Company Registration No. 09929963 (England and Wales)
HTS (PROPERTY AND ENVIRONMENT) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
HTS (PROPERTY AND ENVIRONMENT) LIMITED
COMPANY INFORMATION
Directors
Councillor S N Carter
Councillor R V Davis
Mr J E C Phillips
Mr M A Harrowven
Councillor C J Vince
(Appointed 5 July 2018)
Secretary
Mr J A Morris
Company number
09929963
Registered office
The Civic Centre
The Water Gardens
College Square
Harlow
Essex
CM20 1WG
Auditor
Ensors Accountants LLP
Cardinal House
46 St Nicholas Street
Ipswich
Suffolk
IP1 1TT
Business address
Mead Park Industrial Estate
River Way
Harlow
Essex
CM20 2SE
HTS (PROPERTY AND ENVIRONMENT) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 7
Income statement
8
Statement of financial position
9 - 10
Statement of changes in equity
11
Notes to the financial statements
12 - 31
HTS (PROPERTY AND ENVIRONMENT) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2019
- 1 -
The directors present the strategic report and financial statements for the year ended 31 March 2019.
Principle activities and review of the business
The principal activities of the Company are housing maintenance, gas servicing and repair, grounds maintenance and street cleaning. The majority of the Company's activities are performed on behalf of Harlow District Council ("the Council") under a five-year contract which commenced on 1
st
February 2017.
The Company has made a profit on ordinary activities before taxation of £0.51m for the year ended 31
st
March 2019 (2018: £0.56m).
The Company measures performance in a number of ways, including contract performance, quality reviews, debt reviews and regular re-forecasting and monitoring reviews.
The Company’s aim is to provide a high-quality cost-effective client facing service whilst delivering positive financial returns to its shareholders.
HTS (Property & Environment) Limited attaches great importance to its corporate responsibility as evidenced by the many community support events and conferences attended by the company, the 140 work experience placements from Harlow college and 5 apprentices employed along with charitable fund raising being examples of this.
HTS (Property & Environment) Limited recognises the importance of our wider responsibility within the local community and have been involved with a number of local initiatives.
The HACT report for 2018-19 reported that HTS created £1,129,128 of social value in the year.
Principal Risks and uncertainties
The Company maintain a detailed Risk Management and Internal Control system. This requires the company to:
-
identify risks and record them in a risk register;
-
diagnose and quantify the risks as to their likelihood and impact, record the controls established and monitor their effectiveness;
-
develop a plan to mitigate the likelihood and impact of the identified risks;
-
regularly review the risk registers and action plans; and
-
report key issues upwards to Harlow District Council.
The key risks identified for the Company, and the mitigating actions taken, are:
|
|
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Long-Term contracts in progress are controlled and managed through regular review of forecast revenue and cost to complete.
|
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The company applies rigorous health and safety policies and procedures aimed at minimising health and safety incidents that may affect the company’s employees, subcontractors and members of the public who come into contact with our business activities.
|
HTS (PROPERTY AND ENVIRONMENT) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 2 -
A
nalysis of the development and performance
Safety.
The Company’s health and safety performance has been and will remain a key priority. The performance remained well above the industry average. In the year ended 31
st
March 2019, the company has had no reportable incidents (2018: 1 reportable incident), giving an Accident Incident Rate of 0 (this is calculated from the number of accidents occurring in the period and the total man hours worked and which is significantly lower than our industry standard of 412). The Company will not be complacent on this important issue and remains committed to maintaining a low Accident Incident Rate.
Quality.
We seek constantly to improve the quality of the service we deliver to our clients and customers. To this end we encourage all our customers to provide feedback on the service they receive from us. The results for the month of March 2019 show that HTS (Property & Environment) Limited has achieved an overall success rate of 100% (2018: 97.32%) against the KPI’s that govern the contract.
Community.
HTS employees have been active in raising funds for various charities. These activities are purely down to the commitment of our staff to be involved in fundraising activities at work and during their own time. A number of staff were involved in School visits and assisted in Harlow Council Crucial Crew initiative whereby 1,000 children were trained in life skills. In the year, the Company and staff raised £7,542 for the chosen charity, St. Clare’s Hospice.
Employee Development.
The company is committed to employee development and invested over £67k in the period on staff training. The company employs five apprentices and offers work experience to local schools throughout the year. In line with the strategic objectives of our partner, Harlow District Council, HTS became a living wage employer in 2017. During 2018, the Company improved the gender pay gap from 2.16% to 0.7%.
Mr J A Morris
Secretary
3 July 2019
HTS (PROPERTY AND ENVIRONMENT) 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 activities of the Company are housing maintenance, gas servicing and repair, grounds maintenance and street cleaning. The majority of the Company's activities are performed on behalf of Harlow District Council ("the Council") under a five year partnering contract which expires on 31
st
January 2022.
Results and dividends
The company made a profit after tax of £413,298 (2018: £412,200) for the year which has been included within reserves.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Councillor S N Carter
Councillor J Strachan
(Resigned 5 July 2018)
Councillor R V Davis
Mr J E C Phillips
Mr M A Harrowven
Councillor C J Vince
(Appointed 5 July 2018)
Political and charitable donations
The Company has made £5,332 (2018:£1,428) of charitable donations in the year and no political donations.
Financial instruments
Treasury operations and Financial Instruments
The Company operates a treasury function which is, responsible for managing the liquidity, interest and credit risks associated with the company’s activities.
The Company's principal financial instruments include loans (the main purpose of which is to raise finance for the company's operations). In addition, the company has various other financial assets and liabilities such as other receivables, amounts due from the Council and trade creditors arising directly from its operations. The company does not have any ‘derivative' instruments.
Liquidity risk
The Company does not operate any overdraft facilities and maintains bank balances to meet the ongoing needs of the business.
Interest rate risk
All loans, lease and hire purchase agreements are on a fixed interest rate and therefore the Company reduces any exposure to changes in interest rates.
Credit risk
Harlow Council is the ultimate shareholder of the Company and also the main customer. As such the credit risk to the Company is very low.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 4 -
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the Company continues and that the appropriate training is arranged. It is the policy of the Company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees. To this end the Company is recognised as a Disability Confident Employer.
Employee involvement
The Company's policy is to consult and discuss with employees, through its recognition of trade unions, staff councils and at meetings, matters likely to affect employees' interests.
Information of matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the Company’s performance.
Future developments
HTS (Property & Environment) Ltd was established to deliver the repairs and maintenance of Harlow District Council’s 9000 Social Housing and 220 public Buildings together with the cleaning and grounds environmental works within the Town.
The Company will also deliver a further £17.4million of housing related capital works over the first 3 years of operation.
Following a successful first two years of trading, the group is looking to maximize the opportunities available both locally and in the surrounding areas.
Auditor
Ensors Accountants LLP were appointed as auditor to the Company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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
C
ompany’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
C
ompany’s auditor is aware of that information.
By order of the board
Mr J A Morris
Secretary
3 July 2019
HTS (PROPERTY AND ENVIRONMENT) 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 including FRS 101 "Reduced Disclosure Framework", 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, including FRS 101, 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 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.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HTS (PROPERTY AND ENVIRONMENT) LIMITED
- 6 -
Opinion
We have audited the financial statements of HTS (Property and Environment) Limited
(the 'company')
for the year ended 31 March 2019 which comprise the Income Statement, the Statement Of Financial Position, the Statement of Changes in Equity 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 101 ‘Reduced Disclosure Framework’ (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 profit 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.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HTS (PROPERTY AND ENVIRONMENT) 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.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in 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.
Barry Gostling (Senior Statutory Auditor)
for and on behalf of Ensors Accountants LLP
3 July 2019
Chartered Accountants
Statutory Auditor
Cardinal House
46 St Nicholas Street
Ipswich
Suffolk
IP1 1TT
HTS (PROPERTY AND ENVIRONMENT) LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2019
- 8 -
2019
2018
Notes
£
£
Revenue
4
23,329,315
23,753,196
Cost of sales
(20,280,960)
(20,000,515)
Gross profit
3,048,355
3,752,681
Administrative expenses
(2,606,851)
(3,280,853)
Other operating income
122,456
91,398
Operating profit
5
563,960
563,226
Investment income
8
7,187
2,074
Interest payable to group undertakings
9
(40,109)
(55,518)
Other finance costs
9
(16,285)
(585)
Profit before taxation
514,753
509,197
Tax on profit
10
(101,455)
(96,897)
Profit and total comprehensive income for the financial year
22
413,298
412,300
The income statement has been prepared on the basis that all operations are continuing operations.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2019
31 March 2019
- 9 -
2019
2018
Notes
£
£
Non-current assets
Intangible assets
11
268,912
358,549
Property, plant and equipment
12
893,229
1,012,363
1,162,141
1,370,912
Current assets
Inventories
14
42,421
32,945
Trade and other receivables
15
1,529,184
1,354,672
Deferred tax asset
19
11,137
-
Investments
13
505,478
501,229
Cash and cash equivalents
1,362,310
1,327,574
3,450,530
3,216,420
Current liabilities
Borrowings
16
233,942
233,942
Trade and other payables
17
2,397,410
2,159,280
Taxation and social security
532,281
726,023
Obligations under finance leases
18
145,517
179,466
Deferred income
20
6,125
15,384
3,315,275
3,314,095
Net current assets/(liabilities)
135,255
(97,675)
Total assets less current liabilities
1,297,396
1,273,237
Non-current liabilities
Borrowings
16
467,884
701,826
Obligations under finance leases
18
3,913
149,430
471,797
851,256
Provisions for liabilities
Deferred tax liabilities
19
-
9,680
Net assets
825,599
412,301
HTS (PROPERTY AND ENVIRONMENT) LIMITED
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT
31 MARCH 2019
31 March 2019
2019
2018
Notes
£
£
- 10 -
Equity
Called up share capital
21
1
1
Retained earnings
22
825,598
412,300
Total equity
825,599
412,301
The financial statements were approved by the board of directors and authorised for issue on 3 July 2019 and are signed on its behalf by:
Mr J E C Phillips
Director
Company Registration No. 09929963
HTS (PROPERTY AND ENVIRONMENT) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2019
- 11 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 January 2017
1
-
1
Period ended 31 March 2018:
Profit and total comprehensive income for the period
-
412,300
412,300
Balances at 31 March 2018
1
412,300
412,301
Year ended 31 March 2019:
Profit and total comprehensive income for the year
-
413,298
413,298
Balances at 31 March 2019
1
825,598
825,599
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
- 12 -
1
Accounting policies
Company information
HTS (Property and Environment) Limited is a
private
company limited by shares incorporated in England and Wales. The registered office is The Civic Centre, The Water Gardens, College Square, Harlow, Essex, CM20 1WG.
1.1
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below.
The company has taken advantage of the following disclosure exemptions under FRS 101:
-
the requirements of paragraphs 45(b) and 46-52 of IFRS 2 Share based Payment;
-
the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64 (o)(ii), B64(p), B64(q)(ii), B66 and B67of IFRS 3 Business Combinations. Equivalent disclosures are included in the consolidated financial statements of Harlow District Council in which the entity is consolidated;
-
the requirements of paragraph 33 (c) of IFRS 5 Non current Assets Held for Sale and Discontinued Operations;
-
the requirements of IFRS 7 Financial Instruments: Disclosures;
-
the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement;
-
the requirements of paragraphs
113(a), 114, 115, 118, 119(a)–(c), 120–127 and 129
of IFRS 15 Revenue from Contracts with Customers.
-
the requirement in paragraph 38 of IAS 1 ‘Presentation of Financial Statements’ to present comparative information in respect of: (i) paragraph 79(a) (iv) of IAS 1, (ii) paragraph 73(e) of IAS 16 Property Plant and Equipment (iii) paragraph 118 (e) of IAS 38 Intangibles Assets, (iv) paragraphs 76 and 79(d) of IAS 40 Investment Property and (v) paragraph 50 of IAS 41 Agriculture;
-
the requirements of paragraphs 10(d), 10(f), 16, 38A to 38D, 39 to 40 ,111 and 134-136 of IAS 1 Presentation of Financial Statements;
-
the requirements of IAS 7 Statement of Cash Flows;
-
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
-
the requirements of paragraph 17 of IAS 24 Related Party Disclosures;
-
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member ; and
-
the requirements of paragraphs 134(d)-134(f) and 135(c)-135(e) of IAS 36 Impairment of Assets.
As permitted by FRS 101, the company has taken advantage of the disclosure exemptions available under that standard in relation to share based payments, financial instruments, capital management, presentation of a cash flow statement, presentation of comparative information in respect of certain assets, standards not yet effective, impairment of assets, business combinations, discontinued operations and related party transactions.
Where required, equivalent disclosures are given in the group accounts of Harlow District Council. The group accounts of Harlow District Council are available to the public and can be obtained as set out in note 25.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 13 -
1.2
Going concern
The directors have at the time of approving the financial statements, a reasonable expectation that the
true
company
has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Revenue
Revenue arises from the provisions of goods and services provided in line with the principal activities set out in the Directors' report and excludes value added tax.
Where the outcome of a contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a contract cannot be estimated reliably, contract costs are recognised as expenses in the period in which they are incurred and contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable.
In the case of the annual service charge (building maintenance, street cleaning and environmental services) which is a fixed-price contract, governed by KPI's the customer pays the fixed amount based on a payment schedule, normally paid in the same month as the service is rendered.
The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
In the case of capital and planned works performed for customers amounts are invoiced monthly based on certified valuations. Payment is due within 31 days from the date of the invoice.
For construction contracts, w
here the outcome of a contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a contract cannot be estimated reliably, contract costs are recognised as expenses in the period in which they are incurred and contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 14 -
For construction contracts, the “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
Bank interest accruing on capital borrowed to fund the production of long term contracts is carried forward within long term contract balances.
The company recognises revenue from the following major sources:
The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:
1.4
Intangible assets other than goodwill
Costs arising on the acquisition of the contract with Harlow District Council were capitalised as intangible assets and were charged over the life of the initial term of the contract with Harlow District Council. The rates of amortisation are as follows:-
Capitalised contract costs - 20% per annum.
1.5
Property, plant and equipment
Property, plant and equipment 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:
Leasehold improvem'ts
20% of cost
Computers and office equipment
20% of cost
Plant and machinery
20% of cost
Motor vehicles
20% of cost
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 income statement.
In relation to small tools it is the company's policy to expense tools with an individual of less than £1,000 as consumables as these are likely to have an estimated useful life of less that 12 months.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 15 -
1.6
Impairment of tangible and intangible assets
At each reporting end date, the
company
reviews the carrying amounts of its tangible and intangible 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.
Intangible assets
do not have
indefinite useful lives
so
are
not
tested for impairment annually
.
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.
1.7
Inventories
Inventories
are stated at cost
and relate to fuel and vehicle parts being used in the business.
1.8
Fair value measurement
IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted
. The company is exempt under FRS 101 from the disclosure requirements of IFRS 13. There was no impact on the company from the adoption of IFRS 13.
1.9
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks
and
other short-term liquid investments with original maturities of three months or less,
Bank deposits with
original maturities of
over three months are shown in current investments.
1.10
Financial assets
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 16 -
Financial assets at fair value through profit or loss
Financial assets are classified as at FVTPL when the financial asset is held for trading. This is the case if:
-
the asset has been acquired principally for the purpose of selling in the near term, or
-
on initial recognition it is part of a portfolio of identified financial instruments that the
manages together and has a recent actual pattern of short-term profit taking, or
-
it is a derivative that is not designated and effective as a hedging instrument.
Financial assets at FVTPL are stated at fair value with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset. Interest and dividends are included in 'Investment income' and gains and losses on remeasurement included in 'other gains and losses' in the statement of comprehensive income.
Financial assets held at amortised cost
Financial assets with fixed or determinable payments and fixed maturity dates that the Company has the positive intent and ability to hold to maturity are classified as held to maturity investments.
Held to maturity investments are measured at amortised cost using the effective interest method less any impairment, with revenue recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
Trade Receivables
, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 17 -
Financial assets at fair value through other comprehensive income
D
ebt instrument
s
are
classified as
financial asset
s
measured at fair value through other comprehensive income where the financial asset
s
are
held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction cost
s
directly attributable to the asset. After initial recognition,
each
asset is measured at fair value
,
with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.
Financial assets classified as available for sale are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income. Where an AFS financial asset is disposed of or determined to be impaired, the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss.
Dividends and interest earned on AFS financial assets are included in the investment income line item in the statement of comprehensive income.
Impairment of financial assets
Financial assets, other than those
measured
at fair value through profit or 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 of the investment have been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
1.11
Financial liabilities
The company recognizes financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either
'
financial liabilities at fair value through profit or loss
'
or
'
other financial liabilities
'
.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as
measured at
fair value through profit or loss when the financial liability is held for trading. A financial liability is classified as held for trading if:
-
it has been incurred principally for the purpose of
repurchasing it in the near term, or
-
on initial recognition it is part of a portfolio of identified financial instruments that the
manages together and has a recent actual pattern of short-term profit taking, or
-
it is a derivative that is not
designated and effective hedging instrument.
Financial liabilities at fair value through profit or loss are stated at fair value with any gains or losses arising on remeasurement recognised in profit or
loss
.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 18 -
Other financial liabilities
Other financial liabilities, including borrowings
, t
rade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs
directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method
.
For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the
company’s
obligations are discharged, cancelled, or they expire.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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 is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 19 -
1.14
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
inventories
or non-current 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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The
c
om
pan
y’s employees are members the Essex pension fund which is a defined benefit pension plan and a part of the Local Government Pension Fund.
The assets of the scheme are held separately from those of the company in an independently administered fund. Pension scheme assets are measured using fair values. Pension scheme liabilities are measured using a projected unit method and discounted at the current rate of return on a high quality corporate bond of equivalent term and currency to the liability.
It has been agreed with Harlow District Council that contributions payable by the Company will be capped at
either
10.6%
or 14.1%.
To the extent that the company has a liability to pay any additional amounts to the scheme such liabilities are negated by an equal contingent asset arising from the capping agreement with Harlow District Council.
Accordingly, the
contributions paid by the company are set in relation to the current service period only and as such the company has accounted for the contributions to this scheme as if they were a defined contribution scheme.
Harlow District Councils’ Indemnity of the pension deficits supports the preparation of the financial statements on a going concern basis.
1.16
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 fair
value of the assets at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position 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.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Rentals payable under operating leases, less 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
d
asset are consumed.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 20 -
Assets held under finance leases and hire purchase contracts are capitalised in the statement of financial position and depreciated over their expected useful lives. The amount initially recognised as an asset is the lower of the fair value of the leased asset and the present value of the minimum lease payments payable over the term of the lease. The corresponding lease commitment is shown as a liability. Lease payments are analysed between capital and interest. The interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to the income statement over the period of the lease. The capital element reduces the balance owed to the lessor.
2
Adoption of new and revised standards and changes in accounting policies
In the current year, the following new and revised Standards and Interpretations have been adopted by the company and have an effect on the current period or a prior period or may have an effect on future periods:
IFRS 9 Financial instruments and IFRS 15 Revenue from Contracts with Customers are new accounting standards that are effective for the year ended 31 December 2018 and we do not think there will be any material impact to the accounts other than some amendments to the accounting policies.
There are no other amendments to accounting standards to consider, that are effective for the year ended 31 December 2018 have had a material impact on the company.
3
Critical accounting estimates and judgements
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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Critical judgements
Accounting for the defined benefit scheme deficit
There has been significant judgement involved when reviewing the agreement with the Harlow District Council and concluding that all the actuarial risks associated with the scheme remain with Harlow District Council and therefore the deficit of the scheme relating to the company has not been accounted for within these accounts.
Key sources of estimation uncertainty
Estimation of useful life - Tangible fixed assets
The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. Increasing an asset’s expected life or its residual value would result in a reduced depreciation charge in the income statement. The useful lives and residual values of the
company's assets
are determined by management at the time the asset is acquired and reviewed annually for appropriateness. The lives are based on historical experience with similar assets as well as anticipation of future events which may impact their life such as changes in technology.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 21 -
4
Revenue
2019
2018
£
£
Revenue analysed by class of business
Building maintenance, street cleaning and environmental services
23,329,315
23,753,196
2019
2018
£
£
Other significant revenue
Interest income
7,187
2,074
Rental income
118,117
60,936
5
Operating profit
2019
2018
£
£
Operating profit for the year is stated after charging/(crediting):
Fees payable to the company's auditor for the audit of the company's financial statements
9,425
12,227
Depreciation of property, plant and equipment
269,062
223,536
Loss on disposal of property, plant and equipment
3,547
-
Amortisation of intangible assets
89,637
89,637
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
Production
239
233
Administration and Support
93
100
332
333
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
9,173,451
10,407,023
Social security costs
855,461
982,539
Pension costs
1,044,611
1,045,990
11,073,523
12,435,552
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 22 -
7
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
186,867
199,407
8
Investment income
2019
2018
£
£
Interest income
Interest on bank deposits
7,187
2,074
Total interest income for financial assets that are not held at fair value through profit or loss is £7,187 (2018 - £2,074).
9
Finance costs
2019
2018
£
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
40,109
55,518
Interest on other financial liabilities:
Interest on lease liabilities
16,285
585
Total interest expense
56,394
56,103
10
Income tax expense
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
108,060
87,217
Adjustments in respect of prior periods
14,212
-
Total UK current tax
122,272
87,217
Deferred tax
Origination and reversal of temporary differences
(20,817)
9,680
Total tax charge
101,455
96,897
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
10
Income tax expense
(Continued)
- 23 -
The charge for the year can be reconciled to the profit per the income statement as follows:
2019
2018
£
£
Profit before taxation
514,753
509,197
Expected tax charge based on a corporation tax rate of 19.00%
97,803
97,460
Effect of expenses not deductible in determining taxable profit
97
96
Depreciation on assets not qualifying for tax allowances
1,002
562
Under/(over) provided in prior years
14,211
-
Deferred tax adjustments in respect of prior years
(12,623)
-
Adjust opening and closing deferred tax to average rate
965
(1,221)
Taxation charge for the year
101,455
96,897
11
Intangible fixed assets
Capitalised contract costs
£
Cost
At 31 March 2018
448,186
At 31 March 2019
448,186
Amortisation and impairment
At 31 March 2018
89,637
Charge for the year
89,637
At 31 March 2019
179,274
Carrying amount
At 31 March 2019
268,912
At 31 March 2018
358,549
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 24 -
12
Property, plant and equipment
Leasehold improvem'ts
Computers and office equipment
Plant and machinery
Motor vehicles
Total
£
£
£
£
£
Cost
At 31 March 2018
16,271
225,963
702,115
291,550
1,235,899
Additions
24,830
29,645
99,000
-
153,475
Disposals
-
-
-
(5,600)
(5,600)
At 31 March 2019
41,101
255,608
801,115
285,950
1,383,774
Accumulated depreciation and impairment
At 31 March 2018
3,254
44,796
117,176
58,310
223,536
Charge for the year
6,479
47,324
157,136
58,123
269,062
Eliminated on disposal
-
-
-
(2,053)
(2,053)
At 31 March 2019
9,733
92,120
274,312
114,380
490,545
Carrying amount
At 31 March 2019
31,368
163,488
526,803
171,570
893,229
At 31 March 2018
13,017
181,167
584,939
233,240
1,012,363
Property, plant and equipment includes assets held under finance leases or hire purchase contracts, as follows.
Leased assets
2019
2018
£
£
Net values
343,800
458,400
Depreciation charge for the year
114,600
114,600
13
Investments
Current
Non-current
2019
2018
2019
2018
£
£
£
£
Investments held at fair value through profit or loss
505,478
501,229
-
-
The company has not designated any financial assets that are not classified as held for trading as financial assets at fair value through profit or loss.
Fair value of financial assets carried at amortised cost
The directors consider that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 25 -
14
Inventories
2019
2018
£
£
Raw materials
42,421
32,945
15
Trade and other receivables
2019
2018
£
£
Trade receivables
29,135
57,377
Other receivables
735,414
692,929
Amounts owed by fellow group undertakings
455,262
550,785
Prepayments
309,373
53,581
1,529,184
1,354,672
Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.
16
Borrowings
2019
2018
£
£
Unsecured borrowings at amortised cost
Loans from related parties
701,826
935,768
Analysis of borrowings
Borrowings are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2019
2018
£
£
Current liabilities
233,942
233,942
Non-current liabilities
467,884
701,826
701,826
935,768
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 26 -
17
Trade and other payables
2019
2018
£
£
Trade payables
676,182
311,286
Accruals
1,700,136
1,841,101
Other payables
21,092
6,893
2,397,410
2,159,280
The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.
18
Obligations under finance leases
Minimum lease payments
Present value
2019
2018
2019
2018
£
£
£
£
Within one year
147,437
195,751
145,517
179,466
In two to five years
4,368
151,805
3,913
149,430
151,805
347,556
149,430
328,896
Less: future finance charges
(2,375)
(18,660)
-
-
Lease liabilities in the financial statements
149,430
328,896
149,430
328,896
Finance lease obligations are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2019
2018
£
£
Current liabilities
145,517
179,466
Non-current liabilities
3,913
149,430
149,430
328,896
2019
2018
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
16,285
585
The fair value of the company's lease obligations is approximately equal to their carrying amount.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 27 -
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
ACAs
Other
Total
£
£
£
Deferred tax liability at 1 April 2017
-
-
-
Deferred tax movements in prior year
Credit to profit or loss
17,312
(7,632)
9,680
Deferred tax liability at 1 April 2018
17,312
(7,632)
9,680
Deferred tax movements in current year
Credit to profit or loss
5,497
(26,314)
(20,817)
Deferred tax liability at 31 March 2019
-
-
-
Deferred tax asset at 31 March 2019
22,809
(33,946)
(11,137)
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:
2019
2018
£
£
Deferred tax liabilities
-
9,680
Deferred tax assets
(11,137)
-
(11,137)
9,680
20
Deferred revenue
2019
2018
£
£
Arising from rent
6,125
15,384
Analysis of deferred revenue
Deferred revenues are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2019
2018
£
£
Current liabilities
6,125
15,384
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 28 -
21
Share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
1 ordinary share of £1 each
1
1
1
1
22
Retained earnings
2019
2018
£
£
At 1 April 2018
412,300
-
Profit for the year
413,298
412,300
At 31 March 2019
825,598
412,300
23
Operating lease commitments
Lessee
Amounts recognised in profit or loss as an expense during the period in respect of operating lease arrangements are as follows:
2019
2018
£
£
Minimum lease payments under operating leases
303,302
208,178
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
287,989
303,302
Between two and five years
672,009
936,732
959,998
1,240,034
24
Capital commitments
2019
2018
£
£
At 31 March 2019 the company had capital commitments as follows:
Contracted for but not provided in the financial statements:
Acquisition of property, plant and equipment
-
84,000
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 29 -
25
Controlling party
The parent company of HTS (Property and Environment) Limited is HTS Group Ltd and its registered office is The Civic Centre, The Water Gardens, College Square, Harlow. Essex. CM20 1WG.
The ultimate parent undertaking and controlling party is Harlow District Council.
The consolidated financial statements of Harlow District Council are available from The Civic Centre, The Water Gardens, College Square, Harlow. Essex. CM20 1WG
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 30 -
26
Retirement benefit schemes
Defined contribution scheme
The company operates a defined contribution pension scheme for all qualifying employees with Smart pension. The assets of the scheme are held separately from those of the company in an independently administered fund.
The total costs charged to income in respect of defined contribution plans is £22,179 (2018:£44,079)
Defined benefit scheme
Qualifying employees belonged to the Local Government Pension Scheme (LGPS), which is managed by Essex County Council. This is a funded defined-benefit scheme, with the assets held in separate trustee-administered funds.
Harlow District Council entered into an agreement with the company which has the effect of capping the employer pension contributions payable by the company to the Essex Local Government Pension Scheme.
Due to the capping of the contributions the defined benefit scheme will be treated as a defined contribution scheme for the purposes of the preparation of the accounts and the contributions will be recognised as they fall due.
Included within the pension charge are contributions of £1,609,826 (2018: £1,584,970) payable by the company to the fund less £587,220 (2018: £583,056) reimbursed by Harlow District Council under the capping contribution arrangement.
The Net Pension Liability is guaranteed by the Local Authority and not the company, therefore the Net Pension Liability is treated as contingent liability which has an equal contingent asset being the fair value of the guarantee.
Liabilities have been assessed on an actuarial basis using the projected unit credit method, an estimate of the pensions that will be payable in future years dependent on assumptions about mortality rates, salary levels, etc. The pension scheme's liabilities have been assessed by Barnett Waddingham, an independent firm of actuaries, estimates for the Company being based on the latest full valuation of the scheme as at 31 March 2016. The key assumptions (expressed as weighted averages) at the period end were as follows:
In valuing the liabilities of the pension fund at 31 March 2019, mortality assumptions have been made as indicated below.
The assumptions relating to longevity underlying the pension liabilities at the balance sheet date are based on standard actuarial mortality tables and include an allowance for future improvements in longevity. The assumptions are equivalent to expecting a 65 year old to live for a number of years as follows:
-
Retiring today: Male 21.3 years (2018: 22.4 years), female 23.6 years (2018: 24.7 years)
-
Retiring in 20 years : Male 22.9 years (2018: 24.4 years), female 25.4 years (2018: 27.0 years)
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 31 -
26
Retirement benefit schemes (continued)
The contingent amounts arising from the company’s obligations in respect of this defined benefit pension plan are as follows:
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Present value of defined benefit obligations
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Fair value of plan assets
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Fair value of local authority guarantee
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Councillor S N Carter
Councillor J Strachan
Councillor R V Davis
Mr J E C Phillips
Mr M A Harrowven
Councillor C J Vince
Mr J A Morris
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