CARELINE SERVICES LIMITED

Transcription

1 Registered number: CARELINE SERVICES LIMITED DIRECTORS' REPORT AND FINANCIAL STATEMENTS

2 COMPANY INFORMATION DIRECTORS S Ghosh (appointed 21 June 2010) P Sarkar (appointed 21 June 2010) R C Cooper-Driver (resigned 21 June 2010) D Jackson (resigned 21 June 2010) R P Hinduja (appointed 11 August 2010) V S Hinduja (appointed 11 August 2010) S Palakodeti (appointed 11 August 2010) COMPANY SECRETARY G Denham COMPANY NUMBER REGISTERED OFFICE 250 Gunnersbury Avenue Chiswick London W4 5QB AUDITORS Price Bailey LLP Chartered Accountants & Statutory Auditors Dashwood House 69 Old Broad Street London EC2M 1QS

3 CONTENTS Page Directors' report 1-3 Independent auditors' report 4-5 Profit and loss account 6 Balance sheet 7 Notes to the financial statements 8-16

4 DIRECTORS' REPORT The directors present their report and the financial statements for the period ended 31 March PRINCIPAL ACTIVITIES The company's principal activity during the period remained the provision of outsourced contact services. BUSINESS REVIEW The share capital of the company was acquired by HTMT (Europe) Limited and subsequently the accounting reference date was extended to 31 March to align with other group companies. The reported results therefore reflect the trading performance of the company for a 15 month period. During this period the company has achieved strong growth with like for like annualised growth of over 35%. Costs continue to be well controlled and the increase in turnover has given rise to a substantial increase in profit before taxation. The gross margin on sales continues to be the key performance indicator for the business. During the period this margin fell slightly from 35.3% to 33.7%. Given the increase in Turnover the directors consider this to be a good result. Future Outlook Careline Services continues to be positive about the outlook for 2011/12 while it does recognise that the market is competive. As a member of a large worldwide group the company is now able to provide more services and expertise across international borders and this may provide furture opportunities for growth. As part of a strategy of European expansion Careline Services will be delivering services in Holland, Germany Italy and France during the year to 31 March The principle risks and uncertainties affecting the company are thought to be the economic instability which is still faced in the UK and Europe which may result in key customers reducing demand. Experience shows that this may also present an opportunity as businesses seek to further rely on outsourcing services provided by the company. Winning new business remains a primary focus and with the backing of a worldwide organisation Careline is well placed to market its services proactively. The retention and expansion of existing client contracts also continues to be a high priority. The Company has a great track record of working strategically with clients in helping them to identify cost reductions, efficiency and quality improvements; this approach often leads to an expansion of existing contracts. In periods of economic downturn more companies look to outsourcing as a cost reduction exercise and this increases our new business opportunities. Research and Development Careline continues to investigate and utilise, where possible, new technologies in the delivery of Customer Management Solutions RESULTS AND DIVIDENDS The profit for the period, after taxation, amounted to 968,433 ( ,922). During the period dividends of 264,102 were paid. No further dividends are proposed. Page 1

5 DIRECTORS DIRECTORS' REPORT The directors who served during the period were: S Ghosh (appointed 21 June 2010) P Sarkar (appointed 21 June 2010) R C Cooper-Driver (resigned 21 June 2010) D Jackson (resigned 21 June 2010) R P Hinduja (appointed 11 August 2010) V S Hinduja (appointed 11 August 2010) S Palakodeti (appointed 11 August 2010) STATEMENT OF DIRECTORS' RESPONSIBILITIES The directors are responsible for preparing the Directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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. In preparing these financial statements, the directors are required to: select suitable accounting policies and then apply them consistently; make judgments and 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. 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 They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. POLITICAL AND CHARITABLE CONTRIBUTIONS During the year the company made charitable donations of 16,516 ( ). Include within this balance are donations to the Sky Rainforest Rescue of 2,000, Treehouse Trust of 10,250 and CLIC Sargent of 2,644. Other small donations totalling 1,622 were made during the period. COMPANY'S POLICY FOR PAYMENT OF CREDITORS The company has a policy of settling creditor balances as they fall due. Credit terms are negociated and adhered too wherever possible. The average settlement term for trade creditors during the period was 58 days. EMPLOYEE INVOLVEMENT It is the company policy to provide information, consultation, involvement in performance and awareness of factors affecting the company through a combination of formal and informal meetings, electronic communications and structured training. Page 2

6 DIRECTORS' REPORT DISABLED EMPLOYEES The company gives full and fair consideration to all applications made by disabled persons bearing in mind the aptitude and abilities of the persons concerned. It is company policy to ensure that training, career development and promotion should, as far as possible, be made equally available to all employees. PROVISION OF INFORMATION TO AUDITORS Each of the persons who are directors at the time when this Directors' report is approved has confirmed that: so far as that director is aware, there is no relevant audit information of which the company's auditors are unaware, and that director has taken all the steps that ought to have been taken as a director in order to be aware of any information needed by the company's auditors in connection with preparing their report and to establish that the company's auditors are aware of that information. AUDITORS The auditors, Price Bailey LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act This report was approved by the board and signed on its behalf. S Ghosh Director Date: 21 April 2011 Page 3

7 INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF CARELINE SERVICES LIMITED We have audited the financial statements of Careline Services Limited for the period ended 31 March 2011, set out on pages 6 to 16. 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). 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 Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS As explained more fully in the Statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors. SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS 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 company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. OPINION ON FINANCIAL STATEMENTS In our opinion the financial statements: give a true and fair view of the state of the company's affairs as at 31 March 2011 and of its profit for the period 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 OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion the information given in the Directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements. Page 4

8 INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF CARELINE SERVICES LIMITED MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors' remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. Richard Vass (Senior statutory auditor) for and on behalf of Price Bailey LLP Chartered Accountants Statutory Auditors Dashwood House 69 Old Broad Street London EC2M 1QS 21 April 2011 Page 5

9 PROFIT AND LOSS ACCOUNT Note TURNOVER 1,2 24,300,742 14,373,323 Cost of sales (16,109,587) (9,299,878) GROSS PROFIT 8,191,155 5,073,445 Administrative expenses (6,771,300) (4,803,597) OPERATING PROFIT 3 1,419, ,848 Interest receivable and similar income 1, Interest payable and similar charges 6 (42,238) (46,682) PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 1,379, ,729 Tax on profit on ordinary activities 7 (410,612) 20,193 PROFIT FOR THE FINANCIAL PERIOD , ,922 All amounts relate to continuing operations. There were no recognised gains and losses for 2011 or 2009 other than those included in the Profit and loss account. The notes on pages 8 to 16 form part of these financial statements. Page 6

10 FIXED ASSETS CARELINE SERVICES LIMITED REGISTERED NUMBER: BALANCE SHEET AS AT 31 MARCH 2011 Note Tangible assets 8 407, ,294 CURRENT ASSETS Debtors 9 4,185,742 3,602,141 Cash at bank and in hand 924,611 86,215 5,110,353 3,688,356 CREDITORS: amounts falling due within one year 10 (3,354,732) (2,361,855) NET CURRENT ASSETS 1,755,621 1,326,501 TOTAL ASSETS LESS CURRENT LIABILITIES 2,163,400 1,513,795 CREDITORS: amounts falling due after more than one year 11 - (5,836) PROVISIONS FOR LIABILITIES Other provisions 13 (50,966) (99,856) NET ASSETS 2,112,434 1,408,103 CAPITAL AND RESERVES Called up share capital 14 14,528 14,528 Share premium account , ,824 Profit and loss account 15 1,761,082 1,056,751 SHAREHOLDERS' FUNDS 16 2,112,434 1,408,103 The financial statements were approved and authorised for issue by the board and were signed on its behalf by: S Ghosh Director Date: 21 April 2011 The notes on pages 8 to 16 form part of these financial statements. Page 7

11 NOTES TO THE FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES 1.1 Basis of preparation of financial statements The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards. 1.2 Turnover Turnover comprises revenue recognised by the company in respect of goods and services supplied, exclusive of Value Added Tax and trade discounts. The recognition of revenue differs from contract to contract. Typically revenue is recognised inline with pre-agreed rates based on the number of telephone calls made. Other contracts allow for flat rate charges or a 'per hours worked' basis. The majority of contracts are billed monthly in arrears; a small number are billed upfront. 1.3 Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases: Fixtures & fittings - 25% reducing balance Office equipment - 3 years straight line Computer equipment - 3 years straight line Leasehold improvements - 5 years straight line 1.4 Leasing and hire purchase Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the Profit and loss account so as to produce a constant periodic rate of charge on the net obligation outstanding in each period. 1.5 Operating leases Rentals under operating leases are charged to the Profit and loss account on a straight line basis over the lease term. Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the period until the date the rent is expected to be adjusted to the prevailing market rate. Page 8

12 1. ACCOUNTING POLICIES (continued) 1.6 Deferred taxation NOTES TO THE FINANCIAL STATEMENTS Full provision is made for deferred tax assets and liabilities arising from all timing differences between the recognition of gains and losses in the financial statements and recognition in the tax computation. A net deferred tax asset is recognised only if it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax assets and liabilities are calculated at the tax rates expected to be effective at the time the timing differences are expected to reverse. Deferred tax assets and liabilities are not discounted. 2. TURNOVER All turnover arose within the United Kingdom. 3. OPERATING PROFIT The operating profit is stated after charging: Depreciation of tangible fixed assets: - owned by the company 199, ,890 - held under finance leases 3,263 3,494 Operating lease rentals: - plant and machinery 3,944 4,673 - other operating leases 786, ,975 During the period, no director received any emoluments ( NIL). 4. AUDITORS' REMUNERATION Fees payable to the company's auditor for the audit of the company's annual accounts 16,000 9,075 Fees payable to the company's auditor and its associates in respect of: Other services relating to taxation 5,200 - All other services 56,899 25,015 Page 9

13 NOTES TO THE FINANCIAL STATEMENTS 5. STAFF COSTS Staff costs were as follows: Wages and salaries 16,743,585 9,458,010 Social security costs 1,368, ,941 18,112,570 10,198,951 The average monthly number of employees, including the directors, during the period was as follows: No. No. Administrative staff Management Sales staff Directors INTEREST PAYABLE On bank loans and overdrafts 18, On finance leases and hire purchase contracts 4,633 13,262 Other interest payable 19,090 33,332 42,238 46,682 Page 10

14 NOTES TO THE FINANCIAL STATEMENTS 7. TAXATION Analysis of tax charge in the period/year Current tax (see note below) UK corporation tax charge on profit for the period/year 391,842 94,491 Deferred tax Origination and reversal of timing differences 14,674 (114,684) Effect of increased tax rate on opening liability 4,096 - Total deferred tax (see note 12) 18,770 (114,684) Tax on profit on ordinary activities 410,612 (20,193) Factors affecting tax charge for the period/year The tax assessed for the period/year is higher than ( higher than) the standard rate of corporation tax in the UK of 28% ( %). The differences are explained below: Profit on ordinary activities before tax 1,379, ,729 Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 28% ( %) 386,133 62,644 Effects of: Non-tax deductible amortisation of goodwill and impairment 20,383 3,050 Capital allowances for period/year in excess of depreciation (14,674) 29,414 Other tax relief (charge) on exceptional items - (617) Current tax charge for the period/year (see note above) 391,842 94,491 Factors that may affect future tax charges There were no factors that may affect future tax charges. Page 11

15 8. TANGIBLE FIXED ASSETS Cost NOTES TO THE FINANCIAL STATEMENTS Fixtures & Office Computer Leasehold fittings equipment equipment improvement Total At 1 January , ,715 1,887,906 54,970 2,241,235 Additions - 5, ,673 20, ,540 Disposals - - (286,379) - (286,379) At 31 March , ,024 1,999,200 75,528 2,378,396 Depreciation At 1 January , ,410 1,764,161 29,168 2,053,941 Charge for the period 3,263 24, ,760 16, ,393 On disposals - - (285,717) - (285,717) At 31 March , ,382 1,636,204 45,566 1,970,617 Net book value At 31 March ,179 7, ,996 29, ,779 At 31 December ,442 27, ,745 25, ,294 The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows: Plant and machinery - 12,863 Furniture, fittings and equipment - 40,622-53,485 Page 12

16 NOTES TO THE FINANCIAL STATEMENTS 9. DEBTORS Trade debtors 3,580,115 2,870,204 Amounts owed by group undertakings 66, ,102 Other debtors - 49,804 Prepayments and accrued income 485, ,983 Deferred tax asset (see note 12) 53,278 72,048 4,185,742 3,602,141 Included within trade debtors above in 2009 are amounts of 2,621,019 covered under an invoice discounting facility. Included within other creditors in 2009 are advances under an invoice discounting facility of 185,475 (debit balance). These were secured on the trade debtors of the company. This facility ceased during the financial period. 10. CREDITORS: Amounts falling due within one year Bank loans and overdrafts 2,583 1 Net obligations under finance leases and hire purchase contracts - 49,540 Trade creditors 560, ,773 Corporation tax 393, ,031 Social security and other taxes 1,286, ,732 Proceeds of factored debts - 185,475 Other creditors 73,788 74,646 Accruals and deferred income 1,037, ,657 3,354,732 2,361,855 The bank hold a debenture over all of the assets of the company as security over any borrowings and overdrafts. Net obligations under finance leases and hire purchase contracts are secured on the assets to which they relate. 11. CREDITORS: Amounts falling due after more than one year Net obligations under finance leases and hire purchase contracts - 5,836 Page 13

17 NOTES TO THE FINANCIAL STATEMENTS 11. CREDITORS: Amounts falling due after more than one year (continued) Obligations under finance leases and hire purchase contracts, included above, are payable as follows: Between one and five years - 5,836 Net obligations under finance leases and hire purchase contracts are secured on the assets to which they relate. 12. DEFERRED TAX ASSET At beginning of period/year 72,048 (42,636) (Charge for)/released during period/year (18,770) 114,684 At end of period/year 53,278 72,048 The deferred tax asset is made up as follows: Decelerated capital allowances 53,278 72, PROVISIONS At 1 January ,856 Amounts used (48,890) At 31 March ,966 Included in the above provision is 12,851 (2009: 61,278) in respect of an onerous lease and 38,115 (2009: 38,578) in respect of a buildings maintenance provision on the leasehold premises. Page 14

18 NOTES TO THE FINANCIAL STATEMENTS 14. SHARE CAPITAL Authorised 2,000,000 Ordinary shares shares of 0.01 each 20,000 20,000 Allotted, called up and fully paid 1,452,800 Ordinary shares shares of 0.01 each 14,528 14, RESERVES Share premium Profit and account loss account At 1 January ,824 1,056,751 Profit for the period 968,433 Dividends: Equity capital (264,102) At 31 March ,824 1,761, RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS Opening shareholders' funds 1,408,103 1,164,181 Profit for the period/year 968, ,922 Dividends (Note 17) (264,102) - Closing shareholders' funds 2,112,434 1,408, DIVIDENDS Dividends paid on equity capital 264,102 - Page 15

19 18. OPERATING LEASE COMMITMENTS NOTES TO THE FINANCIAL STATEMENTS At 31 March 2011 the company had annual commitments under non-cancellable operating leases as follows: Expiry date: Land and buildings Other Within 1 year 108, ,000 2,495 2,320 Between 2 and 5 years 268, ,621-5, RELATED PARTY TRANSACTIONS On 20 June 2011 the company was sold to HTMT (Europe) Limited at which point the immediate parent and ultimate holding companies ceased to be Cyclebroad Limited and Foxbay Limited respectively. There have been no transactions during the period with Foxbay Limited or Cyclebroad Limited and all balances due to or from these companies have been settled. In 2009 included within debtors were 66,287 and 197,815 due from Foxbay Limited and Cyclebroad Limited respectively. In 2009 total working capital of 607,707 and 663,148, less management fees of 669,840 and 583,954, was provided to Foxbay Limited and Cyclebroad Limited respectively. During the year a loan of 500,000 was provided to the company by HTMT (Europe) Limited. This has been repaid. At the year end HTMT (Europe) Limited owes the company 66,636 in respect of debts totalling 68,663 assigned at the time of the acquisition of the company from Cyclebroad Limited, less interest charged on the short term loan finance above of 2, ULTIMATE PARENT UNDERTAKING AND CONTROLLING PARTY The immediate parent company is HTMT (Europe) Limited, a company incorporated in England and Wales. The ultimate holding company is Hinduja Global Solutions, a company incorporated in India, from which group consolidated financial statements can be obtained. Page 16

20 DETAILED TRADING AND PROFIT AND LOSS ACCOUNT TURNOVER 24,300,742 14,373,323 Cost of sales (16,109,587) (9,299,878) GROSS PROFIT 8,191,155 5,073,445 LESS: OVERHEADS Administration expenses (6,771,300) (4,803,597) OPERATING PROFIT 1,419, ,848 Interest receivable 1, Interest payable (42,238) (46,682) PROFIT FOR THE PERIOD 1,379, ,729

21 TURNOVER SCHEDULE TO THE DETAILED ACCOUNTS Sales from principal activties 24,300,742 14,373,323 COST OF SALES Direct telephone costs 768, ,697 Drivecare cost of sales 73,632 42,992 Direct wages and salaries 13,603,086 7,842,148 National insurance 1,029, ,332 Direct agency staff costs 132,995 55,612 Other direct costs 501, ,097 16,109,587 9,299,878

22 ADMINISTRATION EXPENSES SCHEDULE TO THE DETAILED ACCOUNTS Staff wages and salaries 3,140,500 1,615,863 Employers national insurance 339, ,607 Staff training 12, Staff welfare 92,570 52,266 Recruitment expenses 14,667 9,777 Motor running costs 1,748 1,753 Entertainment 9,616 11,843 Travel and subsistence 44,494 38,072 Printing, stationery and postage 68,782 51,178 Telephone and fax 39,626 19,597 Computer costs 325, ,913 General office expenses 9,803 14,862 Advertising and promotion 193,547 66,096 Trade subscriptions 5,696 5,021 Charity donations 16, Legal and professional 111,335 65,907 Auditors' remuneration 16,000 9,075 Auditors' remuneration - non-audit 72,087 25,015 Equipment leasing (operational) 3,944 4,673 Bank charges 3,614 4,179 Bad debts 112 (6,093) Sundry expenses Rent & service charges 786, ,975 Rates and water 366, ,655 Insurance 91,137 61,655 Office maintenance and cleaning 143,967 92,584 Depreciation - plant and machinery 202, ,384 Profit/loss on sale of tangible assets (937) - Management charges payable 638,000 1,352,375 Payroll Running Costs 22,254 14,693 6,771,300 4,803,597 INTEREST RECEIVABLE Bank interest receivable 1,

23 INTEREST PAYABLE SCHEDULE TO THE DETAILED ACCOUNTS Bank overdraft interest payable 18,435 - Bank loan interest payable Other interest - on overdue tax - 3,351 Other interest - on invoice discounting 19,090 29,981 Hire purchase interest payable 4,633 9,660 Finance lease charges payable - 3,602 42,238 46,682