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2021-12-31-accounts

HERTFORD BRITISH HOSPITAL CORPORATION, Paris

ANNUAL REPORT OF THE DIRECTORS

FOR THE YEAR ENDED

31[st] DECEMBER 2021

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HERTFORD BRITISH HOSPITAL CORPORATION, Paris Annual report of the Directors Year ended 31[st] December 2021

1 REFERENCE AND ADMINISTRATIVE DETAILS

Name Hertford British Hospital Corporation, Paris (hereafter, indifferently, “HBHC”, “the Corporation” or “the Charity”)

Charity number 248 198 Company number 00 878 934 Principal office 3 rue Barbès, 92300 Levallois Perret, France Registered office UK 8th Floor, 20 Farringdon St, London EC4A 4AB, United Kingdom

1.1 Auditors

The Corporation’s auditors are:

1.2 Bankers and fund managers

The Corporation’s bankers are:

1.3 Solicitors and other legal advisers

The Corporation’s legal advisers throughout 2021 and to date are:

2 DIRECTORS, TRUSTEES AND COUNCIL OF MANAGEMENT

The Directors of the Corporation, the Trustees of the Charity and the members of the Council of Management serving during the year and since the year end (collectively hereafter “the Directors” or, indifferently, “the Trustees") were as follows:

Christopher Wicker, Chairman

Dr Julia Bache

David Blanchard

Susan Cheyne, Deputy Chairman

Stephen Cowen

Thierry Drilhon representing the FBCCI (ex-officio Trustee)

Sandra Esquiva-Hesse

Michel de Fabiani, OBE, Representative Member

Christopher Gilmore

Ian Gosling

Paul Johnson-Ferguson, Honorary Treasurer

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HERTFORD BRITISH HOSPITAL CORPORATION, Paris Annual report of the Directors Year ended 31[st] December 2021

Theo Rycroft, representing the British Embassy (ex-officio Trustee), since December 2021

Ian McDonald

Richard Seguin

Alicia Suminski

Bridget Terrell, Honorary Secretary

Peter Terrell

Charles Wilson, OBE, Representative Member

2.1 Committees and working groups

The Directors are allocated to the various working groups and committees as shown below. The Chairman and Vice-Chairman are considered ex-officio members of all the Committees and the Director General (see 3.4 below) is a guest at all meetings.

2.1.1 HOSPITAL LIAISON GROUP

Michel de Fabiani, OBE, Chairman

Charles Wilson, OBE,

Dr Julia Bache

This group effectively ceased to operate in 2021 once the last outstanding issues with OPS had been resolved (see below) and day to day relations with the Hôpital Franco-Britannique are managed by the Director General.

2.1.2 PROPERTY COMMITTEE

Stephen Cowen, Chairman

Christopher Gilmore

Ian Gosling

Paul Johnson-Ferguson

Peter Terrell

2.1.3 FINANCE, RISK & AUDIT COMMITTEE

Paul Johnson Ferguson, Chairman

David Blanchard

Stephen Cowen

Ian Gosling

Ian McDonald

2.1.4 GOVERNANCE and NOMINATIONS COMMITTEE

David Blanchard, Joint-Chairman

Susan Cheyne, Joint-Chairman

Dr Julia Bache

Peter Terrell

Richard Seguin

2.1.5 STRATEGY COMMITTEE

Peter Terrell, Chairman Sandra Esquiva-Hesse Richard Seguin Charles Wilson, OBE

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HERTFORD BRITISH HOSPITAL CORPORATION, Paris Annual report of the Directors Year ended 31[st] December 2021

Stephen Cowen

2.1.6 CHARITABLE GIVING COMMITTEE

Ian McDonald, Chairman Dr Julia Bache Bridget Terrell Alicia Suminski

2.1.7 INVESTMENT COMMITTEE (constituted in April 2022)

Paul Johnson-Ferguson, Chairman

Alicia Suminski

Edward Archer (external SME)

Simon Pennington (external SME)

3 STRUCTURE, GOVERNANCE AND MANAGEMENT

3.1 GOVERNING DOCUMENTS AND OVERVIEW OF THE HISTORY OF THE CHARITY

The Hertford British Hospital (HBH) was founded in 1871 by the late Sir Richard Wallace (referred to as “the Original Charity”). The Corporation is a registered charity, incorporated in the United Kingdom in 1966 and registered in France in 1970 as a non-profit organisation which manages the assets of the Original Charity and those assets received subsequently as gifts and donations. The Original Charity’s hospital activity was transferred to the French charity l’Oeuvre du Perpetuel Secours (hereafter “OPS”) with effect from

1[st] January 2008 and combined with the latter’s own hospital activity to form a joint hospital under the name Institut Hospitalier Franco-Britannique (hereafter “IHFB”). HBHC appointed half the members on the Management Committee of the IHFB and had a minority representation on the Board of the OPS. The Chairman of HBHC was appointed Chairman of the Management Committee of the IHFB.

In 2015, the financial provisions of the agreements in place with the OPS were modified. As a consequence, the number of HBHC’s appointees on the Management Committee of the IHFB was reduced from three to two and its representation on the board of OPS was also modified so as to reduce its representation from 40% to 38.8% of the board.

During the year 2018, the hospital activity of the IHFB declined, with the single exception of the Oncology sector, and after taking account of the contributions from the French Health Authorities, the loss for the year amounted to some three million euros.

Given that the losses were predicted to continue to grow in 2019, the OPS entered into negotiations with the Fondation Cognacq-Jay (the “Fondation”), another French charity in the health sector, with a view to transferring the IHFB to a joint venture to be formed with that charity. On 21st December 2018 a final protocol was signed with the Fondation and, with effect on 1st March 2019, the activity of IHFB was transferred to a joint venture in the form of a Groupement de Coopération Sanitaire (the “Groupement”) created by the two charities after receiving the approval of the French Health Authorities. As part of the transaction, the OPS sold the properties situated in rue Kleber, on which the main hospital building stands, to the Fondation for €30 million and an amount of €4 million was injected into the Groupement by the Fondation. As a result, the Fondation held 70.6 % of the capital of the joint venture, with the OPS holding the balance. HBHC was kept informed by OPS throughout the negotiations and HBHC sought and obtained the approval of the Charity Commission to the transaction.

Following the finalisation of the IHFB’s accounts for 2019, it became necessary to inject a further eight million euros by way of capital into the joint venture. This was provided entirely by the Fondation whose percentage ownership in the capital of the Groupement was increased as a consequence to 99.67 % and reduced OPS’ share to 0.33 %. This ensured the long-term future of the hospital activity and the continued employment of the seven hundred staff.

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HERTFORD BRITISH HOSPITAL CORPORATION, Paris Annual report of the Directors Year ended 31[st] December 2021

As a result of the transfer of the hospital activity to the Groupement, the Management Committee of the IHFB was replaced by a six-member Strategy Committee comprised of three representatives of the Fondation, three representatives appointed by the OPS of which one was a nominee of HBHC, and which was presided over by one of the representatives of the Fondation.

HBHC’s obligation to contribute to the funding of the continuing deficits of the IHFB came to an end on 31[st] December 2019, as provided for in the Amendment of 22[nd] July 2015 to the 2008 agreement between the Charity and OPS.

The hospital activity was exercised by the Groupement throughout most of 2020 and continued to benefit from the Occupancy Agreement which had been entered into by the Corporation and OPS in 2018 and which allowed the Maternity Department to use the Corporation’s hospital building to house its Maternity Department until 2031 at the latest. In September 2020, the Fondation injected fresh funds into the Groupement and, as part of its restructuring, the OPS withdrew from participation in the hospital, whose activities are henceforth managed solely by the Fondation. As a consequence, the Corporation and OPS agreed on 28[th] Septembre 2020 to end their own relationship.

Following this agreement, which made the Occupancy Agreement null and void, a new agreement was entered into between the Corporation and the Fondation making the hospital building available rent free until September 2025, with a potential extension until 2026.

As a result of the above developments, HBHC relinquished its seats on the Board of OPS in 2021.

Following the Corporation’s 2020 Annual General Meeting on 16[th] September 2020, the Hospital Liaison Committee was repurposed to work alongside the Fondation to help the latter maintain the British aspect of the hospital activity.

As part of the reorganisation of the hospital activity, on 1[st] January 2021, the Corporation sold its remaining medical activity (the “Centre International de Dermatologie” or “CID”) to the Fondation for a symbolic sum and entered into an agreement similar to that signed for the hospital building so that the CID could continue to use its existing premises at 12 rue Barbès rent free. All the employees attached to the CID were transferred to the Fondation.

The ninth Marquess of Hertford, a member of our founder’s family, has been our Patron since 2006.

The present document and attached financial statements have been prepared in compliance with the Companies Act of 2006 and the Statement of Recommended Practice - Charities (FRS 102).

3.2 APPOINTMENT OF TRUSTEES

The Council of Management is composed of not less than thirteen and not more than twenty-four trustees, comprising two ex-officio members, two representative members and not more than twenty co-opted members. There are at present two ex-officio members, two representative and sixteen co-opted members.

The ex-officio members are:

The representative members are appointed at the Annual General Meeting and retire from office at the close of the next Annual General Meeting following that of their appointment.

Co-opted members are appointed for a term not exceeding five years and are eligible for re-election. Trustees are chosen with regard to their availability to spend time on the charity and their specialist skills and experience in management, finance, law, property, healthcare…

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HERTFORD BRITISH HOSPITAL CORPORATION, Paris Annual report of the Directors Year ended 31[st] December 2021

3.3 TRUSTEE INDUCTION AND TRAINING

New trustees are briefed on their legal obligations under charity and company law, the content of the Memorandum and Articles of Association, the work of the committees, the decision-making processes, the objectives and the recent financial performance of the charity.

In addition, under the stewardship of the Nominations & Governance Committee, there is an annual conflict of interest confirmation process which, together the declarations made at the start of each Council meeting, ensures that the trustees comply with the Conflict of Interest Policy (which is maintained by the Committee and approved by Council).

3.4 ORGANISATION

The Council of Management administers the charity and meets quarterly. At the Council meeting held immediately after the Annual General Meeting, the trustees elect a Chairman, a Deputy Chairman, an Honorary Treasurer and a Secretary. The trustees also elect the Chairmen and members of the various committees listed above and, as appropriate, approve their terms of reference.

These committees make recommendations to Council on the long-term strategy, oversee the finances of the Charity (including its reserves policy), the charitable activities (including the grant giving policy), the succession planning for trustees and the operations of its commercial property portfolio. They meet as often as required.

The Chairman had requested that the relevant committees work in 2021 to review and update all relevant policies, including in particular the reserves and giving policies, in the light of the significant changes in the activities of the Corporation as explained in chapter 4 below. These policies were updated / drafted and approved in 2021: Reserves policy (approved at the Council meeting held on 16[th] June 2021) ; Charitable giving policy (approved at the Council meeting held on 20[th] October 2021) ; Investment policy (approved at the Council meeting held on 20[th] October 2021).

In 2020, knowing that the Chief Accountant of the Corporation would be retiring in March 2021, the Council decided to outsource the accounting function and appoint a Director General with sufficient authority to manage affairs on a daily basis, represent the Corporation vis à vis third parties and assist the Directors in preparing the Corporation for the changes required once the hospital building cease to be used by the Foundation in 2025 or 2026. The Director General, Iain Hutton, took office in January 2021, allowing for a three-month hand-over with the outgoing Chief Accountant, and served throughout the year.

3.5 RELATED PARTIES

The Charity has a long-standing relationship with the British Charitable Fund, Paris (“BCF”). The BCF, a UK registered charity with a related French entity, provides help to British residents in France who have fallen on hard times. The founder of the Original Charity, Sir Richard Wallace, was a most generous benefactor of the BCF in the past and, until early 2022 when the property was sold (with an obligation for the purchaser to maintain the BCF in its premises), the Corporation provided rent-free accommodation to the BCF at 12 rue Barbès. The Corporation also makes a financial contribution each year to the BCF.

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HERTFORD BRITISH HOSPITAL CORPORATION, Paris Annual report of the Directors Year ended 31[st] December 2021

3.6 PRINCIPAL RISKS AND UNCERTAINTIES FACING THE CHARITY

The trustees make every effort to identify and address all major risks to which the Corporation is exposed.

Members of the Property Committee ensure that the Charity’s portfolio of commercial buildings is properly maintained and that its properties are rented out to suitable tenants at market levels of rent.

The tenants of the Château building (which is the original 1898 hospital building and is a listed historical monument, now used as offices) have been in dispute with the Charity over the payment of business tax for several years. In 2019, the tenants held back rent and charges in excess of the business tax in dispute. In 2020 and throughout most of 2021 (with the exception of the fourth quarter of 2021), the tenant made no payments at all and the amount owing at 31[st] December 2021 amounted to a €1.5 million (see note 3.4 to the financial statements). The Corporation pursued legal action on both the business tax issue and the nonpayment of rent throughout 2021 and into 2022 when proceedings were filed before the Commercial Court requesting that the tenant be placed into receivership. After discussion, the parties reached an agreement that was signed on 8[th] March 2022. The impact of this settlement is more fully explained in note 4.2 to the financial statements but its essential non-financial impact is to secure the return of the asset on 30[th] September 2022. In this context, the Charity also had a technical due diligence of the Chateau building carried out so as to identify “red flags” that needed to be dealt with in short term and a schedule of works over the following years. This will be reflected in a three-year forecast to be prepared by the Treasurer and in a multi-year property redevelopment plan that will be prepared in 2022.

Members of the Finance, Risk & Audit Committee ensure that all financial risks are identified and that expenses are strictly limited. The Committee oversees all systems, controls and processes that may have an impact on the Charity’s ability to meet its objectives and ensures that effective audit functions and adequate risk management processes are in place. In 2021, the Corporation has no significant financial investment income, endowments, grants or donations. Stock market upturns and downturns have no direct influence on the Charity’s results. However, given the sale of the 12 rue Barbès property in early 2022, the Charity created an investment policy and the related Investment Committee that was convened in April 2022 and comprises two Trustees and two recognized subject matter experts. The Investment Committee’s remit will be to supervise the application of the investment policy, advise on a choice of fund manager / custodian, etc.

The Covid-19 sanitary crisis which arose in 2020 continued throughout 2021 and into 2022. Whilst the disposal of the dermatology activity on 1[st] January 2021 (see chapter 4 below) meant that the operational impact on the Charity was minimal, the crisis did have a financial impact on the Charity through the decrease in rental income during the period of confinement and subsequent constraints over certain types of activity (eg restrictions on number of people allowed). This is more fully explained in note 3.1 to the financial statements.

4 OBJECTIVES AND ACTIVITIES

The objects for which the Original Charity was established were to operate a hospital in or near Paris for the treatment and relief of persons suffering from illness, injury, disease or other infirmity or otherwise requiring medical attention, being primarily British residents, as well as serving the local population.

The present-day objectives of the Corporation are, in all essential respects, identical to those initially laid down by the founder. These objectives, as expressed in its Memorandum of Association, are dedicated to the medical treatment of patients of British nationality resident in France or of any other nationality, but with a preference for the former. These objectives have been extended to the provision of other health services and retirement homes

In 2006, the objects of the Original Charity were expanded (with the Charity Commission’s consent) to include the protection of health by such means as the trustees consider.

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HERTFORD BRITISH HOSPITAL CORPORATION, Paris Annual report of the Directors Year ended 31[st] December 2021

As already described above, the way in which these objectives were achieved has evolved through time, with the approval of the Charity Commission. As from the transfer of the Original Charity’s hospital activity to the OPS on 1[st] June 2008 until September 2020, the Corporation participated in the Management (later Strategy) Committee which supervised the management of the new joint hospital. As part of the agreement with the OPS (which had retroactive effect to 1[st] January 2008) an occupancy agreement put at the disposal of the new joint hospital the building belonging to the Original Charity and which house the maternity department. Only the Dermatology Centre (known as the “CID”) was maintained under the full ownership of HBHC but it reported an operating loss each year since 2008 despite management’s efforts to improve this situation.

From 28[th] September 2020, the objectives continued to be met by making the hospital premises available to the Foundation Cognacq-Jay on a rent free basis until 2025/26 ; by managing the provision of dermatological care through the CID and by contributing in kind (rent free office space) and financially to the British Charitable Fund (“BCF”) so that it can provide for British citizens in need of care. It is worth noting that, had the hospital been rented to the Fondation Cognacq-Jay at a market rent, as estimated by Savills in a report dated March 2021, that rent would have approximated €1.22 million.

Since 1[st] January 2021, following the sale of the CID, the objectives are met through the rent-free provision of the hospital and through the support afforded the BCF. The Corporation continues to assist the Foundation Cognacq-Jay with the “British” aspects of the hospital.

The Charity is the beneficial owner of certain commercial properties. In 2008, in order to renovate the main commercial buildings, the Charity borrowed €8.7 million from Dexia Crédit Local for a term of fifteen years, together with an additional loan of €1.5 million in 2009. A new charge effective from September 2020 was put in place to guarantee repayment of the loans. Both loans were fully reimbursed on 18[th] February 2022 as is more fully explained in note 25.2 to the financial statements.

Throughout 2021, the Trustees complied with their duty to have due regard to the guidance on public benefit published by the Charity Commission in exercising their powers and duties.

5 ACHIEVEMENTS AND PERFORMANCE

As is more fully described in the various chapters above, the Corporation has seen its role in the provision and management of hospital care evolve over time, moving away from the direct provision of care in 2008 and then relinquishing its management role in 2020 before handing over the CID in early 2021.

Throughout the years, the aim has always been to meet the founder’s objectives whilst preserving the assets at a time when the economic pressures on the provision of care grew constantly.

Today, whilst the objectives continue to be met through the provision of premises, non-financial support to the Fondation Cognacq-Jay and support to the BCF, the Trustees are working on a strategic plan, for submission to the Charity Commission in due course, that would, if approved, see the Corporation focus on the wellbeing of beneficiaries in France with ties to Britain through various means, including the redevelopment of the hospital site once it is vacated by the Fondation Cognacq-Jay. The Fondation Cognacq-Jay have given indications that their redevelopment project is running to a timetable that would require them to remain in the hospital site beyond the current end date of the agreement (probably until 2027) and discussions will be held with The Fondation Cognacq-Jay in 2022 to ensure that the provision of care can continue as appropriate.

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HERTFORD BRITISH HOSPITAL CORPORATION, Paris Annual report of the Directors Year ended 31[st] December 2021

6 FINANCIAL REVIEW

The financial statements as at and for the year ended 31[st] December 2021 show that the Corporation was impacted by the Covid 19 sanitary crisis in 2020/21 in two ways: directly in 2020 by the closure of the CID for certain periods (resulting in a loss of revenue in that year estimated at £157 000 (€175,000)) and, in both 2020 and 2021, indirectly by the impact on commercial tenants. This impacted cash flows significantly and a government backed loan of £898 101 (€999,000) was taken out in August 2020. The repayment schedule for the loan was agreed with the bank in 2021, and it will be repaid over the full permitted term of 6 years from August 2020. The balance owing at 31[st] December 2021 amounted to £784 237 (€933,282).

The cash position of the Charity at 31 December 2021 was £447 782 (€532,884), and Loans outstanding represent £3 345 482 (€3,983,675)

Current cash flow forecasts anticipate the final repayment of all loans on time bearing in mind that the Dexia Crédit Local loan was repaid in full in February 2022 (see note 4.1 to the financial statements).

Let property income has suffered because of the situation on the Château whose tenant continued not to pay the rent due throughout 2021 (with the exception of the fourth quarter, which was paid) and this despite a significant concession by the Corporation which forgave 3 months’ rent in 2020 in recognition of the issues created by the lockdown. This was in line with the practice recommended by the French Government and was agreed to despite that fact that, unlike commercial landlords, the Corporation could not benefit from the tax break created by government to incite landlords to forgo rent during lockdown.

In 2021, the Charity made an operating profit of £526 126 (€626,116) before deducting tax and before taking into account the gain on revaluation of its investment properties. There is a loss of €45,398 / £ 38 147 (in 2020, a profit of €110 646 / £99,470) in the French accounts due to a difference in the treatment of depreciation.

A professional valuation of the Wallace Gardens property resulted in an increase in the estimated market value of £2 941 050 (€3 500 000) bringing the total value of the property portfolio to £48.7 million (€57.9 million).

As is further explained in note 16.3 to the financial statements, the land on which are situated the current hospital and the Villiers investment properties is vested in the Secretary of State for the Environment and managed and administered by the Council of Management of the Corporation who are also Trustee of the Original Charity (Hertford British Hospital).

7 DATA PROTECTION

The Charity is compliant with the General Data Protection Regulation (GDPR) which came into force in May 2018. This law was of particular relevance to the operations of the Dermatology Centre (CID) and, whilst the Corporation continues to have a Data Protection Officer (outsourced) to manage its compliance, the volume of personally identifiable data is now considerably reduced.

8 PLAN FOR FUTURE PERIODS

The Finance, Risk & Audit Committee will continue to keep costs to a minimum. Interest payments to banks should steadily reduce from the current rate of £85 873 (€102,194) per annum since the Dexia Crédit Local loans are paid in full in 2022, leaving only the government backed loan and the loan from Société Générale.

Discussions are also in early stages with the Charity’s advisors in the UK and France as to the potential reorganization of the way in which the Original Charity’s assets are held.

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HERTFORD BRITISH HOSPITAL CORPORATION, Paris Annual report of the Directors Year ended 31[st] December 2021

9 TRUSTEES’ RESPONSIBILITIES IN RELATION TO THE FINANCIAL STATEMENTS

English company law requires the trustees to prepare financial statements that give a true and fair view of the state of affairs of the charity at the end of the financial year and of its surplus or deficit for the financial year. In doing so the trustees are required to:

The trustees are responsible for maintaining proper accounting records, which disclose with reasonable accuracy at all times the financial position of the charity and enables them to ensure that the financial statements comply with the Companies Act 2006 and the Statement of Recommended Practice–Charities (FRS 102). The trustees are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In accordance with English company law, as the Corporation’s directors, we certify that:

10 AUDITORS

The firm of Grant Thornton was re-appointed for a six-year mandate under French law, commencing with the accounts for the year ending 31st December 2016, and ending with the accounts for the year ending 31st December 2021.

The reappointment of Grant Thornton for a five-year period commencing with the examination of the 2022 financial statements will be proposed to the Annual General Meeting.

By order of the Directors Christopher Wicker, Chairman 13[th] May 2022

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HBHC_Directors report_31 Dec 21_VDef

Statutory auditor’s Report on the financial statements

Year ended 31 December 2021

Grant Thornton

Hertford British Hospital Corporation, Paris

3, rue Barbès 92300 Levallois Perret

SAS d'Expertise Comptable et de Commissariat aux Comptes au capital de 2 297 184 € inscrite au tableau de l'Ordre de la région Paris Ile France et membre de la Compagnie régionale de Versailles RCS Nanterre B 632 013 843 27 rue James Watt 37200 Tours

Grant Thornton

Hertford British Hospital Corporation, Paris Year ended 31 December 2021

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Statutory auditor’s Report on the financial statements

Hertford British Hospital Corporation, Paris Year ended 31 December 2021

To the Trustees,

In our capacity as French statutory auditor and in accordance with your request for the purpose of the Charity Commission Requirements, we hereby report to you on the audit of the accompanying financial statements of Hertford British Hospital Corporation, Paris for the year ended 31 December 2021 which comprise the Statement of Financial Activities, the Balance Sheet, the Statement of Cash Flow and the related notes 1 to 25.2. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”.

Respective responsibilities of Trustees and auditor

As explained more fully in the Trustees’ Responsibilities Statement set out on page 10, 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 the 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 ability to continue as a going concern, disclosing, as applicable, masters related to going concern and using the going concern basis of accounting unless the Trustees

Grant Thornton

Hertford British Hospital Corporation, Paris Year ended 31 December 2021

13

either intend de liquidate the entity or to cease operations, or have no realistic alternative but to do so.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and French Standards on Auditing. Those standards require that we comply with local ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs 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.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the charitable company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the trustees; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the financial statements:

Grant Thornton

Hertford British Hospital Corporation, Paris Year ended 31 December 2021

14

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, the information given in the Trustees’ Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

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 auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

This report is governed by French law. The courts of France shall have exclusive jurisdiction over any claim, dispute or difference resulting from the engagement letter or the present report or any related matters. Each party irrevocably waives its right to oppose any action brought before the French courts, to claim that the action is being brought before an illegitimate court or that the courts have no jurisdiction.

Paris, 2[nd] June 2022

The Statutory auditor

Grant Thornton

French Member of Grant Thornton International

Adam Nicol Partner

HERTFORD BRITISH HOSPITAL CORPORATION, Paris

FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 DECEMBER 2021

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Financial statements Year ended 31[st] December 2021

Statement of Financial activities

(including income and expenditure account) For the year ended 31[St] December 2021

Income and endowments
Income from trading activities:
Income from property investments
Income from charitable activities:
Health service income
Total income and endowments
Expenditure on raising funds
Cost of generating funds
Total expenditure on raising funds
Expenditure on charitable activities:
Health services expenditures
Governance costs
Total expenditure
Net income before non-operating
items
Provision for retirement indemnities
Net income before unrealised gains on
investment properties
Gains / (losses) on revaluation of
investment properties
Net movement in funds before
taxation
Taxation
Net movement in funds after taxation
Funds brought forward at 1stJanuary
Exchange difference
Funds carried forward at
31st December		 Unrestricted funds
2021
2020
2021
2020
€
€
£
(0,8403)
£
(0.8990)
5
2 647 843
2 633 143
2 224 982
2 367 195
6
63 566
1 077 073
53 415
968 289
2 711 409
3 710 216
2 278 397
3 335 484
1 589 560
1 389 503
1 335 707
1 249 164
7
1 589 560
1 389 503
1 335 707
1 249 164
8 & 9
(44 384)
1 431 852
(37 296)
1 287 235
12
540 117
109 120
453 860
98 099
2 085 293
2 930 475
1 752 271
2 634 498
626 116
779 741
526 126
700 986
626 116
779 741
526 126
700 986
16
3 252 263
500 000
2 732 877
449 500
3 878 379
1 279 741
3 259 003
1 150 486
13
3 878 379
1 279 741
3 259 003
1 150 486
23
54 811 405
53 531 664
49 275 453
45 544 740
..
..
(3 217 431)
2 580 227
23
58 689 784
54 811 405
49 317 025
49 275 453

The footnotes form an integral part of the financial reporting.

16

HBHC UK accounts 31 Dec 21 VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Financial statements Year ended 31[st] December 2021

Fixed assets
Intangible fixed assets_:_
Tangible fixed assets
Investment properties
Financial assets
Current assets
Debtors
Short term investments
Cash at bank and in hand
Sinking fund
Current liabilities
Creditors
Loans (excluding accrued interest)
Taxation
Net current (liabilities) / assets
Total assets less current liabilities
Long-term liabilities
Loans
Provisions
Investment grant
Creditors
Total net assets
Unrestricted funds
Revaluation reserve
Special and other reserves
Total unrestricted funds		 Balance sheet
As at 31StDecember 2021
2021
2020
2021
2020
€
€
£
£
14
..
2 345
..
2 109
15
2 418 873
2 564 383
2 032 578
2 305 379
16
57 900 001
54 400 000
48 653 371
48 905 600
230
..
193
..
60 319 104
56 966 728
50 686 142
51 213 088
17
2 738 284
2 384 994
2 300 981
2 144 111
29 359
24 033
24 670
21 606
1 828 391
2 710 176
1 536 397
2 436 448
18
100 042
230 371
84 065
201 104
4 696 076
5 349 574
3 946 113
4 809 269
19
1 793 791
1 552 082
1 507 320
1 395 323
20
3 217 921
2 388 360
2 704 019
2 147 135
13
..
..
..
..
5 011 712
3 940 442
4 211 339
3 542 458
(315 636)
1 409 132
(265 226)
1 266 811


60 003 468
58 375 860
50 420 916
52 749 899
20
765 754
2 624 485
643 463
2 359 412
21
..
133 490
..
120 008
22
547 930
606 480
460 426
545 226
19
..
200 000
..
179 800
1 313 684
3 564 455
1 103 889
3 204 446
58 689 784
54 811 405
49 317 027
49 275 453
23
33 173 066
29 902 768
27 875 327
26 882 588
23
25 516 718
24 908 637
21 441 698
22 392 865
58 689 784
54 811 405
49 317 025
49 275 453

Signed on 13th May 2021

Christopher Wicker

Chairman

Iain Hutton Director General

The footnotes form an integral part of the financial reporting.

17

HBHC UK accounts 31 Dec 21 VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Financial statements Year ended 31[st] December 2021

Statement of cash flow

For the year ended 31[St] December 2021

Cash flow from operating activities
Net incoming resources for year
Depreciation
Decrease / (increase) in debtors
Increase / (decrease) in creditors
Increase / (decrease) in provisions
Increase / (decrease) in investment
grant
Cash generated by operating activities
Taxation paid
Investing activities
Net acquisition of fixed assets
Net acquisition of financial asset
Renovation of investment properties
Proceeds from disposal of fixed assets
Cash applied to investing activities
Net cash (outflow) / inflow before
financing
Financing activities
New long-term loans
Repayment of long-term loans
Cash applied to financing activities
Net cash applied
Net opening cash
Net closing cash
Net closing cash
Cash at bank and in hand
Sinking fund
Short term investments
Current liabilities – short term bank
loans
Net closing cash		 2021
2020
2021
2020
€
€
£
£
626 116
779 741
526 126
700 986
124 040
138 429
104 231
124 448
(353 290)
(329 777)
(296 869)
(296 469)
41 709
678 350
35 048
(609 837
21
(133 490)
(192 056)
(112 172)
(172 658)
(58 550)
(58 550)
(49 200)
(52 636)
246 535
1 016 137
207 164
913 508
15
(7 148)
(6 392)
(6 006)
(5 746)
(230)
..
(193)
..
(247 737)
(599 985)
(208 173)
(539 387)
30 962
..
26 017
..
(224 153)
(606 377)
(188 355)
(545 133)
22 382
409 760
18 809
368 375
..
999 000
..
898 101
(904 775)
(487 466)
(760 282)
(438 232)
(904 775)
511 534
(760 282)
459 869
(882 393)
921 294
(741 473)
828 244
1 415 277
493 983
1 189 257
444 091
532 884
1 415 277
447 784
1 272 335
1 828 391
2 710 176
1 536 397
2 436 448
18
100 042
230 371
84 065
207 104
29 359
24 033
24 670
21 606
(1 424 908)
(1 549 303)
(1 197 350)
(1 392 823)
532 884
1 415 277
447 782
1 272 335

The footnotes form an integral part of the financial reporting.

18

HBHC UK accounts 31 Dec 21 VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris

Notes to the financial statements for the year ended 31[st] December 2021

1 Legal status, activities and financing

Hertford British Hospital Corporation, Paris (hereafter “the Corporation”), was incorporated in the United Kingdom on 10[th] May 1966 as a company limited by guarantee and not having a share capital. The Corporation was established for purposes which are exclusively charitable, and in this context, provides premises to the Fondation Cognacq-Jay for the operation of the Hôpital Franco-Britannique and Centre International de Dermatologie (hereafter the “CID”). It also provides office accommodation and limited financial support to the British Charitable Fund, a related but independent charity.

The Corporation also owns a portfolio of investment properties whose revenue is used to further the objects of the charity.

2 Accounting policies

2.1 Basis of preparation

The financial statements incorporate the CID activities for 2020 but not 2021 since the activity was sold on 1[st] January 2021) and the investment property management and commercial letting activities of the Corporation. They have been prepared under the historic cost convention, except for investments in property which are included at market value.

The financial statements have been prepared in accordance with the Statement of Recommended Practice–Charities (FRS 102) as per October 2019 and effective at 1[st] January 2019, applicable UK Accounting Standards and the Companies Act 2006. The principal accounting policies adopted in the preparation of the financial statements are set out below.

2.2 Functional and reporting currencies

The functional and reporting currency of the Corporation is the Euro. Financial information is also presented in these financial statements in pounds sterling, using year-end rates of exchange in translating all assets, liabilities, funds, income, expenditure and cash flows as follows:

2.3 Income and endowments

Investment income is recognised on an accruals basis.

Where leases on investment properties provide for a rent-free period and where sums are significant, the rental income is spread over the period of the lease to provide a constant return over that period.

For significant amounts, the rent-free period is spread over the term of the lease by accounting for “Income not yet invoiced” and a corresponding amount receivable. This amount is released progressively over the term of the lease and the amount to the spread is revised annually in accordance with the relevant index.

19

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

Health services income is recognised as earned as and when the related medical services are provided. Financing from the French government included in this category is recognised where there is entitlement, certainty of receipt and the amount can be measured with sufficient reliability.

2.4 Costs of generating funds

These costs include let property expenses and interest on loans relating to the renovation of the Corporation’s investment properties.

2.5 Charitable activities

These activities include health services expenditure and comprise both the direct costs and support costs related to this activity. Governance costs include those incurred in the governance of the Corporation and its assets and are primarily associated with corporate and statutory requirements

2.6 Irrecoverable VAT

As a charity, the Corporation does not fall under the VAT regime for all its healthcare related activities; VAT is only applicable to the management and real estate activities.

All amounts expended are classified under activity headings that aggregate all costs related to the category. Irrecoverable VAT is charged against the category of resources expended for which it was incurred.

2.7 Intangible fixed assets

Intangible fixed assets comprised establishment costs, computer licences and software and are amortised over a five-year period

2.8 Tangible fixed assets

Tangible fixed assets are stated at cost. Only those assets in use for medical purposes are classified as tangible fixed assets, investment properties being classified separately.

Individual fixed assets are capitalised at cost.

The cost of an asset is its purchase price, including customs duties and non-recoverable taxes, after deduction of rebates, trade rebates and cash discounts of all directly attributable costs incurred to bring the asset into use, in place and in working order for the intended use. Transfer rights, fees or commissions and legal costs related to the acquisition are attached to this acquisition cost.

All costs which are not part of the acquisition price of the asset and which cannot be directly attached to the costs made necessary to put the asset in place and in a state of operation in accordance with its intended use, are recognized as expenditure.

2.9 Valuation of investment properties

The Trustees determine the market value of investment properties on the basis of valuations undertaken by professional surveyors and estate agents on a rotational basis over three years.

2.10 Depreciation

No depreciation is provided on assets under construction. Depreciation of other tangible fixed assets is calculated on the straight-line method at annual rates designed to write off the cost or

20

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

valuation over their estimated useful lives.

Depreciation rates are as follows:

The Directors determine at the year-end, considering both internal and external information available to them, whether there are any indications that would suggest that the value of the assets may have been significantly impaired.

2.11 Investment grants received

Investment grants received to finance the acquisition of fixed assets are recorded on the balance sheet and taken to income based on the depreciation plan of the related equipment. Other grants received are credited to income on receipt.

2.12 Short-term investments

Short-term investments are stated at their market value at the balance sheet date.

2.13 Donations received

Any donations received during the year are recorded in unrestricted funds.

2.14 Current assets

Current assets are valued at their nominal value. A provision for depreciation is recorded when the realizable value is estimated to be lower than the book value.

2.15 Provisions

Any present obligation resulting from a past event with regard to a third party, which can be estimated with sufficient reliability, and covering identified risks, is recognized as a provision.

2.16 Retirement indemnities

Upon retirement, the Corporation’s employees receive a lump sum retirement indemnity in accordance with the law and the collective agreement applicable to the Corporation. There is no specific agreement and no on-going pension liability for retired employees once this one-off indemnity has been paid.

In accordance with FRS 102, a provision for rights acquired by staff is established based on an actuarial calculation, reduced if applicable by the realizable value of the insurance contract taken out to meet the future cost of the retirement indemnities.

2.17 Impact of the Covid-19 pandemic

The Covid-19 pandemic is likely to have significant impacts on the assets, financial situation and results of companies. Relevant accounting information on these impacts constitutes a key element of the financial reporting for the period in question.

To achieve this, the Corporation has adopted a targeted approach to express the main relevant impacts on the performance of the year and on its financial situation.

Methodology followed:

21

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

The information provided relates to the main impacts, deemed relevant, of the event which are recorded in the Corporation’s financial statements. A distinction was made between one-off effects and structural impacts. These effects are detailed taking into account the interactions and effects of the event on the usual aggregates, appreciating the gross and net impacts. The support measures from which the Corporation has been able to benefit are also assessed.

As the Covid-19 pandemic was still ongoing on the date the financial statements were approved by the Directors, the Corporation is unable to assess the precise consequences for the years to come.

3 Significant events

3.1 COVID 19 sanitary crisis

In 2021, the corporation did not use the aid mechanisms implemented by the government.

Although the health crisis did not have a direct impact on the Corporation’s activity during the 2021 financial year, the fact remains that it suffered the consequences indirectly due to repeated breaches by its tenant, Zalathabar, of its payment obligation. As a consequence of the measures taken by the government to fight against the spread of the COVID 19 virus, the activity of Zalthabar, tenant of the "Château", was seriously disrupted, and this company has refrained from paying their rent due under the conditions of the lease. The situation with Zalthabar is presented in detail in notes 3.4 and 4.2.

3.2 Disposal of the CID and transfer of staff

As of 1[st] January 2021, the Corporation, under an appropriate contract, ceded to the Fondation Cognacq-Jay the trading activity of the CID comprising:

The sale was made at net book value for fixed assets (€30 964 / £35 929) and inventories (€12 410 / £11 157); for an amount of € 1 for the trade name and patient base.

Except for protected employees who were transferred on 19[th] February 2021, all CID staff were transferred to the Fondation Cognacq-Jay on 1[st] January 2021.

3.3 Agreements to end the direct provision of healthcare

In September 2020, the Fondation Cognacq-Jay injected fresh funds into the Groupement de Coopération Sanitaire (“Groupement”) the joint venture vehicle which had been set up by it and l’Oeuvre du Pertpetuel Secours (“OPS”) to own and manage the Institut Hospitalier Franco-Britannique hospital. As part of the restructuring, OPS withdrew from participation in the Groupement and from the management of the hospital which was renamed “Hopital Franco-Britannique Fondation Cognacq-Jay”.

As a consequence, the Corporation and OPS agreed on 28th September 2020 to end their own relationship, including the agreement under which the Corporation had agreed to the Maternity Department of the hospital occupying its hospital building until 2031.

In this context, the Corporation has recognized that it does not have a right to recover the hospital activities transferred in 2008 and that in any event, it waives any such right should it exist.

The old occupancy agreement with OPS which allowed the hospital to occupy the building was replaced by a new agreement signed with the Fondation on 9[th] December 2020. As such, the Corporation consents, free of charge, and temporarily, in application of articles 1875 to 1891 of the French Civil Code, to the Fondation Cognacq-Jay, beneficiary-borrower, who accepts it, a rent-free lease relating to the hospital site at 3 rue Barbès, 92300 Levallois-Perret for a period of five full and consecutive years from 28[th] September 2020 at 00 hour, expiring on 28[th] September 2025 at midnight.

22

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

The lender accepts that the borrower may, 6 months before the end of the term, request a postponement of the initially planned term to 28[th] March 2026 or 28[th] September 2026. This request must be made no later than 28[th] March 2025.

At the end of the said agreement, the borrower undertakes to return the premises loaned, as well as the equipment present and mentioned in the inventory, in normal and usual condition.

All of the agreements between the Corporation, OPS and the Fondation Cognacq-Jay do not call into question the reimbursement by the Hôpital Franco Britannique of the subsidies described in note 22.

3.4 Litigation with Zalthabar

The Zalthabar company, tenant of the Château, disputes owing the tax on offices which is re-invoiced to it by Corporation in the amount of € 192 063 including VAT, (£ 161 390) as of 31[st] December 2021.

In addition, Zalthabar, whose activity is considered non-essential, was forced to close its establishment from 10[th] March 2020 until 27[th] May 2020 and again from 30[th] October 2020, until 9[th] June 2021.

Except for the rent and charges for the 4[th] quarter of 2021, amounting to €220 998 including VAT (£ 185 704), Zalthabar refrained from paying the rent and charges due in 2020 and 2021 without making the slightest difference between the periods when it was closed or open.

This resulted in a backlog at 31[st] December 2021 of unpaid rents and charges including VAT amounting to € 1 506 858 (£ 1 266 213) and this despite the reduction in rent granted by Corporation and amounting to € 199,192 including VAT as described in note 4.2. This backlog, net of VAT, has been duly provided against at 31 December 2021.

4 Post balance sheet events

4.1 Sale of 12 rue Barbès property

Effective 18[th] February 2022, the Corporation sold the asset located at 12 rue Barbès for € 12.1 million. This sale led to the full repayment of the loan due to Dexia Credit Local that was secured on this asset.

4.2 On-going litigation with Zalthabar

The dispute described in note 3.4 has not been resolved as at 31[st] December 2021 and, with the exception of the payment of the rent and charges for the 4[th] quarter of 2021, the amounts due in 2020 and 2021 have not been settled despite the granting of payment facilities (monthly term expired rather than quarterly to expire) that the Corporation agreed to during the first quarter of 2021.

On 1[st] October 2021, the Corporation petitioned the Commercial Court of Nanterre asking that Zalthabar be placed into receivership. After discussion, the parties reached an agreement that was documented in a protocol signed on 8[th] March 2022. In accordance with this protocol, the lease will be terminated early, on 30[th] September 2022 and Zalthabar is committed to reimbursing the outstanding debt net of an exceptional discount of € 337 122 inclusive of VAT (£ 283 283) granted by the Corporation. In addition, the Corporation has agreed to a 15% reduction in the rent due for the period from 1[st] January 2022 to 30[th] September 2022; this rent is payable monthly. At the date on which the Directors approved the financial statements, Zalthabar was meeting in full its obligations under the protocol.

23

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

5 Income from investments
Let property income
Rental income and indemnities
Other charges invoiced to tenants
Interest income
Exchange gain / (loss) - net
Grant
Total income from investments
6 Income from health services
Health services income
Patients’ fees CID
Grant
Right of lease on hospital building
Other
Total income from health services
7 Expenditure on raising funds
Let property expense
Expenses recoverable from tenants
Taxes recoverable from tenants
Property taxes
Other costs and expenses
Risk provisions (see below)
Interest on borrowings
Investment properties:
Interest on loans
Bank interest
Total expenditure on raising funds		 2021
2020
2021
2020
€
€
£
`£
1 856 283
1 997 505
1 559 835
1 795 757
727 664
635 473
611 456
571 290
2 583 947
2 632 978
2 171 291
2 367 047
5 346
165
4 492
148
58 550
..
49 200
..
2 647 843
2 633 143
2 224 983
2 367 195
2021
2020
2021
2020
€
€
£
`£
..
804 599
..
723 335
..
55 131
..
49 563
..
..
..
..
63 566
217 343
53 415
195 391
63 566
1 077 073
53 415
968 289
2021
2020
2021
2020
€
€
£
£
263 582
253 735
221 488
228 108
464 082
380 238
389 968
341 834
70 772
82 399
59 470
74 077
422 021
149 696
354 624
134 577
266 901
387 881
224 277
348 705
1 487 358
1 253 949
1 249 827
1 127 301
101 577
134 847
85 355
121 227
617
707
518
636
1 589 552
1 389 503
1 335 700
1 249 164

The risk provision in 2020 includes the total amount due by Zalthabar (€861 972), which is provided in 2021 as a bad debt. See note 21.

24

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

8 Health services and other expenditure

Provision of health services
Staff costs
Materials and consumables
Laundry
Other external costs
Taxes, other than income
Provisions
Other costs and expenses
Depreciation
Hospital:
Buildings
Intangible assets
Total health services and other expenditure		 2021
2020
2021
2020
€
€
£
£
(1 231)
850 498
(1 034)
764 598
12 410
35 353
10 428
31 782
..
19 559
..
17 584
..
350 513
..
315 111
..
55 773
..
50 140
(178 848)
(4 556)
(150 286)
(4 096)
..
65
..
58
(167 669)
1 307 205
(140 892)
1 175 177
123 285
121 020
103 596
108 797
..
3 627
..
3 261
(44 384)
1 431 852
(37 296)
1 287 235

9 Charitable activities

In addition to the direct provision of health services (in 2020 only), the Corporation makes premises available freely to:

The Corporation also makes an annual grant to the BCF. In 2021, this amounted to €75 000 (£63 023).

10 Staff costs

Salary costs
Social security costs
Health services
Administration		 2021
2020
2021
2020
€
€
£
£
124 525
632 379
104 638
568 509
89 441
294 753
75 157
264 983
213 966
927 132
179 795
833 492
(1 231)
850 498
(1 034)
764 598
215 197
76 634
180 830
68 894
213 966
927 132
179 796
833 492

The trustees are not remunerated for their services, but some direct expenses incurred in the performance of their duties are reimbursed.

25

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

The average number of employees for the year was as follows:

2021 2020
Total Health Admin. Total Health Admin.
Doctors and midwives .. .. .. 9 9 ..
Nurses and auxiliaries .. .. .. 2 2 ..
Administrative staff 1 .. 1 5 4 1
Total 1 .. 1 16 15 1

Emoluments of employees:

Above £70 000 (€80 000)
Between £62 000 and £72 000 (€70 000 and €80 000)
Below £62 000 (€70 000)
Total		 2021
2020
1
..
..
3
..
13
1
16

The total gross remuneration of the three highest paid employees was €186 490 (£156 707) for the year ended 31[st] December 2021 (€235 447 / £211 667 in 2020).

Employee salaries are set in accordance with the collective bargaining agreement for the sector: the “Convention Collective National” dated 31 October 1951.

11 Indemnity insurance

Included in the costs for the provision of health services are the following premiums paid on an insurance policy which provides cover for losses arising from the neglect or default of the Directors, employees or agents and indemnification of the Directors against the consequences of any neglect or default on their part.


rt.
2021 2020 2021 2020
€ € £ £
Premiums 3 122 2 975 2 623 2 675

12 Governance costs

These costs can be analysed as follows:

Staff costs
Provision for retirement indemnities
Audit fee
Legal fees
Other fees and expenditures
Depreciation		 2021
2020
2021
2020
€
€
£
£
215 197
76 634
180 830
68 894
..
..
..
..
16 932
17 492
14 228
15 725
4 753
1 212
3 994
1 090
302 480
..
254 174
..
755
13 782
634
12 390
540 117
109 120
453 860
98 099

26

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

13 Taxation

The Corporation is registered as a non-profit association in France under the law of 1[st] July 1901 and, as such, is only subject to income tax on the net profit arising from investment properties at a rate of 24% and on certain financial income at a rate of 10%.

The tax computation is as follows for the years to 31[st] December:

Taxable income from investment properties
Management costs
Insurance
Real estate and related taxes
Depreciation
Adjustment to amounts recovered from tenants
Improvements
Interest income
Loss carried forward at 1st January 2020
Loss carried forward at 31st December 2020
Tax charge for the year		 2021
2020
€
€
369 537
316 117
(30 952)
(69 323)
..
(605)
(60 961)
(35 774)
(18 674)
(18 638)
72 514
(7 841)
(7 288)
..
371
(512 348)
(769 722)
(261 239)
(512 348)
..
..

14 Intangible assets

Intangible assets comprise establishment costs and computer software licenses as and are as follows:

Cost
Aggregate depreciation		 2021
2020
2021
2020
€
€
£
£
9 290
88 301
7 806
79 383
(9 290)
(85 956)
(7 806)
(77 274)
..
2 345
..
2 109

27

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

15 Tangible assets

Tangible assets are as follows:

Summary (in € and £) Total Buildings Other tangible Other tangible Total Buildings Other tangible Other tangible
health services fixed assets - health services fixed assets –
(see B below) Admin. (see B below) Admin.
(see C below) (see C below)
€ € € £ £ £
Cost or valuation
At 1stJanuary 2021 11 044 037 10 825 659 218 378 9 928 588 9 732 266 196 322
Additions 7 148 .. 7 148 6 006 .. 6 006
Retirements (198 184) .. (198 184) (166 534) .. (166 534)
Exchange difference .. .. .. (648 287) (635 467) (12 820)
At 31stDecember 2021 10 853 001 10 825 659 27 342 9 119 773 9 096 799 22 974
Aggregate depreciation
At 1st January 2021 8 479 654 8 290 675 188 979 7 623 209 7 453 317 169 892
Charge for the year 124 040 123 285 755 104 231 103 597 634
Retirements (169 566) .. (169 566) (142 486) .. (142 486)
Exchange difference .. .. .. (497 759) (486 664) (11 095)
At 31stDecember 2021 8 434 128 8 413 960 20 168 7 087 195 7 070 250 16 945
Net book value
At 1stJanuary 2021 2 564 383 2 534 984 29 399 2 305 379 2 278 949 26 430
At 31stDecember 2021 2 418 873 2 411 699 7 174 2 032 578 2 026 549 6 029
e detailed analysis of the tangible fixed assets is as follows:
Health service (in €) Total Buildings Buildings Buildings Part of Part of land
Hospital Hospital Hospital Buildings Barbès
1990 1982 1974 Barbès
€ € € € € €
Cost
At 1stJanuary 2021 10 825 659 3 046 184 5 265 953 1 593 324 846 435 73 763
At 31stDecember 2021
Aggregate depreciation
At 1st January 2021 8 290 675 2 134 237 3 846 954 1 593 324 716 160 ..
Charge for the year 123 285 26 163 89 670 .. 7 452 ..
At 31stDecember 2021 8 413 960 2 160 400 3 936 624 1 593 324 723 612 ..
Net book value
At 1stJanuary 2021 2 534 984 911 947 1 418 999 .. 130 275 73 763
At 31stDecember 2021 2 411 699 885 784 1 329 329 .. 122 823 73 763

The detailed analysis of the tangible fixed assets is as follows:

28

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

Health service (in £)
Cost
At 1stJanuary 2021
Exchange difference
At 31stDecember 2021
Aggregate depreciation
At 1st January 2021
Charge for the year
Exchange difference
At 31stDecember 2021
Net book value
At 1stJanuary 2021
At 31stDecember 2021
Other fixed assets -
Admin (in € and £)
Cost
At 1stJanuary 2021
Additions
Retirements
Exchange differences
At 31stDecember 2021
Aggregate depreciation
At 1stJanuary 2021
Charge for the year
Retirements
Exchange differences
At 31stDecember 2021
Net book value
At 1stJanuary 2021
At 31stDecember 2021		 Total
Buildings
Hospital
1990
Buildings
Hospital
1982
Buildings
Hospital
1974
Part of
Buildings
Barbès
Part of land
Barbès
£
£
£
£
£
£
9 732 266
2 738 519
4 734 092
1 432 398
760 945
66 313
(635 467)
(178 811)
(309 112)
(93 528)
(49 686)
(4 330)
9 096 799
2 559 708
4 424 980
1 338 870
711 259
61 983
7 453 317
1 918 679
3 458 412
1 432 398
643 828
..
103 597
21 985
75 350
..
6 262
..
(486 664)
(125 280)
(225 817)
(93 528)
(42 039)
..
7 070 250
1 815 384
3 307 945
1 338 870
(608 051)
..
2 278 949
819 840
1 275 680
..
117 117
66 313
2 026 549
744 324
1 117 035
..
103 208
61 983
Total
Furniture
Computer
equipment
Total
Furniture
Computer
equipment
€
€
€
£
£
£
218 378
188 453
29 924
196 322
169 419
26 903
7 148
2 196
4 952
6 006
1 845
4 161
(198 184)
(170 242)
(27 942)
(166 534)
(143 054)
(23 480)
..
..
..
(12 820)
(11 062)
(1 758)
27 342
20 407
6 935
22 974
17 147
5 826
188 979
162 865
26 114
169 892
146 416
23 476
755
575
180
634
483
151
(169 566)
(144 678)
(24 888)
(142 486)
(121 573)
(20 913)
..
..
..
(11 095)
(9 560)
(1 535)
20 168
18 762
1 406
16 945
15 766
1 179
29 399
25 588
3 811
26 430
23 003
3 427
7 175
1 645
5 530
6 029
1 382
4 647

29

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

16 Investment properties

vestment properties
Historical cost
At 31stDecember 2021
Market value
At 1stJanuary 2021
Fixed assets – increase
Revaluation of properties
Exchange difference
At 31stDecember 2021		 Total
Total
€
£
25 397 314
21 341 363
54 400 000
48 905 600
247 738
209 624
3 252 262
2 732 877
..
(3 194 730)
57 900 000
48 653 371

Investment properties are all located in Levallois-Perret in France and include:

16.1 Valuation of investment properties

The independent valuation of the Wallace Gardens offices at 31[st] December 2021 was carried early 2022 by Savills. Other properties were last valued in 2019 and 2020.

16.2 Land and buildings at 12 rue Barbès

Although the Barbès building is principally held for investment purposes, approximately one third of the floor area of the building is occupied by the British Charitable Fund, apartments and the CID and these parts are recorded as tangible fixed assets. The remaining two-thirds of the building are held for open-market letting purposes and are recorded as an investment property. Land is also considered to be held in similar proportions.

16.3 Secretary of State for the Environment

The land on which are situated the current hospital buildings and the Villiers investment properties (which include the original hospital building now converted to offices) was, together with the buildings then existing, the subject of a gift on 30 July 1898 in favour of the predecessor of the United Kingdom Secretary of State for the Environment. He was deemed, under English law, to have accepted the gift of the land in his capacity of trustee for the original hospital charity. Following a scheme of arrangement dated 2[nd] November 1977, the Charity Commissioners for England and Wales confirmed that the land and buildings continue to be vested in the Secretary of State for the Environment and that their management and administration is undertaken by the members of the Council of Management of the Corporation who are also Trustees of the charity.

30

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

17 Debtors

Debtors comprise the following at 31[st] December:

Receivables from health services and patients
Income not yet invoiced (rental on Batigère
lease)
Accounts receivable
Stock of consumables
Other debtors and prepayments (net of a
provision of €595 071 for Zalthabar in 2020)
Dexia, payment In advance on loan
VAT
Receivable from IHFB (now HFB-FCJ)
Investment grant from ARS to be received
from IHFB (now HFB-FCJ)
Investment grant on cost overrun of the
smoke extraction system to be received from
IHFB (now HFB-FCJ)		 2021
2020
2021
2020
€
€
£
£
1 532
1 377
1 372 461
1 768 098
1 153 279
1 589 520
717 074
602 557
..
12 410
..
11 157
100 953
187 435
84 832
168 505
..
..
125 581
46 114
105 526
41 456
234 315
61 242
196 895
55 057
123 700
211 863
103 945
190 465
64 200
96 300
53 947
86 574
2 738 284
2 348 994
2 300 981
2 144 111

18 Sinking fund

A sinking fund has been set up to meet unforeseen expenses. As of 31[st] December 2021, this fund has a balance of € 100 042 /£ 84 065 (2020 € 230,000/ £207 000). The amount is invested in a passbook savings account and earned interest of € 42 / £ 35 for the year ended 31[st] December 2021 (2020 € 371/ £334). This fund is included in current assets and in rental income and indemnities as non-material income.

This "sinking fund" was planned to face future cost of refurbishment but there is in fact no constraint on its use and, in 2020, given the difficulties described in note 3, part of it was used to finance current operations.

31

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

19 Current liabilities

Current liabilities comprise the following at 31[st] December:

Social debt
Suppliers
Due to tenant Batigère
Deposits received from tenants
VAT
Other taxes
IHFB contribution (see below)
Rent paid in advance – Orange
Due to IHFB (now HFB-FCJ)
Accrued interest on loans
Other creditors and accruals		 2021
2020
2021
2020
€
€
£
£
38 904
107 378
32 691
96 533
306 021
60 072
257 149
54 005
441 326
600 000
370 846
539 400
650 697
657 705
546 781
591 277
278 150
188 280
233 729
169 264
1 751
14 756
1 471
13 266
..
..
..
..
9 154
9 154
7 692
8 229
16 015
..
13 457
..
21 876
65 248
18 382
58 658
29 897
49 489
25 122
44 491
1 793 791
1 752 082
1 507 320
1 575 123

20 Loans

20.1 Summary

Details of outstanding loans as as follows at 31[st] December:

Short-term bank loans
Short-term portion of property loans
Total short-term loans
Long-term portion of property loans
Total loans		 2021
2020
2021
2020
€
€
£
£
1 424 908
1 549 303
1 197 350
1 392 823
1 793 013
839 057
1 506 669
754 312
3 217 921
2 388 360
2 704 019
2 147 135
765 754
2 624 485
643 463
2 359 412
3 983 675
5 012 845
3 347 482
4 506 547

32

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

20.2 Property loans in detail

At 1stJanuary 2021
Dexia Credit Local
Société Générale
Crédit du Nord
Total
At 31stDecember 2021
Dexia Credit Local
Société Générale
Crédit du Nord
Total		 Total
Long-term
Short-term
Total
Long-term
Short-term
Note
€
€
€
£
£
£
2 252 679
1 501 786
750 893
2 025 159
1 350 106
675 053
211 863
123 699
88 164
190 464
111 205
79 259
999 000
999 000
..
898 101
898 101
..
3 463 542
2 624 485
839 057
3 113 724
2 359 412
754 312
(a)
1 501 786
..
1 501 786
1 261 951
..
1 261 951
(b)
123 699
30 377
93 322
103 944
25 526
78 418
(c)
933 282
735 377
197 905
784 237
617 937
166 300
2 558 767
765 754
1 793 013
2 150 132
643 463
1 506 669

The details of the loans subscribed and the balances due at

Amount Amount drawn Amount due at Duration Interest rate
subscribed down at 31stDec. 21
31stDec. 21
€ € €
Dexia Credit Local (a) 8 700 000 8 700 000 1 501 786 15 years from 5.70% fixed rate
December 2008
Société Générale (b) 850 000 850 000 123 700 12 years from 5.70% fixed rate
September 2009
Crédit du Nord (c) 999 000 999 000 933 282 6 years from August 0.25% initial rate
2020

33

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

21 Provisions

The provisions at the year end and the movements in the year can be analysed as follows:

At 1st January
Retirement indemnities – see (a) below
Zalthabar tenant litigation – see (b) below
Additions in the year
Retirement indemnities
Zalthabar tenant litigation
Reversed in the year
Retirement indemnities
Zalthabar tenant litigation
Exchange difference
At 31st December
Retirement indemnities
Zalthabar tenant litigation
Total		 2021
2020
2021
2020
€
€
£
£
133 490
138 046
120 008
117 450
..
187 500
..
159 525
133 490
325 546
120 008
276 975
..
..
..
..
..
..
..
..
(133 490)
(4 556)
(112 172)
(4 096)
..
(187 500)
(168 562)
..
..
(7 836)
15 691
..
133 490
..
120 008
..
..
..
..
..
133 490
..
120 008

Notes:

34

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

22 Investment grants

The investment grants received for the fitting of a smoke extraction system in the hospital building and movements thereon are as follows:

vestment grants
e investment grants received for the fitting
ovements thereon are as follows:		 of a smoke extraction system in the hospital building and
Initial investment grant
Additional grant
Total in €
Total in £
Exchange difference
Total in £		 31 Dec. 2020
Increases
Reductions
31 Dec. 2021
€
€
€
€
440 229
..
42 500
397 729
166 251
..
16 050
150 201
606 480
..
58 550
547 930
513 172
..
49 192
463 980
32 054
..
..
19 134
545 226
..
49 192
483 114

In 2011, the Corporation recorded the commitment received from the Oeuvre du Perpétuel Secours (“OPS”) to retrocede to it the payments received from the Regional Health Agency of Ile de France for its investment support aimed at financing the upgrading of hospital buildings, such as those appearing in the treaty for the partial contribution of assets from the Corporation to OPS dated 2008. This support amounted at the time to €850 000 and this sum was expected to cover all of the work.

In this context, the Corporation recognized in its accounts the hospital smoke extraction work which was completed in 2011 for a total cost of € 1,171,000 and accounted for two investment grants: one for the financial debt that it contracted to finance the works (i.e. € 850,000) and a second for the investment which exceeded the initial budget covered by the financing described above, i.e. € 321,000 that OPS has committed to repay in full over 10 years (see note 3.2)

Investment grants are amortized over the depreciation period for the work, ie 20 years.

35

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

23 Unrestricted funds

Revaluation reserve
1967 revaluation of land at rue Barbès
1974 revaluation of other fixed assets
Unrealised gain on investment properties
Revaluation reserve
Total revaluation reserve
Special reserves
Investment reserve
Treasury reserve
Total special reserves
Other reserves
Reserve for refurbishment of assets
1982 grant received from the “Service de la
coordination de l’Action Economique du
département des Hauts de Seine »
Various other funds
Total other reserves
General funds
Total other reserves
Total unrestricted funds		 2021
2020
2021
2020
€
€
£
£
198 184
198 184
166 534
178 167
472 195
472 195
396 785
424 503
670 379
670 379
563 319
602 670
32 502 687
29 232 389
27 312 008
26 279 918
33 173 066
29 902 768
27 875 327
26 882 588
173 130
173 130
145 481
155 644
549 156
549 156
461 456
493 691
722 286
722 286
606 937
649 335
1 000 000
1 000 000
840 300
899 000
1 102 352
1 102 352
926 306
991 014
1 310 983
1 310 983
1 101 619
1 178 574
3 413 335
3 413 335
2 868 225
3 068 588
21 381 097
20 773 016
17 966 536
18 674 942
24 794 432
24 186 351
20 834 761
21 743 530
58 689 784
54 811 405
49 317 025
49 275 453

As described in note 25.2, the Wallace Gardens property was independently valued at 31[st] December 2021 and this gave rise to a €3 270 298 (£ 2 748 031) increase in the revaluation reserve.

The other funds shown above include various donations received over the years. The Directors have qualified these funds as non-designated or general funds on the basis of available data and because, to the best of the knowledge of those involved in preparing the financial information, there is no contradictory information that would lead to this qualification being questioned. This is consistent with the way in which such funds were previously reported.

36

HBHC_Footnotes_31_Dec_21_VDef

HERTFORD BRITISH HOSPITAL CORPORATION, Paris Notes to the financial statements Year ended 31[st] December 2021

24 Reconciliation to French financial reporting

Given its status in France and French law, the books and records of the Corporation are maintained under French accounting standards using the French chart of accounts and restated for the purposes of this financial reporting.

The net result reported for the year ended 31[st] December and its reconciliation to the net movement in funds after taxation as reported herein can be reconciled as follows:

Net profit for the year per French accounts
Reconciling items
Revaluation of investment assets
Difference in depreciation charge
Net movement in funds after taxation		 2021
2020
€
€
(45 398)
110 646
3 252 263
500 000
671 525
669 095
3 878 389
1 279 741

The reconciliation of net equity per the French accounts and the total unrestricted funds is as follows:

Net equity per French accounts
Reconciling items
Revaluation of assets
Unrealised gain on investment properties
Cumulative difference in depreciation charge
Other
Total unrestricted funds		 2021
2020
€
€
9 110 472
9 155 865
17 212 128
17 212 128
15 290 559
13 902 008
17 076 634
14 541 394
(9)
10
58 689 784
54 811 405

25 Off balance sheet commitments

25.1 Other reserves

The grant of €1 102 352 received in 1982 from the Service for the Coordination of Economic Action of the Department of Hauts-de-Seine is definitively acquired over a period of 40 years. In the event that the Corporation should leave the French social security system, a pro-rata temporis reimbursement will apply. As of 31[st] December 2021, this potential reimbursement, based on 1 remaining year, would be €27 559.

25.2 Other commitments

The Corporation has granted Dexia Crédit Local a first rank mortgage on the building located at 12 rue Barbès in Levallois-Perret as a guarantee for the repayment of any amount due in principal for the loan granted by Dexia Crédit Local on 23rd August 2007 for the financing of the renovations and rehabilitation of buildings located in Levallois-Perret at 48 rue de Villiers (the Château), at 2 rue Voltaire and 1 rue Barbès (together, Wallace Gardens). The initial loan amount was €8 700 000. As of 31[st] December 2021, the outstanding capital amounts to €1 501 786.

The Corporation has also granted to Dexia Crédit Local a charge over the rental stream rents received for the Wallace Gardens buildings as security for this same loan.

Both these commitments ceased to apply on 18[th] February 2022 when the loan was repaid in full.

37

HBHC_Footnotes_31_Dec_21_VDef