Financial Statement Year ending 31st March 2012
Financial Statements 2012 – Total Response Limited
Total Response Limited Financial Statements for the year 1 April 2011 to 31 March 2012 Page
Contents
1
Chair’s Statement - review of activities
1
Directors’ Report
2–3
Statement of Board of Directors’ Responsibilities
4
Operating and Financial Review
5
Auditors’ Report
6
Income and Expenditure Account
7
Balance Sheet
8
Cash Flow Statement
9
Notes to the Cash Flow Statement
10 – 15
Notes to the Financial Statements
Registered Office The Gateway, The Auction Yard, Craven Arms, Shropshire SY7 9BW
Company Registration No. 6178863
Financial Statements 2012 – Total Response Limited Chair’s Statement the future with the addition of an appointment and scheduling service. A more efficient handling of repairs is envisaged with management information available showing the profitability of each job undertaken. The company has made a significant contribution to the parent for the hand held computers now in use by all operatives. A total of £50,000 will be paid off by 2012/13.
This is Total Response Limited’s 5th trading period since formation. I am pleased to report that the company has produced a surplus of £11,280 (£7,588 in 2011). This is after making a larger contribution for its share of overheads of the Group, to more fairly reflect the costs and after making reserves for possible bad debts and other charges. Turnover has grown by nearly 9% in the year with the majority of work coming from within Shropshire Housing Group. This has enabled the workforce to be increased from 97 to 98. South Shropshire Housing Association commissioned £2,500,931 and Meres and Mosses Housing Association commissioned £2,108,002. Private works accounted for £649,141. The private works contributed £105,000 towards overheads (£158,000 in 2011).
I would like to thank all staff for the dedication and commitment they have shown throughout the year as they have sought to achieve an efficient and effective maintenance service in spite of very difficult national trading conditions. Once again they have risen to the challenge admirably. My thanks also for the support of my fellow directors. John Stringer Chair
It has been a challenging year for the company. A new computer system has been installed and this will enable a better level of service to customers in
16th July 2012
=================================================== Directors’ Report Members of the Board
Future developments
The members of the Board who served during the year were as follows:
The Board is looking to further extend its business operations in the county. This will include further work for Meres & Mosses Housing Association and investigating opportunities to increase its level of private works.
John Stringer (Chair) Martin Buxey Martin Holland Stephen Donkersley
Cash Flow and Liquidity The Board reports that the company produced a surplus of £11,280, compared to the budgeted surplus of £97,986 at the latest revised stage. Turnover was over £5.6 million.
The cash flow from operating activities during the year was £184,916. By order of the Board
John Stringer Chair 1
16th July 2012
Financial Statements 2012 – Total Response Limited Statement of Board of Directors’ Responsibilities The Directors are responsible for preparing the Directors’ Report and the financial statements in accordance with applicable law and regulations.
Directors’ Indemnity The Directors have confirmed that the company does have Directors and Officers Insurance in place.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
Internal Controls The Performance Committee, on behalf of the Group and all its subsidiaries, has reviewed the effectiveness of the system of internal control, including the sources of assurance agreed by the Board as being appropriate for that purpose. On the basis of the evidence provided by the Assistant Director of Performance & Governance which has been considered by the Group Board on 1st June 2012, we are satisfied that there is sufficient evidence to confirm that adequate systems of internal control existed and operated throughout the year. We are also satisfied that those systems were aligned to an ongoing process for the management of the significant risks facing TRL and the Group as a whole. No weaknesses were identified which would have resulted in material misstatement or loss and which would have required disclosure in the financial statements.
In preparing these financial statements, the directors are required to: • select suitable accounting policies and then apply them consistently; • make judgments and accounting estimates that are reasonable and prudent; • state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
Financial Instruments The company does not have any abnormal exposure to price, credit, liquidity and cash flow risks arising from its trading activities. The company does not enter into any hedging transactions and no trading in financial instruments is undertaken.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safe-guarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Disclosure of Information to Auditors In the case of each of the persons who are Directors of the company at the date when this report was approved: • So far as each of the Directors is aware, there is no relevant audit information of which the company’s auditors are unaware; and
2
Financial Statements 2012 – Total Response Limited • Each of the Directors has taken all the steps that they ought to have taken as a Director to make them aware of any relevant audit information and to establish that the company’s auditors are aware of that information. Going Concern After reviewing the company’s budget for 2012/2013 and based on normal business planning and control procedures, the Directors of the Board have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The financial statements have therefore been prepared on a going concern basis.
3
Financial Statements 2012 – Total Response Limited Operating and Financial Review Background
Continuous Improvement
Total Response Limited (TRL) is an independent private limited company (registration number 6178863) formed in June 2007 to provide high quality maintenance services to Shropshire Housing Group and external customers, and any other enterprises within the communities of Shropshire and Herefordshire.
We are committed to achieving excellent performance across the whole of our business and services. The Group has a comprehensive Performance Management framework which ensures a clear focus on performance improvement and clear responsibility for scrutiny on performance at various levels.
Operating Review
The Performance Management Group monitors benchmarked data together with performance indicators, reports and best practice visits. The group is made up mainly of senior managers from across the Shropshire Housing Group.
On 1st June 2007 Total Response Limited was established as a private limited company. It has delivered a quality repairs service to South Shropshire Housing Association and Meres and Mosses as well as private individuals. On 30th July 2007 it became a wholly owned subsidiary of the Shropshire Housing Group.
Risks and uncertainties The Group’s managers have a clear responsibility for identifying risk facing each of the areas in which they operate and for putting in place procedures to mitigate and manage risk. It is the Performance Committee’s responsibility to review and assess those risks.
During the current year the company has managed the Facilities Management contract for the Gateway at Craven Arms and has won over £649,141 worth of private works. This has contributed around £105,000 to overhead costs and has allowed a cost effective service to be delivered to the tenants of Meres & Mosses and South Shropshire Housing Associations.
Financial Review In 2011/2012 the company has achieved a surplus of £11,280. This is an improved position from 2011 (£7,588) and further Group recharges part paid for handheld devices of around £25,000.
Reporting Structure The Board comprises up to 5 members. The Board is responsible for the company’s continuing strategy and policy framework. It delegates the day to day management and implementation of that framework to the Senior Management team. The Board now meets quarterly.
4
Financial Statements 2012 – Total Response Limited Independent report of the Auditors to the members of Total Response Limited • give a true and fair view of the state of the company’s affairs as at 31st March 2012 and of its surplus 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.
We have audited the financial statements of Total Response Limited for the year ended 31st March 2012 which comprise the Income and Expenditure Account, Balance Sheet, Cash Flow Statement and the related notes. 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).
Opinion on the other matter prescribed by the Companies Act 2006
Respective responsibilities of the Board and Auditors
In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
As explained more fully in the Directors’ Responsibilities Statement set out on page 2, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Matters on which we are required to report by exception
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors. This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body for our audit work, for this report, or for the opinions we have formed.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion; • adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or • the financial statements are not in agreement with the accounting records and returns; or • certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit.
Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/private.cfm.
Glen Jones (Senior Statutory Auditor) For and on behalf of Mazars LLP, Chartered Accountants (Statutory Auditor)
Opinion on the financial statements 45 Church Street Birmingham B3 2RT
In our opinion the financial statements;
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Financial Statements 2012 – Total Response Limited Income and Expenditure Account for the year ended 31st March 2012 2012 £
2011 ÂŁ
Note Turnover Operating costs
2 2
5,652,957 (5,641,857)
5,187,934 (5,180,524)
Operating surplus
2
11,100
7,410
-
-
11,100
7,410
Loss on sale of fixed assets Surplus on ordinary activities before interest
Interest receivable and similar income Interest payable and similar charges
3
180 (-)
178 (-)
Surplus on ordinary activities before taxation
4
11,280
7,588
Taxation on surplus on ordinary activities
6
-
-
Surplus for the year charged to reserves
13
11,280
7,588
All of the above relate to continuing activities.
There are no recognised gains or losses other than the surplus for the year.
6
Financial Statements 2012 – Total Response Limited Registered No 6178863 Balance Sheet at 31st March 2012 2011
2012 Note Tangible fixed assets Tangible assets cost Less Depreciation
Current assets Stock Debtors Investments Cash at bank and in hand Creditors: amounts falling due within one year
£
£
£
383,616 (348,667) 34,949
7 7
364,170 (314,962) 49,208
8 9 10
148,015 535,826 52,193 112,824 848,858
131,598 337,153 52,193 26,274 547,218
11
(981,718)
(705,617)
Net current liabilities
£
(132,860)
(158,399)
Total assets less current liabilities
(97,911)
(109,191)
Capital and reserves Called up share capital Revenue reserve
1 (97,912)
1 (109,192)
(97,911)
(109,191)
12 13
These financial statements were approved by the Board of Management on on its behalf by
John Stringer Chair
Martin Buxey Director
7
July 2012 and were signed
Financial Statements 2012 – Total Response Limited Cash Flow Statement for the year ended 31st March 2012 2011
2012 Net cash inflow from operating activities
Notes (a)
£
£
£
£
184,916
Returns on investments and servicing of finance Interest received Interest paid
180 -
18,449
178 180
Capital expenditure Proceeds on disposal of fixed assets Purchase of other tangible fixed assets
-
Financing Principal lease repayments Net shares issued
Increase / (Decrease) in cash
-
(19,446)
Taxation
(12,764) (19,446)
(12,764)
-
-
(79,100) -
(c)
8
178
(23,499) (79,100)
(23,499)
86,550
(17,636)
Financial Statements 2012 – Total Response Limited Notes to the Cash Flow Statement for the year ended 31st March 2012 (a)
Reconciliation of operating surplus to net cash inflow from operating activities 2012 £ 11,100 33,705 (198,673) (16,417) 355,201 184,916
Operating surplus Depreciation (Increase) in debtors (Increase) in stock Increase in creditors Net cash inflow from operating activities
(b)
2011 £ 7,410 87,625 (128,806) (4,038) 56,258 18,449
Reconciliation of net cashflow to movement in net funds 2012 £
2011 £
Increase / (Decrease) in cash in the year Housing loans received
86,550 -
(17,636) -
Change in net funds Net funds brought forward
86,550 26,274
(17,636) 43,910
Net funds carried forward
112,824
26,274
(c)
Analysis of changes in net funds At 31st March 2011 £
Investments Cash at bank and in hand
Debt due after 5 years Total
At 31st March 2012 £
Cash Flow £
26,274 26,274
86,550 86,550
112,824 112,824
-
-
-
26,274
86,550
112,824
9
Financial Statements 2012 – Total Response Limited Notes (forming part of the financial statements) 1
Accounting policies
The financial statements have been prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). A summary of the more important accounting policies, which have been consistently applied, is set out below. The accounting policies were reviewed by the Performance Committee on 9th May 2012 in accordance with FRS18. Accounting convention The financial statements are prepared under the historical cost convention. Turnover Turnover represents work done on behalf of other members of Shropshire Housing Group and external work done for other entities or private individuals, together with facilities management for the Gateway. Fixed assets and depreciation Other tangible fixed assets are stated at cost and are written down to their residual value over their expected useful life on a straight line basis at the following annual rates: Office equipment, fixtures & fittings Plant & machinery Vehicles
- 15% to 25% - 15% to 25% - 25%
Stock Stock is stated at the lower of cost and net realisable value. Operating leases Rentals payable under operating leases are charged on a straight-line basis over the term of the lease. Finance leases Assets acquired under finance leases are capitalised and interest charged to revenue. Pension costs Contributions payable to the company’s pension scheme are charged to the income and expenditure account so as to spread the cost of pensions over the service lives of employees in the schemes. FRS 17 is followed. Taxation The charge for taxation is based on the results for the year and takes into account taxation deferred (or accelerated) because of timing differences between the treatment of certain items for taxation and accounting purposes. Provision is made for deferred tax on a full provision basis.
10
Financial Statements 2012 – Total Response Limited Notes (continued)
2
Turnover, operating costs and operating surplus 2012
External work of TRL Internal work of TRL Facilities Management
3
2011
Turnover
Operating Costs
Operating (Deficit) / Surplus
Turnover
Operating Surplus / (Deficit)
£
£
£
£
£
649,141 4,608,933 394,883 5,652,957
(703,261) (4,543,713) (394,883) (5,641,857)
(54,120) 65,220 11,100
736,088 4,066,004 385,842 5,187,934
Interest receivable and similar income 2012 £ 180
Interest receivable from bank deposits
4
(58,640) 66,050 7,410
2011 £ 178
Surplus on ordinary activities before taxation 2012 £
2011 £
Surplus on ordinary activities before taxation is stated after charging: Depreciation of tangible fixed assets Auditors’ remuneration (including VAT):(This item is shown within group costs) In their capacity as auditors In respect of other services Amounts payable in respect of hire of plant and machinery Amounts payable in respect of rents of land and buildings
11
33,705
87,625
186,005 180,876
181,543 178,470
Financial Statements 2012 – Total Response Limited Notes (continued) 5
Staff costs 2012 £ 2,311,176 185,082 99,947 2,596,205
2011 £ 2,162,483 170,614 102,307 2,435,404
Average number of full-time equivalent persons employed during the year
98
97
These were categorised as: Office Teams Operatives
16 82
16 81
98
97
Wages and salaries Social security costs Other pension costs
No directors received payments from Total Response Limited during the year.
6
Taxation 2012 £ 11,280
Surplus on ordinary activities before tax
2011 7,588
Tax on surplus on ordinary activities at 26% (2011 - 26%) Costs not deductible for tax purposes (primarily depreciation on tangible fixed assets) Capital allowances (restricted claim) Unrelieved tax losses utilised Current charge on the accounts
12
2,932
1,972
8,763 (7,650) (4,045)
22,782 (5,281) (19,473)
-
-
Financial Statements 2012 – Total Response Limited Notes (continued) 7
Tangible fixed assets Office equipment, fixtures & fittings
Plant and machinery & vehicles
Total
£
£
£
Cost At beginning of year Additions Disposals
34,178 11,570 -
329,992 7,876 -
364,170 19,446 -
At end of year
45,748
337,868
383,616
At beginning of year Charge for the year Eliminated on disposals
15,283 6,862 -
299,679 26,843 -
314,962 33,705 -
At end of year
22,145
326,522
348,667
23,603
11,346
34,949
18,895
30,313
49,208
Depreciation
Net book value st At 31 March 2012 st
At 31 March 2011
8
Stock 2012 £ 148,015
Consumable maintenance stock
9
Debtors 2012 £ 535,826 535,826
Due within one year Prepayments and accrued income
10
2011 £ 131,598
2011 £ 337,153 337,153
Current asset investments 2012 £ 52,193
Land held for development / resale
13
2011 £ 52,193
Financial Statements 2012 – Total Response Limited Notes (continued) 11
Creditors: amounts falling due within one year 2012 £ 291,114 661,106 29,498 981,718
Trade creditors Accruals and deferred income Finance leases VAT
12
2011 £ 225,080 359,126 102,600 18,811 705,617
Called up share capital 2012 £
Issued and fully paid shares of £1 each: At beginning of year Issued during the year Relinquished during the year At end of year
13
2011 £ 1 1
1 1
Reserves Revenue reserve £ (109,192)
Balance brought forward
11,280
Surplus in the year
(97,912)
Balance carried forward
14
Pension obligations
All employees working within Total Response Limited are employed by South Shropshire Housing Association or Meres & Mosses Housing Association and, as such, they are members of the Social Housing Pension Scheme (SHPS) or the Shropshire County Council Pension Scheme. Full details and actuarial valuations of these schemes are disclosed in South Shropshire Housing Association’s, and Meres & Mosses Housing Association’s Financial Statements and Shropshire Housing Limited group accounts.
15
Capital commitments
Capital expenditure contracted for but not provided in the financial statements Capital expenditure authorised by the Board of Management but not yet under contract This will be financed from internal funds.
14
2012 £
2011 £
-
-
35,057
62,000
Financial Statements 2012 – Total Response Limited Notes (continued) 16
Other financial commitments
The company was committed to making the following annual payments under non-cancellable operating leases:
Operating leases which expire: 2012 ÂŁ Property
Plant
Total
Total
-
86,361 59,614 145,975
86,361 59,614 145,975
73,013 27,774 38,535 97,027 236,349
Within 1 year 1 - 2 years 2 - 5 years over 5 years
17
2011 ÂŁ
Contingent liabilities
There were no contingent liabilities at 31st March 2011 or 31st March 2012.
18
Legislative provisions
The company is incorporated as a private limited company under the Companies Act 2006, Registered No. 6178863. The company has taken advantage of FRS8 exemption not to disclose intra-group transactions. The ultimate parent undertaking is Shropshire Housing Limited, an Industrial and Provident Society regulated by the Homes and Communities Agency.
15