ORDNANCE SURVEY TRADING FUND Annual Report & Accounts 2015–16 Ordnance Survey Annual Report and Accounts 2015−16 Presented to Parliament pursuant to Section 4(6) of the Government Trading Funds Act 1973 as amended by the Government Trading Act 1990 (The trade and assets of Ordnance Survey were transferred to a limited company on 1 April 2015 and the Trading Fund was revoked on 31 March 2016) Ordered by the House of Commons to be printed 11 July 2016 HC 263 © Crown copyright 2016 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: [email protected]. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. This publication is available at www.gov.uk/government/publications Any enquiries regarding this publication should be sent to us at [email protected] Print ISBN 9781474133593 Web ISBN 9781474133609 ID 26051601 07/16 Printed on paper containing 75% recycled fibre content minimum Printed in the UK on behalf of the Controller of Her Majesty’s Stationery Office Contents 4 Chairman’s statement 5 Performance report 7 Accountability report 15 Audit report 16 Financial statements 21 Notes to the consolidated financial statements 42 HM Treasury Minute dated 23 May 2011 3 ORDNANCE SURVEY − ANNUAL REPORT AND FINANCIAL STATEMENTS 2015−16 Chairman’s statement It’s been another year of achievement and progress for Ordnance Survey as we completed the transfer of trade and assets from this Trading Fund and Government Agency to a government owned company (GovCo) in April 2015. With this change in status Ordnance Survey embraces the opportunity of conducting its business as Ordnance Survey Limited. The Trading Fund did not trade in the year and ceased to exist on 31 March 2016. Sir Rob Margetts CBE Non‑Executive Chairman 4 ORDNANCE SURVEY − ANNUAL REPORT AND FINANCIAL STATEMENTS 2015−16 Performance report Overview Strategy and objectives The Ordnance Survey Trading Fund (the Trading Fund) held An overriding objective of the transition to a Limited Company Britain’s mapping agency and until 31 March 2015 was a was to increase the pace of development by introducing non‑ministerial government department with Executive more location‑based products, services and solutions to Agency status. On 1 April 2015 the assets and liabilities of the benefit existing and new customers, partners and markets. Trading Fund were transferred to Ordnance Survey Limited, For Ordnance Survey to have a long‑term sustainable future, a company incorporated in the UK. The entire share capital we needed a conventional business structure, which provides of Ordnance Survey Limited is held by the Secretary of State the platform for commercial growth, investment and product for Business, Innovation and Skills (BIS) on behalf of UK development. Government, which leaves the operations of Ordnance Survey fully in public ownership. The Ordnance Survey Trading Fund (Revocation) Order 2016 The public task came into effect on 31 March 2016. As a result of the Revocation, the Trading Fund which previously held the operations of The public task of Ordnance Survey was transferred to Ordnance Survey ceased to exist on 31 March 2016. Ordnance Survey Limited on 1 April 2015. During 2014−15 Ordnance Survey worked with BIS to consider the most appropriate platform for its future operations and growth and together concluded that operating as a Limited Business review Company would better place the business to act at pace in rapidly changing markets and keep its leading position at the In the current year the only transaction was to transfer the trade heart of the global geospatial industry. and assets of Ordnance Survey to the Ordnance Survey Limited. Ordnance Survey’s customers, partners and stakeholders were not affected by the transition to a Limited Company, although it was expected that they would benefit from a more Going concern efficient and focused business better aligned to their needs. Existing arrangements such as the Public Sector Mapping On 1 April 2015 the assets and liabilities of the Trading Agreement (PSMA), One Scotland Mapping Agreement (OSMA) Fund were transferred to Ordnance Survey Limited, a and OS OpenData™ continue on the same terms until their company incorporated in the UK. The entire share capital of scheduled end dates. Ordnance Survey Limited is held by the Secretary of State for Business Innovation and Skills on behalf of UK Government. Operating as a GovCo was expected to enable Ordnance Survey As the functions of Ordnance Survey have been transferred to to: another government owned entity and not ceased operations • Provide continued commitment and efficiencies in the the Financial Statements have been prepared on a going delivery of its public task. concern basis. • Respond more effectively, quickly and flexibly to the needs of the geospatial industry and its wider markets. The Ordnance Survey Trading Fund (Revocation) Order 2016 • Better support the maintenance and quality of geographic came into effect on 31 March 2016. As a result of the Revocation, data sets, which are available under the open data the Trading Fund ceased to exist on 31 March 2016. programme, and identify where more can be done. • Improve Ordnance Survey’s ability to recruit and retain skilled employees, particularly those with digital, mobile and data management skill sets, which are in great demand. • Give Ordnance Survey greater freedom to manage its day‑to‑day operations. 5 ORDNANCE SURVEY − ANNUAL REPORT AND FINANCIAL STATEMENTS 2015−16 Performance analysis Capital structure As the trading and assets of the Trading Fund were transferred The capital structure in the year changed on 1 April 2015 when to Ordnance Survey Limited on 1 April 2015, there is only one the £34.0m of public dividend capital was cancelled as part of transaction in the year, the transferring out of the trade and the transfer of the trade and assets to Ordnance Survey Limited assets of Ordnance Survey. As the Trading Fund did not receive (note 18). any direct consideration for the transfer, the transfer out has been recognised as a non‑operating loss as it has not been generated by operations. The credit to assets reduces the net assets in the Trading Fund to nil. Supplier payments No supplier payments were made in the year. Group results £m 2015−16 2014−15 Corporate and social responsibility Revenue − 146.7 Operating Costs (excluding depreciation − 103.9 During the year the Trading Fund had no employees and and amortisation) undertook no trade, so there were no corporate or social Earnings before interest, tax, − 47.0 responsibility activities undertaken. For the prior year depreciation and amortisation (EBITDA) comparatives please see the ‘Ordnance Survey Annual Report & Accounts 2014−15’ available on the Ordnance Survey website Non−operating cost 169.0 − (www.os.uk). Depreciation, amortisation & − 16.3 impairment Profit attributable to PDC holders − 30.9 Sustainability Dividend − 21.0 During the year the Trading Fund had no employees Net assets − 169.0 and undertook no trade, so there were no activities that require consideration for sustainability. For the prior year comparatives please see the ‘Ordnance Survey Annual Report Dividends & Accounts 2014−15’ available on the Ordnance Survey website (www.os.uk). No dividends were declared or paid in the year (2014−15: £21.0m). Future outlook Net assets The activities and operations of Ordnance Survey will be The net asset position at the end of year was nil (2014−15: continued by Ordnance Survey Limited. The Trading Fund £169.0m). ceased to exist when the Ordnance Survey Trading Fund (Revocation) Order 2016 came into effect on 31 March 2016. Other entities Principal risks and uncertainties All the subsidiaries and investment holdings of the Trading Fund were transferred to Ordnance Survey Limited on 1 April 2015. The Trading Fund had no employees and undertook no trade, so there were no activities, current or future, that require Subsidiaries and investment holdings held at the prior year end: consideration for risks and uncertainties. Post 1 April 2015 Ordnance Survey Limited has indemnified the Trading Fund 100% subsidiaries from any future liabilities resulting from the trade and assets of Ordnance Survey Leisure Limited (OSL) Ordnance Survey. Ordnance Survey International LLP (OSI) Shared ownership entities GeoPlace LLP (GeoPlace) − 50% owned − 75% profit share Neil Ackroyd Astigan Limited (Astigan) − 51% owned and profit share Accounting Officer PointX Limited (PointX) − 50% owned and profit share 24 June 2016 6 ORDNANCE SURVEY − ANNUAL REPORT AND FINANCIAL STATEMENTS 2015−16 Accountability report Corporate governance report Directors’ report All appointments of Directors (in office on 31 March 2016) expired when the Ordnance Survey Trading Fund (Revocation) The Directors present the Annual Report and Accounts of the Order 2016 came into effect. Ordnance Survey Trading Fund (Trading Fund) for the year to 31 March 2016. Miscellaneous disclosures On 1 April 2015 the assets and liabilities of the Trading Fund were transferred to Ordnance Survey Limited, a company The Trading Fund had no employees during the year so there incorporated in the UK. As the Trading Fund did not receive any are no pension disclosures. direct consideration for the transfer, the transfer out has been recognised as a non‑operating loss as it has not been generated Our auditor is The National Audit Office. The fee for the year was by operations. The credit to assets reduces the net assets in £6k. This fee has been borne by Ordnance Survey Limited. the Trading Fund to nil, clearing down all equity. There was no principal activity of the Trading Fund in the year to 31 March 2016.