Annual Report & Financial Statements 2016-2017 · Annual Report & Financial Statements 2016-2017...

The Phone Co-op. Your voice counts.

Annual Report & Financial Statements2016-2017

2 | The Phone Co-op The Phone Co-op | 3

Annual Report & Financial Statements 2016-2017 Annual Report & Financial Statements 2016-2017

Foreword from the Chair

Society Information

Chief Executive’s Review

Financial Review of the Year

The Strategic Landscape

Membership and Responsibility Review

Governance Report

Remuneration Report

Directors’ Report

Contents

Report of the Independent Auditors

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Society Statement of Financial Position

Consolidated Cash Flow Statement

Notes to the Financial Statements

04

05

06

07

09

11

15

18

21

24

26

26

27

28

29

31

Receiving Investors in People accreditation; a universally recognised

standard for better people management

Recommend a friend

in last six months

317Members

joined online

201,000Prospects

sales

c500 new customers

through A�nity Partner

o�ers and promotions

through smartphone

usage

52%male

48%female

Over 100Kpeople reached

through Social Media

80%web orders

ProductSales

Advisororders

20%Our core audience

52% growth

818

NEW WEBSITE FACTS

GOOD STUFF

From 3 April - 31 Aug

2017


Highlights from new website launch



Foreword from the Chair

Society Information

Robert Denbeigh, Chair

Simon Richards Shelagh YoungJane Watts

Robert Denbeigh Chair

Fiona Nicholls Vice Chair

Helen Grayshan Karen McArthurWelcome to the latest annual report from The Phone Co-op. We know that our members take a very keen interest in what we do, so this report gives plenty of insight into the details of our activities and performance over the past twelve months.

To say the past year has been a significant one in the history of The Phone Co-op would be an understatement. We have seen many changes already: to the business structure, the products and services we offer, and the people who work for us. Our founder, Vivian Woodell has stepped down from the role of Chief Executive, and Peter Murley has taken over as an interim. There will be further changes in the year ahead, which we are confident will lead to a bigger, better and stronger Society.

These are exciting times: the Board has worked closely with our new Chief Exec and Management Team to develop a strong strategy for the entire business – one that will let us grow whilst still retaining our uniqueness. The telecoms sector is without doubt a highly competitive space, and it’s true to say that any business must grow or risk being overtaken. Standing still is not an option.

We are looking forward to doing more of what makes us special and becoming a force to be reckoned with as an ethical supplier of telecoms, internet and mobile phone services.

I hope you enjoy reading our Annual Report and feel proud to be part of an organisation that makes a difference, and has a positive impact on the lives of all those involved. A big thank you to all our customers, members, staff and Board colleagues.

Robert Denbeigh, Chair

Annual Report & Financial Statements 2016-2017

Introducing the Board

Statutory Auditors

Shaw Gibbs LimitedChartered Certified Accountants

Registered Auditors264 Banbury Road,

Oxford OX2 7DY

Registered office (main place of business)

The Phone Co-op Limited 5 Millhouse

Elmsfield Business Centre Worcester Road Chipping Norton

Oxfordshire OX7 5XL

Registered number 28965R

Registered under the Co-operative and Community Benefit Societies Act 2014



ethos that is essential to the way we run our business. Based on this and a number of other factors, we have decided to sell the building. We have already identified alternatives and are currently reviewing these with full staff involvement.

During July and August, in conjunction with the Board, I focused on determining the three- to four-year strategy for our business, and this work is continuing. Our strategy will require significant investment in infrastructure and people, a strong emphasis on technical skills, an increase in sales staff, product and technical knowledge, and customer service resources, plus a growing presence in Manchester. This investment is vitally important if we are to continue to grow, both in consumer markets and, especially, the business to business sector.

The needs and expectations of our existing and potential customers and members are evolving rapidly. If we are to match and exceed these needs and expectations, we must seize the opportunity to address the challenges and opportunities which lie ahead.

The Phone Co-op is a unique business in the crowded telecommunications space: a business with true ethical values and clear social responsibility. It is fundamentally important that this commitment remains at the heart of everything we do. After being here for just two months of the financial year, it is clear to me that our team is the key asset of our organisation. Our people have ensured our continued financial success, and, yet again, we have exceeded expectations in terms of net sales.

Profitability for the year was disappointingly lower than budgeted for. This was due to a number of one-off costs, including stock write-offs – but membership was up on the previous year, a trend which we are committed to continuing in the coming financial year.

The consumer market trend towards inclusive fixed line and broadband bundling endures, and revenue from ‘minutes’ charging continues to decline.

The mobile market is highly competitive, and we need to improve our penetration in this area through creativity and emphasis on the unique nature of our offering.

Unified Communication is and will remain a key business-to-business area for us. We’ve already started building our business as a highly focused, ethical, end-to-end provider of telecommunications solutions, rather than a reseller.

Our Head of Operations left the business in August following a management reorganisation, and his direct reports now form part of The Chief Executive’s team. Clarifying roles and accountabilities will lead to improvements right across the customer experience, from brand to billing, service, products and membership.

In last year’s report we commented on the development of new premises in the centre of Chipping Norton. On review, however, it became clear that the layout of the building was not conducive to the team working

Chief Executive’s Review

Following Vivian Woodell’s decision to step down and establish The Phone Co-op Foundation, I was privileged to be asked by the Board in June 2017 to take on the role of Chief Executive on an interim basis until a permanent individual could be appointed. That process is already well underway.

Peter Murley, Chief Executive

This accounts for the significant items listed under administrative expenses of £113k for the year.

Interest receivable and similar income for the year was £154k – a £10k increase on 2015/16. This includes interest on the treasury investments as well as return on investments in other social enterprises.

Profit before distributions (and before significant items) was £405k, which is a £78K increase on last year (£327k). However, after accounting for the significant items totalling £250k, profit before distribution reduced to £154k.

The members’ dividend of £62k – and transfer of a similar amount to the Co-operative and Social Economy Development Fund (CSEDF) – were voted on by the members at the AGM in February 2017.

The tax on profit as shown in the accounts is a credit of £3k compared with a charge of £33K last year. This is due to larger tax allowances for write down of fixed assets compared with the accounting depreciation, as well as a significant drop in taxable profit due to the significant items mentioned previously.

During the year, we invested £660k in premises: this included the acquisition of the previous HSBC long lease for our property at Market Place in Chipping Norton, as well as professional and other fees for its development. The intention was to convert the premises to become the Society’s head office, but the Board decided to reverse this decision and the property has since been put up for sale.

Investment in IT and similar assets amounted to £139k, which was predominantly due to launch of the Society’s

The net sales figure for the Business Division was £4.0m, and £7.1m for the Residential Division.

Gross profit for the Society was £3.7m before significant items, which is an improvement of £0.1m compared with last year (£3.6m). The gross margin (before significant items) was 33.1% for the year, and 33.9% for 2015/16. The significant items of £137k resulted from the write-off of SIM cards and prepaid commission relating to instore-placed sim cards of £96k, and devaluation of handset stock of £41k.

The commercial arrangement underpinning the instore-placed SIM cards has been reviewed and as a result there will be no further replenishing of SIM cards.

Improved returns procedures were introduced for handsets during the accounting period, which will reduce the amount of future impairment losses.

The Society’s administrative expenses (or general overheads) increased by £52k before significant items. This was mainly due to continued investment in personnel, which began in the latter half of the last financial year, but the full-year effect is seen in the current year.

Following Vivian Woodell’s decision to step down as Chief Executive in June 2017, Peter Murley was appointed as interim Chief Executive. The additional cost for this interim position was £28k, which fell in the last few months of the financial year.

Reorganisation costs towards the end of the accounting period included redundancy and compensation for loss of office of £69k and fees of £16K to consultants in respect of marketing review, systems and procedural review.

Financial Review of the Year

The Society’s net sales (turnover exclusive of Value Added Tax) exceeded £11 million in this financial year. The figure of £11.1m represents an increase of £0.6m, or 5.8%, compared with the previous year, and is another record high for our organisation.

“The mobile market is highly competitive, and

we need to improve our penetration in this area through

creativity and emphasis on the

unique nature of our offering.”

Highest ever turnover of

£11.1million



new web site earlier in the year.

We invested £15k in Leeds Community Housing, a community benefit society which aims to create 1,000 affordable homes in Leeds over the next ten years; £10k in the New Internationalist, a worker co-op which publishes a magazine about global development, economics and sustainability; and £6k in Sutton Community Farm – a community benefit society operating a seven acre smallholding, which wants to build a barn.

Our fixed assets increased during the period by £743k to £3.6m, and our current assets increased by £399k to £7.5m. Creditors increased by £304k, meaning that net current assets totalled £5.4m at the end of the year (£5.3m last year).

The net assets (total assets less liabilities) increased by £824k to £9.0m due to continued member investment in the Society. The balance sheet (consolidated statement of financial position) remains strong.

The Strategic Landscape

be involved with some of these planned changes, which will also be supported by temporary project management capability from outside the business.

• We will partner with organisations which can add clear value to our service and help us raise awareness of our brand and all that we stand for. This will require a new strategy for affinities and relationships with like-minded organisations, which focuses on increasing customers and members in the residential/consumer space and working closely with our product suppliers.

• The residential/consumer element of our business is planned to grow, in terms of net sales, from around £7.1 million in 2016/17 to £11.1 million by the end of the four-year period, with a 50% growth in customers and more than double the membership numbers (from the current circa 12,000). With several changes in product offerings, including some simplification, coupled with a renewed focus on profitable and appropriate customers (those which match our values) and a greater emphasis on pricing, we are confident that this growth target is well within our reach.

• Most importantly, we will develop a well-resourced and highly professional business to business organisation with a comprehensive technical skill set, so we can bid for significant contracts in the business space – contracts which are long lasting and profitable.

• This ‘B2B’ strand of our business plan shows a growth from £4.0 million annual net sales value to around £16.5 million run rate at the end of the 4-year term. To achieve this, we will create close ties with appropriate and trusted third party technical providers so we can deliver true ‘solutions’ to our current and prospective B2B customer base, focusing on areas such as Virtual Private Networks (VPN), Session Initiation Protocol (SIP), Voice over Internet Protocol (VoIP) and Unified Communications (UC).

• We strongly believe in, and will place a real emphasis on, investing in the most important asset of all – our people. By the time of this report we will have employed an HR manager, whose key tasks will include a skills and needs analysis, a review of our pay structure, consideration of performance related pay and a commitment to a Learning Management Solution. This is a software platform which supports one-to-one development of staff, helping them

Our plans are focused on growing our membership base, cementing our ethical and social commitments and capitalising on our unique position in the telecommunications market.

Our strategy will see active growth in our telecommunications business and the people who work for us, as well as increasingly giving our customers a great user experience. Our profitability allows us to invest in the business and deliver the things that make a real contribution to society: things that matter to The Phone Co-op and what we stand for.

In an exciting but rapidly changing market, where new products and pricing models and exciting shifts in technology and customer expectations take place on an ongoing basis, we have both strategic opportunities and great challenges.

Our four year plan

The Board has confirmed its commitment to a four year strategy to move the business forward and grow sales to an annual run rate of more than £27 million by 2021. This is a 250% increase on today’s figures. Here’s how we will achieve it.

• Increase our staff levels from 79 people at the end of 2016/17 to around 110 at the end of 2021/22. Most of this growth will centre around customer services (15 more people), technical skills, business to business sales (18 people), product management and marketing.

• New employees will mainly be in Manchester, leading to a relatively even split in full-time headcount between the two locations – which will also provide more resilience.

• Our Manchester premises will be expanded to accommodate more than doubling of staff numbers. Work is already underway, in consultation with staff, on the design and build of a new, energy efficient flagship building in Chipping Norton which meets our 21st century needs.

• We will be focusing during the 2017/18 financial year on identifying, designing and fully implementing our core systems within the business. Specifically, this includes a new billing platform to vastly improve the whole customer service experience, through more seamless integration of systems and processes. We are hoping that some of our customers can

As we headed into the new financial year, work was well underway on a strategy that aims to position The Phone Co-op as a dynamic and responsive telecoms business.

Continue reading ›

“forecast net sales of £27.7 million with a net profit exceeding 7.5%...”Per Simonsen, Chief

Financial Officer

Making food fairSutton Community Farm gets a £6,000

investment from us



exceeding 7.5%. This means returning some £2 million net profit in 2012/22 – over ten times more than any previous year – enabling us to invest in our business, provide good returns to members and invest in projects which complement our ethics and values.

I have great confidence in our ability to transform and grow the business while maintaining and enhancing our reputation and our brand. Most importantly, we will continue to deliver what we believe in and what this business was designed to do – bringing people together to cooperate for joint economic, social, and cultural reasons, through a jointly-owned and democratically-controlled enterprise.

achieve their aspirations, preparing them for opportunities within the business and enabling their development. The HR manager will help line managers identify suitable people for the many new roles we are planning within the business, and ensure we recruit those who can enable our vision.

We have ambitious targets, but I know that with the right investment, leadership and management team, we will deliver. I am very excited about the future of The Phone Co-op, but what does delivering this considerable shift in business focus and organisational change mean for you?

The considerable investment in business systems, processes and people over the next two years will result in losses. In the third year, the business plan is to make a net profit greater than the average of past years (i.e. in excess of 2.5%). The fourth full year of our plan shows forecast net sales of £27.7 million with a net profit

We’re delighted that more members are attending meetings: 144 members came to the Annual General Meeting (AGM) in Bristol in February 2017 (up from 125 the previous year), with a further eight joining in via teleconference. The Half Yearly Meeting was held by telephone conference, with 30 members participating. We hold the AGM in different key locations each year to enable members from all over the UK to attend, and Sheffield has been chosen for 2018.

Long term, we have always looked to do 50% of our business with members of The Phone Co-op. This year, the figure was 41.1%, up from 39.3% last year. The launch of the new website has helped contribute to this by enabling a simpler sign-up process.

523 new members joined us during the year, giving us 12,257 members in total, and representing a growth of 4.5%. Our aim is for 70% of all customers to become members by August 2021; the current figure is 52%.

The average amount invested per member as of August 2017 was £609, rising from £565 in the previous year.

An important plank of our strategy is to grow the membership of the Society, and to increase the business we do with our members.

Membership & Responsibility Review

Peter Murley, Chief Executive

RESPONSIBILITY REVIEW

INDICATOR THE PHONE CO-OP MEASURE 2017 2016 2015

Membership Number of members at the end of the year 12,257 11,734 11,003

– Growth in membership (%) 4.5 6.6 5.0

Member economic involvement Trade with members as % of sales 41.1 39.3 38.2

Member democratic participation Number of candidates for Board (number of vacancies in brackets)

10 (2) 9 (3) 5 (2)

Voting turnout (%) 24.0 25.9 21.2

Non-vocational trainingNumber of grants made to employees for non-vocational training

9 9 6

Participation of employees in training and education schemes

Number of training days per full time employee per year (a)

9 6.2 9.1

Staff injury and absentee rates Average number of days’ leave recorded due to injury, illness etc. per full time employee per year (a)

3.9 4.5 4.7

Staff profile – ethnicity Minority ethnic as % of all staff 6.0 4.0 4.0

Staff profile – gender Women as % of all management and supervisory staff 56 60 55

– Women as % of all staff 64.0 55.0 57.0

Director profile – ethnicity Minority ethnic as % of all Directors 0 0 0

Director profile – gender Women as % of all Directors 57.0 43.0 21.0

OU

R V

ALU

ESO

UR

EM

PLO

YEES

DIV

ERSI

TY

Vivian Woodell with Peter Murley and Rob Denbeigh

(left to right)

The Society would like to thank Vivian Woodell for his services over the past 19 years. Vivian is the Founder of the Society and has been its Chief Executive since it started in June 1998. He has been instrumental in spreading the message of co-operation throughout the country, and beyond. We are also grateful to him for such a diverse investment portfolio; from student housing and solar panels to financially supporting other co-ops, community benefit societies and other socially responsible projects.

Picture on the left taken by the Oxford Mail



INDICATOR THE PHONE CO-OP MEASURE 2017 2016 2015

Customer satisfaction Satisfied

no survey carried out

53.4% 36.3%

Very satisfied 34.7% 56.5%

Customer service Satisfied 57.6%no survey

carried outVery satisfied 34.7%

Consideration of ethical issues in procurement and investment decisions

Purchases with other co-operatives as % of costs (non-personnel overhead)

8.3 11.6 15.7

Sales to other co-operatives as % of total 9.3 10.1 12.4

Investment in community and co-operative initiatives

Co-operative and Social Economy Development Fund (CSEDF) (£ in year)

61,904 57,706 57,825

CSEDF value to date (£) 480,831 418,927 362,720

Share capital investments in community and co-operative initiatives (£)

898,557 870,029 486,517

Other investments in co-operatives (short term, including fixed-term loans) (£)

3,142,065 2,944,389 3,315,540

Revenue paid to Affinity Partners £ revenue share in year 66,592 56,803 64,412

Business journeys by rail, bus, bicycle or foot

% of journeys 75.0 74.6 75.4

% of miles travelled 81.9 85.8 90.9

Proportion of waste recycled/reused % of paper waste recycled/reused 100 100 100

Electricity use (total of all offices) kWh per m2 of treated floor area 68.6 67.3 72.5

KgCO2 per m2 of treated floor area (b) 9.6 27.3 33.5

Gas use (LPG) kWh per m2 of treated floor area 106.3 46.1 81.4

Kg CO2 per m2 of treated floor area (b) 21.9 9.2 16.8

Net carbon dioxide emissions arising from electricity and gas use

Kg CO2(b) 31,264 32,173 36,634

Net carbon dioxide emissions arising from electricity and gas use per m2

Kg CO2/m2(b) 45.9 44.2 50.4

Voluntary carbon offset levyTonnes CO2 equivalent arising from operations (including suppliers)

70.7 66.8 66.3

CU

STO

MER

SER

VIC

EEN

VIR

ON

MEN

T

Notes: (a) Average monthly number of employees was 79 (54 full time)

(b) All electricity is from renewable sources. Electricity based on landfill gas, hydro and wind is no longer considered to have zero net carbon emissions. Electricity is 0.35kg CO2 per kWh, LPG (gas) is 0.21kg CO2 per kWh and natural gas is 0.18kg CO2 per KWh.

CO

MM

UN

ITY/

CO

-OPE

RAT

IVE

INIT

IATI

VES

MILES TRAVELLED % OF TOTAL MILES

MEANS OF TRANSPORT 2016-17 2015-16 2016-17 2015-16

Less environmentally damaging transport modes:

69,272 60,389 81.9% 85.8%

More environmentally damaging transport modes:

15,309 9, 950 18.1% 14.2%

Total (all recorded journeys) 84,581 70,339 100% 100.0%

can be attributed to a long and chilly winter where the Manchester office benefitted from new efficiencies in the heating system so didn’t experience an incremental increase in costs. It is much harder to retain heat in the Chipping Norton office; one of the reasons we are planning to move premises as soon as possible.

The Phone Co-op pays a voluntary levy to offset all the carbon dioxide emissions resulting directly from its activities, as well as from the activities of the upstream telecoms providers whose networks we utilise in the provision of our services. The levy is being paid to Pure Leapfrog, a charity which has a vision of reducing climate change by supporting community-led low carbon projects.

We recycle our own paper office waste and other waste where possible.

We also compost all our non-meat food waste.

Environmental and other ethical measures

The Phone Co-op, in line with the wider international co-operative movement, is committed to combating climate change, promoting sustainable development and encouraging green living. To help reduce our carbon footprint we continue to support renewable energy co-operatives, operate our Sustainability Fund to improve our environmental performance and record the number of business miles we travel, encouraging all employees to take green alternatives whenever possible.

Environmental issues

We continue to encourage our people to use public transport for business journeys where possible, rather than cars. This has helped us support sustainable transport networks as well as limiting our carbon emissions.

During the year, 75% of journeys were made by rail, bus, tram, and underground, cycling or walking, accounting for 81.9% of our business miles. Total mileage rose by 14,242 miles in the year. There was an increase in number of miles travelled by more damaging forms of transport from 9,950 to 15,309, although the overall percentage of journeys travelled this way remained the same, at 25%.

We provide bicycles free of charge for the use of our employees for commuting and for business journeys. We also offer a mileage payment for cycling and walking on business journeys and an interest-free loan scheme for colleagues to purchase annual season tickets, encouraging the use of public transport.

Our Sustainability Fund enables us to improve our environmental performance by funding initiatives which would not otherwise be financially viable. Members and customers contributed directly to the Fund.

During the year, we saw a small rise in our electricity consumption over the two offices, a small increase in gas consumption in Holyoake House in Manchester, but a sharp increase in gas usage in Chipping Norton. This



5. To ensure women and ethnic minority groups are fairly represented

Target: To review our equality and diversity policies, identify gaps and set challenging new targets.

The Ethical Policy Committee is working on a new policy. Target retained.

6. To reduce carbon emissions

Target: To establish a verifiable carbon monitoring approach for carbon emissions gathering baseline data.

Not yet achieved. Target retained.

Target: Build an energy-efficient and healthy building for head office operations.

These considerations are paramount in the planning for the new office in Chipping Norton.

Target: To retrofit an existing building to high energy efficiency standards. No longer applicable.

7. To offer an exemplary level of customer service

Target: Customer satisfaction rating to reflect more than 90% satisfied or very satisfied.

Customer satisfaction survey not completed.

Target: To achieve customer satisfaction rating of more than 90% satisfied or very satisfied from survey.

8. To use transport with lowest carbon emissions for all business travel

Target: Over 90% of business miles travelled use lower carbon alternatives.

81.9% achieved this year.

Target: we are increasing our sales force which will necessitate some use of less-environmentally friendly modes of transport. The new target is 70%.

1. To increase member engagement by encouraging take-up of goods and services

Target: 50% of trade to be with members (£ spent on goods and services).

Member trade 41.1%, up from 39.3%.

50% is retained as the target.

2. To grow our membership

Target: To increase membership by 10% during the financial year 2016-17.

4.5% growth achieved in a year in which, for several months, marketing resources were fully utilised in developing the new website. 52% of customers are members.

New target is for 57% of customers to be members by Aug 2018.

3. To increase member participation in the election process

Target: 30% of members to vote in the annual election.

24% voted in the annual election. Target retained.

4. To increase colleague engagement and satisfaction

Target: To achieve Investors in People accreditation.

Achieved Investors in People accreditation.

New target is to work on the five areas below for improvement under the accreditation:

• Leading and inspiring people

• Managing performance

• Recognising and rewarding performance

• Structuring work

• Building capability

Target: To carry out annual employee satisfaction surveys, report back and identify priorities.

Employee Satisfaction survey circulated in September 2016. Results fed into the IiP work. Target retained to carry out annual employee satisfaction survey in 2018.

Last year our Ethical Policy Committee agreed objectives and targets for measuring our co-operative, social and environmental work:

Governance Report

Good governance is an essential foundation for a co-operative society owned by its members. Corporate governance is at the top of our agenda: the strength of The Phone Co-op’s values, our reputation and our ability to achieve our objectives are influenced by the how the business is directed, managed and controlled in the interests of all our members.

approving budgets and effective monitoring of the performance of Executive Management.

Although the Board delegates some responsibilities to its established sub-committees and the Executive Management, there is a documented list under the Rules of reserved matters which are for the exclusive determination and decision of the Board. These include, but are not limited to:

• review of all audit matters

• review of all strategies and policies

• annual review of and approval of The Phone Co-op’s revenue and capital budgets

• approval of all business and property acquisitions and disposals

• approval of large capital expenditure

• approval of all funding arrangements.

In addition, the Board has a duty to ensure that The Phone Co-op adheres to the co-operative values and principles set out by the International Co-operative Alliance.

The Phone Co-op maintains certain safeguards and values to ensure that the Board retains an appropriate balance in its composition. These include ensuring that no Director (or connected person) serves in a managerial position for a business which competes in a material way with The Phone Co-op (or who is engaged in activities which, in the opinion of the Board, would render that person’s service on the Board prejudicial to the interests of The Phone Co-op). No more than two employees or materially-dependent suppliers (or connected persons) can serve on the Board at the same time, and no member of the management team can hold the position of Director.

The Board of The Phone Co-op consists of seven Directors including the Chair and Vice-Chair. The Board believes this to be an appropriate size in a co-operative context, ensuring democratic accountability and a diversity of member representation while still allowing effective decision-taking. We continue to review the size and composition of the board: currently, five members

Governance Code and The Phone Co-op rules

This report has been prepared in accordance with the Corporate Governance Code for Consumer Co-operatives issued by Co-operatives UK in November 2013 (“the Code”), which sets out a framework for the governance of consumer co-operatives. The Code sets out the principles of best practice, and requires co-operatives to disclose the extent to which they have followed the Code during the reporting period. A copy of the most up-to-date Code can be found on the website of Co-operatives UK.

The Code itself is structured on three levels: main principles, supporting principles and provisions. The main principles of governance are applicable to all co-operatives. Under the Code, co-operatives must disclose where they have not complied with the Code’s provisions and provide an explanation. This section of the report seeks to comply with the Code.

As a registered co-operative society, The Phone Co-op is also bound by a set of constitutional rules (“the Rules”) which include further governing safeguards (in addition to the Code) ensuring that certain important decisions require member approval. A current up-to-date copy of the Rules can be found on our website.

Members’ meetings and elections

The Phone Co-op holds an AGM and a Half Yearly Meeting (HYM) which gives members the opportunity to question the Board twice a year. Board elections allow members to determine who oversees the running of The Phone Co-op on behalf of its members.

Elections are held on an annual basis prior to the AGM and are currently conducted via postal and online ballots. Nominations are open to anyone who has been a member of The Phone Co-op for more than six months. Terms of office are for three years and, to ensure that contested elections are both fair and transparent, The Phone Co-op uses an independent body that specialises in providing election services.

Role and composition of the Board

The Board’s role is to provide strong leadership of the co-operative in setting out objectives and strategy,



are women and two are men.

At least every two years, the Board conducts a skills audit to assess the knowledge and skills of each Director and of the Board as a whole.

Board meetings and sub-committees

The Board holds a minimum of ten meetings each year, at least four of which are conducted face-to-face. The Board also meets in private session without the presence of management when required.

The Board currently operates one sub-group and one sub-committee: an Ethical Policy working group and a Personnel Committee. The Ethical Policy working group has been established to recommend business-driven ethical policies, including the environment, and current practices to the Board. The Personnel Committee is intended to deal with any personnel matters requiring Board involvement and meets only when required.

The Board has not established a Search Committee, Remuneration Committee or an Audit Committee as recommended under the Code. The Board’s view is that these are not appropriate in view of the small size of the co-operative and the limited number of Board members. This means that the Board remains responsible for evaluating the balance of skills, knowledge, independence, experience and diversity of the Board; setting the levels of remuneration to attract and retain Executive Managers; and making recommendations to members in relation to the level of Directors’ fees. The

Board however continues to review this position.

The table below lists the attendance record of Directors at Board and Committee meetings over the year, with the number in brackets being the eligible number to attend.

The Chair

The Chair leads the Board in setting strategy and works closely with the Chief Executive in achieving its objectives. In accordance with the Code, the Chair is not an employee.

The Chief Executive

The Chief Executive is responsible for the executive management of The Phone Co-op’s operations. The current interim Chief Executive is working alongside the Board to recruit a permanent replacement.

The Society Secretary

The Society Secretary has responsibility for advising the Board on all governance matters.

Directors

The Phone Co-op has developed a code of conduct for Board members. In addition, all Directors are required on election to sign an agreement stating that they will abide by this code. The Board continues to develop and monitor the induction and training of new Directors as well as the continuing professional and skills

DIRECTORS BOARD MEETINGS ETHICAL POLICY COMMITTEE

PERSONNEL COMMITTEE

ACTUAL ELIGIBLE ACTUAL ELIGIBLE

Robert Denbeigh (Chair) 13 (13)

This committee did not sit during the period under

review.

Fiona Nicholls (Vice-Chair) 10 (13) 2 (2)

Justin Andersen 6 (6)

Helen Grayshan 4 (7)

David Legge 4 (6)

Karen McArthur 7 (7)

Simon Richards 13 (13)

Jane Watts 12 (13) 2 (2)

Shelagh Young 13 (13)

Per Simonsen, Society Secretary21 December 2017

development of current Directors.

Internal controls, risk management systems and whistleblowing procedures

The Board is responsible for The Phone Co-op’s system of internal controls and risk management and for reviewing its effectiveness. Risks are continuously identified, reviewed and managed by both the management risk committee and the executive management team. Matters considered significant are reported to the Board. In addition, the Board reviews the documented risk register on an annual basis.

The Board has developed a documented whistleblowing procedure to allow colleagues to raise any concerns, in confidence, on matters of financial reporting, financial control or any other issues. Matters raised under the procedure are investigated in a consistent, proportionate and independent manner and appropriate follow-up action is taken.

The Board reviews all these processes on an annual basis and believes that these controls, processes and procedures are appropriate for an organisation of The Phone Co-op’s size and complexity. The Board considers that there have been no weaknesses that have resulted in any material losses or contingencies which require disclosure.

Declaration of interests

Directors and Executive Management are asked to register any conflicts of interest on an annual basis, and are required to declare specific conflicts as and when they arise. Details of Directorships held by Board members and Executive Management can be found on our website.

Compliance statement

As part of the compliance process for the Code, co-operative societies including The Phone Co-op report annually on their governance practices each year in a return filed with Co-operatives UK.

Member speaking to Ruth Semple, Head of

Communications, Soil Association at AGM



External advice is taken from time to time, usually from sources within the co-operative movement.

Management remuneration

This report is published in accordance with the Code of Best Practice adopted by the Co-operative Congress in May 2005 and updated in November 2013. Remuneration packages for the management team comprise basic salary, participation in the Society’s incentive scheme and pension provision. Details for the Executive Team are given below (the notes form an integral part of the table):

The report also outlines the fees and other benefits paid to the Society’s Directors, giving an overview of performance-related benefits available to employees generally.

The Board considers that it is not appropriate, given the size of the Society, to establish a separate Remuneration Committee, and these functions are carried out by the Board as a whole. The Board is responsible for setting the remuneration of the Chief Executive and Society Secretary, and, in conjunction with the Chief Executive, for setting the remuneration of other members of the senior management team.

Remuneration Report

This report gives members an overview of the Society’s remuneration policies and practices for its seniormanagement, and details of their remuneration, pension and other benefits.

NAME EMPLOYMENT COMMENCED

BASIC SALARY

PERFORMANCE RELATED PENSION

TOTALEMOLUMENTS

2016/17

TOTALEMOLUMENTS

2015/16

Peter Murley 29/06/2017 £28,050

Vivian Woodell

01/07/1998 £44,642 £841 £33,333 £78,816 £85,662

Craig Lumsden 28/12/2013 £55,567 £891 £6,112 £62,570 £66,730

Fiona Ravenscroft

21/07/2004 £38,051 £854 £8,704 £47,609 £53,504

Per Simonsen 08/02/2016 57,825 £248 £22,113 £80,186 £40,463

Note: the figures shown relate only to the period during the year when each of the above was a member of the Executive Team with the exception of Peter Murley and Per Simonsen. Emoluments for Peter Murley are consultancy fees (exclusive of expense reimbursement). Redundancy and compensation for loss of office are not included in the above table.

General

Vivian Woodell, Founder of the Society stood down as

Chief Executive in June. Peter Murley was engaged as

interim Chief Executive in June 2017 via Innobridge Ltd,

a company owned and controlled by him.

The management structure was revised in July 2017 and,

as a result, the previous Executive Team was disbanded

and amalgamated into the senior management structure.

As a result of this reorganisation, the position of Head of

Operations was made redundant.

Basic salary Basic salary is the amount paid during the year.

Performance related

Payments shown relate to financial year 2016/17. Where a member of the Executive Team served for part of the year only, performance-related amounts which were paid monthly are shown for the months when they served on the Executive Team, and those which were paid annually are shown pro-rata to their length of service on the Executive Team during the year.

NAME BASIC SALARY PENSION TOTAL

2016/2017BASIC

SALARY PENSION TOTAL 2015/2016

Vivian Woodell £67,417 £7,415 £74,832 £73,499 £8,085 £81,584

Fiona Ravenscroft £41,672 £4,584 £46,256 £47,048 £5,175 £52,223

Per Simonsen £70,825 £7,791 £78,616 £39,444 £789 £40,233

No other members of the Executive Team opted for salary sacrifice during the year.

Service Contracts

The employment contracts of Executive Team members

provide for a notice period of three months, except in

the case of Vivian Woodell, where the notice period is

six months. Peter Murley is engaged via Innobridge Ltd,

which has a contract for 100 days consultancy at £850 for

each day.

Pensions

The Phone Co-op currently offers a workplace pension

scheme (defined contribution scheme), which is

invested ethically by default. The Phone Co-op makes a

contribution on behalf of each scheme member, which

is a percentage of basic salary. The amount of this

percentage is decided by the Board of Directors from

time to time, and is currently 11%.

The Phone Co-op operates a salary sacrifice option in

connection with its defined contribution pension scheme.

Employees may opt to reduce their gross salary and have

the salary foregone, together with an additional amount

equivalent to the National Insurance contributions which

would have been payable by the employer in respect of

the salary foregone, contributed to their pension. This

option is available to all employees for whom pension

contributions are paid.

The following members of the Executive Team opted

for salary sacrifice under this scheme during the year. If

they had not done so, their gross basic salary and their

pension contributions would have been as follows:

Pay differentials

The Phone Co-op’s Board has always sought to ensure fair rates of pay and benefits for all. Management pay rates have been moderate by the standards of our industry, while pay at the lower end of the scale has been relatively generous. In addition, both the general sales-related bonus schemes, and the profit share are paid in relation to contracted hours, meaning that everyone receives the same amounts, subject to qualifying periods. There are no executive or management bonuses.

Our pension scheme is non-contributory, which means that all permanent employees benefit after a qualifying period, avoiding the situation in many businesses where many lower-paid employees opt out because they are unable to afford the employee contributions, and therefore lose out on the employer contributions as well.

In 2013, The Phone Co-op received accreditation as a Living Wage employer and has maintained this accreditation during the financial year ended 31 August 2017.

Performance-related benefits

The Society operates a profit sharing scheme and two sales-related bonus schemes.

Profit sharing scheme:

Under this scheme, 11% of the Society’s profit (before distributions, less share interest, but before deduction of the cost of the scheme) is divided between all employees on permanent contracts, subject to a qualification period of six months’ service and to certain rules regarding longer periods of absence. Payments are pro-rata to the number of full calendar months of service in the



year (after completion of the waiting period, where applicable), and to contracted basic hours for part-time employees. Senior managers participate in this scheme on the same basis as all other employees. The percentage of profit paid under this scheme is discretionary and is fixed by the Board from time to time. Certain exceptions and conditions apply.

Sales-related bonus scheme (general):

The Society pays an amount equal to a percentage (fixed by the Board from time to time) of the increase in sales in the previous month, compared with the same month in the previous year, which is divided between all employees on permanent contracts in proportion to their contracted basic hours, subject to a waiting period of six months. The percentage paid was 2% throughout the year. Certain exceptions and conditions apply. Members of the senior management team participate in this bonus scheme on the same basis as other employees.

Sales-related bonus scheme (business sales staff):

A separate bonus scheme is in place for Business Sales Team members, which is based on sales revenues generated by individual sales staff, subject to meeting a minimum threshold for business generated. A

Directors’ Report for the year ended 31 August 2017

and prudent

• state whether applicable accounting standards have been followed

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Society will continue in business.

The Directors are responsible for ensuring the keeping of proper accounting records which disclose, with reasonable accuracy at any time, the financial position of the Society, and which enable them to ensure that the financial statements comply with the Co-operative and Community Benefit Societies Act 2014. They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Society and to prevent and detect fraud and other irregularities.

As far as each of the Directors, at the time the report is approved, are aware:

• there is no relevant audit information of which the auditors are unaware and

• they have taken all the steps they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information

On behalf of the Board of Directors

Robert Denbeigh, ChairPer Simonsen, Society Secretary

21 December 2017

Principal activity

The principal activity of the Society during the year under review was the provision of telecommunications and internet services and equipment, on a co-operative basis, to members and customers.

Results for the Year

The results for the year are set out on page 26.

Proposed Dividend

The proposed dividend payable for the year is 0.25% of members’ eligible spend with The Phone Co-op during the financial year.

Directors

The Directors during the period under review were:

• Robert Denbeigh (Chair from 22.02.17)

• Fiona Nicholls (Vice-chair from 22.02.17)

• Justin Andersen (left 04.02.17)

• Helen Grayshan (joined 04.02.17)

• David Legge (left 04.02.17)

• Karen McArthur (joined 04.02.17)

• Simon Richards

• Jane Watts

• Shelagh Young (Chair until 10.02.17)

Auditors

A resolution to re-appoint Shaw Gibbs Limited as auditors for the ensuing year will be proposed at the Annual General Meeting.

Statement of Directors’ Responsibilities

Co-operative and Community Benefit Society law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Society and of the profit or loss of the Society for that period. In preparing those financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently

• make judgements and estimates that are reasonable

The Directors present their report and financial statements for the year ended 31 August 2017 for the Phone Co-op Limited - Registered number 28965R.

Share Capital 88%

Reserves 12%Members at our last AGM

in Bristol

commission scheme is also in place for phone systems, whereby 1% of the sales value of the system installed is paid to the sales person.

Remuneration of Directors

In accordance with a resolution approved by members, Directors received a fee of £1,299 per year (£1,624 for the Vice-Chair and £1,948 for the Chair). They are also entitled to claim reasonable out-of-pocket expenses incurred in the performance of their duties. Details of the total value of fees and expenses paid to the Directors are provided in the Notes to the Financial Statements.

On behalf of the Board of Directors

Robert Denbeigh, ChairFiona Nicholls, Vice-Chair

Peter Murley, Chief ExecutivePer Simonsen, Society Secretary

21 December 2017



FIVE YEAR COMPARISON

PERIOD ENDED 31 AUGUST 2013 2014 2015 2016 2017

Income Statement

Turnover (Net Sales) £10,572,619 £9,328,092 £10,063,945 £10,501,773 £11,116,012

Depreciation £215,745 £201,390 £95,740 £97,396 £84,449

Operating Profit/(Loss) £414,677 £257,747 £164,614 £182,826 £84

Profit/(Loss) Before Distributions £554,632 £339,940 £280,334 £326,546 £154,337

Recommended Distributions for year* £266,911 £216,306 £225,765 £233,585 130,167

Transfer to Reserves £302,035 £124,082 £136,150 £178,427 £33,969

Statement of Financial Position

Fixed Assets £1,110,537 £1,575,577 £1,909,102 £2,890,263 £3,633,003

Current Assets £5,737,293 £6,520,847 £7,217,182 £7,127,040 £7,525,711

Net Current Assets £4,215,900 £4,934,108 £5,731,929 £5,336,683 £5,431,232

Net Assets £5,326,437 £6,435,470 £7,559,338 £8,150,316 £8,974,479

Share Capital £4,036,955 £5,126,533 6,166,763 £6,632,669 £7,470,023

Reserves £980,614 £1,004,041 £1,029,856 £1,098,720 £1,023,625

20132014

20152016

2017

£1,000,000

£0

£2,000,000

£3,000,000

£4,000,000

£5,000,000

£6,000,000

Fixed Assets Net Cuurent

£100,000

£0

£200,000

£300,000

£400,000

£500,000

£600,000

20132014

20152016

2017

20132014

20152016

2017

£50,000

£0

£100,000

£150,000

£200,000

£250,000

£300,000

20132014

20152016

2017

£8,000,000

£7,000,000

£9,000,000

£10,000,000

£11,000,000

£12,000,000

£13,000,000

20132014

20152016

2017

£1,000,000

£0

£2,000,000

£3,000,000

£4,000,000

£5,000,000

£6,000,000

Fixed Assets Net Current Assets

Profit before distributions Turnover

Recommended distributions relating to the year

* Recommended distributions consist of members’ interest for the year and recommended dividend including transfer to CSDEF.



Independent Auditor’s Report to the Members of The Phone Co-op Limited

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 group’s or the society’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 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 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.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Co-operative and Community Benefit Societies Act 2014 requires us to report to you if, in our opinion:

• the society has not kept proper books of account, and not maintained a satisfactory system of control over its transactions, in accordance with the requirements of the legislation; or

• the revenue account, any other accounts to which our report relates, and the balance sheet are not in agreement with the society’s books of account; or

Opinion

We have audited the financial statements of The Phone Co-op Limited (the ‘society’) and its subsidiaries (the ‘group’) for the year ended 31 August 2017 which comprise the Consolidated Income Statement, Consolidated Statement of Financial Position, Society Statement of Financial Position, the Consolidated Cash Flow Statement and 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).

This report is made solely to the society’s members, as a body, in accordance with section 87 of the Co-operative and Community Benefit Societies Act 2014. Our audit work has been undertaken so that we might state to the society’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 society and the society’s members as a body, for our audit work, for this report, or for the opinions we have formed.

In our opinion the financial statements:

• give a true and fair view of the state of the group’s and the society’s affairs as at 31 August 2017 and of the group’s income and expenditure for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Co-operative and Community Benefit Societies Act 2014.

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 group 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.

group’s internal control.

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• conclude 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 group’s or the society’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the society to cease to continue as a going concern.

• evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Stephen John Wetherall (Senior Statutory Auditor) for and on behalf of Shaw Gibbs Limited

Chartered Certified Accountants Statutory Auditor 264 Banbury Rd, Oxford OX2 7DY

21 December 2017

• we have not obtained all the information and explanations necessary for the purposes of our audit.

Responsibilities of the directors

As explained more fully in the directors’ responsibilities statement set out on page 21, 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 it determines 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 directors are responsible for assessing the group’s and the society’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 group or the society or to cease operations, or have no realistic alternative but to do so.

Auditor’s 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 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.

As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and

• obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but, except to the extent otherwise explicitly stated in our report, not for the purpose of expressing an opinion on the effectiveness of the



CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 AUGUST 2017

NOTES

2016/17 BEFORE

SIGNIFICANTITEMS

2016/17 SIGNIFICANT

ITEMS(NOTE 2A)

2016/17 TOTAL 2015/16

Net sales 2 £11,116,012 £11,116,012 £10,501,773

Cost of Sales £7,433,354 £137,395 £7,570,749 £6,938,732

Gross profit £3,682,658 (£137,395) £3,545,263 £3,563,041

Administrative expenses £3,432,358 £112,821 £3,545,179 £3,380,215

Operating profit 3 £250,300 (£250,216) £84 £182,826

Interest receivable and similar income 6 £154,253 £154,253 £143,720

Profit before distributions £404,553 (£250,216) £154,337 £326,546

Members’ dividend £61,904 £61,904 £57,706

Co-operative and Social Economy Development Fund (CSEDF) £61,904 £61,904 £57,706

Profit on ordinary activities before taxation £280,745 (£250,216) £30,529 £211,134

Tax charge / (credit) on profit on ordinary activities 7 £44,101 (£47,541) (£3,440) £32,707

Transfer to reserves £236,644 (£202,675) £33,969 £178,427

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 AUGUST 2017

NOTES 31.8.17 31.8.16

Fixed assets:

Intangible assets 8 £11,600 £13,050

Tangible assets 9 £1,865,498 £1,149,836

Investment properties 10 £705,348 £705,348

Investments 11 £1,050,557 £1,022,029

£3,633,003 £2,890,263

Current assets:

Stock £113,564 £394,227

Debtors 12 £2,315,562 £2,355,323

Investments 13 £2,451,207 £2,253,531

Cash at bank 14 £2,645,378 £2,123,959

£7,525,711 £7,127,040

Creditors:

Amounts falling due within one year 15 £2,094,479 £1,790,357

Net current assets: £5,431,232 £5,336,683

Total assets less current liabilities: £9,064,235 £8,226,946

Provisions for liabilities and charges: 16 £89,756 £76,630

Total assets less total liabilities: £8,974,479 £8,150,316

Capital and reserves:

Members’ share capital 17 £7,470,023 £6,632,669

CSEDF 18 £480,831 £418,927

Revenue reserve 19 £1,023,625 £1,098,720

£8,974,479 £8,150,316

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 AUGUST 2017

31.8.17 31.8.16

Retained profit for the year £33,969 £178,427

Share interest (£108,467) (£109,777)

Total recognised gains and (losses) in the year (£74,498) £68,650

Total recognised gains and (losses) since last Annual Report (£74,498) £68,650

The notes on pages 31-43 form part of these financial statements.

Board Certification 21 December 2017

The financial statements on pages 26 to 43 are hereby signed on behalf of the Board pursuant to Section 82(1)1 of the Co-operative and Community Benefit Societies Act 2014.

Robert Denbeigh, ChairFiona Nicholls, Vice-Chair

Peter Murley, Chief Executive Per Simonsen, Society Secretary



SOCIETY STATEMENT OF FINANCIAL POSITION AS AT 31 AUGUST 2017

NOTES 31.8.17 31.8.16

Fixed assets:

Intangible assets 8 £11,600 £13,050

Tangible assets 9 £1,865,498 £1,149,836

Investment properties 10 £705,348 £705,348

Investments 11 £1,051,658 £1,023,130

£3,634,104 £2,891,364

Current assets:

Stock £113,564 £394,227

Debtors 12 £2,315,362 £2,355,123

Investments 13 £2,451,207 £2,253,531

Cash at bank 14 £2,645,138 £2,123,718

£7,525,271 £7,126,599

Creditors:

Amounts falling due within one year 15 £2,110,319 £1,806,197

Net current assets: £5,414,952 £5,320,402

Total assets less current liabilities: £9,049,056 £8,211,766

Provisions for liabilities and charges:

Deferred taxation 16 £89,757 £76,630

Total assets less total liabilities: £8,959,299 £8,135,136

Capital and reserves:

Members’ share capital 17 7,470,023 6,632,669

Co-operative and Social Economy

Development Fund 18 £480,831 £418,927

Revenue reserve 19 £1,008,445 £1,083,540

£8,959,299 £8,135,136

Disposal of investment £369,770 £371,963

Net cash flows from investing activities (£858,246) (£614,817)

Cash flows from financing activities

Contributions to share capital by members £1,702,311 £1,277,049

Withdrawals of share capital by members (£1,033,607) (£985,747)

Net cash used in financing activities £668,704 £291,302

Increase/(decrease) in cash £521,419 (£220,588)

Cash at the beginning of the year £2,123,959 £2,344,547

Cash at end of the year £2,645,378 £2,123,959

CONSOLIDATED CASH FLOW STATEMENT

2017 2016

Cash flows from operating activities

Operating profit £84 £182,826

Depreciation charges £82,999 £87,783

Amortisation £1,450 £9,613

(Profit) / loss on disposal of fixed assets £954 £19,206

(Increase)/decrease in stocks £280,663 (£390,778)

(Increase)/decrease in debtors £41,624 (£80,394)

Increase/(decrease) in creditors £342,061 £293,887

Cash from operations £749,835 £122,143

Taxation (£38,874) (£19,216)

Net cash generated from operating activities £710,961 £102,927

Cash flows from investing activities:

Interest & dividend received £167,573 £113,294

Proceeds from disposal of investments £4,285 £20,000

Purchase of tangible fixed assets (798,900) (596,693)

Purchase of investment properties £0 (£19,057)

Purchase of fixed asset investments (£33,528) (£503,512)

Purchase of investments (£567,446) (£812)



SOCIETY STATEMENT OF CHANGES IN EQUITY

MEMBERS’SHARE

CAPITAL

CO-OPERATIVE &SOCIAL ECONOMY

DEVELOPMENT FUND

REVENUERESERVE TOTAL

At 1 September 2016 £6,632,669 £418,927 £1,083,540 £8,135,136

Profit for the year £33,969 £33,969

Transferred in the year £61,904 £61,904

Share interest £108,467 (£108,467) £0.00

Contributions in the year £1,762,494 £1,762,494

Withdrawals in the year (£1,033,607) (£1,033,607)

Other movements (£597) (£597)

At 31 August 2017 £7,470,023 £480,831 £1,008,445 £8,959,299

Notes to the Financial Statements

change in amortisation rate or residual value of an asset, the amortisation of the asset is revised prospectively to reflect the new expectations.

Impairment of fixed assets

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in the Income Statement. If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in the Income Statement.

Tangible fixed assets

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses.

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

Diallers, routers & programming

33% on cost

Fixtures and fittings

at varying rates on cost

Computer equipment

at varying rates on cost

Renewable energy installations

4% on cost

Investment properties

Investment properties are initially recognised at cost which includes purchase cost and any directly attributable expenditure.

Investment properties whose fair value can be measured reliably are measured at fair value. The surplus or deficit on revaluation is recognised in the profit and loss reserve unless a deficit below original cost, or its reversal, on an individual investment property is expected to be permanent, in which case it is recognised in the profit and

1. ACCOUNTING POLICIES

Society Information

The Phone Co-op Limited is a Society incorporated under the Co-operative and Community Benefit Societies Act 2014. The registered office is 5 Millhouse, Elmsfield Business Centre, Worcester Road, Chipping Norton, Oxfordshire OX7 5XL.

The Group consists of The Phone Co-op Limited and all of its subsidiaries..

Basis of preparation

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Co-operative and Community Benefit Societies Act 2014.

The following accounting policies have been applied consistently in dealing with the items which are considered material in relation to financial statements. The financial statements have been prepared under the historical cost convention modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value.

The financial statements are presented in Sterling (£).

Turnover

Society turnover, which excludes value added tax, comprises the value of services provided and equipment sales by the society.

Turnover from calls is recognised in the Consolidated Income Statement at the time the call is made over the Group’s carrier network.

Turnover from rentals is recognised evenly over the rental period. Turnover arising from other services, including broadband and maintenance contracts, is recognised evenly over the periods in which the service is provided to the customer.

Goodwill and other Intangible assets

Goodwill relating to business acquired is amortised over its useful economic life up to a maximum of 10 years. The same applies to other intangible assets.

If there is an indication that there has been a significant

For the year ended 31 August 2017CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

MEMBERS’SHARE

CAPITAL

CO-OPERATIVE &SOCIAL ECONOMY

DEVELOPMENT FUND

REVENUERESERVE TOTAL

At 1 September 2016 £6,632,669 £418,927 £1,098,720 £8,150,316

Profit for the year £33,969 £33,969

Transferred in the year £61,904 £61,904

Share interest £108,467 (£108,467) £0.00

Contributions in the year £1,762,494 £1,762,494

Withdrawals in the year (£1,033,607) (£1,033,607)

Other movements (£597) (£597)

At 31 August 2017 £7,470,023 £480,831 £1,023,625 £8,974,479



Stock

Stock is stated at the lower of cost and net realisable value, using the first in first out method.

Basis of consolidation

The Group financial statements consolidate the financial statements of The Phone Co-op Limited and its wholly owned subsidiaries, which remain dormant.

Deferred taxation

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

loss account for the year.

Investments

Fixed asset investments are stated at cost less any provision for diminution in value. Current assets investments are stated at the lower of cost and net realisable value.

Pensions

The Society operates a defined contribution pension scheme. Contributions payable for the year are charged in the revenue account.

Leasing

Rentals paid under operating leases are charged over the life of the lease.

Foreign currency translation

Transactions in foreign currencies are translated at the exchange rate in effect at the time of the transaction. Monetary items in foreign currencies are translated at the exchange rate in effect on the balance sheet date. All exchange differences are dealt with in the revenue account.

Going concern

After reviewing the Group’s forecast and projections, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its consolidated financial statements.

2. TURNOVER

Turnover, analysed by category, was as follows: 31.8.17 31.8.16

Sales of goods (phone systems & outright sale of equipment) £501,079 £462,249

Rendering of services £10,614,933 £10,039,524

Total £11,116,012 £10,501,773

Equipment integral to the servicing of contract has been treated as services.

2a. SIGNIFICANT ITEMS

Exceptional and non recurring items: 31.8.17

Write off of sim cards and prepaid commission £96,451

Devaluation of handset stock £40,944

Redundancy & compensation for loss of office £68,771

Reorganisation costs £16,000

Consultancy fees to interim Chief Executive £28,050

Total of significant items £250,216

Corporation tax as a result of significant items (£47,541)

Total after tax £202,675

3. OPERATING PROFIT

The operating profit is stated after charging/(crediting): 31.8.17 31.8.16

Depreciation – owned assets £82,999 £87,783

Amortisation – intangible fixed assets £1,450 £9,613

Operating leases - land and buildings £74,033 £76,543

Fees paid to auditors

Audit £12,500 £12,150

Other £1,988 £2,970



4. STAFF COSTS

Turnover, analysed by category, was as follows: 31.8.17 31.8.16

Wages and salaries £1,646,057 £1,500,626

Social security costs £144,890 £130,833

Other pension costs £228,604 £204,029

Redundancy & compensation for loss of office £68,771 £0.00

£2,088,322 £1,835,488

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

Full-time staff 54 51

Part-time staff 25 23

Total 79 74

5. DIRECTORS’ REMUNERATION

The total remuneration of the Directors for their Board duties was as follows: 31.8.17 31.8.16

Fees £9,990 £9,438

Expenses £11,487 £10,755

The following annual fees were payable to Directors during the year under review: 31.8.17 31.8.16

Chair £1,907 £1,907

Vice-Chair £1,617 £1,589

Other Directors £1,293 £1,271

6. INTEREST RECEIVABLE AND SIMILAR INCOME

31.8.17 31.8.16

Deposit/loan account interest £142,338 £137,553

Dividends received £11,915 £6,167

£154,253 £143,720

The annual fees were increased in February following the AGM, to £1,948 (2016: £1,929) for the Chair, £1,624 (2016: £1,608) for the Vice-Chair, and £1,299 (2016: £1,286) for other Directors. These figures reflect the amounts payable up to January at the old rate and from February onwards at the new rate. The average number of Directors during the year was 7. Further details of management remuneration is shown under the Remuneration Report.

the trade that we undertake.

As a result, the organisation will never undertake transactions that would require notification to HM Revenue & Customs under the Disclosure of Tax Avoidance Schemes Regulations or participate in any arrangement to which it might be reasonably anticipated that the UK’s General Anti-Abuse Rule might apply.

We believe tax havens undermine the UK’s tax system. As a result, whilst we will trade with customers and suppliers genuinely located in places considered to be tax havens, we will not make use of those places to secure a tax advantage, and nor will we take advantage of the secrecy that many such jurisdictions provide for transactions recorded within them. Our accounts will be prepared in compliance with this policy and will seek to provide all the information that users, including HM Revenue & Customs, might need to properly appraise our tax position. We will review this policy with our accountants annually to ensure that it is complied with.

7. TAXATION

(a) TAX POLICY

We are committed to paying all the taxes that we owe in accordance with the spirit of all tax laws that apply to our operations. We believe that paying our taxes in this way is the clearest indication we can give of our being responsible participants in society.

We will fulfil our commitment to paying the appropriate taxes that we owe by seeking to pay the right amount of tax (but no more), at the right rate, in the right place and at the right time. We aim to do this by ensuring that we report our tax affairs in ways that reflect the economic reality of the transactions we actually undertake in the course of our trade.

What we will never do is seek to use those options made available in tax law or the allowances and reliefs that it provides in ways that are contrary to the spirit of the law. Nor will we undertake specific transactions with the sole or main aim of securing tax advantages that would otherwise not be available to us based on the reality of

31.8.17 31.8.16

UK corporation tax – current taxation (credit)/charge (£19,796) £35,645

Adjustments in respect of previous years £3,229 £2,125

Total Current Tax (note 7(c)) (£16,567) £37,770

Deferred Tax (note 16) £13,127 (£5,063)

Tax (credit) / charge on ordinary activities (£3,440) £32,707

(b). THE TAX CHARGE ON THE PROFIT ON ORDINARY ACTIVITIES FOR THE YEAR



8. INTANGIBLE FIXED ASSETS | Group and Society

GOODWILL NUMBER RANGES TOTALS

Cost:

At 1 September 2016 £714,654 £14,500 £729,154

At 31 August 2017 £714,654 £14,500 £729,154

Depreciation:

At 1 September 2016 £714,654 £1,450 £716,104

Charge for year £0 £1,450 £1,450

At 31 August 2017 £714,654 £2,900 £717,554

Net book value:

At 31 August 2017 £0 £11,600 £11,600

At 31 August 2016 £0 £13,050 £13,050

9. TANGIBLE FIXED ASSETS | Group and Society

DIALLERS, ROUTERS

ETC

FIXTURES & FITTINGS

COMPUTER EQUIPMENT &

SOFTWARE

RENEWABLE ENERGY

INSTALLATIONS

FREEHOLD PROPERTY TOTALS

Cost:

At 1 September 2016 £55,311 £149,522 £545,702 £622,111 £553,373 £1,926,019

Additions 0 £4,760 £134,591 0 £659,549 £798,900

Disposals 0 (£299) 0 0 0 (£299)

At 31 August 2017 £55,311 £153,983 £680,293 £622,111 £1,212,922 £2,724,620

Depreciation:

At 1 September 2016 £55,309 £137,940 £477,172 £105,762 0 £776,183

Charge for year £2 £5,468 £52,644 £24,884 0 £82,999

Eliminated on disposals 0 (£60) 0 0 0 (£60)

At 31 August 2017 55,311 £143,348 £529,816 £130,646 0 £859,122

Net book value:

At 31 August 2017 0 £10,635 £150,477 £491,465 £1,212,922 £1,865,498

At 31 August 2016 2 £11,582 £68,530 £516,349 £553,373 £1,149,836

10. INVESTMENT PROPERTIES Group and Society

Fair value: 31.8.17 31.8.16

At 1 September £705,348 £686,291

Additions 0 £19,057

At 31 August £705,348 £705,348

(c). FACTORS AFFECTING TAX CHARGE FOR THE YEAR

The tax assessed for the period is lower than the standard rate of corporation tax in the UK (20%). The differences are explained below:

31.8.17 31.8.16

Profit on ordinary activities before distributions £154,337 £326,546

Profit on ordinary activities multiplied by the corporation tax in the UK of 19%(2016: 20%)

£30,220 £65,309

Effects of:

Expenses/income not deductible for tax purposes £969 £4,021

Depreciation for period (less than)/in excess of capital allowances (17,523) £922

Members’ distributions (£33,360) (£34,336)

Adjustments to tax charge in respect of previous years £3,229 £2,125

Other timing differences (£102) (£271)

Current tax charge for period (note 7 (b)) (£16,567) £37,770



11. FIXED ASSET INVESTMENTS

GROUP SOCIETY

Cost:

At 1 September 2016 £1,023,085 £1,024,186

Additions £33,528 £33,528

Disposals (£5,000) (£5,000)

At 31 August 2017 £1,051,613 £1,052,714

Provisions:

At 1 September 2016 £1,056 £1,056

At 31 August 2017 £1,056 £1,056

Net book value:

At 31 August 2017 £1,050,557 £1,051,658

At 31 August 2016 £1,022,029 £1,023,130

DETAILED INVESTMENT INFORMATION:

Society only: 31.8.17 31.8.16

Investment in subsidiary undertakings £1,101 £1,101

Group and Society: Investments in other Co-operatives and Community Benefit Societies:

Shares £751,029 £735,029

Loan stock and bonds £147,528 £135,000

Total £898,557 £870,029

Other investments: 31.8.17 31.8.16

ICO Fund plc £2,000 £2,000

The Ethical Property Company Limited £50,000 £50,000

Unity Trust Bank plc £100,000 £100,000

Total £152,000 £152,000

Group total investments £1,050,557 £1,022,029

Society total investments £1,051,658 £1,023,130

Phone Co-op Numbering Limited

Nature of business: dormant

Country of incorporation: United Kingdom

Class of shares: holding

Ordinary of £1 each 100%

Ecobilling Limited




Ordinary & Preference shares of 10p

100%

Avoco UK Limited




%Ordinary of £1 each 100%

12. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Society

31.8.17 31.8.16 31.8.17 31.8.16

Trade Debtors £1,071,332 £1,098,459 £1,071,332 £1,098,459

Prepayments and accrued income £709,251 £734,744 £709,051 £734,544

Other debtors £534,979 £522,120 £534,979 £522,120

£2,315,562 £2,355,323 £2,315,362 £2,355,123

13. CURRENT ASSET INVESTMENTS

Group Society

Investments in other Co-operative and Community Benefit Societies: 31.8.17 31.8.16 31.8.17 31.8.16

Shares, ICOF Community Capital Limited £59,142 £59,142 £59,142 £59,142

Share bond, The Midcounties Co-operative Limited £250,000 £250,000 £250,000 £250,000

Corporate investor shares, The Co-operative Group Limited £2,142,065 £1,944,389 £2,142,065 £1,944,389

£2,451,207 £2,253,531 £2,451,207 £2,253,531

14. CASH AT BANK

Group Society

31.8.17 31.8.16 31.8.17 31.8.16

The Midcounties Co-operative Limited Community membership account £750,000 £750,000 £750,000 £750,000

Chelmsford Star Co-operative Limited Membership share account £750,000 £750,000 £750,000 £750,000



15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Society

31.8.17 31.8.16 31.8.17 31.8.16

Trade creditors: £413,616 £384,604 £413,616 £384,604

Value added tax £335,375 £312,141 £335,375 £312,141

Social security & other taxes £45,933 £42,326 £45,933 £42,326

Corporation tax £0 £37,938 £0 £35,645

Accrued expenses and deferred income £1,240,144 £989,706 £1,240,144 £989,706

Other creditors £59,411 £23,642 £75,251 £41,775

£2,094,479 £1,790,357 £2,110,319 £1,806,197

16. PROVISIONS: AMOUNTS FALLING DUE AFTER ONE YEAR DEFERRED TAXATION

Group Society

The movement in the deferred taxation provision during the year was: 31.8.17 31.8.16 31.8.17 31.8.16

Profit and loss account movement arising during the year £13,127 (£5,063) £13,127 (£5,063)

Provision carried forward £89,757 £76,630 £89,757 £76,630

The provision for deferred taxation consists of the tax effect of timing differences in respect of:

Excess of taxation allowances over depreciation on fixed assets £89,757 £76,630 £89,757 £76,630

£89,757 £76,630 £89,757 £76,630

Deferred tax arises because financial accounting rules and tax accounting rules are different. For accounting purposes, an annual rate of depreciation is applied by the Society. For taxation purposes, the Society is able to claim capital allowances, a tax relief provided in law.This difference between the rates of depreciation and capital allowances means that there is a difference between the taxable profit for accounting and taxation purposes and this year the Society was able to claim more tax relief than the accounting charge for depreciation.

17. MEMBERS’ SHARE CAPITAL

Group Society

31.8.17 31.8.16 31.8.17 31.8.16

As at 1 September 2016 £6,632,669 £6,166,763 £6,632,669 £6,166,763

Share interest £108,467 £109,797 £108,467 £109,797

Contributions in the year £1,762,494 £1,338,857 £1,762,494 £1,338,857

Withdrawals in the year (£1,033,607) (£982,748) (£1,033,607) (£982,748)

As at 31 August 2017 £7,470,023 £6,632,669 £7,470,023 £6,632,669

(i) Share capital is comprised entirely of non-equity shares of £1 each (as defined in FRS 102).(ii) At the year-end, Shares attracted interest of 1.5% per annum, payable annually after the financial year-end.(iii) Shares are withdrawable on notice of one week. The Rules give the Board the power to suspend withdrawals.(iv) Each member is entitled to one vote irrespective of the number of shares held.(v) In the event of a solvent winding-up of the Society, the Rules state that a surplus remaining after all liabilities, including paidup share capital, have been settled, would not be distributed to members of the Society, but that they would be transferred tosome other non-profit, co-operative or charitable body or bodies subject to at least the same degree of restriction on thedistribution of surpluses and assets as is imposed on this co-operative. Any assets not so transferred would be paid to theCo-operatives UK Limited or its successor organisation.(vi) Dividends payable to members are related to eligible purchases from the Society.The position that a shareholder of this Society occupies is no different from that of a shareholder in any other corporate bodyin the sense that, if the Society fails, not all or any of their investment may be returned to them. Investments are withdrawablewithout penalty. The Society, unlike banks and building societies, is not subject to prudential supervision by the FinancialConduct Authority.

18. CO-OPERATIVE AND SOCIAL ECONOMY DEVELOPMENT FUND

Group Society

31.8.17 31.8.16 31.8.17 31.8.16

As at 1 September 2016 £418,927 £362,720 £418,927 £362,720

Transferred in the year £61,904 £57,706 £61,904 £57,706

Other movements (£1,499) (£1,499)

As at 31 August 2017 £480,831 £418,927 £480,831 £418,927



19. MOVEMENTS IN RESERVES

GROUP Revenue reserve

SOCIETY Revenue reserve

31.8.17 31.8.17

As at 1 September 2016 £1,098,720 £1,083,540

Retained profit for the year £33,969 £33,969

Share interest (£108,467) (£108,467)

Other movement (£597) (£597)

As at 31 August 2017 £1,023,625 £1,008,445

20. OPERATING LEASE COMMITMENTS

GROUP Land & buildings

SOCIETY Land & buildings

Expiring 31.8.17 31.8.16 31.8.17 31.8.16

Within one year £37,549 £62,684 £37,549 £62,684

Between two and five years £105,231 £34,836 £105,231 £34,836

for the supply of telecommunications services to The Midcounties Co-operative Ltd., of which Vivian Woodell (The Phone Co-op’s Chief Executive until June 2017) was a Director during the year.

The value of services provided under this contract during the year was £780,329 (last year: £755,669). Amounts outstanding at the balance sheet date, included in trade debtors, totalled £62,299 (last year: £63,636).

On the 29 June 2017 Peter Murley was appointed Chief Executive of the Phone Co-op. The fees for his services are invoiced by Innobridge Ltd, a company fully owned by Peter Murley. The value of services provided was £28,050 during the year.

Justin Andersen (Director of The Phone Co-op until February 2017) was in receipt of pensions from The Midcounties Co-operative’s pension scheme during the year.

21. PENSION COMMITMENTS

The Society operates a defined contribution pension scheme. The contributions charged to the Income Statement during the year amounted to £228,604 (last year: £204,029). There was £16,132 of unpaid contributions at the balance sheet date (last year: £16,868).annually to ensure that it is complied with.

22. RELATED PARTY DISCLOSURES

Good corporate governance requires that material transactions involving related parties as defined by FRS 102 should be disclosed to members. The following were considered to fall into this category during the year. All amounts shown are excluding Value Added Tax. The Board has resolved that only transactions involving related parties with a value of £2,000 or more are disclosed in the Annual Report.

Contracts with related parties

Throughout the year, The Phone Co-op had a contract

During the year, The Phone Co-op purchased office supplies from The Midcounties Co-operative to the value of £4,584 (last year: £3,161). The Phone Co-op purchased childcare vouchers from The Midcounties Co-operative to the value of £9,987 (last year: £790).

The Phone Co-op received Feed-in-Tariff income from Co-operative Energy which is part of Midcounties Co-operatives of £102,414 (last year: £91,898).

Throughout the year, The Phone Co-op supplied accounting services and office facilities to Co-operative Renewables Limited, of which Vivian Woodell was a Director during the year. The value of these service charges in the year was £24 (last year: £3,400). Co-operative Renewables supplied maintenance services for the solar panel sites and project management services for premises development to the value of £21,913 (last year: £7,297).

Throughout the year, The Phone Co-op provided telecommunications services to Co-operatives UK of which Vivian Woodell was a Director during the year. The value of these services was £4,475 in the year (last year: £4,539). Amounts outstanding at year-end included in trade debtors were £348 (last year: £255). Co-operatives UK provided The Phone Co-op with various services totalling £29,777 including rent of The Phone Co-op’s Manchester office (last year: £31,101).

During 2016-17 The Phone Co-op provided telecommunications services to The Co-operative College of which Craig Lumsden was a founding trustee. The value of these services was £7,465 (last year: £5,919). The Co-operative College provided The Phone Co-op with training and associated services totalling £2,100 (last year: 2,380).

During the year, the Phone Co-op provided Craig Lumsden with rental accommodation in Chipping Norton. Craig Lumsden paid market rent to the Phone Co-op totalling £5,450 for this accommodation (last year: £6,850).

Treasury/financial

The Phone Co-op held £250,000 (last year: £250,000) in a share bond issued by The Midcounties Co-operative Ltd. The Midcounties Co-operative Ltd. also had a share account with The Phone Co-op (the balance of which was almost entirely made up of accrued dividends and interest), and the balance at the year-end was £158,002 (last year £144,138). The Phone Co-op paid interest on this share capital of £2,529 (last year: £2,498) and dividend on purchases of £11,335 (last year: £12,656).

The Phone Co-op also held £750,000 (last year £750,000) in a Community Share Account at The Midcounties Co-operative Ltd. The interest received

during the year was £15,980 (last year £18,321).

The Phone Co-op has an investment of £5,676 in Co-operative Renewables Ltd., of which Vivian Woodell was a Director during the year (last year £5,676).

Co-operative Renewables Ltd. also had a share account with the Phone Co-op and the balance at the year-end was £8,651 (last year: £10,908). The Phone Co-op paid interest on this share capital of £192 (last year: £238).

The above transactions were carried out at arm’s length and under normal commercial terms.

23. SUPPLIER PAYMENT POLICY

It is the Phone Co-op’s policy to agree the terms of payment at the start of business with that supplier and then pay according to those terms once accurate invoice has been received. Trade creditor days for the year under review were 23 days (last year: 26 days). This is based on the ratio of trade creditors at the end of the year to the amounts invoiced during the year by trade creditors.

24. POST BALANCE SHEET EVENTS

The Phone Co-op has made a commitment to financially support The Phone Co-op Foundation for Co-operative Innovation with a minimum of £150k during the next 18 months.

We are chosen as a Trusted Supplier of National Council

for Voluntary Organisations

(NCVO).

The Phone Co-op. Your voice counts.www.thephone.coop

Registered office5 Millhouse

Elmsfield Business CentreWorcester RoadChipping Norton

OxfordshireOX7 5XL

Manchester officeHolyoake HouseHanover Street

ManchesterM60 0AS

T: 01608 434000

[email protected]

/ThePhoneCoop@PhoneCoop /PhoneCoopThe-Phone-Coop

Annual Report & Financial Statements 2016-2017 · Annual Report & Financial Statements 2016-2017...

Documents

Transcript of Annual Report & Financial Statements 2016-2017 · Annual Report & Financial Statements 2016-2017...