, now £1.0m, to support operational cash flow. Forbearance of loan repayments has been granted by the bank until November 2023 without affecting the term. Loan and overdraft interest payments have been accrued from August 2018 reverting to monthly payment from April 2020.
£23.96m had been drawn down against the HSBC Loan facility of £24.1m by the end of the financial year (2021 - £23.9m).
Having reviewed and formally agreed the forecasts prepared in November 2022 and Facility documentation, for the continued funding, the Trustees believe, to the best of their knowledge, that the Hospital remains a going concern for the 12 months from the date of approval of the accounts. The Trustees are committed to the Strategy Plan integral to the forecast and to ensuring that adequate funding is in place to meet HSBC’s repayment requirements in November 2023.
## **Clinical Review**
The Hospital’s commitment to the provision of exceptional standards of care and service to its patients remained the same.
As such, it operated a robust integrated governance and risk programme which aimed to continually review and evaluate practice to improve the outcomes of care for patients and ensure the health, safety and wellbeing of staff, patients, and visitors.
These processes and outcomes were reviewed both internally and externally and the results used as validation of the services delivered and compliance with regulatory, legislative, and best practice requirements and guidance.
The year has been an exciting one, successfully rebuilding private practice through the second and third waves of COVID19.
The Hospital was awarded the contract for female to male gender reassignment by NHSE and surgery started in Dec 2021. Elective private work has continued to grow, alongside a continuation of supporting some breast cancer surgery for Kingston Hospital NHS Foundation Trust.
## _Care Quality Commission (CQC)_
The Hospital is registered with, and regulated by, the CQC and is required to meet the Fundamental Standards of Care 2014 outlined in the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014. The CQC operate a riskbased approach to inspection and collaborate with other regulatory and professional bodies to identify possible areas of concern.
The Hospital’s CQC compliance group continued to review performance against the Fundamental Standards. Several quality improvement initiatives were implemented during the year.
A mock CQC inspection was carried out by an external company focusing on the clinical areas. An action plan was created to meet the inspection recommendations. Key concerns, that could affect the Hospital’s current CQC rating, were:
- Poor mandatory training compliance
- Lack of a single patient record
- Risk Management
- Subsequent inspections have been commissioned to look at Medical Governance, Paediatrics and a more detailed review of Risk Management.
There were two CQC notifiable incidents: one expected death and one wrong site surgery. The latter resulted in a root cause analysis investigation being carried out. Both were formally reported.
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022
In addition, CQC were informed of an Imaging incident that could have had significant implications for patient safety. The investigation was completed, concluding that no patient had suffered harm.
The CQC Relationship Manager continued to provide support and guidance to the Director of Clinical Services (DCS) who is the Registered Manager and the Integrated Governance and Risk Director (IGRD) when required.
There was one remote engagement meeting on 9 November which covered updates on the CQC inspection model, Hospital activity and Management of COVID-19 as well as Quality and Performance and Practising Privileges overviews.
## _Comparative Health Knowledge System (CHKS) - Healthcare Accreditation and Quality Unit ISO 9001:2008_
Continuing accreditation requires annual surveillance visits to assess on-going compliance and a 3 yearly inspection visit of all ISO and CHKS quality standards. The tri-annual inspection took place remotely in May 2021.
The Hospital was successful in its application and was awarded full accreditation. The report made two small recommendations that were quickly achieved, regarding the Hospital’s fire strategy and medicines management training attendance.
## _Public Health, England (PHE)_
The Hospital is required to report incidences of MRSA, MSSA, E. coli, Klebsiella and Pseudomonas bacteraemia and Clostridium Difficile infections on a monthly basis. There were no incidences reported in this year.
The Hospital acquired infection rate for the inpatient population was 0.3% (0.1% in 2019-20). The surgical site infection rate for 2020-21 was 0.46% (0.08% in 2019-20).
## _Controlled Drug Local Intelligence network (CDLIN)_
The Director of Clinical Services is the Hospital’s Controlled Drug Accountable Officer and submits a quarterly report to CDLIN regarding incidents, concerns and adverse events relating to CDs. No concerns were raised for this period.
## _Radiation Protection Advisor Review_
Radiological policies, procedures, quality checks and activity are reviewed annually against IRMER.
The Hospital finished converting all IRMER policies and procedural guidelines to the Radiological Protection Centre (RPC) format.
The RPC completed an external IRMER audit of the Hospital on the 11 February 2022. The report showed the Hospital to be ‘Nearly fully compliant with only a few minor improvements necessary’.
The Hospital’s ‘Medical Exposures/ Radiation Protection Committee’ annual meeting, held 22 February 2022, reviewed the year’s activity. Discussion was held over 3 minor IRMER incidents, all of which were reported to the RPA, but all incidents were found to be clinically insignificant and classified that the patient did not receive significant accidental or unintended exposure; therefore, not reportable to CQC.
The annual review again demonstrated good CT optimisation, doses 40 – 60 % of the national diagnostic reference levels (DRL’s). A new CT protocol was saved on the CT scanner combining HRCT and CTPA due to scanning technique for COVID.
## _National Joint and Cosmetic Breast Registries_
Hip, knee and shoulder implant data was submitted to the NJR and breast implant data submitted to the Cosmetic Breast Registry throughout the year. The Hospital received a commendation for the quality data submitted to the NJR
## _Pathology Services_
The Hospital continued to outsource most pathology services to South West London Pathology (SWLP). A limited amount of work continued to go to The Doctors Laboratory and histology specimens went to St George’s or Richmond Park Pathology (RPP).
All pathology incidents were discussed at the regular contract review/operational meetings. SWLP were responsive with investigating problems in a timely manner, however, ongoing issues with microbiology samples going missing persisted.
In the absence of an electronic reporting system, the Hospital has worked closely with RPP to ensure histology results are
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022
received by email to the referring clinician in a timely manner.
Discussion on the revised contract with SWLP continued and has not yet been signed off by all parties.
A Service Level Agreement with Blood Transfusion Services to cover the provision of Blood and Blood Products was still required.
## _Data Protection and Information Governance_
There were no information security incidents that warranted reporting to the ICO.
The Hospital maintained its NHS Data Security and Protection Toolkit and Payment Card Industry/Data Security Standard accreditation. The annual external ISO27001 Information Security is scheduled for May.
A cyber security information training session was made compulsory due to a few incidents where Hospital staff were victims of online fraud. Feedback of the course was very positive.
## _Medical Profession (Responsible Officer) Regulations 2010 and Revalidation_
Dr Amira Girgis continued in her role as the Hospital’s Responsible Officer (RO). Dr Girgis is RO for 9 consultants. She also provided support to consultants not aligned to the NHS regarding the requirements set out in the RO regulations, with particular regard to appraisal, 360° colleague and patient feedback, activity and adverse outcome data.
The Appraisal and Managing Performance Concerns policies were published and shared with the connected consultants. A new process for managing appraisal is being introduced in April 22, bringing practice in line with GMC guidance.
The Higher-Level Responsible Officer (HLRO) quality review visit took place in Nov 2021. There was much positive feedback about NVH practice and some minor suggestions for areas of development which are currently in progress.
## _Medical Director (MD)_
The MD met regularly with the Chief Executive, Director of Clinical Services and Integrated Governance and Risk Director to review adverse outcomes, complaints and concerns.
## _Kingston Hospital NHS Foundation Trust (KHFT) Joint Working_
NVH continued to work with KHFT throughout this year as part of the Increasing Capacity Framework; in particular NVH has supported the breast cancer surgery lists.
Regular operational and governance meetings were held with KHFT to share and resolve all matters relating to joint working.
## _NHSE Specialist Commissioning_
In September NVH was awarded a contract by NHSE – SC for the female to male surgical pathway. A Gender Dysphoria Surgical Service (GDSS) mobilisation team was created to review all aspects of the patient journey from both a clinical and financial stance.
A significant number of patients were inherited from St Peter’s Andrology, who had previously undertaken this work. Patients were categorised depending on where they were in their surgical journey.
The Hospital started operating in December, prioritising those patients deemed the most urgent by the clinicians. By the end of Q4, 50 surgical procedures were successfully completed.
Administrative staff and a Clinical Nurse Specialist were recruited to support the service.
Regular operational and governance meetings were held with NHSE – SC to share and resolve all matters relating to joint working.
## _Quality Improvement Initiatives_
The following initiatives were implemented:
- The reporting of adverse outcomes was introduced via the Datix management system allowing far greater visibility in real time, better reporting and more robust investigations for each.
- Everyday Standards Document for hotel service teams: a self-audit tool for compliance with Hospital standards that
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022
should be achieved ‘everyday’ was introduced. The HoDs were encouraged to review their department against the standards and note any actions that were required. Reviewed with the line manager in monthly 1:1 meeting.
- Porters Team Commitment to Excellent Patient Service: The Porters were asked to share what they felt a Portering Team, providing Excellent Patient Service, looked, sounded and felt like. This was documented as a reference tool for the team to work towards.
- An innovative wire-free surgical guidance system was successfully trialled and then formally introduced to help surgeons to locate cancerous and abnormal breast tissue. This technology is less restrictive after placement and is more precise in locating the tumour and its boundaries, which also means less unneeded tissue removal takes place.
- The minor operations care pathway was introduced including making improvements to the consent process in Outpatients
## Objectives for the forthcoming year
- Maintain the Hospital’s good rating with CQC and work toward improving to outstanding in at least one domain
- Complete the actions from the mock CQC inspection
- Further develop the GDSS, maintaining patient safety and the highest standard of care
- Embed the recommendations from the Paterson Enquiry
- Reduce patient fasting times and actively encourage hydration
- Continue to build on the relationship with PHIN and support the exchange of information in a timely fashion
- Save the outpatient documentation for minor procedures electronically
- Introduce an online assessment tool to streamline pre-operative assessments for patients and improve efficiencies within the team
- Develop a programme for implementing digitised patient notes
- Reintroduce the Patient Led Assessments of the Care Environment (PLACE)
## **Conclusion**
2021/22 was a hugely successful year for the Hospital, with patient activity and revenue exceeding its highest level ever. Patient care and clinical outcomes continued to be of the highest standard, with consultant feedback on care being exemplary, without exception.
Continuing to work during a pandemic required the Hospital to frequently review and adapt existing processes to meet the needs of the patients and enable the Hospital to continue offering a safe service to all.
## **Plans for future periods**
Phase three of the redevelopment was completed and opened in April 2019. This completed the redevelopment with a new enlarged reception and outpatient department including new consulting rooms and outpatient speciality suites and treatment rooms.
The Hospital recognises its challenge to meet and exceed the forecasts that have been set in support of the redevelopment project and with a strengthened Executive Management Team will be rising to the challenge to maximise revenue and embrace efficiencies and cost saving strategies that higher activity enables.
The Hospital continues to review its current portfolio of activity and explore new opportunities as well as increasing cardiac diagnostic, orthopaedic, gastroenterology, general surgery, gynaecology and urology services, and so attracting new consultants. The Hospital is keen to maximise its self-pay revenue streams with a competitive, transparent offering for patients which is supported by its finance product to assist patients with the payment of treatment.
The Hospital’s consultants support the Hospital due to the quality of care and the standards it is able to offer as a charitable independent hospital. The Hospital is committed to ensuring that this is maintained with increased capacity and higher activity levels. The patient journey is being reviewed considering the new facilities, reinforcing and challenging current practices to ensure that the Hospital continues to embrace best practice.
The Hospital recognises that excellent staff are its key asset and will continue to ensure that they provide an excellent service by providing adequate budgets for training and nursing revalidation support. In addition, partly as an action from staff survey feedback, the Hospital has reviewed its pay and benefits packages to ensure parity across the Hospital to remain competitive in attracting and retaining its staff.
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022
## **Structure, Governance, and Management**
## **Governing Document**
As a limited company the Charity’s governing document is its Articles of Association. The Company adopted new Articles of Association in March 2011 when it applied for registration as a charity and shares the same objects as its parent, The Victoria Foundation, which are detailed on page 3.
## **Organisational structure**
## **Trustees / Directors**
The Trustees are also the Directors of the Charity for the purposes of company law and as such are responsible for the management of the Hospital’s affairs and its future strategy. The Trustees meet monthly, which some of the Executive Management Team attend. The Trustees review the financial and operational performance of the Hospital as well as clinical and financial governance and quality assurance programmes.
The Trustees of the Company who served during the year or who have been appointed or retired subsequently are:
G A R Ball* H E Bradbury (Appointed 26th April 2021) A R Cooke* J A Hamblin* M A Matthews* Mr P Willson (Appointed 27th September 2021)
* Four of the Hospital Trustees are also Trustees of The Victoria Foundation.
## **Rotation, recruitment and appointment and induction of Trustees**
The Trustees consider it essential that the Board is strong, well-balanced and effective, comprising members with the requisite professional skills and experience in healthcare or local services to properly represent users of the Charity’s services.
As in many charities, this process has successfully relied on Trustees’ recommendations and their access to potential candidates in other healthcare and local organisations. In order to maintain its exacting standards, the Board’s skill mix is reviewed regularly and Trustee recruitment aligned.
The Trustees are responsible for ensuring that adequate segregation of duties is maintained across the structure and governance of the Hospital. To this endeavour the Trustees review its key posts and those defining the management of the Hospital’s governance to ensure that these roles are adequately aligned and rotated.
An induction programme is provided to all new Trustees. They are advised of their responsibilities as Trustees and Directors, including their legal obligations under charity and company law and the Charity Commission guidance on public benefit, given copies of the Charity’s governing documents, and are appraised of the Charity’s aims and activities, current financial performance and its plans for the future. All Trustees are encouraged to attend appropriate external training events where these will facilitate the undertaking of their role.
## **Executive Management Team**
The Trustees delegate the day-to-day management of the Hospital to the Chief Executive and the officers of the Company, being the Director of Clinical Services and the Finance Director, along with the Operations Director, Business Development Director, Integrated Governance Director, IT Director and HR Director all of whom constitute the Hospital’s Executive Management Team (EMT) which meets twice a month. The EMT is supported by the Heads of Department who meet monthly.
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022
## **Medical Advisory Committee**
The Medical Advisory Committee comprises a chairperson, the Medical Director, consultants who have practising privileges at the Hospital, the Chief Executive and Director of Clinical Services. The Committee meets quarterly and is responsible for advising the Trustees on matters related to the management of medical practice and any regulatory obligations required. The purpose of the Committee is to:
- Act as a communication link between the Hospital and Consultants.
- Advise when requested on issues of ethics and standards.
- Advise the Chief Executive on the granting, maintenance and withdrawal of Practice and Admitting Privileges.
- Advise the Chief Executive regarding proposed new practices and treatments.
- Advise on all aspects of medical policy and clinical practice.
- Review Clinical Governance Reports regarding Key Performance Indicators, patient clinical complaints and clinical incidents.
- Review and oversee the Medicines management policy and ensure the safe and accurate use of medicines.
## **Audit and Finance Committee**
The Audit and Finance Committee is a joint committee of both The Victoria Foundation and the New Victoria Hospital and comprises Trustees of both companies. The Chief Executive and Finance Director of the New Victoria Hospital are also members. The Committee meets four times a year and its purpose is to:
- Review and challenge where necessary the financial reporting within the Victoria Foundation and the New Victoria Hospital.
- Review compliance with the financial covenants.
- Review the budgeting and forecasting process.
- Keep under review the adequacy and effectiveness of the Company’s internal controls and risk management systems.
- Consider and make recommendations to the Trustees in relation to the appointment of the Companies’ external auditor.
- Ensure financial and ethical controls are in place when agreeing the annual pay increase for staff including that for senior staff members and for bonus payments.
## **Risk Management**
The Trustees have a duty to identify and review the risks to which the Charity is exposed and to ensure that appropriate controls are in place to provide reasonable assurance against fraud and error. The Trustees review annually the major strategic, business, and operational risks to which the Charity is exposed and the systems and procedures that have been established to manage or mitigate those risks. The Hospital holds a centralised, comprehensive risk register, which is regularly reviewed by the Trustees and through the governance structure in the Hospital.
The key risk identified is aligned to meeting the budget for 2022/23 and subsequent one year forecasts agreed with HSBC. The Trustees and Executive Management Team are in continual discussion with HSBC regarding financial performance and funding of capital projects. The key risks associated are:
- Meeting the EBITDA and cash flow forecasts agreed in the five-year forecast.
- Further capital expenditure requirements which are not currently foreseen.
The Trustees and Executive Management Team regularly review the required management structures to ensure support for the Executive Management Team in the management of the Hospital. This will ensure that robust processes are in place, aligned to efficient staffing and cost management, to meet profitability against the forecasts and budgets set. The business development team has been enhanced to support the anticipated increases in activity through an agreed marketing plan, linked to the Hospital’s strategy.
The Executive Management Team ensure that regular communications are made with the Trustees of the Hospital and those of The Victoria Foundation in addition to formal meetings to ensure all key decision makers are kept fully up to date on progress.
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022
The Trustees have identified the following commercial and operational risks:
- Loss of revenue from Private Medical Insurers (PMIs) is a key risk in ever changing market conditions and a reduced number of PMIs through acquisition and reduced corporate policies together with more aggressive pricing. The Hospital has launched a self-pay product and services which are aligned to Competition and Markets Authority requirements as well as additional revenue streams which enhance current activity and the opportunity to work more closely with the NHS.
- Loss of key consultants would have an adverse impact on revenue streams and the Hospital’s ability to meet its forecasts. The Hospital continues to monitor activity and works closely with its consultants as well as actively seeking new consultants to meet its strategic objectives keeping abreast of internal and external factors which may potentially affect practices. In addition, the Hospital is focussed on succession planning for those consultants who are mature in their careers.
- Increased costs associated with external regulatory compliance has impacted results in the year and will continue to do so with Competition and Markets Authority requirements which include the Private Healthcare Information Network (PHIN) subscriptions and clinical coding to provide transparent and comparable data, helping to inform patient choice of hospital and patient information requirements because of the Montgomery legal case and Duty of Candour requirements.
- There is a continuing requirement to increase the use of technology to support patient diagnosis and treatment with higher demands for IT support. Cyber threats and potential data loss is protected through robust security, data backup and disaster recovery plans. The Hospital has robust policies and procedures in place to monitor this and is accredited for its information management systems under ISO27001.
## **Statement of Trustees’ Responsibilities**
The Trustees (who are also the directors of the Company for the purposes of company law) are responsible for preparing the Trustees' report including the strategic report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company law requires the Trustees to prepare financial statements for each financial year. Under company law, the Trustees 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 its incoming resources and application of resources, including its income and expenditure, for that period. In preparing these financial statements, the Trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles of the Charities SORP (FRS 102);
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards (FRS 102) have been followed, subject to any material departures disclosed and explained in the financial statements;
- prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Trustees 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.
- In so far as the Trustees are aware:
- there is no relevant audit information of which the Company's auditor is unaware; and
- the Trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.
Details of Trustees’ interests in contracts and related party transactions are given in note 16 to the accounts.
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022
## **Auditor**
The auditors, Menzies LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
The report of the Trustees, including the strategic report, was approved and signed on behalf of the Trustees on
Approved by order of the members of the board of Trustees on 19 December 2022 and signed on their behalf by:
................................................ **Mr G A R Ball** Executive Chairman
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE NEW VICTORIA HOSPITAL LIMITED
## **Qualified opinion**
We have audited the financial statements of The New Victoria Hospital Limited (the 'charitable company') for the year ended 31 March 2022 which comprise the statement of financial activities, the balance sheet, the statement of cash flows 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).
In our opinion, except for the possible effects of matters described in the Basis for Qualified opinions paragraph, the financial statements:
- give a true and fair view of the state of the charitable company's affairs as at 31 March 2022 and of its incoming resources and application of resources, including its income and expenditure 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 and Charities Act 2011.
## **Basis for qualified opinion on financial statements**
With respect to opening stock in the year ended 31 March 2021, having a carrying amount of £617,680, the audit evidence available to us was limited because we did not observe the counting of the physical stock as at 31 March 2020. This was due to the Coronavirus pandemic creating lockdown restrictions and the requisition of the Hospital as a Covid-19 safe NHS hospital. Owing to the nature of the charitable company’s records, we were unable to obtain sufficient appropriate audit evidence regarding the stock quantities by using other audit procedures for the year end 31 March 2020 and whether there was any consequential effect on the cost of sales for the year ended 31 March 2021. Our audit opinion on the financial statements for the period ended 31 March 2021 was modified accordingly. Our opinion on the current period’s financial statements is also modified because of the possible effect of this matter on the comparability of the current period’s figures and the corresponding figures.
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 charitable 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.
## **Material uncertainty related to going concern**
We draw attention to the going concern accounting policy on page 20, and the wording contained in the ‘Reserves and Going Concern’ section of the Trustees’ Annual Report, both of which indicate that there is a significant uncertainty on the charitable company’s ability to repay bank financing due for repayment in November 2023. This material uncertainty casts significant doubt on the charitable company’s ability to continue as a going concern beyond December 2023. Our opinion is not modified in respect of this matter.
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE NEW VICTORIA HOSPITAL LIMITED (CONTINUED)
## **Other information**
The other information comprises the information included in the annual report other than the financial statements and our auditors' report thereon. The Trustees 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.
## **Opinion 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 Trustees' report including the Strategic report for the financial year for which the financial statements are prepared is consistent with the financial statements.
- the Trustees' report and the Strategic report have been prepared in accordance with applicable legal requirements.
## **Matters on which we are required to report by exception**
Except for the matter described in the basis for qualified opinion section of our report, in the light of our knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of trustees’ remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit; or
- the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies’ exemptions in preparing the trustees’ report and from the requirement to prepare a strategic report.
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE NEW VICTORIA HOSPITAL LIMITED (CONTINUED)
## **Responsibilities of trustees**
As explained more fully in the trustees' responsibilities statement, the Trustees (who are also the directors of the charitable company for the purposes of company law) 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 Trustees 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 Trustees are responsible for assessing the charitable 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 Trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
## **Auditors' responsibilities for the audit of the financial statements**
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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:
- The charitable company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including Charities Act 2011, Health and safety regulations, employment law, Care Quality Commission and other medical regulatory bodies. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
- We understood how the charitable company is complying with those legal and regulatory frameworks by, making inquiries to management, those responsible for legal and compliance procedures and the company secretary. We corroborated our inquiries through our review of board minutes.
- The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognize non-compliance with laws and regulations. The assessment did not identify any issues in this area.
We assessed the susceptibility of the Charity's financial statements to material misstatement, including how fraud might occur. We considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas; posting of fraudulent journal entries, authorisation, processing, and payment of fraudulent expenses, stock misappropriation, and timing of revenue recognition.
Audit procedures performed by the engagement team included:
- Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
- Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
- Challenging assumptions and judgments made by management in its significant accounting estimates; and
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE NEW VICTORIA HOSPITAL LIMITED (CONTINUED)
- Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
## **Use of our report**
This report is made solely to the charitable 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 charitable 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 charitable company and its members, as a body, for our audit work, for this report, or for the opinions we have formed.
**Janice Matthews FCA (senior statutory auditor)** for and on behalf of **Menzies LLP** Chartered Accountants Statutory Auditor Centrum House 36 Station Road Egham Surrey TW20 9LF
> Date: 20-Dec-2022
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 MARCH 2022
|**Note**
**Income from:**
Charitable activities
4
**Total income**
**Expenditure on:**
Charitable activities
Interest payable
6
**Total expenditure**
**Net movement in funds**
**Reconciliation of funds:**
Total funds brought forward
Net movement in funds
**Total funds carried forward**|**Unrestricted**
**funds**
**2022**
**£000**
**25,064**
**25,064**
**23,862**
**1,295**
**25,157**
**(93)**
**(33,304)**
**(93)**
**(33,397)**|**Total**
**funds**
**2022**
**£000**
**25,064**
**25,064**
**23,862**
**1,295**
**25,157**
**(93)**
**(33,304)**
**(93)**
**(33,397)**|_Total_
_funds_
_2021_
_£000_
_25,243_|
|---|---|---|---|
||||_25,243_|
||||_20,220_
_1,426_|
||||_21,646_|
||||_3,597_|
||||_(36,901)_
_3,597_|
||||_(33,304)_|
The Statement of financial activities includes all gains and losses recognised in the year.
The notes on pages 20 to 33 form part of these financial statements.
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares) REGISTERED NUMBER: 5903364
## BALANCE SHEET AS AT 31 MARCH 2022
|**Note**
**Fixed assets**
Tangible assets
11
**Current assets**
Stocks
Debtors
12
Cash at bank and in hand
Creditors: amounts falling due within one year
13
**Net current liabilities**
**Total assets less current liabilities**
Creditors: amounts falling due after more than
one year
14
**Total net assets**
**Charity funds**
Restricted funds
16
Unrestricted funds
16
**Total funds**|**740**
**2,335**
**455**
**3,530**
**(40,272)**|**2022**
**£000**
**27,771**
**27,771**
**(36,742)**
**(8,971)**
**(24,426)**
**(33,397)**
**-**
**(33,397)**
**(33,397)**|_532_
_2,829_
_-_
_3,361_
_(39,782)_|_2021_
_£000_
_27,659_|
|---|---|---|---|---|
|||||_27,659_
_(36,421)_|
|||||_(8,762)_
_(24,542)_|
||||||
|||||_(33,304)_|
|||||_-_
_(33,304)_|
||||||
|||||_(33,304)_|
The Trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.
The financial statements were approved and authorised for issue by the Trustees and signed on their behalf by:
**----- Start of picture text -----**
................................................
**----- End of picture text -----**
................................................ ................................................ **J A Hamblin G A R Ball** Director Director and Executive Chairman Date: 19 December 2022
The notes on pages 20 to 33 form part of these financial statements.
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2022
|**Note**
**Cash flows from operating activities**
Net cash used in operating activities
19
**Cash flows from investing activities**
Purchase of tangible fixed assets
11
**Net cash used in investing activities**
**Cash flows from financing activities**
Cash inflows from new borrowing
Repayments of finance leases
Interest paid on bank borrowings
6
Interest paid on intra group borrowings
6
Interest paid on finance lease borrowings
6
**Net cash used in financing activities**
**Change in cash and cash equivalents in the year**
Cash and cash equivalents at the beginning of the year
**Cash and cash equivalents at the end of the year**
20|**2022**
**£000**
**2,687**
**(820)**
**(820)**
**84**
**(157)**
**(1,167)**
**(100)**
**(29)**
**(1,369)**
**498**
**(43)**
**455**|_2021_
_£000_
_4,600_|
|---|---|---|
|||_(448)_|
|||**(448)**|
|||_187_
_(167)_
_(1,167)_
_(100)_
_(31)_|
|||**(1,278)**|
|||**2,874**
_(2,917)_|
||||
|||_(43)_|
The notes on pages 20 to 33 form part of these financial statements
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
## **1. General information**
The New Victoria Hospital Limited is a private company limited by shares incorporated in England and Wales and a registered charity. The address if the registered office is disclosed on the legal and administrative information page (page 1).
The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are as follows:
## **2. Accounting policies**
## **2.1 Basis of preparation of financial statements**
The financial statements have been prepared in accordance with the Charities SORP (FRS 102) - Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.
The New Victoria Hospital Limited meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.
## **2.2 Critical accounting estimates and areas of judgement**
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. In the opinion of the Trustees the main estimates and assumptions that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are in relation to the use of the going concern basis and valuation of fixed assets, both of which are noted below.
## **2.3 Going concern**
During the financial period, the Charity had an excess of expenditure over income of £93k. At the year-end it had net total liabilities of £33,397k including bank borrowings of £34,939k. At the date of approving these financial statements, the Charity had increased its total bank borrowing facilities to £37,600,000 in order to fund the completion of the hospital redevelopment plan and to cover all working capital requirements.
The Trustees have prepared, reviewed and formally approved detailed trading and cash flow projections covering the period beyond 31st December 2023. The Trustees are committed to the business transformation plan integral to these projections, and to ensuring that adequate funding is in place to meet the Bank's requirement for loan repayment in full in November 2023, if necessary, through refinancing. Based on these projections and the bank facility documentation for the increased funding, the Trustees believe, to the best of their belief and knowledge, that the Charity remains a going concern for at least the period to 31st December 2023 and, accordingly, these financial statements have been prepared on the going concern basis.
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
## **2. Accounting policies (continued)**
## **2.4 Income**
All income is recognised once the Company has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.
Voluntary income comprises donations, legacies, and income generated from fundraising activities.
Investment income includes rental income, the net income received from dividends, interest and realised and unrealised gains generated from investments, and interest received on loans and deposits.
Income from charitable activities represents the total value of charges made to patients and other customers for the provision of hospital services.
## **2.5 Fund accounting**
Unrestricted funds are available to spend on activities that further any of the objects of the Charity.
Restricted funds are donations which the donor has specified are to be solely used for particular areas of the Charity’s objects. This includes the fund for free treatment which is provided by the New Victoria Hospital.
## **2.6 Expenditure**
Expenditure is recognised on an accruals basis and allocated to the appropriate activity and fund.
Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred.
Costs of generating voluntary income include the net costs of fund-raising charitable events.
Expenditure on charitable activities comprise the costs of grant-funding activities and the provision of hospital services, and include both direct costs and the support costs incurred to enable those activities and services to be provided.
Support costs comprise the costs associated with the funding of grants and those incurred in the general, financial, and clinical management of the Hospital, which include the costs of its human resources, IT, and quality assurance functions as well as the cost of the general maintenance of its land and buildings.
Governance costs, which are disclosed separately in the Notes to the Accounts, comprise the costs incurred in the governance and general management of the Charity rather than in the provision of its charitable activities. Governance costs include audit fees, the cost of legal and other advice given to Trustees, and an apportionment of the costs of employing the Charity’s officers.
## **2.7 Leases**
Assets held under finance leases and hire purchase agreements are recorded in the balance sheet as tangible fixed assets and are depreciated over the shorter of their estimated useful lives and the term of the agreement. Interest is charged to the profit and loss account in proportion to the balance of the obligations outstanding; and the capital element of future payments is included in creditors.
Rentals paid under operating leases are charged directly to income.
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
## **2. Accounting policies (continued)**
## **2.8 Tangible fixed assets and depreciation**
Individual assets or groups of similar assets having a value of greater £1,000 and a useful economic life in excess of 1 year are treated as fixed assets. Assets with a value below £1,000 are fully written off in the year of acquisition. Assets are initially measured at purchase cost plus any associated costs in bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended including, for example, any site preparation, initial delivery, installation and testing costs.
Land and buildings includes borrowing costs directly attributable to the construction project at the Hospital. Borrowing costs are capitalised from the point at which expenditure begins on the build project and capitalisation ceases during the extended periods between the major phases in development and will cease completely upon final completion of the building works. Only borrowing costs from loans directly attributable to the project are treated in this way. Borrowing costs to cover general borrowing are not capitalised.
Following initial recognition, freehold land and buildings are carried at valuation. The Trustees of the Company deem that the property held by the Company is a specialised asset; assets of this type are usually only sold as part of the sale of a continuing business. As such, the land and buildings are valued on an income-generating basis. Revaluations are undertaken with sufficient regularity to ensure that the carrying value does not materially differ from the fair value at the end of each reporting period. Typically, this will be at least every 5 years. Gains or losses on revaluation are recorded on the SOFA in the year of revaluation.
Depreciation is charged on fixed assets on a systematic basis over the useful life of the assets. The policies adopted across different asset types are as follows:
- Freehold property 50 years - Building improvements 10-20 years - Equipment 3-10 years
## **2.9 Stocks**
Stock, which comprises medical and other supplies used in the provision of services to patients, is valued at the lower of cost and net realisable value. The value of consignment stock, which is stock held at the Hospital where the supplier retains ownership until it is used and paid for by the Company, is not included in stock on the balance sheet.
## **2.10 Pay Policy for Senior Staff**
The Trustees consider the Trustees, who are the Hospital’s Directors, and the Executive Management Team, who comprise the key management personnel of the Charity, are in charge of directing and controlling, running and operating the Hospital on a day-to-day basis.
All Trustees give of their time freely and no Trustee received remuneration in the year, with the exception of those Trustees’ remuneration, expenses and related party transactions as disclosed in note 16 to the accounts.
The pay of the senior staff, including the Chief Executive, is reviewed annually and normally increased in accordance with average earnings. In view of the nature of the Charity, the Trustees benchmark against pay levels in other hospitals of a similar size. Annual pay review salary increases for Hospital staff, for the Executive Management Team (including the Chief Executive), including any bonus payments, are proposed to and agreed by the Audit and Finance Committee.
## **2.11 Pensions**
The Company operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Company to the fund in respect of the year.
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
## **2. Accounting policies (continued)**
## **2.12 Foreign currencies**
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Exchange differences are taken into account in arriving at the operating result.
## **3. Principal Activity and Income**
The principal activity of the Company is the operation of the New Victoria Hospital, an independent acute hospital in Kingston upon Thames, Surrey. Income is attributable to the principal activity of the Company and arose wholly in the United Kingdom.
## **4. Income from charitable activities**
|Provision of hospital services
_Total 2021_|**Unrestricted**
**funds**
**2022**
**£000**
25,064
_25,243_|**Total**
**funds**
**2022**
**£000**
**25,064**
_25,243_|_Total_
_funds_
_2021_
_£000_
_25,243_|
|---|---|---|---|
|||||
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
## **5. Analysis of expenditure by activities**
|Provision of Hospital Services
_Total 2021_|**Activities**
**undertaken**
**directly**
**2022**
**£000**
15,077
_12,654_|**Support**
**costs**
**2022**
**£000**
8,785
_7,566_|**Total**
**funds**
**2022**
**£000**
**23,862**
_20,220_|_Total_
_funds_
_2021_
_£000_
_20,220_|
|---|---|---|---|---|
||||||
## **Analysis of direct costs**
|Staff costs
Depreciation
Medical and other supplies
Contracted services
Other|**Total**
**funds**
**2022**
**£000**
**7,075**
**164**
**3,599**
**4,199**
**40**
**15,077**|_Total_
_funds_
_2021_
_£000_
_6,317_
_312_
_2,812_
_3,194_
_19_|
|---|---|---|
|||_12,654_|
## **Analysis of support costs**
|Staff costs
Depreciation
Contracted services
Other|**Total**
**funds**
**2022**
**£000**
**4,698**
**545**
**1,457**
**2,085**
**8,785**|_Total_
_funds_
_2021_
_£000_
_4,075_
_476_
_1,538_
_1,477_|
|---|---|---|
|||_7,566_|
Included within support costs above are governance costs of £986k (2021: £843k).
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## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
## **6. Interest payable**
|**Unrestricted**
**funds**
**2022**
**£000**
Bank loans and overdrafts
1,166
Finance leases
29
Loan from parent undertakings
100
1,295
_Total 2021_
_1,426_
**7.**
**Auditors' remuneration**
Fees payable to the Company's auditor for the audit of the Company's annual
accounts
Fees payable to the Company's auditor in respect of:
All non-audit services not included above
**8.**
**Staff costs**
Wages and salaries
Social security costs
Contribution to defined contribution pension schemes|**Total**
**funds**
**2022**
**£000**
**1,166**
**29**
**100**
**1,295**
_1,426_
**2022**
**£000**
**31**
**13**
**2022**
**£000**
**10,554**
**971**
**249**
**11,774**|_Total_
_funds_
_2021_
_£000_
_1,295_
_31_
_100_|
|---|---|---|
|||_1,426_|
|||_2021_
_£000_
_31_
_-_|
|||_2021_
_£000_
_9,297_
_862_
_234_|
||||
|||_10,393_|
Page 25
DocuSign Envelope ID: 44D0A0C6-FA08-4547-97AA-3764DB166805
## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
## **8. Staff costs (continued)**
The average number of persons employed by the Company during the year was as follows:
|Hospital - Senior Management
Hospital Services - Clinical
Hospital Services - Support Services
Hospital Services - Administrative|**2022**
**No.**
**9**
**128**
**46**
**51**
**234**|_2021_
_No._
_9_
_101_
_47_
_49_|
|---|---|---|
||||
|||_206_|
The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:
||**2022**|_2021_|
|---|---|---|
||**No.**|_No._|
|In the band £60,001 - £70,000|**10**|_7_|
|In the band £70,001 - £80,000|**4**|_6_|
|In the band £80,001 - £90,000|**2**|_1_|
|In the band £90,001 - £100,000|**2**|_2_|
|In the band £100,001 - £110,000|**1**|_1_|
|In the band £120,001 - £130,000|**1**|_-_|
|In the band £190,001 - £200,000|**1**|_-_|
|In the band £200,001 - £210,000|**-**|_1_|
The aggregate of salaries paid to key management personnel was £975,385 (2021: £1,012,849).
## **9. Trustees' remuneration**
Mr Ball served as Chief Executive of the Charity until 31 December 2018 when he became the Executive Chairman. His engagement was approved by the Charity Commission and is reviewed annually by the Trustees. Remuneration paid to Mr Ball in the year was £70,575 gross salary and £2,117 pension contribution totalling £72,692 (2021 - £71,000).
The other Trustees received no payment for their services during the year and were not reimbursed for any expenses.
## **10. Taxation**
The New Victoria Hospital Limited is exempt from taxation in respect of income and capital gains to the extent that such income and gains are applied to exclusively charitable purposes.
Page 26
DocuSign Envelope ID: 44D0A0C6-FA08-4547-97AA-3764DB166805
## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
## **11. Tangible fixed assets**
|**Cost or valuation**
At 1 April 2021
Additions
Transfers between classes
At 31 March 2022
**Depreciation**
At 1 April 2021
Charge for the year
At 31 March 2022
**Net book value**
At 31 March 2022
_At 31 March 2021_|**Freehold**
**property**
**£000**
**27,681**
**185**
**201**
**28,067**
**1,386**
**459**
**1,845**
**26,222**
_26,295_|**Equipment**
**£000**
**3,290**
**516**
**-**
**3,806**
**2,008**
**249**
**2,257**
**1,549**
_1,282_|**Construction**
**in Progress**
**£000**
**82**
**119**
**(201)**
**-**
**-**
**-**
**-**
**-**
_82_|**Total**
**£000**
**31,053**
**820**
**-**|
|---|---|---|---|---|
|||||**31,873**|
|||||**3,394**
**708**|
|||||**4,102**|
|||||**27,771**|
|||||_27,659_|
The net book value of equipment held under finance leases at 31 March 2022 was £137k (2021 - £317k). Its original cost was £748k (2021 - £1,502k) and the depreciation charged in the year was £106k (2021 - £240k). During the year, no new finance leases were contracted for.
A Trustees’ valuation of the Hospital was carried out in April 2021, supported by professional independent advisors, valuing the Hospital at £40m which has not been recognised in the accounts. The Hospital has been valued at £54m when trading at full capacity.
## **12. Debtors**
|**Due within one year**
Trade debtors
Other debtors
Prepayments and accrued income|**2022**
**£000**
**1,994**
**90**
**251**
**2,335**|_2021_
_£000_
_1,105_
_3_
_1,721_
_2,829_|
|---|---|---|
Page 27
DocuSign Envelope ID: 44D0A0C6-FA08-4547-97AA-3764DB166805
## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
## **13. Creditors: Amounts falling due within one year**
|Bank overdrafts
Bank loans
Trade creditors
Amounts owed to group undertakings
Other taxation and social security
Obligations under finance lease and hire purchase contracts
Accruals and deferred income|**2022**
**£000**
**-**
**34,939**
**1,292**
**3**
**274**
**116**
**3,648**
**40,272**|_2021_
_£000_
_43_
_34,855_
_1,095_
_2_
_291_
_156_
_3,340_|
|---|---|---|
||||
|||_39,782_|
The first loan with HSBC of £17.5 million was obtained in January 2011 at the time of The Victoria Foundation’s acquisition of the Hospital to enable the repayment of its existing borrowings. The outstanding amount of the loan at 31 March 2021 was £10,981,000 (2021 - £10,981,000). Interest is charged on the loan at the bank’s sterling base rate plus 2.7% per annum.
A second loan facility of £17.0 million was obtained in January 2014 in order to fund the planned redevelopment of the Hospital. This facility was increased by £6.5m to £23.5m to support the finalphase of the redevelopment and again to £24.1m in April 2019. At 31 March 2022 £23,958,000 (2021 - £23,875,000) had been drawn against this facility. Interest is charged on the loan at the bank’s sterling base rate plus 3.25% per annum.
In March 2017, HSBC granted forbearance on capital repayments on the initial loan and second loan following completion of phase 3 of the redevelopment. At 31 March 2020, an agreement was in place granting forbearance of both loans and the overdraft facility until December 2020, making the loans short term creditors. However, a further agreement was signed in December 2020, granting continued support of the Hospital in the form of forbearance on the loans and the overdraft facility until December 2021. Interest payments of both loans and overdraft facility were suspended from August 2018 until March 2020, reverting to monthly payment terms from April 2020. The arrangement fees for the increased facility have also been deferred until November 2023. Repayment of the loans, arrangement fees and accrued interest are due in November 2023.
The Charity is currently in breach of its banking covenants as a result of delays in the delivery of the new trading facilities. HSBC remain supportive of the Hospital and the redevelopment project. Testing of the covenants has been deferred until November 2023.
Page 28
DocuSign Envelope ID: 44D0A0C6-FA08-4547-97AA-3764DB166805
## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
## **14. Creditors: Amounts falling due after more than one year**
|Other loans
Net obligations under finance lease and hire purchase contracts|**2022**
**£000**
**24,393**
**33**
**24,426**|_2021_
_£000_
_24,392_
_150_|
|---|---|---|
||||
|||_24,542_|
The loan from the parent undertaking of £24,393,000 comprises a loan from The Victoria Foundation on its acquisition of the Company in January 2011 and subsequent increases to support the Hospital’s redevelopment and operational cash flow requirements. The loan is sub-ordinated to the facilities provided by HSBC plc. The Trustees of The Victoria Foundation have agreed that interest charged and paid be limited to £100,000 per annum.
The loan is repayable on 28th January 2026.
## **15. Share Capital**
|Authorised 1,000 ordinary share of £1 each
Called-up allotted and fully paid 100 ordinary shares of £1 each|**2022**
**£000**
**1**
**-**
**1**|_2021_
_£000_
_1_
_-_|
|---|---|---|
|||_1_|
Page 29
DocuSign Envelope ID: 44D0A0C6-FA08-4547-97AA-3764DB166805
## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
## **16. Statement of funds**
## **Statement of funds - current year**
|**Unrestricted funds**
General Funds
**Statement of funds - prior year**
**Unrestricted funds**
General Funds|**Balance at 1**
**April 2021**
**£000**
**(33,304)**
_Balance at_
_1 April 2020_
_£000_
_(36,901)_|**Income**
**£000**
**25,064**
_Income_
_£000_
_25,243_|**Expenditure**
**£000**
**(25,157)**
_Expenditure_
_£000_
_(21,646)_|**Balance at 31**
**March 2022**
**£000**
**(33,397)**|
|---|---|---|---|---|
|||||_Balance at_
_31 March_
_2021_
_£000_
_(33,304)_|
## **17. Summary of funds**
## **Summary of funds - current year**
|General funds
**Summary of funds - prior year**
General funds|**Balance at 1**
**April 2021**
**£000**
**(33,304)**
_Balance at_
_1 April 2020_
_£000_
_(36,901)_|**Income**
**£000**
**25,064**
_Income_
_£000_
_25,243_|**Expenditure**
**£000**
**(25,157)**
_Expenditure_
_£000_
_(21,646)_|**Balance at 31**
**March 2022**
**£000**
**(33,397)**|
|---|---|---|---|---|
|||||_Balance at_
_31 March_
_2021_
_£000_
_(33,304)_|
Page 30
DocuSign Envelope ID: 44D0A0C6-FA08-4547-97AA-3764DB166805
## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
## **18. Analysis of net assets between funds**
## **Analysis of net assets between funds - current year**
|Tangible fixed assets
Current assets
Creditors due within one year
Creditors due in more than one year
**Total**|**Unrestricted**
**funds**
**2022**
**£000**
27,771
3,530
(40,272)
(24,426)
(33,397)|**Total**
**funds**
**2022**
**£000**
**27,771**
**3,530**
**(40,272)**
**(24,426)**|
|---|---|---|
|||**(33,397)**|
## **Analysis of net assets between funds - prior year**
|Tangible fixed assets
Current assets
Creditors due within one year
Creditors due in more than one year
**Total**|_Unrestricted_
_funds_
_2021_
_£000_
_27,659_
_3,361_
_(39,782)_
_(24,542)_
_(33,304)_|_Total_
_funds_
_2021_
_£000_
_27,659_
_3,361_
_(39,782)_
_(24,542)_|
|---|---|---|
|||_(33,304)_|
## **19. Reconciliation of net movement in funds to net cash flow from operating activities**
|Net income/expenditure for the year (as per Statement of Financial Activities)
**Adjustments for:**
Depreciation charges
Loan interest paid and accrued
Decrease/(increase) in stocks
Decrease/(increase) in debtors
Increase/(decrease) in creditors
**Net cash provided by operating activities**|**2022**
**£000**
**(93)**
**708**
**1,295**
**(208)**
**494**
**491**
**2,687**|_2021_
_£000_
_3,597_|
|---|---|---|
|||_788_
_1,426_
_86_
_(940)_
_(357)_|
||||
|||_4,600_|
Page 31
DocuSign Envelope ID: 44D0A0C6-FA08-4547-97AA-3764DB166805
## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
## **20. Analysis of cash and cash equivalents**
||**2022**|_2021_|
|---|---|---|
||**£000**|_£000_|
|Cash in hand|**455**|_-_|
|Overdraft facility|**-**|_(43)_|
## **21. Analysis of changes in net debt**
|Cash at bank and in hand
Bank overdrafts repayable on demand
Debt due within 1 year
Debt due after 1 year
Finance leases|**At 1 April**
**2021**
**£000**
**-**
**(43)**
**(34,855)**
**(24,392)**
**(305)**
**(59,595)**|**Cash flows**
**£000**
**455**
**43**
**(84)**
**-**
**156**
**570**|**At 31 March**
**2022**
**£000**
**455**
**-**
**(34,939)**
**(24,392)**
**(149)**|
|---|---|---|---|
||||**(59,025)**|
## **22. Operating lease commitments**
At 31 March 2022 the Company had commitments to make future minimum lease payments under non-cancellable operating leases as follows:
|Not later than 1 year
Later than 1 year and not later than 5 years|**2022**
**£000**
**85**
**33**
**118**|_2021_
_£000_
_85_
_83_|
|---|---|---|
||||
|||_168_|
The following lease payments have been recognised as an expense in the statement of financial activities:
||**2022**|_2021_|
|---|---|---|
||**£000**|_£000_|
|Operating lease rentals|**129**|_119_|
## **23. Capital and other financial commitments**
The Company has an overdraft facility of £2,000,000 (2021: £2,000,000).
Page 32
DocuSign Envelope ID: 44D0A0C6-FA08-4547-97AA-3764DB166805
## THE NEW VICTORIA HOSPITAL LIMITED (A company limited by shares)
## NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
## **24. Trustees interests in contracts and related party transactions**
Details of Trustees’ remuneration are given in note 9 above.
Four Trustees serve as Trustees for both the Victoria Foundation and the New Victoria Hospital: Mr G A R Ball, Mr J A Hamblin, Mr M A Matthews and Mr A R Cooke.
Mr Ball is a director and shareholder of Control Account Plc, a company which provides specialist debt collection services to hospitals and which provided £9,816 of services to the Hospital during the year (2021 - £1,890). At 31 March 2022, the company owed Control Account Plc £Nil (2021 - £331).
Mr Curtis, Dr A Ravalia and Mr Wilson, who have all held the position of Medical Director at the Hospital, are also consultants with practising privileges at the Hospital. As consultant surgeons, they act as independent contractors and not as agents of the Hospital and as such do not provide services to the Hospital. They also use the medical facilities, which are made available to all consultants who use the Hospital including the hire of consulting rooms on a sessional basis. The Hospital provides these facilities to them on the same commercial terms as to other consultants.
Mr Willson was appointed Medical Director in July 2020 and is now a member of the Executive Management Team at the Hospital.
## **25. Controlling party**
The Company’s ultimate controlling party is The Victoria Foundation, a company limited by guarantee and a registered charity. The registered office of The Victoria Foundation is St David’s House, 15 Worple Way, Richmondupon-Thames, Surrey, TW10 6DG and its registered charity number is 292841 and company number is 01946612. The principle activities of the entity are the funding of charitable healthcare activities through grants and the operation of its wholly owned subsidiary, The New Victoria Hospital Limited.
Page 33