The trustees, who are also the directors, of the charity for the purposes of the Companies Act 2006, present their annual report and financial statements for the year ended 31 March 2025.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's Memorandum and Articles of Association, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019).
To promote, maintain, improve and advance education and social developments of children, the parents, carers and families of such children and other appropriate persons with emphasis on play experience.
To encourage study of the needs and problems of families and children.
To stimulate and educate the public interest in this and other related educational and social fields.
To encourage the formation, maintenance and development of playgroups, parent and toddler groups, under 5 groups, day care and education schemes.
To encourage appropriate parental involvement within these aforementioned groups including the services of home-visiting support and self-help groups.
Strategic report
The following sections for achievements and performance and financial review form the strategic report of the company.
Strategic overview
Our core activities and work for 2024/25 centred around ensuring we met the key values and aims of our new Strategic Plan for 2022-2026. The Plan has an overarching Vision and 4 key aims and remained a key focus as we sought to balance supporting current vital work with developing new services and ways of working to ensure CALA works smarter and more effectively while monitoring the improvements and outcomes achieved.
Vision
We deliver high quality services that nurture and support children and families.
Children, families and our team are at the heart of all we do.
4 key aims
We will provide high quality services for children and families.
Children and families have access to inclusive services.
Our workforce are professional, skilled and valued.
We are a dynamic, responsive, and sustainable organisation.
Our work continues to focus on outcomes that benefit the children and families of the Highlands as well as supporting our vitally important staff. We built on the Key Performance Indicators (KPI) that had been developed and continued to test the new way of capturing how our work is joined up, evaluated and evidencing our improvement and outcomes. They also ensured our Board had full scrutiny and oversight of our work and has the assurance it needs that we are meeting our Strategic Aims.
Achievements and performance
We continue to provide a wide range of high quality flexible childcare services across the geographically diverse Highlands and continue to enjoy high levels of parental satisfaction with our services.
CALA prides itself in offering flexible, inclusive and quality childcare services across Highland. In 2024/25 reporting period we provide care to an average of 305 children across 20 childcare settings every day - from full daycare to early learning and childcare, school aged childcare and holiday clubs. Continuous improvement and self reflection are key to ensuring we provide the best for the children in our care every day - we are especially proud of the strong partnerships and relationships we have with parents cand carers so together we can ensure children have the best start in life.
"The staff are fantastic. They're kind and thoughtful, they take the time to really know the children and help them develop in ways that suit their personalities" Parent
We continue to seek new ways to recognise our hard working staff and show how much we value them and support their health and wellbeing. We continue to seek new ways to provide rurally based childcare services and the development of our Single Care Model is gathering momentum and we look forward to developing this further into 2025 onwards in partnership with agencies and communities.
The work undertaken by this company is supported by the Highland Council and valued by local community groups. Much of the income comes from public sector funding and the majority of contracts that generate the company's funding have been secured until March 2026. However, due to the effects of inflation on the UK economy there is an overlying feeling of uncertainty as to whether the government will make future cuts. However, we hope to keep operating knowing the company has secured local authority and other public body contracts until March 2026.
At the end of the financial year the company had unrestricted funds of £910,259 (2024 - £893,247).
It is the policy of the charity that unrestricted funds which have not been designated for a specific use should be maintained at a level equivalent to between three and six month’s expenditure. The trustees consider that reserves at this level will ensure that, in the event of a significant drop in funding, they will be able to continue the charity’s current activities while consideration is given to ways in which additional funds may be raised. This level of reserves has been maintained throughout the year.
Future Plans
As we move into 2025/26 and beyond, CALA Direct Management Services will continue to champion and provide solutions in a holistic and collaborative way, working across different agencies, communities and organisations to reflect the realities and challenges in rural areas as well as in the sector and country as a whole. Autumn 2025 onwards will also see the development of our new Strategic Plan guide our work over coming years.
As always , our strength relies on our collaborative and trusted relationships with families and communities as well as key stakeholders Highland Council, NHS Highland, Highland Third Sector Interface (TSI), Inspiring Scotland, Highland and Islands Enterprise (HIE) and Scottish Government, members, communities and wider sector. We also seek to build new relationships and collaborations locally, nationally and internationally, supporting Scottish Government's key priorities and the United Nations Convention on the Rights of the Child (UNCRC) principles putting children's rights at the heart of all we do.
Continuing challenges with recruitment, increasing expectations and regulations on regulated services are all contributing to concerns about ongoing viability of the sector especially in rural areas. It must also be recognised that quality childcare services are cannot just be about qualifications, but also about having the essential time, mentoring and the opportunity for self-reflection, peer dialogue and learning for our staff. Therefore, we must build a new system of school aged childcare that has the child , families and staff at the centre.
Our focus will be on collaboration and innovation to effect real change especially in remote and rural communities. We will continue to work with families, communities and partners to develop place based integrated and intergenerational solutions, offering new ways of delivery that meet our socially responsible objectives. We will continue to evaluate our services including our communications and seek to pivot as needed to reflect new platforms and medias. We will continue to explore and develop our understanding of new and emerging technologies balancing innovation with risk and quality.
Ensuring our staff are valued and their professionalism and skills recognised and fairly rewarded is key to our future sustainability and growth. However, the current gap not only in pay but also in terms and conditions between the 3rd sector and public agency staff must not be allowed to widen and indeed must be closed, as should that between childcare staff and those working in hospitality, retail and other businesses. Our professional staff are our greatest asset and resource and we will continue to find ways to show how much we value them and continue to develop benefits to allow us to recognise their hard work and dedication.
CALA are extremely fortunate to have a hugely supportive, expert volunteer Board who help guide all we do and provide advice, support, leadership and strong governance and accountability. We have a truly dedicated, enthusiastic and professional staff team, without whom we could not deliver to the high standards we do day in day out, at times in the face of huge challenges. This TeamCALA ethos is what gives the charity its strength, integrity and authenticity, allowing us to seek innovative solutions in changing times.
CALA will continue to meet the diverse needs of children, families and communities in a Childrens Rights based solution focussed and inclusive place based way and ensure the wellbeing and empowerment of the child, family and communities remains at the heart of all of our work.
CALA Direct Management Services (DMS) is part of the group accounting structure of CALA group together which supports the cross company working and the articulation of the high level purposes of the activities, services and companies.
The Board meets 4 times a year with the Chief Executive to review company information, the current financial position and discuss in detail senior management decisions that are required. The day to day running of the company is devolved to the Chief Executive as company secretary. The Finance and Audit sub-committee meets in between the Board meetings and the Head of Finance and HR is also in attendance.
Thanks to ongoing work, there has been an increase in the number of directors which supports the Board having the necessary skills to support the development and sustainability of the charity into the future as it meets the many challenges and opportunities ahead.
The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
None of the trustees has any beneficial interest in the company. All of the trustees are members of the company and guarantee to contribute £1 in the event of a winding up.
The Board of Trustees meet 4-6 times a year with the Chief Executive to review company information, the current financial position and discuss in detail senior management decisions that are required. The day to day running of the company is devolved to the Chief Executive as company secretary. The Finance and Audit sub-committee meets in between the Board meetings and the Head of Finance is also in attendance.
The trustees, who are also the directors of CALA Direct Management Services for the purpose of company law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.
In preparing these financial statements, the trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.
The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The trustees are responsible for the maintenance and integrity of the charity and financial information included on the charity's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
In accordance with the company's articles, a resolution proposing that MacKenzie Kerr Limited be reappointed as auditor of the company will be put at a General Meeting.
The trustees' report was approved by the Board of Trustees.
Opinion
We have audited the financial statements of CALA Direct Management Services (the ‘charity’) for the year ended 31 March 2025 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
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 charity 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 the provisions available for small entities, in the circumstances set out in note 20 to the financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the trustees' report for the financial year for which the financial statements are prepared, which includes the directors' report prepared for the purposes of company law, is consistent with the financial statements; and
the directors' report included within the trustees' report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report included within the trustees' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 requires us to report to you if, in our opinion:
proper accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of trustees' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the trustees' report and from the requirement to prepare a strategic report.
As explained more fully in the statement of trustees' responsibilities, the trustees, who are also the directors of the charity for the purpose of company law, are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charity’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 trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and report in accordance with the Acts and relevant regulations made or having effect thereunder.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We assessed the susceptibility of the company's financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006, and UK Tax legislation.
We considered the extent of the compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the Responsible Individual (RI) drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the RI's review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006, and to the charitable company’s trustees, as a body, in accordance with Regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the charitable company’s members and trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company, the charitable company’s members as a body and the charitable company’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.
MacKenzie Kerr Limited is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
CALA Direct Management Services is a public benefit entity and a private company limited by guarantee incorporated in Scotland. The registered office is 40 Longman Drive, Inverness, IV1 1SU.
The financial statements have been prepared in accordance with the charity's [governing document], the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended), FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019) and the Companies Act 2006. The charity is a Public Benefit Entity as defined by FRS 102.
The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing financial statements. CALA Direct Management Services is financially stable and we currently closely monitor income/expenditure to ensure we can meet all our obligations.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
Designated funds are unrestricted funds earmarked by the trustees for a particular future project or commitment.
Restricted funds are subject to specific conditions by donors or grantors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
All incoming resources are included in the statement of financial activities when entitlement has passed to the charity; it is probable that the economic benefits associated with the transaction will flow to the charity and the amount can be reliably measured. The following specific policies are applied to particular categories of income:
Income from donations or grants is recognised when there is evidence of entitlement to the gift, receipt is probable and its amount can be measured reliably.
Legacy income is recognised when receipt is probable and entitlement is established.
Income from donated goods is measured at the fair value of the goods unless this is impractical to measure reliably, in which case the value is derived from the cost to the donor or the estimated resale value. Donated facilities and services are recognised in the accounts when received if the value can be reliably measured. No amounts are included for the contribution of general volunteers.
Income from contracts for the supply of services is recognised with the delivery of the contracted service. This is classified as unrestricted funds unless there is a contractual requirement for it to be spent on a particular purpose and returned if unspent, in which case it may be regarded as restricted.
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably.
Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. At the year end £2,084 (2024 - £1,925) was outstanding.
When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as an expense in the period in which it arises.
Unrestricted Funds
Unrestricted Funds
Services provided
Charitable activity grants
Subscriptions
Management services
The average monthly number of employees during the year was:
The key management personnel are the Chief Executive Officer, the Head of Finance & HR, the Head of Services, the Head of Quality, Learning & Workforce Development and the Head of Business Development & Communication who are remunerated through the parent charity, Care and Learning Alliance.
The charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects.
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.
Redundancy reserves:
Redundancy reserves represent amounts set aside to provide for all potential redundancy costs should CALA Direct Management Services cease activities at the balance sheet date.
During the year the charity had income of £9,253 (2024 - £8,611) and expenditure of £212,552 (2024 - £131,713) arising from their relationship with other charities within the Care and Learning Alliance group. £183,406 (2024 - £24,564) was owed to these charities at the period end. The charities are deemed to be related as they are all under the control of the same Board of Trustees.
The charity is part of the Care and Learning Alliance group comprising of the following charities who share a Board of Trustees :
Care and Learning Alliance incorporated in Scotland, company number SC115681 and charity number SC009292
CALA Direct Management Services
CALA Integrated Services
CALA Out of School Care
CALA Staffbank
Care and Learning Alliance is the only undertaking for which consolidated financial statements of the charity are prepared. Copies of the Care and Learning Alliance financial statements may be requested from 40 Longman Drive, Inverness, IV1 1SU.
As the charity is limited by guarantee, the ultimate controlling party is considered to be the Board of Trustees.
The charity had no material debt during the year.
In common with many businesses of our size and nature we use our auditor to assist with the preparation of the financial statements.