Company Registration No. 01994122 (England and Wales)
HALTON BOROUGH TRANSPORT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
HALTON BOROUGH TRANSPORT LIMITED
COMPANY INFORMATION
Directors
A Jones
W Zygadllo
B Stevenson
A Macmanus
M Wharton
C Stafford
K Morley
Halton Borough Council
Secretary
C Stafford
Company number
01994122
Registered office
Moor Lane
Widnes
Cheshire
WA8 7AF
Auditor
Mitchell Charlesworth LLP
Glebe Business Park
Lunts Heath Road
Widnes
Cheshire
WA8 5SQ
Bankers
National Westminster Bank plc
146 Widnes Road
Widnes
Cheshire
WA8 6BB
HALTON BOROUGH TRANSPORT LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 27
HALTON BOROUGH TRANSPORT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2019
- 1 -
The directors present the strategic report for the year ended 31 March 2019.
Fair review of the business
The principal activity of the company continued to be the provision of commercial local bus services in the Halton (Widnes & Runcorn) area. Services extend to Liverpool, St Helens and Warrington. A number of tendered local bus services operate on behalf of Halton Borough Council and Merseytravel.
The company's balance sheet as detailed on page 11 shows shareholders' funds amounting to
-
£350,594.
Principal risks and uncertainties
The main risks to profitability of the business are large increases in diesel prices together with changes in government legislation both at a national level and locally that either has changed or is likely to, which will restrict the operation of commercial bus services and indeed tendered services. During the financial year we saw the introduction of the new Buses Act which was passed by Government, its affects to the industry and the business are yet to be quantified. In addition, insurance costs and accident claim costs can be unpredictable.
The company uses conventional forms of working capital to finance its day to day activities and as such the figures appearing in the accounts reflect the absolute value of amounts recoverable and payable. The directors receive regular reports on these figures in order to manage the company’s requirements.
The company is exposed to normal credit and cash flow risks associated with selling on credit and manage this through contractual arrangements with its customers and subcontractors.
HALTON BOROUGH TRANSPORT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 2 -
Development and performance
The company’s turnover for the year is £6,910,997 which is a decrease of £68,119 against the prior year (
2018: £6,979,1116
). The profit margin has decreased by 5.48% to 2.23% (
2018: 7.71%
).
The reduction in margin is due to cost increases including insurance and a decline in passenger revenue. This is a national trend not only applicable to the Merseyside region. While some organisations will say Merseytravel is bucking the trend (in terms of passenger numbers) this is not reflected within the Borough of Halton. Indeed, the introduction of a multi journey, multi operator ticketing scheme by Merseytravel is clearly having an adverse effect on the revenue into the company. This has been under review over recent times.
Insurance costs increased due to an escalation in the number of incidents the company were involved in. 2019 is showing a significant improvement in the number of insurance related claims. While the number of claims are reducing the cost of claim settlements in increasing considerably. The company currently have a fuel hedge agreement in place with our fuel supplier. We currently lock in 60% of our fuel usage under this arrangement. The current agreement is due to expire in March 2020.
Growth in the commercial local bus market is increasingly restricted due to a lack of opportunities in the region as the current level of bus services are adequate. Halton Transport currently operate 39% of services in Halton.
Commercial fares in the Halton area were increased in March of this year along with salaries for operational staff. Salaries for all staff have been frozen for the current year to reduce and stabilise outgoings.
An unforeseen delay in completion of a major infrastructure project within Halton continues to have a significant effect on operating costs for the business. This is in the region of £100,000 per annum. The completion of this project, at the time of writing, is estimated to be late Summer 2020.
At the start of the current financial year the company were informed that there would also be a reduction in the concessionary travel reimbursement levels due to eligible passenger numbers decreasing.
The Company has retained its commitment to quality with a low floor fleet of buses on all regular bus services. The company have made recent investments in vehicle replacements in the fleet, we continued to invest in additional training and in engineering. In addition, the company have recently rolled out new electronic ticket machines that facilitate contactless transactions which is reducing the amount of cash being handled and the associated costs.
The company continues to operate in an extremely challenging environment. However, the Council remains supportive of the turnaround action plan that has been agreed with the board of directors. This includes a planned restructure of the company and a complete review of our network of routes and services.
B Stevenson
Director
20 December 2019
HALTON BOROUGH TRANSPORT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2019
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2019.
Principal activities
The principal activity of the company continued to be the provision of commercial local bus services in the Halton (Widnes & Runcorn) area.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
A Jones
W Zygadllo
B Stevenson
A Macmanus
M Wharton
C Stafford
K Morley
Halton Borough Council
Results and dividends
The results for the year are set out on page 12.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Market value of land and buildings
In the opinion of the directors, the market value of the land and buildings of the company is not significantly different than the book values of those assets.
Auditor
In accordance with the company's articles, a resolution proposing that Mitchell Charlesworth LLP be reappointed as auditor of the company will be put at a General Meeting.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
HALTON BOROUGH TRANSPORT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 4 -
On behalf of the board
B Stevenson
Director
20 December 2019
HALTON BOROUGH TRANSPORT LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2019
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HALTON BOROUGH TRANSPORT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HALTON BOROUGH TRANSPORT LIMITED
- 6 -
Opinion
We have audited the financial statements of Halton Borough Transport Limited (the 'company') for the year ended 31 March 2019 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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 FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 March 2019 and of its loss 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 Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the 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.
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 strategic report and the directors' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
HALTON BOROUGH TRANSPORT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HALTON BOROUGH TRANSPORT LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine 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 company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
HALTON BOROUGH TRANSPORT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HALTON BOROUGH TRANSPORT LIMITED
- 8 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Robert Davies (Senior Statutory Auditor)
for and on behalf of Mitchell Charlesworth LLP
20 December 2019
Chartered Accountants
Statutory Auditor
Glebe Business Park
Lunts Heath Road
Widnes
Cheshire
WA8 5SQ
HALTON BOROUGH TRANSPORT LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2019
- 9 -
2019
2018
Notes
£
£
Turnover
3
6,910,997
6,979,116
Cost of sales
(6,756,724)
(6,441,329)
Gross profit
154,273
537,787
Administrative expenses
(763,299)
(823,699)
Other operating income
86,701
75,627
Operating loss
4
(522,325)
(210,285)
Interest receivable and similar income
8
1
17
Interest payable and similar expenses
9
(223,359)
(224,726)
Loss before taxation
(745,683)
(434,994)
Tax on loss
10
125,988
73,172
Loss for the financial year
(619,695)
(361,822)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
HALTON BOROUGH TRANSPORT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2019
- 10 -
2019
2018
£
£
Loss for the year
(619,695)
(361,822)
Other comprehensive income
-
-
Total comprehensive income for the year
(619,695)
(361,822)
HALTON BOROUGH TRANSPORT LIMITED
BALANCE SHEET
AS AT 31 MARCH 2019
31 March 2019
- 11 -
2019
2018
Notes
£
£
£
£
Fixed assets
Tangible assets
11
1,551,817
1,844,143
Current assets
Stocks
13
73,258
83,152
Debtors
14
622,356
601,094
Cash at bank and in hand
19,870
29,979
715,484
714,225
Creditors: amounts falling due within one year
15
(1,735,330)
(1,291,692)
Net current liabilities
(1,019,846)
(577,467)
Total assets less current liabilities
531,971
1,266,676
Creditors: amounts falling due after more than one year
16
(882,565)
(974,601)
Provisions for liabilities
19
-
(22,973)
Net (liabilities)/assets
(350,594)
269,102
Capital and reserves
Called up share capital
22
430,100
430,100
Profit and loss reserves
(780,694)
(160,998)
Total equity
(350,594)
269,102
The financial statements were approved by the board of directors and authorised for issue on 20 December 2019 and are signed on its behalf by:
B Stevenson
Director
Company Registration No. 01994122
HALTON BOROUGH TRANSPORT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2019
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2017
430,100
200,825
630,925
Year ended 31 March 2018:
Loss and total comprehensive income for the year
-
(361,822)
(361,822)
Balance at 31 March 2018
430,100
(160,998)
269,102
Year ended 31 March 2019:
Loss and total comprehensive income for the year
-
(619,695)
(619,695)
Balance at 31 March 2019
430,100
(780,694)
(350,594)
HALTON BOROUGH TRANSPORT LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2019
- 13 -
2019
2018
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
66,284
234,328
Interest paid
(223,359)
(224,726)
Net cash (outflow)/inflow from operating activities
(157,075)
9,602
Investing activities
Purchase of tangible fixed assets
(108,464)
(5,197)
Proceeds on disposal of tangible fixed assets
2,600
2,000
Interest received
1
17
Net cash used in investing activities
(105,863)
(3,180)
Financing activities
Repayment of debentures
(7,143)
(14,286)
Payment of finance leases obligations
(84,892)
(53,083)
Net cash used in financing activities
(92,035)
(67,369)
Net decrease in cash and cash equivalents
(354,973)
(60,947)
Cash and cash equivalents at beginning of year
(55,573)
5,374
Cash and cash equivalents at end of year
(410,546)
(55,573)
Relating to:
Cash at bank and in hand
19,870
29,979
Bank overdrafts included in creditors payable within one year
(430,416)
(85,552)
HALTON BOROUGH TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
- 14 -
1
Accounting policies
Company information
Halton Borough Transport Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Moor Lane, Widnes, Cheshire, WA8 7AF.
1.1
Accounting convention
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 Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
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 principal accounting policies adopted are set out below.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The directors have considered the Company's business activities together with factors likely to affect future performance and financial position. These include outflows and the risks and uncertainties relating to the company's business activities.
The company's 99% shareholder has provided a letter of support to confirm their continued financial support should it be required.
After making appropriate enquires the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly they continue to adopt the going concern basis in the preparation of these financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
HALTON BOROUGH TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 15 -
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:
Freehold land and buildings
Buildings 2% Straight Line / Land - not depreciated
Plant and equipment
20% Straight Line
Computers
20% Straight Line
Vehicles
Straight Line over 20 Years/15 Years
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 credited or charged to profit or loss
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
HALTON BOROUGH TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 16 -
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
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.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
HALTON BOROUGH TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 17 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, 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
paymen
ts 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 business from suppliers. A
m
ounts 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
HALTON BOROUGH TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 18 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
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 profit and loss account, 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.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
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 company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
HALTON BOROUGH TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 19 -
1.15
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.16
Related party transactions
The directors have taken advantage of the exemption in Financial Reporting Standard 8 paragraph 3(c) and have not disclosed related party transactions with the company's parent undertaking, Halton Borough Council, which has a controlling interest in the company.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2019
2018
£
£
Turnover analysed by class of business
6,910,997
6,979,116
2019
2018
£
£
Other significant revenue
Interest income
1
17
Grants received
86,701
75,627
2019
2018
£
£
Turnover analysed by geographical market
United Kingdom
6,910,997
6,979,116
HALTON BOROUGH TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 20 -
4
Operating loss
2019
2018
Operating loss for the year is stated after charging/(crediting):
£
£
Government grants
(86,701)
(75,627)
Depreciation of owned tangible fixed assets
400,790
458,520
Profit on disposal of tangible fixed assets
(2,600)
(2,000)
Cost of stocks recognised as an expense
6,371,397
5,998,012
Operating lease charges
740
822
5
Auditor's remuneration
2019
2018
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
10,500
9,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
Traffic
126
128
Engineering
17
17
Administration
13
13
156
158
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
4,039,086
3,916,253
Social security costs
366,852
345,451
Pension costs
6,554
5,406
4,411,344
4,266,939
HALTON BOROUGH TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 21 -
7
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
203,093
181,529
Company pension contributions to defined contribution schemes
6,554
5,406
209,647
186,935
Remuneration disclosed above include the following amounts paid to the highest paid director:
2019
2018
£
£
Remuneration for qualifying services
76,500
76,500
Company pension contributions to defined contribution schemes
2,250
2,295
8
Interest receivable and similar income
2019
2018
£
£
Interest income
Interest on bank deposits
1
17
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
1
17
9
Interest payable and similar expenses
2019
2018
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
223,019
223,604
Other interest
340
1,122
223,359
224,726
10
Taxation
2019
2018
£
£
HALTON BOROUGH TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
10
Taxation
2019
2018
£
£
(Continued)
- 22 -
Deferred tax
Origination and reversal of timing differences
(125,988)
(73,172)
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2019
2018
£
£
Loss before taxation
(745,683)
(434,994)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
(141,680)
(82,649)
Effect of change in corporation tax rate
14,822
8,608
Depreciation on assets not qualifying for tax allowances
870
869
Taxation credit for the year
(125,988)
(73,172)
11
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Computers
Vehicles
Total
£
£
£
£
£
Cost
At 1 April 2018
301,223
151,556
155,785
6,567,372
7,175,936
Additions
-
1,075
2,599
104,790
108,464
Disposals
-
-
-
(199,520)
(199,520)
At 31 March 2019
301,223
152,631
158,384
6,472,642
7,084,880
Depreciation and impairment
At 1 April 2018
134,304
144,986
136,659
4,915,844
5,331,793
Depreciation charged in the year
5,519
2,567
7,375
385,329
400,790
Eliminated in respect of disposals
-
-
-
(199,520)
(199,520)
At 31 March 2019
139,823
147,553
144,034
5,101,653
5,533,063
Carrying amount
At 31 March 2019
161,400
5,078
14,350
1,370,989
1,551,817
At 31 March 2018
166,919
6,570
19,126
1,651,528
1,844,143
HALTON BOROUGH TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
11
Tangible fixed assets
(Continued)
- 23 -
Included within the net book value of land and buildings is freehold land at £25,269 (201
8
- £25,269) which is not depreciated.
The net book value of motor vehicles includes £
912,703
(20
18
- £
1
,
095
,
239
) in respect of assets held under finance leases and hire purchases. The depreciation charge for the year on leased assets amounted to £
177
,
786
(201
8
- £
203
,
538
).
12
Financial instruments
2019
2018
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
164,507
144,099
Carrying amount of financial liabilities
Measured at amortised cost
2,291,032
1,940,620
13
Stocks
2019
2018
£
£
Raw materials and consumables
73,258
83,152
14
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
164,507
144,099
Corporation tax recoverable
183
183
Other debtors
43,978
89,674
Prepayments and accrued income
310,673
367,138
519,341
601,094
Deferred tax asset (note 20)
103,015
-
622,356
601,094
HALTON BOROUGH TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 24 -
15
Creditors: amounts falling due within one year
2019
2018
Notes
£
£
Debenture loans
17
14,286
14,286
Bank loans and overdrafts
17
430,416
85,552
Obligations under finance leases
18
177,020
177,020
Trade creditors
242,903
101,282
Taxation and social security
101,463
109,572
Government grants
225,400
216,101
Other creditors
94,732
73,695
Accruals and deferred income
449,110
514,184
1,735,330
1,291,692
16
Creditors: amounts falling due after more than one year
2019
2018
Notes
£
£
Debenture loans
17
7,142
14,285
Obligations under finance leases
18
875,423
960,316
882,565
974,601
The debenture loan is secured on the freehold land and buildings and is repayable by equal half yearly instalments from March 1992 at a rate of interest established by the Council under paragraph 15 of Schedule 13 of the Local Government Act 1972 and the final payment is due in 2020.
17
Loans and overdrafts
2019
2018
£
£
Debenture loans
21,428
28,571
Bank overdrafts
430,416
85,552
451,844
114,123
Payable within one year
444,702
99,838
Payable after one year
7,142
14,285
The long-term loans are secured by fixed charges over the assets by which they relate to.
HALTON BOROUGH TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 25 -
18
Finance lease obligations
2019
2018
Future minimum lease payments due under finance leases:
£
£
Within one year
177,020
177,020
In two to five years
875,423
960,316
1,052,443
1,137,336
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
19
Provisions for liabilities
2019
2018
Notes
£
£
Deferred tax liabilities
20
-
22,973
20
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
Assets
Assets
2019
2018
2019
2018
Balances:
£
£
£
£
Fixed asset timing differences
-
83,612
(48,096)
-
Tax losses
-
(60,639)
151,111
-
-
22,973
103,015
-
2019
Movements in the year:
£
Liability at 1 April 2018
22,973
Credit to profit or loss
(125,988)
Asset at 31 March 2019
(103,015)
The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.
HALTON BOROUGH TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 26 -
21
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
6,554
5,406
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
Defined benefit schemes
Certain employees participate in the Cheshire Pension Fund, part of the local government pension scheme, a defined me Benefit scheme administered by Cheshire West and Chester Council in accordance with the Local Government
Regulations 1997 as amended.
Halton Borough Transport Limited is a wholly owned subsidiary of Halton Borough Council and the liability of the
Pension fund ultimately rests with Halton Borough Council.
Halton Borough Council have taken over liability of the past service cost but Halton Borough Transport Limited will
Continue to be liable for future service costs. Therefore the Cheshire Pension Fund is treated as a multi employer
Scheme and treated as a defined benefit contribution scheme and contributions payable charged to the profit and
Loss account.
22
Share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
430,100 Ordinary of £1 each
430,100
430,100
23
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2019
2018
£
£
Within one year
97,286
2,167
Between two and five years
332,519
14,111
In over five years
-
512,979
429,805
529,257
HALTON BOROUGH TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 27 -
24
Ultimate controlling party
The ultimate parent undertaking during the year was the majority shareholder, Halton Borough Council.
25
Cash generated from operations
2019
2018
£
£
Loss for the year after tax
(619,695)
(361,826)
Adjustments for:
Taxation credited
(125,988)
(73,172)
Finance costs
223,359
224,726
Investment income
(1)
(17)
Gain on disposal of tangible fixed assets
(2,600)
(2,000)
Depreciation and impairment of tangible fixed assets
400,790
458,520
Movements in working capital:
Decrease in stocks
9,894
9,635
Decrease in debtors
81,753
44,868
Increase in creditors
89,475
6,791
Increase/(decrease) in deferred income
9,299
(73,197)
Cash generated from operations
66,286
234,328
2019-03-31
2018-04-01
false
CCH Software
CCH Accounts Production 2019.301
A Jones
W Zygadllo
B Stevenson
A Macmanus
M Wharton
K Morley
K Morley
Halton Borough Council
C Stafford
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