ACCOUNTS - Final Accounts preparation
ACCOUNTS - Final Accounts preparation
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Registered number:
For the year ended
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2gether Support Solutions Limited
Company Information
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2gether Support Solutions Limited
Contents
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2gether Support Solutions Limited
Strategic Report
For the year ended 31 March 2022
The Directors present their strategic report and the financial statements for the year ended 31 March 2022.
2gether Support Solutions Limited (“the Company”) is a company incorporated and domiciled in the UK. The Company’s registered office is Management Offices, William Harvey Hospital, Kennington Road, Willesborough, Ashford, Kent, TN24 0LZ. The Company is a wholly owned subsidiary of East Kent Hospitals University NHS Foundation Trust (“the Trust”). Details of the ultimate parent undertaking and controlling party are as disclosed in note 27.
The principal activities of the Company are to provide and operate hospitals, health care establishments and health care facilities including services related to these facilities and also to provide other support services. The Company aims to provide safe, efficient, sustainable and modern healthcare and working environments and to provide efficient and cost-effective support solutions. As part of an agreement to provide managed healthcare services, the Company operates a long-term lease arrangement with East Kent Hospitals University NHS Foundation Trust (the “Contract").
The Company continues to maintain a comprehensive risk register (4Risk) as part of its risk management strategy. This is reviewed at the meetings of the Company Board and the meetings of the senior leadership team at the Management Board. The importance of embedding a robust risk management process and culture has continued. The Company continues to work to ensure a positive risk management and health and safety culture is embedded within every area of the Company.
A principle risk carried by our customer, which we provide support to manage, is operating and maintaining an aging portfolio of properties which require significant investment to maintain. When the Company took on the Contract in 2018, there was limited assurance of the levels of statutory compliance relating to the properties within the Contract. This area has therefore been a key focused priority for the Company and the Company continues to improve the levels of statutory compliance although this is dependent upon the investment strategy from our customer. Additionally, the detailed review of the critical infrastructure undertaken, which determined the backlog of works and the level of investment required from our customer, continues to be used to inform critical infrastructure requirements and we provide advice to our customer on the prioritisation of investment. We are dependent upon ongoing investment from our customer to enable further reduction or mitigation of this risk and to ensure safe and effective environments are provided. The Company prioritises and recognises the importance of the health, safety and welfare of its staff and of those occupying and using its facilities. Local site leadership and management meet monthly for site health and safety meetings supported by the dedicated Health & Safety team. Health and safety continue to be reviewed at all Company Board and Management Board meetings. Monthly directorate business performance reviews also focus on key risk management and operational performance. The Company formed a successful working relationship with the British Institute of Cleaning Science Limited (BICSc) over the past 18 months. This ensured that all domestic staff were BICSc trained in a number of skills critical to cleanliness in a healthcare environment, allowing staff to assess and understand any infection risks posed by the delivery of services in this area. The provision of a clean and safe healthcare environment remains a key priority. Investing in training is part of our long-term commitment to the development and retention of our employees. We recognise that we continue to have a workforce retention risk that we manage given our geographical location and market factors, and include succession planning to facilitate our future strategy for the business.
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2gether Support Solutions Limited
Strategic Report (continued)
For the year ended 31 March 2022
With the recent announcement on interest rates by the Bank of England, there is no risk on the interest receivable on the finance lease, or payable under the loan from our parent company, as these are at a fixed rate of interest for the term. 2gether will however benefit from interest income on the cash balance held moving forward. The recent inflationary impact on non-pay costs has been mitigated where possible by supplier chain contracts and an undertaking from our main customer to support costs above contract value in this area.
Our Procurement Team continues to proactively mitigate the impact of supply chain issues on both the Company and as a service provider for our primary customer given the current global supply chain issues. As such, we are working with our supply chain (which includes the NHS Supply Chain) in this area to limit any impact to both the business and the primary customer, with mitigation plans being in place to ensure essential suppliers are on hand as required. These include but are not limited to increased supplier cover, moving from ‘just in time’ purchasing to ‘just in case’ on key lines and maintaining increased stock holdings. For a second year we have continued with our operational response to support our primary customer to establish and maintain the level of on-going service as the NHS Trust again enters the ‘recover and restore’ phase. As a result of this, there has been some minor economic impact to the turnover and profit of the business. In the main, staff have continued in their roles throughout the year with very little business interruption. Future developments The Company’s short term focus has continued again this year in providing support to its primary customer following the operational requirements resulting from the COVID 19 pandemic through to the recovery period. The Directors and senior team are now recommencing work on the development of the strategic long term business and financial investment plans. Going concern At the time of approving the financial statements, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Although the Company enjoys a close relationship with the ultimate parent undertaking, the Trust, the Company manages its cash flow independently and does not seek financial support from the Trust. The Trust is currently in the Recovery Support Programme (RSP) segment 4 of the NHS System Oversight Framework (SOF4), with Finance as one of the strands – previously Financial Special Measures. Although the Company is not dependent on the Trust for financial support it must be acknowledged that a significant portion of the Company's turnover stems from the Trust. The Directors have reviewed the commercial performance of the Company and in particular the sensitivity analysis of the Company's commercial prospects, which demonstrates that although the impact of an adverse change in activity levels or service pricing could be commercially significant to the Company, a number of measures put in place by the Company in order to mitigate the impact of such events along with the Company's record of stable business operations and good relationship with commercial stakeholders indicate that the risks deriving from this type of event can reasonably be regarded by the Directors as manageable business risks. The Directors have assessed the Company’s ability to continue as a going concern taking into account all available information about the future, which is at least, but not limited to, twelve months from the date when the financial statements are authorised for issue. All expectations of the future are inherently uncertain due to the current circumstances; however, the Directors are confident that the Company has adequate resources for all reasonably expected eventualities. Thus, the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.
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2gether Support Solutions Limited
Strategic Report (continued)
For the year ended 31 March 2022
The results of the Company are set out in detail on page 14.
Turnover for the year amounted to £165.4m (2021 - £170.5m). The reduction in turnover in the year is mainly attributable to reduced capital works undertaken for EKHUFT. The operating profit of £1.5m (2021 - £1.4m) resulted from a gross profit of £21.4m (2021 - £20.6m) and administrative costs of £19.9m (2021 - £19.2m) during the year. Corporation tax charge on ordinary activities was £0.3m (2021 - credit £37k) and the profit after tax for the period was £1.8m (2021 - £2.2m). The strong liquidity position resulted in a positive cash balance of £16.0m (2021 - £8.8m) at the end of the period.
Key performance indicators are presented and monitored through the Management Board and the Company Board. These focus on the delivery of our facilities, projects and contract to ensure that these are managed efficiently, correctly, on time and on budget.
Service performance indicators are presented to the customer on a monthly basis with variances to cost, risks and/or operational issues addressed as a result of contract management between both the Company and the Trust. Health and safety recorded 133 accidents over the year (2021 - 80). Of the 133 accidents, 9 were reported to the HSE due to the injury type or having required at least a 7-day absence. There were an additional 19 RIDDOR incidents (2021 - 147), all of which were reported due to the process around reporting suspected COVID occupational exposure in the workplace (2021 - 146). Domestic reactive works volume over the period totalled 108,943 (2021 - 103,898). The number of reactive portering requests over the period was 477,264 (2021 - 352,967). Total switchboard calls answered over the period were 985,158 (2021 - 806,214). Total helpdesk calls over the period were 387,560 (2021 - 462,134). The number of patient meals served over the period was 1,509,320 (2021 - 987,039). Meals wastage over the period was 0.14% (2021 - 0.30%). The average number of employees was 1,336 (2021 - 1,298). This can be split into average number of male employees 648 and female employees 688 (2021 - 642 and 656 respectively).
The Board of Directors, in line with their duties under s172 of the Companies Act 2006, act in a way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole. In doing so, the Directors consider a range of matters when making decisions for the long term. Key decisions and matters that are of strategic importance to the Company are appropriately informed by s172 factors.
The success of the Company is dependent on the support of all stakeholders. Working with stakeholders that share our values is important to us, towards shared long-term goals for sustainable success.
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2gether Support Solutions Limited
Strategic Report (continued)
For the year ended 31 March 2022
The Board and senior leadership team make decisions with a long-term view in mind and with the highest of standards of conduct in line with our policies. Reports across all areas of the business are regularly made available to the Board to allow key decisions to be made with proper consideration and to assess the impact of decisions on stakeholders. The Company recognises that the ownership structure demands an important role in maximising the value and benefit to the NHS and wider community beyond economic gain.
We have an open dialogue with our shareholder through group meetings, joint stakeholder meetings and committees, one-to-one meetings and Board-to-Board meetings, covering a wide range of subject matters. The shareholder views and feedback are considered as part of decision making. We engage with our people as highlighted in the ‘Engagement with Employees’ within the Directors' Report. Key focus areas have been employee pay and we are pleased to continue supporting one of our primary goals in the payment of the Real Living Wage as a minimum for all staff, along with a strong emphasis on health and safety throughout the organisation. The Directors and senior leadership team meet periodically throughout the year with trade unions officials and staff representatives for meaningful conversation and information sharing on matters affecting the Company. We have built a strong service orientated relationship with our primary customer, with the focus being around their requirements whilst mindful of the financial challenges of an NHS Trust. We strive to drive continuous improvement and innovation into our operations to drive long term relationships across each area of the business. To achieve this, the Directors and senior leadership team take the time to understand the real and perceived needs of our primary customer. The Company is now preparing to embark on implementing a continuous improvement program in the second half of 2022/23 to support both the organisation and the primary customer, with an aim to provide further efficiency improvements whilst allowing us flexibility to meet changes in demand. The Board recognises that our suppliers are integral to the success of the business and it is therefore essential that we build strong relationships in an ethical manner whilst meeting stringent quality, performance and delivery requirements. The Company has a number of senior qualified procurement officers and managers that are experienced in supplier relationship management and procurement. As part of the Company’s service offering the Company offers a fully compliant NHS framework procurement and supplier contract management service. The Company ensures that we pay suppliers in line with commercially agreed payment terms. We have a strong code of conduct and policies in relation to Anti Bribery and Corruption and Modern Slavery legislation. We recognise the important role that our company plays in the local community. Social value principles are at the heart of the business, with a focus on creating opportunities in local employment and improving our environmental credentials. The Company has appointed relevant expert advisors to ensure that the Board are aware of, and the Company aims to meet, all relevant obligations in regard to laws and regulations whilst identifying potential opportunities and risks for the business.
This report was approved by the board and signed on its behalf.
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2gether Support Solutions Limited
Directors' Report
For the year ended 31 March 2022
The Directors present their report and the financial statements for the year ended 31 March 2022.
The profit for the year, after taxation, amounted to £1.8m (2021 - £2.2m).
No ordinary dividends were paid during the year. The Directors do not recommend payment of a final dividend.
The Directors who served during the year and at the date of this report were:
Due to the continuing service provider relationship that the Company has with the Trust, the Company is not exposed to the degree of financial risk faced by traditional business entities. The Company has limited powers to borrow or invest surplus funds and the financial assets and liabilities are generated by day to day operational activities rather than being held to change the risks facing the Company in undertaking its activities.
The Company has established a risk and financial management framework, the primary objectives of which are to protect the Company from events that hinder the achievement of its performance objectives. The objectives of the financial risk framework are to limit undue counterparty exposure, ensure sufficient working capital and to manage other financial risks. The Company’s principal financial instruments comprise bank balances, trade creditors, trade debtors, loans to the Company and lease arrangements. The main purpose of these instruments is to finance the Company’s operations. Currency Risk The majority of the Company's transactions, assets and liabilities are in the UK and sterling based. The Company has no overseas operations. Therefore, the Company has low exposure to currency rate fluctuations.
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2gether Support Solutions Limited
Directors' Report (continued)
For the year ended 31 March 2022
Interest rate risk
Most of the Company's financial assets and liabilities carry nil or fixed rates of interest to ensure certainty of cash flows. Cash deposits as at 31 March 2022 were mainly held within commercial bank accounts (at fixed rates or linked to the bank base rate). The Company has loans of £63.8m (2021 - £65.8m) from East Kent Hospitals University NHS Foundation Trust; these loans are at a fixed rate of 3.5% per annum. Therefore, the Company is not exposed to significant interest rate risk. Credit risk Because the majority of the Company's income comes from contracts with the Trust, the Company has relatively low exposure to credit risk. Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting its financial obligations as they fall due. The Company’s objective in managing liquidity risk is to ensure that this does not arise. Having assessed future cash flow requirements the Company expects to be able to meet its financial obligations through the cash flows that are generated from its operating activities.
Our people are at the heart of everything we do and we recognise their commitment, expertise and hard work in helping us achieve our goals through our in-house recognition scheme, The 2gether Team Awards. As an organisation we want to recruit, retain and develop our employees and are working to become an employer of choice in East Kent. The job market is relatively volatile at this time; however, recruitment remains strong to our entry level roles.
We engage and communicate with our employees through team briefings, our weekly in house newsletter “Off the Vine”, listening into action meetings with our front line employees and all of our directors regularly walk the floor and receive and act on feedback. We are growing our apprenticeship numbers and have successfully implemented a British Institute of Cleaning Science (BICSc) training programme for all staff within our Domestics team. 2gether is committed to promoting diversity and inclusion in all its activities and will work to ensure that no worker is discriminated against because of who they are, in particular with regard to age, disability, gender, sexual orientation, marital status, pregnancy or maternity, race, religion, belief and socio economic status. We are continuing to maintain the health and wellbeing support for our workforce with an Occupational Health service along with an employee assistance programme. With the second year of continued operational response to support our primary customer during the pandemic and with the inflationary pressures being seen in 2022 to date, we recognise that this will likely have put pressure on staff. We have continued to focus on increasing the number of mental health first aiders within the organisation and to date have trained more than 120 mental health first aiders.
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2gether Support Solutions Limited
Directors' Report (continued)
For the year ended 31 March 2022
We manage a complex supply chain solution for our customer as well as our own suppliers. It is therefore essential that we work with our suppliers in an ethical manner, ensuring that our suppliers provide goods and services that meet stringent quality, performance and delivery requirements. The Company ensures that we pay suppliers in line with commercially agreed payment terms. We have a strong code of conduct in relation to Anti-Bribery and Corruption, and Modern Slavery legislation.
We have an open two way approach to dialogue with our primary customer and ensure that quality of service delivery to them is at the forefront of our operations, whilst aiming to provide continuous improvement in our service delivery and where possible, efficiencies for financial benefits. The Company has undertaken a number of large capital build projects within the Operated Healthcare Facility which supports the built environment. These have included two substantial Emergency Department extensions at the William Harvey Hospital in Ashford and the Queen Elizabeth The Queen Mother Hospital in Margate, elective orthopaedic theatres and a new interventional radiology theatre at the Kent and Canterbury Hospital in Canterbury. Additionally, the Company has undertaken refurbishments of service streams such as Mammography, a clinical trials unit and a cardiology catheterisation laboratory. A number of energy projects were undertaken including the installation of over 9,000 LED luminaires under the Energy Performance Contract. To enhance staff and patient wellbeing, two sensory gardens were built.
The Company tenant’s energy use across the sites for 2022 was circa 77.888 GWh (2021 - 70.231 GWh).
Carbon emissions were 18,364 tCO2e (2021 - 17,705 tCO2e). Several factors including the opening of the Elective Orthopaedic Centre in August 2022 and the switch to Combined Heat and Power (CHP) have been undertaken to use gas to generate on site electricity in order to drive down costs for the Trust. The annual emissions for April 2021 to March 2022 were 452.39 kWh per occupied m2 of the total estate (2021 - 509.682 kWh per m2). The energy data comes from the billed usage during each financial year. The carbon emissions are calculated from the billed gas and electricity data using BEIS conversion factors as per the ‘UK Government GHG Conversion Factors for Company Reporting’ 2020 - 2021.
The Company is supporting the Trust in its commitment to the NHS target goal of achieving 80% carbon emissions reductions between 2028 and 2032 of base year levels and reaching net zero by 2050. The efforts also support the UK’s commitment to reduce its greenhouse gas emissions by 100% of 1990 levels to achieve net zero under the Climate Change Act (2008). To enable the targets to be met, the Trust and the Company continue to work with internal and external parties to drive the green agenda to reduce the Trust’s carbon footprint.
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2gether Support Solutions Limited
Directors' Report (continued)
For the year ended 31 March 2022
In the last fiscal year, the Trust started to collect and convert to kg CO2e the total monthly consumption of the Trust’s gas, electricity and water usage as well as monthly waste totals. The Trust executives have sight of the carbon emissions footprint and can clearly see whether investments in low carbon energy projects are reflected in core figures.
These low carbon energy projects are managed through the Trust’s Capital Projects Energy Performance Contract (EPC) and include works delivered by the Company such as Solar PV Systems, CHP Plants, Building Management Systems upgrades, insulation and cladding, a 100% lighting fittings and controls retrofits at the three main acute sites, and improved energy enhancing windows. With over 90% of the works having been completed at the approved sites, the Trust is for the first time, in addition to green electricity usage, also using self-generating energy from solar power in its service delivery. The Solar PV System is expected to generate an average of 3.4 Megawatts of energy to our distribution capacity every year and as a result anticipate an emissions saving for the Trust of 1,429 tCOe from the baseline figures of energy emissions footprint. These savings will be in addition to other reductions expected from the use of green electricity when the net emissions savings are finalised.
The Company installed four EV charging points at one of our acute sites to reduce the Trusts travel and transport emissions footprint. A submission for a short and long-term proposal EV charging points infrastructure across our sites has been developed and is expected to be approved by the Trust as part of the Green Travel Plan.
Finally, a draft Green Plan for the joint Trust and Company’s sustainability development strategy is also currently under review and once approved will give focus to the strategic vision of the green transformation. A Joint Carbon Reduction Steering Group was set up to steer the strategic implementation of the green agenda, with a task and finish group being rolled out to study, support and analyse all the data collected to inform the environment and sustainability strategy. The collected data will be analysed monthly for indicative trends on progression or regression on the green agenda and help identify opportunities for improvement. In continuing the Trust’s green energy transformation, they have committed to continuing the use of zero-carbon electricity supply which includes planning for the next set of commercial vehicle leases to include Electric Vehicles (EV). The Transport Department also have plans to ensure that EVs make up at least 10% of the logistics fleet by the end of the fiscal year 2023 in line with the green travel plan transformation agenda. The Trust and Company have included a Net Zero Carbon (NZC) and sustainability appraisal requirement for new projects in its Design and Construction Strategy. The below focused areas have been chosen from a list of focused areas in the draft Green Plan as the next areas in the Trust’s planned strategy to focus and deliver on in the next fiscal year:
∙Green Space and Biodiversity
∙Climate Change Adaptation
∙Sustainable Procurement
These focused areas have been chosen because of the environmental value it would add to the Trust’s net emissions at the end of the next fiscal year. Focussing on these areas will also bring the Trust into compliance with required reports and actions on the NHS Sustainability Guidance Document.
Overall, the objectives set for the Environmental and Sustainability agenda for the fiscal year 2021/22 focuses heavily on the Trust’s Built Environment utilities consumption and its related cost and emissions footprint have been 90% delivered.
Information relating to business activities, likely future developments in the business, its financial position, its exposure to risks, the Directors' assessment of going concern and post balance sheet events have been disclosed within the Strategic Report in accordance with section 414c(ii) of the Companies Act 2006.
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2gether Support Solutions Limited
Directors' Report (continued)
For the year ended 31 March 2022
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the Directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
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 to 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.
Under section 487(2) of the Companies Act 2006, Grant Thornton UK LLP will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the Board and signed on its behalf.
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2gether Support Solutions Limited
Independent Auditor's Report to the Members of 2gether Support Solutions Limited
We have audited the financial statements of 2gether Support Solutions Limited (the 'Company') for the year ended 31 March 2022, which comprise the Statement of Income and Retained Earnings, the Balance Sheet, and the 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 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).
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 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.
We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the company to cease to continue as a going concern.
In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the company’s business model including effects arising from macro-economic uncertainties such as Brexit and Covid-19, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the company’s financial resources or ability to continue operations over the going concern period.
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 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.
In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
The responsibilities of the Directors with respect to going concern are described in the 'Responsibilities of directors for the financial statements' section of this report.
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2gether Support Solutions Limited
Independent Auditor's Report to the Members of 2gether Support Solutions Limited (continued)
The Directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our Auditor's report 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 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 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
Matter on which we are required to report under the Companies Act 2006
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 Directors’ report.
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 Directors' Report.
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2gether Support Solutions Limited
Independent Auditor's Report to the Members of 2gether Support Solutions Limited (continued)
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.
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 Auditor's Report.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK).
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙We understood how the Company is complying with relevant legal and regulatory frameworks by making inquiries of management and those charged with governance. We corroborated our enquiries through our review of board minutes;
∙We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the most significant which are directly relevant to specific assertions in the financial statements are those related FRS 102, the Companies Act 2006 and the relevant tax compliance regulations in the UK;
∙We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by meeting with management from different parts of the business to understand where it is considered there was a susceptibility of fraud. We also considered performance targets and their propensity to influence efforts made by management to manage earnings. We considered the processes and controls that the Company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those processes and controls. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk;
∙Our audit procedures involved: journal entry testing, with a focus on manual journals and journals indicating large or unusual transactions based on our understanding of the business; substantive testing of revenue transactions to ascertain the appropriate recognition of revenue within the year and enquiries of management. In addition, we completed audit procedures to conclude on the compliance of disclosures in the annual report and accounts with applicable financial reporting requirements;
∙These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it; and
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2gether Support Solutions Limited
Independent Auditor's Report to the Members of 2gether Support Solutions Limited (continued)
∙Assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team’s:
−understanding of, and practical experience with audit engagements of a similar nature and complexity through appropriate training and participation
−knowledge of the industry in which the Company operates
−understanding of the legal and regulatory requirements specific to the Company.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Crawley
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2gether Support Solutions Limited
Statement of Income and Retained Earnings
For the year ended 31 March 2022
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2gether Support Solutions Limited
Registered number: 11385580
Balance Sheet
As at
The financial statements were approved and authorised for issue by the Board and were signed on its behalf by:
The notes on pages 16 to 34 form part of these financial statements.
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
2gether Support Solutions Limited (“the Company”) is a private company limited by shares and is incorporated in England with the registration number 11385580. The Company operates from a number of locations across East Kent. The address of the registered office is Management Offices, William Harvey Hospital, Kennington Road, Willesborough, Ashford, Kent, England, TN24 0LZ.
The Company’s principal activity is to act as a property facilities management company to provide an Operated Healthcare Facility (OHF) to the East Kent Hospitals University NHS Foundation Trust. Further information on the activities of the Company is included as part of the strategic report on pages 1 to 4.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The functional and presentational currency of the Company is pounds sterling. The financial statements are rounded to the nearest thousand pounds.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of East Kent Hospitals University NHS Foundation Trust as at 31 March 2022 and these financial statements may be obtained from www.ekhuft.nhs.uk.
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
2.Accounting policies (continued)
At the time of approving the financial statements, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.
Although the Company enjoys a close relationship with the ultimate parent undertaking, East Kent Hospitals University NHS Foundation Trust, the Company manages its cash flow independently and does not seek financial support from the Trust. The Trust is currently in the Recovery Support Programme (RSP) segment 4 of the NHS System Oversight Framework (SOF4), with Finance as one of the strands – previously Financial Special Measures. Although the Company is not dependent on the Trust for financial support it must be acknowledged that a significant portion of the Company's turnover stems from the Trust. The Directors have reviewed the commercial performance of the Company and in particular the sensitivity analysis of the Company's commercial prospects, which demonstrates that although the impact of an adverse change in activity levels or service pricing could be commercially significant to the Company, a number of measures put in place by the Company in order to mitigate the impact of such events along with the Company's record of stable business operations and good relationship with commercial stakeholders indicate that the risks deriving from this type of event can reasonably be regarded by the Directors as manageable business risks. The Directors have considered the impact of the COVID 19 pandemic and inflationary pressures within the going concern assessment. The Directors do not consider any adjustments to the reported financial information to be required in relation to this and no adjusting post balance sheet events as a result have been identified. The Directors have assessed the Company’s ability to continue as a going concern considering all available information about the future, which is at least, but not limited to, twelve months from the date when the financial statements are authorised for issue. All expectations of the future are inherently uncertain due to the current circumstances; however, the Directors are confident that the Company has adequate resources for all reasonably expected eventualities. Thus, the Directors continue to adopt the going concern basis of accounting in preparing the financial statements. Revenue from rendering of services is recognised when the amount of revenue can be measured reliably and it is probable that future economic benefits will flow to the entity. Revenue from rendering of services under the OHF is recognised on the provision of those services. This is normally on a straight-line basis over the term of the contract or over the agreed service period or, if the performance is other than straight line, as and when the service is performed. In cases where the Company cannot estimate the amount of services performed under the OHF the Company accrues revenue to the extent of the expenses incurred where it is probable the expenses will be recovered.
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
2.Accounting policies (continued)
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
2.Accounting policies (continued)
NHS Pension Scheme
Certain past and present employees are covered by the provisions of two NHS Pension Schemes. Both schemes are unfunded, defined benefit scheme that cover NHS employers, general practices and other bodies, allowed under the direction of Secretary of State for Health and Social Care in England and Wales. The scheme is not designed in a way that would enable employers to identify their share of the underlying scheme assets and liabilities. Therefore, the scheme is accounted for as though it is a defined contribution scheme: the cost to the Foundation Trust is taken as equal to the employer's pension contributions payable to the scheme for the accounting period. The contributions are charged to operating expenses as and when they become due. Additional pension liabilities arising from early retirements are not funded by the scheme except where the retirement is due to ill-health. The full amount of the liability for the additional costs is charged to the operating expenses at the time the Foundation Trust commits itself to the retirement, regardless of the method of payment. Defined contribution pension plan The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations. The contributions are recognised as an expense in the Statement of Income and Retained Earnings when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
2.Accounting policies (continued)
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life.
Computer software is amortised over a 5-year period.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
The Company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to the Statement of Income and Retained Earnings during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. Depreciation charges are included in Administrative expenses in the Statement of Income and Retained Earnings.
The estimated useful lives range as follows:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Income and Retained Earnings.
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
2.Accounting policies (continued)
Provisions are charged as an expense to the Statement of Income and Retained Earnings in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
2.Accounting policies (continued)
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
The following judgements have had the most significant impact on amounts recognised in the financial statements: Lease commitments The Company has entered into a range of lease commitments. The classification of these leases as either financial or operating leases requires the Directors to consider whether the terms and conditions of each lease are such that the Company has acquired the risks and rewards associated with the ownership of the underlying assets. Revenue recognition - principal vs. agent A key judgement in recognising revenue is to distinguish where the Company acts in the capacity of principal or agent, so to determine the accounting as either gross or net respectively. The Directors exercise judgement to assess principal or agency by considering if it is the prime obligor in all the revenue arrangements, has pricing discretion and is exposed to credit risk, in which case the Company will be principal to the arrangement. The Directors have assessed that the Company acts as principal in respect of certain transactions.
The whole of turnover is attributable to the Company's principal activity of acting as a property facilities management company to provide an Operated Healthcare Facility (OHF) to the East Kent Hospitals University NHS Foundation Trust.
All turnover relates to the rendering of services within the United Kingdom.
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
11.Taxation (continued)
The main rate of corporation tax is due to increase on 1 April 2023 to 25%, for companies with taxable profits above £250,000. Companies with taxable profits below £50,000 will continue to pay at 19%, and marginal relief will apply between these thresholds. This change formed part of The Finance Bill 2021, which was substantively enacted on 24 May 2021, and is applicable at the reporting date.
Deferred taxes have been measured using rates substantively enacted at the reporting date and reflected in these financial statements.
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
There is a single class of Ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.
Profit and loss account
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
NHS Pension Scheme
Certain past and present employees are covered by the provisions of two NHS Pension Schemes. Both schemes are unfunded, defined benefit scheme that cover NHS employers, general practices and other bodies, allowed under the direction of Secretary of State for Health and Social Care in England and Wales. The scheme is not designed in a way that would enable employers to identify their share of the underlying scheme assets and liabilities. Therefore, the scheme is accounted for as though it is a defined contribution scheme: the cost to the Foundation Trust is taken as equal to the employer's pension contributions payable to the scheme for the accounting period. The contributions are charged to operating expenses as and when they become due. The pension cost charge represents contributions payable by the Company to the fund and amounted to £765k (2021 - £829k). Contributions totalling £96k (2021 - £102k) were payable to the fund at the balance sheet date and are included in creditors. Additional pension liabilities arising from early retirements are not funded by the scheme except where the retirement is due to ill-health. The full amount of the liability for the additional costs is charged to the operating expenses at the time the Foundation Trust commits itself to the retirement, regardless of the method of payment. Defined contribution pension plan The Company also operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £444k (2021 - £351k). Contributions totalling £98k (2021 - £99k) were payable to the fund at the balance sheet date and are included in creditors.
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2gether Support Solutions Limited
Notes to the Financial Statements
For the year ended 31 March 2022
The Company is a wholly owned subsidiary undertaking of East Kent Hospitals University NHS Foundation Trust.
The Directors regard East Kent Hospitals University NHS Foundation Trust as its ultimate parent undertaking. East Kent Hospitals University NHS Foundation Trust heads the smallest and largest group for which consolidated financial statement are prepared that include the results of the Company. Those financial statements are available at www.ekhuft.nhs.uk. East Kent Hospitals University NHS Foundation Trust is registered at Trust Offices, Kent & Canterbury Hospital, Ethelbert Road, Canterbury, Kent, CT1 3NG.
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