LIVERPOOL_COMMUNITY_TRANS - Accounts

The Council of Management present their annual report and financial statements for the year ended 31 March 2022.

The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charitable company's Memorandum and Articles of Association, the Companies Act 2006 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)".

The charitable company's principal activities continued to be the provision of subsidised transport and the repair and maintenance of vehicles owned by community groups who would not be able to access mainstream transport because of the cost involved.

Public benefit

The Council of Management have paid due regard to guidance issued by the Charity Commission in deciding what activities the charitable company should undertake. The Trustees are satisfed that the information provided in the report and accounts meets the public benefit reporting requirements.

Following the extraordinary challenges posed by the Covid-19 pandemic, Liverpool Community Transport Ltd has reinstated our community transport provision and continued to make steady progress throughout this financial year. The total number of trips taken by community groups, organisations and schools has held steady at over 14,500 and through the furtherance and development of assistance to Liverpool SEN schools and our already established MOT testing station, we are committed to continue subsidising community transport at the same level as in pre-covid years. In order to be successful in this, our aim is to continue building upon current MOT’s, maintenance and repair work which is now back to normal levels.

Throughout this time our company values and objectives have remained the same with regards to community transport and the services we provide. Our well-established MOT, maintenance & repair services continue to play a key role in our provision and has reinforced the assistance we provide to local communities, ensuring they have access to a safe, reliable, accessible & affordable transport provision citywide.

During this financial year we have continued our contracted work for Liverpool City Council where we currently hold 38 home to school transport contracts. As ever, the management committee feel we are in a strong position to advance in our contracted work with Liverpool City Council in the start of the next school year. In addition, the opportunity to expand into a neighbouring borough has become available and we are currently at the start of the new tendering process with a view to obtaining additional contracts for the start of the new school year.

As in previous years we have continued to work in line with the organisations development plan which outlines our long-term aim to modernise our fleet of vehicles. With this in mind, we have continued to purchase additional and replacement vehicles which has increased our fleet to 42 vehicles in total. Our staffing levels are also at an all-time high with 5 full-time staff and 40 part-time staff members.

Liverpool City Council licencing have continued to utilise our garage and training facilities in order to carry out various personal licence courses, taxi compliance inspections, licencing training programs and taxi enforcement operations in conjunction with Merseyside Police and neighbouring Councils.

As in previous years we have continued working with our long-term volunteer placements with an aim to promote social inclusion in a safe and friendly workplace. During their time with us they have integrated well and are valued members of the team with both individuals contributing significantly to the company’s day to day operations. The management committee feel our volunteer work placements have been a great success with both individuals and ourselves benefitting from the scheme.

The results for the year and the charity's financial position at the end of the year are shown in the attached financial statements.

The deficit for the year was £55,248 (2021: £34,521). At the year end the charity had net assets of £141,102 (2021 : £196,350). There were no restricted funds at the period end.

Reserves policy

It is the policy of the charitable company that unrestricted funds which have not been designated for a specific use should be maintained at a level equivalent to between three and six month’s expenditure. The Council of Management considers that reserves at this level will ensure that, in the event of a significant drop in funding, they will be able to continue the charitable company’s current activities while consideration is given to ways in which additional funds may be raised. The trustees recognise that the level of free reserves need to be increased and are reviewing options to improve the position.

Principal risks and uncertainties

The Council have assessed the major risks to which the charitable company is exposed, and are satisfied that systems are in place to mitigate exposure to the major risks. The principal risks are considered to be:

• Loss of SEN school contracts which are subject to regular tender processes

• Fluctuations in fuel prices

• Competition from alternative transport providers

As the continuance of community transport is essential for many groups, schools and organisations across the city, the management committee consider it a priority to maintain the subsidy of community transport as a whole during these uncertain economic times. This can be achieved through the furtherance and development of our already established MOT testing bay which continues to be a fundamental plan for the future. The management committee consider this to be integral in the organisations work in challenging exclusion in today’s economic climate.

We aim to build upon further support that is also available to groups in terms of our maintenance and repair service. The broadening of this long standing, essential part of our provision would greatly benefit numerous groups, schools and organisations citywide. We plan to continue to market the services we provide across the city through various publicity material, targeting non-members, current members and members of the public with the aim of expanding our customer base.

An additional aim for the future is focusing on increasing the number of SEN school contracts over the forthcoming year. With our City Council school contracts now well established, we will endeavour to secure additional contracts with City Council and in neighbouring boroughs should the opportunity arise.

The management committee look forward to another productive year and would like to thank the Operational Transport Manager, staff and volunteers for working hard on behalf of the organisation. Their commitment and dedication to Liverpool Community Transport has not gone unnoticed.

The charity is a company limited by guarantee, the charitable company's objects are governed by the Memorandum of Association adopted on 1 November 1983.

The Council of Management, who are also the directors for the purpose of company law, and who served during the year were:

The charity adheres to recruit new trustees to ensure the board has the range of skills and experience necessary to comply with its collective responsibility. Trustees receive ongoing training during their tenure as required.

None of the Council of Management has any beneficial interest in the company. All of the Council of Management are members of the company and guarantee to contribute £1 in the event of a winding up.

The charitable company is controlled by the members of the Council of Management. The number of members must not be more than 15. The members of the Council are appointed at the Annual General Meeting. The Council may appoint additional members to the Council during the year but these shall only retain the office if re-appointed at the next Annual General Meeting.

The Council delegates the day to day running of the charitable company to the General Manager, Mr T Crofton. All key operational decisions are made with the approval of the charity Trustees.

The Trustees have responsibility for setting the pay and remuneration of the charity’s key personnel and this is done on an annual basis, including a formal cost of living review. Salaries are benchmarked with other similar organisations.

Under the Memorandum and Articles of Association, the charitable company has the power to make investments which the Council see fit.

In accordance with the company's articles, a resolution proposing that DSG be reappointed as auditor of the company will be put at a General Meeting.

The directors have confirmed that there is no information of which they are aware which is relevant to the audit, but of which the auditor is unaware. They have further confirmed that they have taken appropriate steps to identify such relevant information and to establish that the auditors are aware of such information.

Small company provisions

This report has been prepared in accordance with the special provisions relating to small companies within Part 15 of the Companies Act 2006.

The Council's report was approved by the Board of Council Of Management.

The Council of Management, who are also the directors of Liverpool Community Transport Limited for the purpose of company law, are responsible for preparing the Council's Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company Law requires the Council of Management to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.

In preparing these financial statements, the Council of Management are required to:

- select suitable accounting policies and then apply them consistently;

- observe the methods and principles in the Charities SORP;

- make judgements 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; and

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation.

The Council of Management are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Opinion

We have audited the financial statements of Liverpool Community Transport Limited (the ‘charitable company’) for the year ended 31 March 2022 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

give a true and fair view of the state of the charitable company's affairs as at 31 March 2022 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

In auditing the financial statements, we have concluded that the Council's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Council of Management with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The Council of Management are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

the information given in the Council's report for the financial year for which the financial statements are prepared, which includes the directors' report prepared for the purposes of company law, is consistent with the financial statements; and

the directors' report included within the Council's report has been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report included within the Council's report.

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

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

we have not received all the information and explanations we require for our audit; or

the Council of Management were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Council's report and from the requirement to prepare a strategic report.

As explained more fully in the statement of Council's responsibilities, the Council of Management, who are also the directors of the charitable company for the purpose 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 Council of Management determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Council of Management are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Council of Management either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our discussions with the charitable company’s management and the Trustees, we identified that the following laws and regulations are significant to the charitable company:

· Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards and Charity Law.

· Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the Group and parent charitable company and therefore may have a material effect on the financial statements include compliance with the charitable objectives, public benefit, fundraising regulations, safeguarding and health and safety legislation.

These matters were discussed amongst the engagement team at the planning stage and the team remained alert to non-compliance throughout the audit.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and the Trustees as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of Trustee meeting minutes; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an 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 charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Liverpool Community Transport Limited is a private company limited by guarantee incorporated in England and Wales. The registered office is 14 Grundy Street, Liverpool, L5 9SG.

The financial statements have been prepared in accordance with the charitable company's Memorandum and Articles of Association, the Companies Act 2006 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)". The charitable company is a Public Benefit Entity as defined by FRS 102.

The financial statements are prepared in sterling, which is the functional currency of the charitable company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

At the time of approving the financial statements, the Council of Management have a reasonable expectation that the charitable company has adequate resources to continue in operational existence for the foreseeable future. Thus the Council of Management continue to adopt the going concern basis of accounting in preparing the financial statements.

Unrestricted funds are available for use at the discretion of the Council of Management in furtherance of their charitable objectives unless the funds have been designated for other purposes.

Designated funds comprise funds which have been set aside at the discretion of the Council of Management for specific purposes. The purposes and uses of the designated funds are set out in the notes to the accounts.

Income is recognised when the charitable company is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.

Cash donations are recognised on receipt. Other donations are recognised once the charitable company has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.

Legacies are recognised on receipt or otherwise if the charitable company has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.

Capital grants are credited to restricted funds when receivable and transferred to unrestricted funds when the asset is purchased. Depreciation on the fixed assets purchased with such grants is charged against unrestricted funds. Grants of a revenue nature are credited to income in the period to which they relate. Grants received before the charity is entitled to them are treated as deferred income.

Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.

Expenditure is accounted for on an accruals basis.

Charitable expenditure comprises direct expenditure including direct staff costs attributable to the charitable company's activities. Where costs cannot be directly attributed, they have been allocated to activities on a basis consistent with the use of resources as detailed below.

Governance costs include those costs incurred in the governance of the charitable company's assets and are associated with constitutional and statutory requirements.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.

At each reporting end date, the charitable company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, those overheads that have been incurred in bringing the stocks to their present location and condition.

Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Cash and cash equivalents include cash in hand and deposits held at call with banks,

The charitable company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the charitable company's balance sheet when the charitable company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial assets are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.

If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the assets original effective interest rate. The impairment loss is recognised in net income/(expenditure) for the year.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in net income/(expenditure) for the year.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the charitable company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Basic financial liabilities are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the charitable company’s contractual obligations expire or are discharged or cancelled.

Provisions are recognised when the charitable company has a legal or constructive present obligation as a result of a past event, it is probable that the charitable company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.

Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value the unwinding of the discount is recognised as a finance cost in net income/(expenditure) in the period it arises.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the charitable company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

In the application of the charitable company’s accounting policies, the Council of Management are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Income from charitable activities

Vehicle costs

Rent

Rates and water usage

Heat and light

Telephone

Repairs

Sundry

Premises insurance

Vehicle insurance

Bank charges

Legal and professional

Computer running costs

Governance costs includes payments to the auditors of £6,000 (2021: £5,450) for audit fees.

The average monthly number of employees during the year was:

The balance represents a provision for dilapidations in respect of the leasehold property occupied by the charitable company.

The tangible fixed asset fund reflects the value of the tangible fixed assets used operationally by the charity.

The remuneration of key management personnel is as follows.

During the year the charitable company entered into the following transactions with related parties:

Mr M Hughes, a Trustee of Liverpool Community Transport Limited, is an employee of Play Away. During the year a motor vehicle was sold to Play Away but was subsequently returned to the charity with a loss on sale of £1,875 (2021: sales of £42). At the year end a balance of £nil (2021: £nil ) was due from Play Away.

There were no other related party transactions in the year.