Greenwich Service Plus Limited - Limited company accounts 18.2

REGISTERED NUMBER: 07065923 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2018

FOR

GREENWICH SERVICE PLUS LIMITED

(LIMITED BY GUARANTEE)

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Statement of Profit or Loss

8

Statement of Profit or Loss and Other Comprehensive Income

9

Statement of Financial Position

10

Statement of Changes in Equity

11

Statement of Cash Flows

12

Notes to the Statement of Cash Flows

13

Notes to the Financial Statements

14

DIRECTORS:

P J Brooks

S M Stephenson

I Tasker

K M Gibbs

M Bakalovic

SECRETARY:

Mrs S K Sandhu

REGISTERED OFFICE:

Room 102

Birchmere Business Site Eastern Way

Thamesmead

LONDON

SE28 8BF

REGISTERED NUMBER:

07065923 (England and Wales)

AUDITORS:

McCabe Ford Williams

Statutory Auditors and Chartered Accountants

Bank Chambers

1 Central Avenue

Sittingbourne

Kent

ME10 4AE

GS Plus is a company limited by guarantee, whose ultimate parent is the Royal Borough of Greenwich, the activities of

the company include:

" Education Catering

" Hospitality and retail catering

" Fleet Management and Maintenance Service

" Building Cleaning Service

" Facilities Management Service

" Passenger Services

" Schools ICT support service

REVIEW OF BUSINESS

This is the 8th full year of trading for GSPlus. Turnover was down from £32.6m to £32.0m, with, accumulated reserves

of £2.28m.

This year saw the retirement of Gurmel Singh-Kandola, MBE, Managing Director of the company, at the end of January

2018. The company was notified that it was the council's intention, as the parent of the company, to use this change in

management arrangements, to undertake a review of the operating model of the company. To facilitate this, the board

has accepted the council's nomination for the appointment of an Interim Chief Operations Officer. The Interim Chief

Operations Officer is charged with managing the business, reviewing the governance arrangements of the company and

report back to the board and council on the future direction of the Company.

PRINCIPAL RISKS AND UNCERTAINTIES

Notwithstanding the strategic review mentioned herein, the principal client of the company is the Royal Borough of

Greenwich. Credit risk is therefore low and trade is directly influenced by the parent.

FORWARD LOOKING STATEMENT

The company's revised high level objectives, as agreed at the company's Board meeting on 5th January 2018 are:

" The company will concentrate on consolidating and improving their core businesses.

" Any new business stream will be subject to detailed scrutiny by the board.

" The company will continue with a commercial ethos but also ensuring that any new ventures have a business fit with

existing core business streams.

" The company will continue to achieve excellence and good governance in the Management of public finances.

It is expected that these objectives will be carried forward until the council resolves to agree a new strategic direction for

the company.

The change in high level objectives and review of strategic direction mentioned above means that the performance

indicators and performance last year are not reflective of current and future performance and have not been included.

ON BEHALF OF THE BOARD:

M Bakalovic - Director

19 November 2018

The directors present their report with the financial statements of the company for the year ended 31 March 2018.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of providing frontline services to Greenwich

Council, schools and other public bodies.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2018.

DIRECTORS

S M Stephenson has held office during the whole of the period from 1 April 2017 to the date of this report.

Other changes in directors holding office are as follows:

G S Kandola - resigned 31 January 2018

S J Evans - resigned 8 March 2018

J P Comber - resigned 29 August 2017

I Tasker - appointed 29 August 2017

K M Gibbs - appointed 2 January 2018

M Bakalovic was appointed as a director after 31 March 2018 but prior to the date of this report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 International Financial Reporting Standards as

adopted by the European Union. 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 surplus or deficit 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 judgements and accounting estimates that are reasonable and prudent;

-	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 2006. 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies

Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have

taken as a director in order to make himself aware of any relevant audit information and to establish that the company's

auditors are aware of that information.

AUDITORS

The auditors, McCabe Ford Williams, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

M Bakalovic - Director

19 November 2018

Opinion

We have audited the financial statements of Greenwich Service Plus Limited (Limited by Guarantee) (the 'company') for

the year ended 31 March 2018 which comprise the Statement of Profit or Loss, the Statement of Profit or Loss and

Other Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement

of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, including a summary of

significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable

law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 March 2018 and of its deficit for the year then ended;

-	have been properly prepared in accordance with IFRSs as adopted by the European Union; and

-	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 Auditors' responsibilities for the audit of the

financial statements section of our report. We are independent of the 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.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic

Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors

thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or

apparent material misstatements, we are required to determine whether there is a material misstatement in the financial

statements or a material misstatement of the other information. 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.

Opinion on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit,

we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors 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 directors determine 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 directors are responsible for assessing the 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 directors either intend to liquidate the company or to cease operations, or have no realistic

alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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 a Report of the Auditors 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those

matters we are required to state to them in a Report of the Auditors 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.

Ashley Phillips FCCA (Senior Statutory Auditor)

for and on behalf of McCabe Ford Williams

Statutory Auditors and Chartered Accountants

Bank Chambers

1 Central Avenue

Sittingbourne

Kent

ME10 4AE

19 November 2018

CONTINUING OPERATIONS

Revenue

31,967,377

32,568,797

Cost of sales

(31,165,862

)

(30,436,480

)

GROSS SURPLUS

801,515

2,132,317

Other operating income

68,477

361

Distribution costs

(199,212

)

(133,316

)

Administrative expenses

(2,701,468

)

(2,825,412

)

OPERATING DEFICIT

(2,030,688

)

(826,050

)

Finance costs

4

(1,455,000

)

(1,437,000

)

Finance income

4

1,006,224

1,144,869

DEFICIT BEFORE INCOME TAX

5

(2,479,464

)

(1,118,181

)

Income tax

6

(357,603

)

(101,575

)

DEFICIT FOR THE YEAR

(2,837,067

)

(1,219,756

)

DEFICIT FOR THE YEAR

(2,837,067

)

(1,219,756

)

OTHER COMPREHENSIVE INCOME

Item that will not be reclassified to profit or loss:

Actuarial gain/(loss)

1,747,000

(7,546,000

)

Income tax relating to item that will not be reclassified to profit or loss

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

1,747,000

(7,546,000

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(1,090,067

)

(8,765,756

)

Note

Prior year adjustment

7

2,543,642

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

1,453,575

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment

8

227,017

227,725

77,009

CURRENT ASSETS

Inventories

9

157,490

200,349

184,943

Trade and other receivables

10

5,812,125

4,802,005

4,008,523

Cash and cash equivalents

11

3,372,475

4,642,648

3,747,915

9,342,090

9,645,002

7,941,381

TOTAL ASSETS

9,569,107

9,872,727

8,018,390

EQUITY

Retained earnings

12

(15,438,160

)

(14,348,093

)

(8,125,979

)

TOTAL EQUITY

(15,438,160

)

(14,348,093

)

(8,125,979

)

LIABILITIES

NON-CURRENT LIABILITIES

Pension liability

15

17,722,000

17,437,000

8,713,000

Deferred tax

14

21,040

27,692

1,354

17,743,040

17,464,692

8,714,354

CURRENT LIABILITIES

Trade and other payables

13

6,899,971

6,680,887

7,417,160

Tax payable

364,256

75,241

12,855

7,264,227

6,756,128

7,430,015

TOTAL LIABILITIES

25,007,267

24,220,820

16,144,369

TOTAL EQUITY AND LIABILITIES

9,569,107

9,872,727

8,018,390

The financial statements were approved by the Board of Directors on 19 November 2018 and were signed on its behalf by:

M Bakalovic - Director

Retained

Total

earnings

equity

£

£

Balance at 1 April 2016

(5,582,337

)

(5,582,337

)

Changes in equity

Total comprehensive income

(11,309,398

)

(11,309,398

)

Balance at 31 March 2017

(16,891,735

)

(16,891,735

)

Prior year adjustment

2,543,642

2,543,642

As restated

(14,348,093

)

(14,348,093

)

Changes in equity

Total comprehensive income

(1,090,067

)

(1,090,067

)

Balance at 31 March 2018

(15,438,160

)

(15,438,160

)

Cash flows from operating activities

Cash generated from operations

1

(1,005,652

)

1,180,746

Tax paid

(75,241

)

(12,850

)

Net cash from operating activities

(1,080,893

)

1,167,896

Cash flows from investing activities

Purchase of tangible fixed assets

(198,504

)

(284,032

)

Interest received

9,224

10,869

Net cash from investing activities

(189,280

)

(273,163

)

(Decrease)/increase in cash and cash equivalents

(1,270,173

)

894,733

Cash and cash equivalents at beginning of year

2

4,642,648

3,747,915

Cash and cash equivalents at end of year

2

3,372,475

4,642,648

1.	RECONCILIATION OF DEFICIT BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS

31.3.18

31.3.17

as restated

£

£

Deficit before income tax

(2,479,464

)

(1,118,181

)

Depreciation charges

199,212

133,316

Pension charge less cash contributions

1,392,000

857,000

Past service pension costs

182,000

18,000

Prior year adjustment

-

2,543,642

Finance costs

1,455,000

1,437,000

Finance income

(1,006,224

)

(1,144,869

)

(257,476

)

2,725,908

Decrease/(increase) in inventories

42,859

(15,406

)

Increase in trade and other receivables

(1,010,120

)

(793,482

)

Increase/(decrease) in trade and other payables

219,085

(736,274

)

Cash generated from operations

(1,005,652

)

1,180,746

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect

of these Statement of Financial Position amounts:

Year ended 31 March 2018

31.3.18

1.4.17

£

£

Cash and cash equivalents

3,372,475

4,642,648

Year ended 31 March 2017

31.3.17

1.4.16

as restated

£

£

Cash and cash equivalents

4,642,648

3,747,915

1.	STATUTORY INFORMATION

Greenwich Service Plus Limited (Limited by Guarantee) is a private company, limited by guarantee , registered

in England and Wales. The company's registered number and registered office address can be found on the

Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards

and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting

under IFRS. The financial statements have been prepared under the historical cost convention.

The company meets its day to day working capital requirements largely through its own activities but also

through financial and grant support from the Boroughs for which it operates facilities. The Directors expect this

financial support to continue for the foreseeable future and therefore consider it appropriate to prepare the

financial statements on a going concern basis. The financial statements do not include any adjustments that

would result from the withdrawal of its financial support by the local authority.

Under International Accounting Standard 19 (Employee Benefits), the net deficit on the company's pension

scheme has been included in the Financial Statements and the company's reserves have therefore been

reduced by the pension deficit creating net liabilities of £15,438,160 (2017: £14,348,093) at the period end. The

board of Directors are satisfied that the company will be able to meet all of its obligations as and when they fall

due.

Revenue recognition

Income represents net sales of goods and services excluding value added tax, to customers during the year.

Service concession arrangements

The Company has Service Contracts with various schools within the Royal Borough of Greenwich for the

provision of meals to these schools owned by the Authority to which it has lease and management service

contracts. The Authority has the right under the contracts to specify the price charged. The contracts specify

minimum standards for the services to be provided, with deductions from the service management fee payable

being made if facilities are unavailable or performance is below the minimum standards. The Company also has

a Service Contract for the provision of school meals to some schools in the County of Kent, with similar terms in

place with regards to the price charged and deductions from the service management fee payable being made if

facilities are unavailable or performance is below the minimum standards.

Receipts

The Company, in most cases, receives an agreed payment from the Authority each year which may, in certain

cases, be adjusted each year by inflation and can be reduced if the Company fails to meet availability and

performance standards in any year, but which is otherwise fixed.

Property, plant and equipment

The buildings and plant at the centres are leased to the Company as part of the overall contractual relationship

with the Authority but the Authority maintains ultimate control of these assets. Accordingly the access which the

Company has in the use of these assets is to enable it to provide the service it is contracted to provide, not to

effectively own these public service assets. These assets are therefore not recognised on the Company's

Balance Sheet.

Depreciation is provided at the following annual rates in order to write off each asset over its useful life:

Improvements to property - straight line over 3 years

Plant and machinery - straight line over 3 years

Motor vehicles - straight line over 3 years

Financial instruments

The company enters into basic financial instruments that result in the recognition of financial assets and

liabilities like trade and other accounts receivable and payable, loans from banks and other third parties and

loans to related parties.

a) Trade and other debtors

Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the

effective interest method, less impairment losses for bad and doubtful debts except where the effect of

discounting would be immaterial. In such cases, the receivables are stated at cost less impairment losses for

bad and doubtful debts.

b) Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand.

c) Impairment of financial assets

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period

for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is

recognised in profit or loss.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an

asset's carrying amount and the present value of estimated cash flows discounted at the asset's original

effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any

impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference

between an asset's carrying amount and the best estimate, which is an approximation, of the amount that the

company would receive for the asset if it were to be sold at the reporting date.

d) Trade and other creditors

Debt instruments like loans and other accounts payable are initially measured at present value of the future

payments and subsequently at amortised cost using the effective interest method. Debt instruments that are

payable within one year, typically trade payables, are measured, initially and subsequently, at the undiscounted

amount of the cash or other consideration expected to be paid. However, if the arrangements of a short-term

instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business

terms or financed at a rate of interest that is not a market rate or in case of an outright short-term loan not at

market rate, the financial asset is measured, initially and subsequently, at the present value of the future

payments discounted at a market rate of interest for a similar debt instrument.

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when

there is an 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.

Inventories

Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and

slow moving items.

Taxation

Current taxes are based on the results shown in the financial statements and are calculated according to local

tax rules, using tax rates enacted or substantially enacted by the statement of financial position date.

Employee benefit costs

The company operates a defined benefit scheme. The cost of providing the benefits is accounted for each year

with actuarial valuations being carried out at each balance sheet date. The net deficit or surplus on the scheme

is carried in the statement of financial position, comprising the present value of the defined benefit obligation at

the balance sheet date less the fair value of scheme assets. Actuarial gains and losses are charged to retained

earnings in full in the period during which they occur.

3.	EMPLOYEES AND DIRECTORS

31.3.18

31.3.17

as restated

£

£

Wages and salaries

15,592,628

15,829,355

Social security costs

867,011

853,204

Other pension costs

2,775,645

1,963,496

19,235,284

18,646,055

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

31.3.18

31.3.17

as restated

926

920

31.3.18

31.3.17

as restated

£

£

Directors' remuneration

130,726

155,750

The number of directors to whom retirement benefits were accruing was as follows:

Defined benefit schemes

-

1

The above remuneration relates to all directors in total.

4.	NET FINANCE COSTS

31.3.18

31.3.17

as restated

£

£

Finance income:

Deposit account interest

9,224

10,869

Interest income on pension scheme assets

997,000

1,134,000

1,006,224

1,144,869

31.3.18

31.3.17

as restated

£

£

Finance costs:

Net interest on defined liabil

ity

1,455,000

1,437,000

Net finance costs

448,776

292,131

5.	DEFICIT BEFORE INCOME TAX

The deficit after income tax is stated after charging:

31.3.18

31.3.17

as restated

£

£

Depreciation - owned assets

199,212

133,316

Auditors remuneration

12,700

12,360

6.	INCOME TAX

Analysis of tax expense

31.3.18

31.3.17

as restated

£

£

Current tax:

Taxation

364,256

75,241

Corporation tax interest

-

(5

)

Total current tax

364,256

75,236

Deferred taxation

(6,653

)

26,339

Total tax expense in statement of profit or loss

357,603

101,575