Company registration number 09929963 (England and Wales)
HTS (PROPERTY AND ENVIRONMENT) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
HTS (PROPERTY AND ENVIRONMENT) LIMITED
COMPANY INFORMATION
Directors
Mr M A Harrowven
Mr A Townshend
(Appointed 20 June 2023)
Councillor R V Davis
Councillor E C Johnson
Councillor S Seales
(Appointed 16 June 2022)
Secretary
Mrs Christina Roach
Company number
09929963
Registered office
The Civic Centre
The Water Gardens
College Square
Harlow
CM20 1WG
Auditor
Ensors Accountants LLP
Connexions
159 Princes Street
Ipswich
IP1 1QJ
Business address
Mead Park Industrial Estate
River Way
Harlow
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 - 8
Income statement
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 27
HTS (PROPERTY AND ENVIRONMENT) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report and financial statements for the year ended 31 March 2023.
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 ten-year contract which commenced on 1st February 2017.
The Company has made a profit on ordinary activities before taxation of £56,661 for the year ended 31st March 2023 (2022: £31,015). Margins were significantly impacted by rising material, labour and subcontractor costs caused mainly by high inflation not just in the sector but nationally due to Brexit and other global factors.
Revenues were slightly higher than anticipated at £29,543,116 (+£168k). Delivery of the Annual Service Charge and the Capital Works Programme was challenging due to factors above, but additionally had the added pressure of recruiting suitably qualified staff to replace staff leaving the business and procuring a supply chain that was also experiencing similar challenges.
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 events and conferences supported and attended by the company. This includes providing work experience to students and charitable fundraising events for St Clares Hospice and other local organisations
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.
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:
| |
| Long-Term contracts in progress are controlled and managed through regular review of forecast revenue and cost to complete. |
| 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 2023
- 2 -
Analysis of the development and performance
Safety. The Company’s health and safety performance has been and will remain a key priority. In the year ended 31st March 2023, the company has had no reportable incidents (2022: no reportable incidents), 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 lower than our industry standard of 400). 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 2023 show that HTS (Property & Environment) Limited has achieved an overall success rate of 97% (2022: 93%) 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.
Employee Development. The company is committed to employee development and has continues to invest on staff training. The company employs nine 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.
Mrs Christina Roach
Secretary
26 June 2023
HTS (PROPERTY AND ENVIRONMENT) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
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 ten-year contract which commenced on 1st February 2017.
Results and dividends
The company made a profit after tax of £64,286 (2022: £6,536 ) 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:
Mr M A Harrowven
Mr J E C Phillips
(Resigned 31 May 2023)
Mr A Townshend
(Appointed 20 June 2023)
Councillor R V Davis
Councillor E C Johnson
Councillor S Seales
(Appointed 16 June 2022)
Political donations
The Company has made £1,210 (2022:£4,307) 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 2023
- 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.
HTS has also secured a number of FM contracts for Harlow Council including the prestigious Nexus Building in the Science Park and FM works to number of commercial buildings in Harlow.
HTS has also started the process of improving its IT capabilities across the company including the introduction of Field Services Management Software to support the efficient delivery and transparency of the services its delivers.
The Company will also continue to deliver housing related capital works for Harlow District Council over the next 5 years of operation.
Following a successful first five years of trading, the Company is looking to maximize the opportunities available both locally and in the surrounding areas.
Auditor
The auditor, Ensors Accountants LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
By order of the board
Mrs Christina Roach
Secretary
26 June 2023
HTS (PROPERTY AND ENVIRONMENT) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 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 2023 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 2023 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
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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 identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which 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 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' responsibilities statement, 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have given consideration to the control environment (including management's own process for identifying and assessing risks) as well as the nature of the entity, the industry in which it operates and the underlying performance. Consideration was also given to the attitudes and incentives of management to commit fraud. We determined that the greatest potential for fraud existed in the following areas: timing of recognition of income, posting of unusual journals and complex transactions. In line with all audits performed under ISAs (UK), we planned and performed specific procedures to respond to the risk of management override of controls.
We also obtained an understanding of the applicable laws and regulations that the company has to abide by, through discussions with management and those charged with governance, as well as commercial knowledge of the sector and statutory legislation. We paid particular focus to those laws and regulations that had the potential to materially impact the amounts and disclosures within the financial statements. The key laws and regulations we identified were the UK Companies Act, employment law, health and safety, tax legislation and landlord regulations.
After our initial risk assessment, we performed the following procedures to detect material misstatements in respect of irregularities arising due to fraud or error:
HTS (PROPERTY AND ENVIRONMENT) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HTS (PROPERTY AND ENVIRONMENT) LIMITED
- 8 -
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness
- Reviewing financial statement disclosures and testing these against supporting documentation to assess compliance with applicable laws and regulations
- Assessing of key accounting estimates within the financial statements in order to assess their reasonableness and determining whether there were any indications of management bias in the estimates.
- Reviewing minutes of meetings of those charged with governance
- Enquiring of management as to whether they are aware of any alleged, suspected or actual fraud during the year
We also performed procedures to satisfy ourselves regarding compliance with applicable laws and regulations, including:
- Enquiring of management, those charged with governance and the entity’s solicitors if there were any actual and potential litigation and claims
- Reviewing minutes of meetings of those charged with governance.
- Reviewing legal expenses for any indicators of litigation or claims against the company
All audit team members were made aware of the applicable laws and regulations, as well as potential fraud risks during the planning stage of the audit and this was discussed at the audit team planning meeting. It was therefore determined that team members all had the relevant awareness and competence to identify any instances of non-compliance with relevant laws and regulations or fraud.
There are, however, inherent limitations to our above audit procedures. Auditing standards only require us to enquire of the directors and management regarding non-compliance with laws and regulations, as well as review regulatory and legal correspondence (if there is any). It is therefore possible that instances of non-compliance could be missed, particularly where the law in itself is far removed from any financial transactions.
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.
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
19 July 2023
Chartered Accountants
Statutory Auditor
Connexions
159 Princes Street
Ipswich
IP1 1QJ
HTS (PROPERTY AND ENVIRONMENT) LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
2023
2022
Notes
£
£
Revenue
3
29,543,116
29,106,591
Cost of sales
(26,738,224)
(26,052,536)
Gross profit
2,804,892
3,054,055
Administrative expenses
(2,853,839)
(3,146,091)
Other operating income
119,880
150,763
Operating profit
4
70,933
58,727
Investment income
7
12,325
1,236
Interest payable to group undertakings
8
(10,510)
(19,236)
Other finance costs
8
(16,087)
(9,712)
Profit before taxation
56,661
31,015
Tax on profit
9
7,637
(24,479)
Profit and total comprehensive income for the financial year
64,298
6,536
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 2023
31 March 2023
- 10 -
2023
2022
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
10
1,392,154
1,119,747
Current assets
Inventories
12
121,570
87,272
Trade and other receivables
13
3,477,193
4,524,583
Investments
11
523,747
513,078
Cash and cash equivalents
581,374
684,521
4,703,884
5,809,454
Current liabilities
14
(3,918,216)
(5,122,573)
Net current assets
785,668
686,881
Total assets less current liabilities
2,177,822
1,806,628
Non-current liabilities
14
(690,785)
(408,512)
Provisions for liabilities
Deferred tax liabilities
18
(92,207)
(67,584)
Net assets
1,394,830
1,330,532
Equity
Called up share capital
20
1
1
Retained earnings
1,394,829
1,330,531
Total equity
1,394,830
1,330,532
The financial statements were approved by the board of directors and authorised for issue on 26 June 2023 and are signed on its behalf by:
Mr M A Harrowven
Director
Company registration number 09929963
HTS (PROPERTY AND ENVIRONMENT) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 April 2021
1
1,323,995
1,323,996
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
6,536
6,536
Balance at 31 March 2022
1
1,330,531
1,330,532
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
64,298
64,298
Balance at 31 March 2023
1
1,394,829
1,394,830
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 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, 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 under the historical cost convention. 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 24.
1.2
Going concern
The directors have at the time of approving the financial statements, a reasonable expectation that the truecompany has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
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.
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%-33.33% of cost
Plant and machinery
20% of cost
Motor vehicles
20%-30% 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 2023
1
Accounting policies
(Continued)
- 14 -
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.
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
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.
1.9
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.
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.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
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.
Financial assets at fair value through other comprehensive income
Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets 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 costs 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.
Impairment of financial assets
Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.
The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
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.
1.10
Financial liabilities
The company recognises 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'. The company only has 'other financial liabilities'
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
Other financial liabilities
Other financial liabilities, including borrowings, trade 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.
1.11
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.
1.12
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.
1.13
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.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 17 -
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The company’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.
1.15
Leases
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Contracts with no consideration are therefore outside the scope of IFRS 16. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 18 -
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
When the company acts as a lessor, leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees, over the major part of the economic life of the asset. All other leases are classified as operating leases. If an arrangement contains lease and non-lease components, the company applies IFRS 15 to allocate the consideration in the contract. When the company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately, classifying the sub-lease with reference to the right-of-use asset arising from the head lease instead of the underlying asset. As there is no consideration for the head lease, no right to use asset has been accounted for under IFRS 16, therefore sub-leases are classified for as operating leases. Rental income from sub-leases is credited to the profit and loss account on a straight line basis over the period of the lease.
2
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 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.
Accounting for leases with no consideration
There has been significant judgement made on whether the head lease between the company and Harlow District Council in relation to Mead Park should be accounted for as a right to use asset. As there is no consideration for the head lease then the conclusion is that no accounting for a right to use asset is required under IFRS 16 and therefore sub-leases are accounting for as operating leases.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
3
Revenue
2023
2022
£
£
Revenue analysed by class of business
Building maintenance, street cleaning and environmental services
29,543,116
29,106,591
2023
2022
£
£
Other income
Rental income
100,540
96,373
4
Operating profit
2023
2022
£
£
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
15,730
13,620
Depreciation of property, plant and equipment
582,751
836,397
Amortisation of intangible assets
-
89,637
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production
253
249
Administration and Support
102
95
Total
355
344
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
10,990,836
10,063,945
Social security costs
1,121,559
950,214
Pension costs
1,298,933
1,157,782
13,411,328
12,171,941
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
202,860
206,474
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
170,089
174,750
7
Investment income
2023
2022
£
£
Interest income
Interest on bank deposits
12,325
1,236
8
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
10,510
19,236
Interest on lease liabilities
16,087
9,712
26,597
28,948
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
87,800
Adjustments in respect of prior periods
(32,260)
(26,014)
Total UK current tax
(32,260)
61,786
Deferred tax
Origination and reversal of temporary differences
24,623
(37,307)
Total tax charge/(credit)
(7,637)
24,479
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
9
Taxation
(Continued)
- 21 -
The charge for the year can be reconciled to the profit per the income statement as follows:
2023
2022
£
£
Profit before taxation
56,661
31,015
Expected tax charge based on a corporation tax rate of 19.00% (2022: 19.00%)
10,766
5,893
Effect of expenses not deductible in determining taxable profit
542
788
Group relief
(9,305)
(6,746)
Depreciation on assets not qualifying for tax allowances
592
1,175
Under/(over) provided in prior years
(32,260)
(26,014)
Deferred tax adjustments in respect of prior years
37,934
27,380
Payment for group relief
-
6,746
Remeasurement of deferred tax for changes in tax rates
(3,195)
16,220
Super-deduction adjustment
(12,711)
(963)
Taxation (credit)/charge for the year
(7,637)
24,479
10
Property, plant and equipment
Leasehold improvem'ts
Computers and office equipment
Plant and machinery
Motor vehicles
Total
£
£
£
£
£
Cost
At 31 March 2022
77,278
318,358
989,104
2,371,630
3,756,370
Additions
19,797
31,202
138,692
665,467
855,158
Disposals
(29,443)
(373,303)
(402,746)
At 31 March 2023
97,075
320,117
1,127,796
2,663,794
4,208,782
Accumulated depreciation and impairment
At 31 March 2022
45,545
292,451
793,653
1,504,974
2,636,623
Charge for the year
14,205
16,781
96,059
455,706
582,751
Eliminated on disposal
(29,443)
(373,303)
(402,746)
At 31 March 2023
59,750
279,789
889,712
1,587,377
2,816,628
Carrying amount
At 31 March 2023
37,325
40,328
238,084
1,076,417
1,392,154
At 31 March 2022
31,733
25,907
195,451
866,656
1,119,747
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
10
Property, plant and equipment
(Continued)
- 22 -
Property, plant and equipment includes right-of-use assets, recognised within computers and office equipment and motor vehicles with a carrying value of £610,543 (2022: £215,066). Depreciation of £233,249 (2022: £328,999) was charged in respect of these right-of-use assets.
The net carrying value of tangible fixed assets includes £104,767 (2022: £Nil) in respect of assets held under finance lease or hire purchase contracts. The depreciation charge in respect of these assets amounted to £7,483 (2022: £Nil) for the year.
11
Investments
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Investments held at fair value through profit or loss
523,747
513,078
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.
12
Inventories
2023
2022
£
£
Tools, fuel and vehicle repairs stock
121,570
87,272
13
Trade and other receivables
2023
2022
£
£
Trade receivables
21,067
10,149
Corporation tax recoverable
1,925
56,780
Amounts owed by fellow group undertakings
641,902
684,321
Other receivables
39,336
67,867
Prepayments and accrued income
2,772,963
3,705,466
3,477,193
4,524,583
Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
14
Liabilities
Current
Non-current
2023
2022
2023
2022
Notes
£
£
£
£
Borrowings
15
265,908
131,638
259,515
393,786
Trade and other payables
16
3,234,035
4,165,297
Taxation and social security
121,581
575,115
-
-
Lease liabilities
17
256,296
202,588
431,270
14,726
Deferred income
19
40,396
47,935
3,918,216
5,122,573
690,785
408,512
15
Borrowings
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Borrowings held at amortised cost:
Loans from parent undertaking
265,908
131,638
259,515
393,786
16
Trade and other payables
2023
2022
£
£
Trade payables
1,092,799
1,048,342
Accruals and deferred income
2,135,030
3,111,177
Other payables
6,206
5,778
3,234,035
4,165,297
The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.
17
Lease liabilities
2023
2022
Maturity analysis
£
£
Within one year
272,003
205,625
In two to five years
460,622
15,037
Total undiscounted liabilities
732,625
220,662
Future finance charges and other adjustments
(45,059)
(3,348)
Lease liabilities in the financial statements
687,566
217,314
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
17
Lease liabilities
(Continued)
- 24 -
Lease liabilities 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:
2023
2022
£
£
Current liabilities
256,296
202,588
Non-current liabilities
431,270
14,726
687,566
217,314
2023
2022
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
16,087
9,712
The fair value of the company's lease obligations is approximately equal to their carrying amount.
18
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
£
£
£
Liability at 1 April 2021
141,596
(36,705)
104,891
Deferred tax movements in prior year
Charge/(credit) to profit or loss
(18,775)
(18,532)
(37,307)
Liability at 1 April 2022
122,821
(55,237)
67,584
Deferred tax movements in current year
Charge/(credit) to profit or loss
(13,493)
38,116
24,623
Liability at 31 March 2023
109,328
(17,121)
92,207
Deferred tax assets and liabilities are offset in the financial statements only where the company has a legally enforceable right to do so.
19
Deferred revenue
2023
2022
£
£
Arising from the annual service charge and rent
40,396
47,935
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 25 -
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary share of £1 each
1
1
1
1
21
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 2023
- 26 -
22
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 £28,943 (2022: £22,423)
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 £1,998,714 (2022: £1,801,582) payable by the company to the fund less £728,724 (2022: £666,223) 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 2023. 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 2023, 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 21.1 years (2022: 21.6 years), female 23.5 years (2022: 23.7 years)
Retiring in 20 years : Male 22.3 years (2022: 23.0 years), female 25.0 years (2022: 25.1 years)
HTS (PROPERTY AND ENVIRONMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 27 -
22
Retirement benefit schemes (continued)
The contingent amounts arising from the company’s obligations in respect of this defined benefit pension plan are as follows: | | |
Present value of defined benefit obligations | | |
Fair value of plan assets | | |
Net defined benefit asset / (liability) | | |
| | |
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