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Ealing Homes Limited
REPORT AND FINANCIAL STATEMENTS
For the period ended 31 March 2005
Company Registration Number: 05120243
Ealing Homes Limited
ADMINISTRATIVE INFORMATION
BOARD OF DIRECTORS
Tenant board members
Don Ayre 1,2,3,5 Florence Hervé3,4
Joseph Bell 5 Fiona Worrell3
Eddie Brown 1,2,3,4,5 Marsha Wright 5 (appointed 10/5/05)
Brian Durban 1,3,5
Council appointed board members
Tej Bagha Ian Green 2 (resigned 6/6/05)
Dave Bond Sarah Selvanathan (resigned 13/1/05)
Kieron Gavan 2,5 Ian Potts (appointed 8/7/05)
Independent board members
Paul Abraham 1(resigned 26/10/05) Brian Everett 1,5
Liban Ali 4 (Chair) David Ramsden 2
Sharlene Atkins (resigned 10/2/05)
1. Member of the capital programme committee 2. Member of the audit & regulatory committee
3. Member of the equality & diversity committee 4. Member of remuneration committee
5. Member of the business planning committee
SENIOR MANAGEMENT TEAM
Su Gomer Managing Director
David Mark Director of Asset Management
Keith Millican Director of Resources
Andrew Potter Director of Housing
REGISTERED OFFICE
Westec House
West Gate
Hanger Lane
London W5 1YY
AUDITORS
Baker Tilly
2 Bloomsbury Street
London WC1B 3ST
SOLICITORS
Legal Services
London Borough of Ealing Council Perceval House
14-16 Uxbridge Road
Ealing
London W5 2HL
BANKERS
National Westminster
1 The Mall
Ealing
London W5 2PL
Baker Tilly 1
Ealing Homes Limited
(Company limited by guarantee)
DIRECTORS‟ REPORT
31 March 2005
CHAIR’ S STATEMENT
I submit the report and Financial statements – period ending 31st March 2005 for
the business known as Ealing Homes Limited.
We can now look back with pride after an extremely successful year. Our
greatest achievement this year has to be the Audit Commission‟s inspection of
our services, which recognised marked improvements and, as a result, awarded us
a “Two Star” good service rating. This unlocked the £207 million government
funding required to deliver our Decent Homes Programme.
Financial efficiencies and savings have shown noticeable improvements this year,
as have customer focus and service delivery.
In the coming year, we will continue to focus on our prime responsibilities to
achieve Decent Homes and provide the best possible service for Ealing Tenants and Leaseholders. We will do
this by working in partnership with Ealing Council, the local Strategic Partnership, Police, Health Service
contractors and in particular, listening to and acting upon the wishes and aspirations of our tenants. Through our
Business Plan 2005/06, we have once again set ourselves exciting and challenging targets and I am confident
that we will achieve them.
I commend the work of our Board, five sub-committees and two area boards. Particularly, I would like to thank
those tenants and leaseholders who have given up their time to contribute to Ealing Homes‟ work either as board
members, area board members, members of tenant associations or as resident representatives – and the officers
of Ealing Homes who have steadfastly worked with Board and Tenants to deliver the business of Ealing Homes.
I look forward to the year ahead and I hope you find this report both interesting and informative.
Liban Ali
Ealing Homes Chair.
STATEMENT FROM THE MANAGING DIRECTOR
This year has been one of immense challenges for the Ealing Homes team, who
have committed to creating a service that best serves our residents‟ needs with the
resources we have by meeting the requirements of the Delivery Plan 2004/5 as
agreed by LBE and Board.
The “Two Star” ALMO inspection rating was the culmination of many years
work which provides the financial viability to support Ealing Homes in delivering
the 2005/06 Business Plan, Value for Money strategy and mitigate risks.
There are undoubtedly further challenges ahead in continuing to build, from a
good to an excellent service. Performance during 2005 continues to improve and I
am confident that by working together Board, Officers, Tenants, Leaseholders
and Partners can deliver the business required for 2005/06. By working to
achieve this we are also contributing towards tackling anti-social behaviour,
improved crime prevention; support for the young and elderly; community
cohesion, social and economic regeneration.
Regards,
Su Gomer
Managing Director, Ealing Homes
Baker Tilly 2
Ealing Homes Limited
(Company limited by guarantee)
DIRECTORS‟ REPORT
31 March 2005
The directors present their report and the audited financial statements for the period ended 31 March 2005.
INCORPORATION
The company was incorporated on 5th May 2004.
CONSTITUTION
The company is incorporated as a private company limited by guarantee under the Companies Act 1985. As
such it has no share capital.
The company‟s sole member is Ealing Council.
PRINCIPAL ACTIVITIES
Ealing Homes is the Arms Length Management Organisation (ALMO) established by Ealing Council to manage
its 14,000 tenanted and 5,000 leasehold council homes to deliver the Decent Homes Standard by 2010. Ealing
Homes took responsibility for the management of the homes on 6 September 2004. Prior to that date the
company did not trade.
Ealing Homes is run by an independent board of directors, but Ealing Council remains the landlord of the
homes. Ealing Homes has applied for funding of c.£207 million from the Government in order to achieve the
Decent Homes Standard.
Ealing Homes has responsibility for:
Housing and estate management (including Sheltered Housing) - dealing with anti-social behaviour,
tenancy issues and cleaning and maintaining estates
Rent collection and arrears management
Responsive repairs and maintenance to tenants‟ home, communal areas and getting homes ready for
new tenants
Carrying out planned repairs and major works
Leasehold management and processing right-to-buy applications
Developing and encouraging resident involvement
Management of non-residential Housing Revenue Account assets
Dealing with complaints about Ealing Homes
OPERATING AND FINANCIAL REVIEW
Mission statement
“Delivering decent homes and high quality housing services for our tenants through working in partnership with
Ealing Council and with local communities.”
Our objectives
The objectives that have been adopted in order to achieve the mission statement are:
Delivering high quality housing services that continue to improve and meet tenants‟ needs
Reaching the Decent Homes Standard by 2010, and then maintaining the standard
Empowering tenants so that they have real opportunities to get involved
Helping to build social inclusion and sustainable neighbourhoods
Providing services that are consistent with best practice in diversity and equalities
How are we doing?
During the period the business has moved forward at a tremendous pace and we have achieved a significant
number of successes in a relatively short period of time, building on the work undertaken by Ealing Council.
We have continued to improve services to customers in a number of ways including:
Baker Tilly 3
Ealing Homes Limited
(Company limited by guarantee)
DIRECTORS‟ REPORT
31 March 2005
The turn around of empty homes from 58 days to 30.5 days in the last two years
The introduction of new repairs partnering contracts enabling faster response times
Achieving top quartile in satisfaction of Black and Minority Ethnic (BME) residents with the overall
service
Increased overall satisfaction levels for all our customers
The implementation of a new integrated IT system to support these changes
Developed in–house dedicated HR team
Developed in–house legal services
How is our performance monitored?
Ealing Homes has a range of plans, strategies and documents in
The Planning Framework
place to support the achievement of its core objectives and
residents‟ priorities.
Our performance is monitored through our comprehensive
Performance Management Framework.
The Board monitors performance of the organisation quarterly
through the 'Business Scorecard', a checklist of Performance
Indicators. The Audit & Regulatory Sub-Committee carries out
further detailed quarterly reviews of the performance indicators
and the risk register. The Diversity & Equalities and Capital
Programme Committees monitor their areas of work.
Internal Monitoring and reporting
Performance of the organisation thorough the Corporate Service Plan and performance indicators is monitored
at three levels within the organisation:
Strategically by the Senior Management Team
Operationally by the Management Operational Team
Individually during one-to-one meetings between managers and staff
Ealing Homes has a range of plans, strategies and documents in place to support the achievement of its core
objectives.
Management Agreement
The Management Agreement sets out the delegated responsibilities of Ealing Homes in managing the housing
stock on behalf of Ealing Council. A summary of the Management Agreement is available from the website
www.ealinghomes.net.
Business Plan
The Business Plan is the driver for delivering the responsibilities under the Management Agreement. The
business plan is reviewed in conjunction with residents, partners and Ealing Council.
We have a fully financed resource plan in place and agreed with London Borough of Ealing for 2005/6 and this
is set out in our 2005/6 Business Plan, a summary of which can be found at www.ealinghomes.net.
The Business plan also sets out our residents‟ priorities for the following year and where they would like us to
target resources. The Business Plan also outlines how Ealing Homes delivers the responsibilities under the
Management Agreement.
Corporate Service Plan and Performance Indicators 2005/10
The Corporate Service Plan is the sole plan that translates the mission statement, core objectives and resident
priorities into actions and outcomes.
Baker Tilly 4
Ealing Homes Limited
(Company limited by guarantee)
DIRECTORS‟ REPORT
31 March 2005
Targets are based on Ealing Homes‟ key objectives and link, to Ealing Council‟s Housing Strategy and
corporate priorities. Targets are set to stretch the service towards an excellent service.
The Corporate Service Plan identifies all actions contained in Ealing Homes' policies and strategies. The plan is
set each year in March and revised in September to reflect the tasks needed to continually improve the overall
performance of the service towards a 3-star service. Tasks in the plan are cascaded to individual staff objectives
through the Job Performance Scheme.
Risk Management Register
A key role for Ealing Homes' Board is the assessment, monitoring and management of risk, focusing on
performance and budget monitoring. The Risk Register is reported to the Board, twice a year. The Audit &
Regulatory Sub-Committee carries out further detailed quarterly reviews and updates of the Risk Register
Financial Review
The results for the seven-month trading period from 6 September 2004 to 31 March 2005 are in line with
management expectations. As a new company the Board recognises the need for delivering efficiency and,
before goodwill amortisation and interest charges on the pension scheme liability, a small surplus of £362,000
has been generated. However, amortisation of goodwill amounts to £326,000 and interest on the pension scheme
liability is £332,000, which results in a loss of £296,000 for the period.
The company continues to strive for Value For Money in all that it does and has identified potential savings of
£1.6 million that will be re-invested in front line services for the direct benefit of our residents.
The company manages cash flows on a daily basis and has sufficient liquidity to meet its day-to-day liabilities.
Short-term surplus funds are transferred to interest bearing accounts overnight.
The company has a significant pension scheme liability of £11,994,000 as at 31 March 2005, the majority of
which arose prior to the company‟s formation. This liability is calculated in accordance with the requirements of
Financial Reporting Standard 17 and does not represent an amount that that will actually be paid. Instead annual
contributions are paid in accordance with the advice of a qualified actuary and the required payments are
included in the company‟s financial forecasts.
The Directors believe that the company continues to operate as a going concern.
Statement of Compliance
This OFR has been prepared in accordance with Reporting Standard 1 “Operating and Financial Review”
published by the Accounting Standards Board.
POST BALANCE SHEET EVENTS
The company has recently undergone a housing inspection by the Audit Commission and has been judged to be
a “good” 2 star service with promising prospects for the future. This judgement has enabled the company to
push forward with its Decent Homes programme and apply to the Government for £207 million of funding.
DIRECTORS
Under the Memorandum and Articles of Association the directors, all of whom are non-executive, represent the
local community:
5 Ealing Council nominees
7 Ealing Council tenants, including 2 leaseholders
5 Independent members
The directors who served during the year are shown on Page 1. All directors were appointed on incorporation
and, except where indicated, served throughout the period and subsequently.
The directors have no interests in the shares of the company.
Baker Tilly 5
Ealing Homes Limited
(Company limited by guarantee)
DIRECTORS‟ REPORT
31 March 2005
RETIREMENT PROVISIONS
In accordance with the Articles of Association at the first annual general meeting three Tenant Board members
and two Independent Board members shall retire, to be chosen by lot amongst those longest in office. To
maintain continuity retiring members shall, if willing to act, be deemed to be re-appointed.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each financial year which give a true and
fair view of the state of affairs of the company and of the profit or loss for that period. In preparing those
financial statements, the directors are required to:
Select suitable accounting policies and then apply them consistently;
Make judgements and estimates that are reasonable and prudent; and
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 maintaining proper accounting records which disclose with reasonable
accuracy at any time the financial position of the company and to enable them to ensure that the accounts
comply with the Companies Act 1985. 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.
The directors are responsible for the preparation of the directors‟ report and other information contained in the
annual report, and for any financial information which is available on the company website.
CHARITABLE DONATIONS
The company made no charitable donations during the period.
AUDITORS
Baker Tilly were appointed as auditors in the period and a resolution for their re-appointment will be put to the
annual general meeting.
By order of the board
[DIRECTOR OR SECRETARY]
2005
Baker Tilly 6
Ealing Homes Limited
(Company limited by guarantee)
INDEPENDENT AUDITOR‟S REPORT TO THE MEMBERS OF EALING HOMES LIMITED
We have audited the financial statements on pages 7 to 17.
This report is made solely to the company‟s members, as a body, in accordance with section 235 of the
Companies Act 1985. 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.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The directors‟ responsibilities for preparing the Annual Report and the financial statements in accordance with
applicable law and United Kingdom Accounting Standards are set out in the Statement of Directors‟
Responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory
requirements and United Kingdom Auditing Standards.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly
prepared in accordance with the Companies Act 1985. We also report to you if, in our opinion, the Directors‟
Report is not consistent with the financial statements, if the company has not kept proper accounting records, if
we have not received all the information and explanations we require for our audit, or if information specified
by law regarding directors‟ remuneration and transactions with the company is not disclosed.
We read other information contained in the Annual Report, and consider whether it is consistent with the
audited financial statements. This other information comprises only the Directors‟ Report. We consider the
implications for our report if we become aware of any apparent misstatements or material inconsistencies with
the financial statements. Our responsibilities do not extend to any other information.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An
audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and judgements made by the directors in
the preparation of the financial statements, and of whether the accounting policies are appropriate to the
company‟s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered
necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or other irregularity or error. In
forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial
statements.
OPINION
In our opinion the financial statements give a true and fair view of the state of the company‟s affairs at 31 March
2005 and of its loss for the period then ended and have been properly prepared in accordance with the
Companies Act 1985.
Registered Auditor
Chartered Accountants
2 Bloomsbury Street
London WC1B 3ST
2005
Baker Tilly 7
Ealing Homes Limited
(Company limited by guarantee)
PROFIT AND LOSS ACCOUNT
For the period ended 31 March 2005
Period ended 31
March 2005
Notes £ ‘000
Turnover 1 11,477
Administrative expenses (11,559)
OPERATING LOSS 2 ( 82)
Interest receivable 3 118
Interest payable 4 ( 332)
LOSS ON ORDINARY ACTIVITIES BEFORE
TAXATION ( 296)
Taxation 6 ( 35)
RETAINED LOSS ON ORDINARY ACTIVITIES AFTER
TAXATION FOR THE PERIOD 12 ( 331)
All activities relate to new activities in the period and all activities are continuing.
The accounts are prepared on the historical cost basis.
Baker Tilly 8
Ealing Homes Limited
(Company limited by guarantee)
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the period ended 31 March 2005
Period ended 31
March 2005
Notes £ ‘000
RETAINED LOSS FOR THE PERIOD ( 331)
PENSION SCHEME GAINS AND LOSSES
Actual return less expected return on pension scheme assets 89
Experience gains and losses arising on scheme liabilities -
Changes in assumptions underlying the present value of scheme
liabilities ( 651)
( 562)
TOTAL RECOGNISED GAINS AND LOSSES RELATING TO
THE PERIOD ( 893)
Baker Tilly 9
Ealing Homes Limited
(Company limited by guarantee)
BALANCE SHEET
As at 31 March 2005
2005
Notes £ ‘000 £ ‘000
FIXED ASSETS
Goodwill 7 10,857
CURRENT ASSETS
Debtors 8 679
Deposit held by Ealing Council 9 5,791
Cash at bank and in hand 145
6,615
CREDITORS: amounts falling due within one year 10 (6,371)
NET CURRENT ASSETS 244
NET ASSETS EXCLUDING PENSION LIABILITY 11,101
Pension liability 18 (11,994)
NET ASSETS INCLUDING PENSION LIABILITY ( 893)
CAPITAL AND RESERVES
Profit and loss account – deficit 12 ( 893)
SHAREHOLDER‟S FUNDS ( 893)
As disclosed in note 11, members derive no financial interest from their shareholding and accordingly all capital
and reserves are classed as non-equity.
The financial statements on pages 7 to 17 were approved by the board on 2005 and signed on
its behalf by:
Chair Vice Chair
Baker Tilly 10
Ealing Homes Limited
(Company limited by guarantee)
CASHFLOW STATEMENT
For the period ended 31 March 2005
Period ended
31 March 2005
Notes £ ‘000
NET CASH INFLOW FROM OPERATING ACTIVITIES 13 5,818
Returns on investments and servicing of finance 118
Taxation (paid)/recovered -
Capital expenditure -
14 5,936
MOVEMENT IN LIQUID RESOURCES (5,791)
INCREASE IN CASH 15 145
SIGNIFICANT NON-CASH TRANSACTIONS
There were no significant non-cash transactions in the period.
Baker Tilly 11
Ealing Homes Limited
(Company limited by guarantee)
ACCOUNTING POLICIES FOR THE PERIOD ENDED 31 MARCH 2005
ACCOUNTING CONVENTION
The financial statements have been prepared under the historical cost convention and in accordance with
applicable accounting standards.
GOING CONCERN
The company has a deficiency of funds and has incurred a loss in the period. The loss arises only due to the
amortisation of goodwill and the excess of pension charges over and above the required contributions, which are
non cash items. The directors assess the ability of the company to continue as a going concern by reference to
future cashflows, rather than the reported results. Based on the cashflows, the directors are confident that the
company will be able to meet its obligations as these fall due and, therefore, have prepared the financial
statements on the going concern basis.
TURNOVER
Turnover represents property management fees and associated income and is stated net of value added tax.
Management fees are included within turnover on a time apportioned basis. Associated income is included in
turnover on the basis of work done.
RETIREMENT BENEFITS
For defined benefit schemes the amount charged to the profit and loss account in respect of pension costs and
other post retirement benefits is the estimated regular cost of providing the benefits accrued in the year, adjusted
to reflect variations from that cost. The interest cost and expected return on assets are included within other
finance costs. Actuarial gains and losses arising from new valuations and from updating valuations to the
balance sheet date are recognised in the Statement of Total Recognised Gains and Losses.
Defined benefit schemes are funded, with the assets held separately from the group in separate trustee
administered funds. Full actuarial valuations, by a professionally qualified actuary, are obtained at least every
three years, and updated to reflect current conditions at each balance sheet date. The pension scheme assets are
measured at fair value. The pension scheme liabilities are measured using the projected unit method and
discounted at the current rate of return on a high quality corporate bond of equivalent term and currency. A
pension scheme asset is recognised on the balance sheet only to the extent that the surplus may be recovered by
reduced future contributions or to the extent that the trustees have agreed a refund from the scheme at the
balance sheet date. A pension scheme liability is recognised to the extent that the group has a legal or
constructive obligation to settle the liability.
DEFERRED TAXATION
Deferred tax liabilities are recognised in respect of all timing differences that have originated but not reversed at
the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a
right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences
between the company‟s taxable profits and its results as stated in the financial statements that arise from the
inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in
the financial statements.
Deferred tax assets are only recognised if it is considered that there is a reasonable expectation that these will be
recoverable in the foreseeable future.
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing
differences are expected to reverse, based on tax rates and laws that have been enacted or substantially enacted
by the balance sheet date. Deferred tax is measured on a non-discounted basis.
GOODWILL
Goodwill representing the excess of the purchase consideration compared with the fair value of net assets
acquired is capitalised. Goodwill is amortised over its useful economic life as follows:
Goodwill arising as a result of recognising FRS 17 pension scheme deficit - 20 years, this being the average
remaining service lives of employees who are members of the pension scheme.
LIQUID RESOURCES
Liquid resources represent balances on deposit with Ealing Council that are readily available to the company.
Baker Tilly 12
Ealing Homes Limited
(Company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 March 2005
1 ANALYSIS OF TURNOVER 2005
£ ‘000
Property management fees 11,345
Supporting people contractual income 132
11,477
Turnover represents the value, net of Value Added Tax of goods and services provided to third parties.
2 OPERATING LOSS 2005
£ ‘000
This is stated after charging/(crediting):
Amortisation of goodwill 326
Auditors‟ remuneration
- for audit services 25
- for other services -
3 INTEREST RECEIVABLE 2005
£ ‘000
Interest on deposits held with Ealing Council 118
4 INTEREST PAYABLE 2005
£ ‘000
Interest on pension scheme liabilities (429)
Expected return on pension scheme assets 97
(332)
5 STAFF COSTS 2005
£ ‘000
Wages and salaries 4,676
Social security costs 345
Other pension costs 519
5,540
Average number of employees during the year: No
Directorate 6
Resources 18
Management Services 173
Asset Management Services 91
Total 288
Baker Tilly 13
Ealing Homes Limited
(Company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 March 2005
5 STAFF COSTS (CONTINUED)
None of the directors received any remuneration or taxable benefits and none were members of the
pension scheme.
PENSION COSTS ARE ANALYSED AS FOLLOWS 2005
£ ‘000
Current service cost 519
Past service costs -
Curtailment and settlements -
Decrease in irrecoverable surplus -
Total operating charge 519
6 TAX ON LOSS ON ORDINARY ACTIVITIES 2005
£ ‘000
Current tax:
UK corporation tax on loss of the period 35
Deferred tax:
Origination and reversal of timing differences -
Tax on loss on ordinary activities 35
FACTORS AFFECTING TAX CHARGE FOR THE PERIOD:
The tax assessed for the year differs from the standard rate of
corporation tax in the UK. The differences are explained below:
Loss on ordinary activities before tax (296)
Loss multiplied by the standard rate of corporation tax in the UK
of 30% (89)
Effects of:
Difference between pension scheme contributions and amounts
recognised in the profit and loss account 75
Expenses not allowable for tax purposes (primarily amortisation of
goodwill) 98
Profits earned on trading with member, not subject to tax (49)
Tax charge for period 35
FACTORS THAT MAY AFFECT FUTURE TAX CHARGES
Under an extra statutory concession, any profits earned from trading with the company‟s member are
not subject to tax. Future tax charges will be significantly reduced providing that this concession
remains available to the company as only profits earned from transactions with non-members, will be
subject to tax.
The company has not recognised deferred tax assets arising on the pension scheme deficit. In the
unlikely circumstance that the tax asset is recognised in the future, there will be a substantial reduction
in the tax charge.
Baker Tilly 14
Ealing Homes Limited
(Company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 March 2005
7 GOODWILL 2005
£ ‘000
COST
Arising in the period on transfer of undertaking and as at 31 March
2005 11,183
AMORTISATION
Charge for the period and as at 31 March 2005 ( 326)
NET BOOK VALUE
As at 31 March 2005 10,857
As at 5 May 2004 -
8 DEBTORS: amounts falling due within one year 2005
£ ‘000
Trade debtors 121
Prepayments and accrued income 558
679
9 DEPOSITS HELD BY EALING COUNCIL
Surplus funds are held by Ealing Council. Interest earned on the deposits is paid to the company and
the company is able to draw down from the deposits at will.
10 CREDITORS: amounts falling due within one year 2005
£ ‘000
Other taxes and social security 818
Accruals and deferred income 5,518
Corporation tax 35
6,371
11 SHARES
The company is limited by guarantee and the liability of members to contribute to any deficiency of
assets is £1 per member.
The members have no rights to the income or assets of the company.
Baker Tilly 15
Ealing Homes Limited
(Company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 March 2005
12 PROFIT AND LOSS ACCOUNT Profit and loss
account
excluding
pension
liability Pension reserve Total
£ „000 £ „000 £ „000
Retained loss for the period ( 331) - ( 331)
Other recognised gains and losses - pension
scheme loss - ( 562) ( 562)
At 31 March 2005 ( 331) ( 562) ( 893)
13 RECONCILIATION OF OPERATING LOSS TO NET 2005
CASH INFLOW FROM OPERATING ACTIVITIES £ ‘000
Operating loss (82)
Amortisation of goodwill 326
Increase in debtors (679)
Increase in creditors 6,336
Difference between pension scheme contributions and
amounts charged to the income and expenditure account (83)
NET CASH INFLOW FROM OPERATING ACTIVITIES 5,818
14 RECONCILIATION OF NET CASH FLOW TO
MOVEMENT IN NET FUNDS
Increase in cash in the period 145
Increase in liquid resources 5,791
Change in net funds 5,936
Net funds at 31 March 2005 5,936
15 ANALYSIS OF CHANGES IN At 5 May Cash Non-cash At 31 March
NET FUNDS 2004 flows changes 2005
£ „000 £ „000 £ „000 £ „000
Cash at bank and in hand - 145 - 145
Liquid resources - 5,791 - 5,791
- 5,936 - 5,936
Baker Tilly 16
Ealing Homes Limited
(Company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 March 2005
16 ULTIMATE PARENT UNDERTAKING
The company is a wholly owned subsidiary of the London Borough of Ealing (“Ealing Council”), a
local government organisation. No one party controls the company as, under the Memorandum and
Articles of Association, Ealing Council can only appoint one third of the board, with the balance of
directors being drawn from Council tenants (including leaseholders) and members of the wider
community.
17 RELATED PARTY TRANSACTIONS
The company has related party transactions with Ealing Council. Management fees are invoiced to
Ealing Council and Ealing Council has provided legal, I.T., HR and other services to the company to
the value of £2million. The balance owed to Ealing Council as at the year end is shown in note 10 and
the maximum balance outstanding during the year was £2million. The balance is repayable on normal
commercial terms and does not bear interest.
All fixed assets used by the company are owned by Ealing Council. No charge is made in respect of
these assets.
Any surplus funds are place on deposit with Ealing Council.
18 RETIREMENT BENEFITS
The company is an admitted member of the Ealing Council Local Government Superannuation scheme,
a funded defined benefit scheme. A full actuarial valuation was undertaken as at 31 March 2004 and
updated at 6 September 2004 and 31 March 2005 by a qualified independent actuary. The assumptions
and net assets and liabilities of the element of the scheme relating to the company were:
ASSUMPTIONS AS AT 31 March 2005 6 September 2004
% p.a. % p.a.
Rate of inflation 2.9 2.8
Rate of increase in salaries 4.65 4.55
Rate of increase in pensions 2.9 2.8
Discount rate ` 5.4 5.5
Return at 6 Assets at 6
Return at 31 Assets at 31 September September
ASSETS March 2005 March 2005 2004 2004
(EMPLOYER)
% p.a. £‟000 % p.a. £‟000
Equities 7.5 2,060 7.5 -
Bonds 4.7 569 4.7 -
Property 6.5 - 6.5 -
Cash 4.75 81 4.0 -
________
Total 2,710 -
___
31 March 2005
NET PENSION LIABILITY AS AT £‟000
Estimated employer assets 2,710
Present value of scheme liabilities (14,704)
Present value of unfunded liabilities -
Net pension liability (11,994)
Baker Tilly 17
Ealing Homes Limited
(Company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 March 2005
18 RETIREMENT BENEFITS (CONTINUED)
MOVEMENT IN DEFICIT DURING THE PERIOD Period to 31
March 2005
£‟000
Arising on transfer of undertaking (11,183)
Current service cost ( 519)
Employer contributions 602
Contributions in respect of unfunded benefits -
Net return on assets ( 332)
Actuarial losses ( 562)
Deficit in scheme at end of the period (11,994)
HISTORY OF EXPERIENCE GAINS AND LOSSES
Period to 31
March 2005
£‟000
Difference between the expected and actual return on assets 89
Value of assets 2,710
Percentage of scheme assets 3.3%
Experience (losses) on liabilities (-)
Total present value of liabilities (14,704)
Percentage of the total present value of scheme liabilities 0%
Actuarial (losses) recognised in STRGL (562)
Total present value of liabilities (14,704)
Percentage of the total present value of scheme liabilities 3.8%
19 TRANSFER OF BUSINESS UNDERTAKING
On 6 September 2004, the company took over the management of Ealing Council‟s housing stock. At
that date, the staff involved in providing this service were transferred to the company‟s employment.
The company took on no assets or liabilities and no consideration was paid.
The company has adopted FRS 17 and the FRS 17 deficit as at the date of transfer was £11,183,000.
This amount represents goodwill arising on the business combination.
Baker Tilly 18
Ealing Homes Limited
(Company limited by guarantee)
SCHEDULE TO THE PROFIT AND LOSS ACCOUNT
For the period ended 31 March 2005
2005
£ ‘000
ADMINISTRATIVE EXPENSES
Employee costs:
Wages and Salaries (Permanent) 4,288
Wages and Salaries Caretakers 1,252
Salaries (Temporary) 1,030
Staff training and welfare 141
Redundancy/Retirement 135
Insurance 93
Travel and Subsistence 13
Rent-Free Accommodation 42
Advertising - pers. Only 38
Staff bank charges 1
7,033
General administrative expenses:
Advertising (non-pers.) 32
Telephone and fax related 43
Postage 78
Stationery 41
Information and publications 3
Subscriptions 34
Equipment Purchase and Maintenance (non-IT) 54
Printing 69
Lessee refunds 12
Sundry expenses -
Clothing & Uniforms 8
Refreshments 16
390
IT related services:
Hardware purchase & maintenance 52
Software purchase & maintenance 93
IT Training 26
IT Outsourcing 119
290
Baker Tilly 19
Ealing Homes Limited
(Company limited by guarantee)
SCHEDULE TO THE PROFIT AND LOSS ACCOUNT
For the period ended 31 March 2005
Legal and professional costs / services:
Prep resource accounting 5
Audit fees 51
Solicitors fees 54
Contract - Insurance Claims -
Bank costs 169
Consultancy fees 263
Compensation payments 220
Language & Translation services 13
775
CSA (Customer Service Agreement):
Telecom & switchboard charges 57
Microfilming - recharge 8
ITNET Contract services 113
CSG RG-Corporate finance 90
CSA RG-Legal 327
CSA D&T Personnel 293
CSA CE&I-ICT 135
CSA RG-Exchequer services 97
CSA RG - Property services 30
CSA Leisure-halls & Offices 9
CSA Accomm. 212
1,371
Contracts:
Cleaning 200
Misc Cleaning 11
Pest Control 96
Graffiti Removal 119
Grounds Maintenance 153
Payments to DSO's 107
686
TOTAL ADMIN EXPENSES 10,545
Baker Tilly 20
Ealing Homes Limited
(Company limited by guarantee)
SCHEDULE TO THE PROFIT AND LOSS ACCOUNT
For the period ended 31 March 2005
NON-ADMIN EXPENSES
Premises costs:
Rates 20
Cleaning 70
Premises security 128
Repairs & Maintenance 15
Vehicle transportation costs 40
Water and electricity 31
Heating 16
Fixtures & fittings 9
Greenford Area Office Recharge 3
332
Tenant participation costs 17
Supplies and services:
Health and safety costs 13
Conference expenses 36
Customer Relationship Management 115
Best Value - Supplies & Services 7
Removals Related 137
Garden / Playground expenses 77
Other expenses - 46
339
Amortisation of goodwill 326
TOTAL NON-ADMIN EXPENSES 1,014
NET TOTAL 11,559
Baker Tilly 21
