Corporate report

Financial statements

Updated 25 September 2019

Applies to England and Wales

Financial statements

Statement of comprehensive income for the year ended 31 March 2019

		2018/19	2017/18
	Notes	£’000	£’000
Income from contracts with customers	2	320,253	317,185
Miscellaneous income	2.1	2,967	–
Cost of service	2	(270,414)	(232,147)
Gross surplus		52,806	85,038
Administrative expenses	2	(21,765)	(25,276)
Operating surplus	2	31,041	59,762
Gain/(Loss) on disposal of non-current assets		39	(22)
Investment income – interest receivable	5	3,068	1,462
Finance costs	6	(633)	(658)
Restructure and reorganisation costs	3.2	3,494	(5,701)
Local Land Charges revenue costs	3.3	(4,681)	(1,298)
Surplus for the financial year		32,328	53,545
Dividend payable	7	(27,264)	(28,706)
Retained surplus/(loss) for the financial year		5,064	24,839
Gain/(Loss) on revaluation of property, plant and equipment		2,273	(726)
Comprehensive surplus/(loss) for the financial year		7,337	24,113

The notes to the financial statements are an integral part of these accounts.

Statement of financial position as at 31 March 2019

		2018/19		2017/18
	Notes	£’000	£’000	£’000	£’000
Non-current assets
Property, plant and equipment	8.1	60,638		55,742
Investment property	8.4	2,950		2,750
Intangible assets	9	25,227		17,032
Other receivables	12.2	1,498		2,219
Total non-current assets			90,313		77,743
Current assets
Contract assets	11	5,670		6,648
Trade and other receivables	12.1	10,279		9,365
Held-to-maturity investments	10	–		230,335
Cash and cash equivalents	13	519,798		308,739
Total current assets			535,747		555,087
Non-current assets classified as held for sale	8.3		–		2,100
Total assets			626,060		634,930
Current liabilities
Trade and other payables	14.1	67,373		85,264
Obligations under finance leases	14.1, 15.1	241		213
Short-term provisions	16.1	4,945		5,426
			72,559		90,903
Indemnity Fund	16.2		95,400		91,000
Total current liabilities			167,959		181,903
Non-current assets plus net current assets			458,101		453,027
Non-current liabilities
Obligations under finance leases	14.2, 15.1	4,282		4,523
Long-term provisions	16.1	927		2,124
Total non-current liabilities			5,209		6,647
Net assets			452,892		446,380
Capital and reserves
Public Dividend Capital			61,545		61,545
Revaluation reserve			20,308		18,096
Income and expenditure reserve			371,039		366,739
			452,892		446,380

The notes to the financial statements are an integral part of these accounts.

Mike Harlow
Acting Chief Executive and Chief Land Registrar 1 July 2019

Statement of changes in reserves for the year ended 31 March 2019

	Public Dividend Capital	Revaluation reserve	I&E reserve	Total reserves
	£’000	£’000	£’000	£’000
Balance at 31 March 2017	61,545	19,200	341,522	422,267
Changes in reserves 2017/18
Revaluation reserve
Transfer to retained earnings	–	(378)	378	–
Revaluation of non-current assets	–	–	–	–
Comprehensive surplus/(loss)	–	(726)	24,839	24,113
Balance at 31 March 2018	61,545	18,096	366,739	446,380
Impact of changes in accounting policy*			(825)	(825)
Adjusted balance at 31 March 2018	61,545	18,096	365,914	445,555
Changes in reserves 2018/19
Revaluation reserve
Transfer to retained earnings	–	(61)	61	–
Revaluation of non-current assets	–	–	–	–
Comprehensive surplus/(loss)	–	2,273	5,064	7,337
Balance at 31 March 2019	61,545	20,308	371,039	452,892

*The opening 2018/19 I&E reserve has been restated to reflect the impact of IFRS 15

The notes to the financial statements are an integral part of these accounts.

Public dividend capital represents the capital invested by the Government in HM Land Registry on its becoming a trading fund.

The I&E reserve represents the cumulative retained net income (after dividends) since HM Land Registry became a trading fund.

The Revaluation Reserve records the unrealised gain or loss on revaluation of assets.

Cash flow statement for the year ended 31 March 2019

		2018/19	2017/18
	Notes	£’000	£’000
Net cash inflow from operating activities	19.1	43,547	65,632
Investing activities
Purchase of tangible assets		(2,368)	(4,519)
Purchase of intangible assets		(13,816)	(8,646)
Proceeds on disposal of tangible assets		8	3,479
Interest received		3,359	953
(Increase)/decrease in investments in National Loans Fund	10	230,335	(230,335)
Net cash inflow from investing activities		217,518	(239,068)
Financing activities
Dividends paid		(49,160)	(6,899)
Repayments of capital element of obligations under finance leases		(213)	(194)
Interest elements of obligations under finance leases	6	(633)	(658)
Net cash outflow from financing activities		(50,006)	(7,751)
Net increase/(decrease) in cash and cash equivalents	19.2	211,059	(181,187)
Cash and cash equivalents at beginning of year	19.2	308,739	489,926
Cash and cash equivalents at end of year	13	519,798	308,739

The notes to the financial statements are an integral part of these accounts.

Notes to the financial statements

1. Statement of accounting policies

1.1 Basis of preparation

These financial statements have been prepared in accordance with the Government Financial Reporting Manual (FReM) 2018/19 and comply with the Accounts Direction given by HM Treasury in accordance with section 4 (6) (a) of the Government Trading Funds Act 1973. The accounting policies contained in the FReM follow International Financial Reporting Standards (IFRS), as adapted or interpreted for the public sector context. Where the FReM permits a choice of accounting policy, the accounting policy that has been judged to be the most appropriate to the particular circumstances of HM Land Registry for the purposes of giving a true and fair view has been selected. HM Land Registry’s accounting policies have been applied consistently in dealing with items considered material in relation to the financial statements.

These financial statements have been prepared on a going concern basis. Management is of the opinion that a going concern basis is appropriate as we are legally obliged under the Land Registration Act 2002 to provide statutory services relating to land registration and there are sufficient reserves to support the business going forward.

Accounting standards issued but not yet effective

IFRS 16 Leases came into effect on 1 January 2019. However, HM Treasury recommended that government departments defer this until 1 April 2020, although allowing early adoption under limited circumstances.

The change from 1 April 2020 is expected to affect five HM Land Registry property rentals, which are currently classified as operating leases, and together have a current lease capital value of £8.9m. Since HM Land Registry will create finance lease assets, and corresponding lease liabilities, net assets are not expected to change significantly. No extra funding will be required: instead of being charged rent, the quarterly repayments will instead be repayment of finance lease capital and interest expense, together with amortised depreciation of the leased asset values. This is not therefore expected to have a material effect on HM Land Registry.

New International Financial Reporting Standards affecting the 2018/19 Accounts

IFRS 15, which is effective from 2018/19, provides a comprehensive standard for income recognition. HM Land Registry recognises income primarily from the provision of land registration, and income recognition under IFRS 15 does not change the timing or value of income, when compared with previous years’ treatment under IAS 18.

Work in progress (inventories), previously accounted for under IAS 2, is now accounted for under IFRS 15. This has impacted on the I&E Reserve and contract assets balances. HM Land Registry has applied the cumulative catch-up method in the statement of changes in reserves, as allowed by the Standard, to reflect the change in accounting policy.

1.2 Accounting convention

The financial statements have been prepared under the historical cost convention modified for the revaluation of property, plant and equipment, investment property, assets held for sale and intangible assets to fair value as determined by the relevant accounting standard.

1.3 Estimation techniques

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The estimates and judgements that had a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the current year are:

• Note 8 - impairment of non-current assets
• Note 9 - impairment of intangibles
• Note 11 - inventories
• Note 14 - deferred income - fees received in advance
• Note 16.1 - early retirement, early severance and other provisions
• Note 16.2 - estimated provision for indemnity claims

1.4 Income from contracts with customers

IFRS 15 Revenue from Contracts with Customers has been adopted by the FReM with effect from 1 April 2018. The income recognition criteria of IFRS 15 are consistent with HM Land Registry accounting policy.

Income from fees and charges is recognised in the financial statements of the financial year in which the service is delivered. Income is recognised net of any refunds for transactions that are not completed, or on transactions where erroneous information is provided by customers.

Certain services require receipt of payment upon application, resulting in payments being received for services not yet delivered within the financial year being reported. These amounts are reported as contract liabilities and disclosed within current liabilities. Income is recognised once the contract performance obligation under IFRS 15 has been fulfilled, i.e. once the register has been fully updated following receipt of an application.

1.5 Operating segments

HM Land Registry’s operating segments are organised around the services it provides and are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM). The three main reportable business segments are: Registration of title; Land Charges and Agricultural Credits; and Commercial Income. This is based on the group’s internal organisation and management structure, and is the primary way in which the CODM is provided with financial information. The CODM of HM Land Registry is Mike Harlow, Acting Chief Executive and Chief Land Registrar.

1.6 Employee benefits

The cost of providing employee benefits is recognised in the period in which HM Land Registry receives services from its employees, rather than when it is paid or payable. Short-term employee benefits are recognised as an expense in the period in which the employee renders the service. Performance payments are recognised only when there is a legal or constructive obligation to pay them and the costs can be reliably estimated. Termination benefits are recognised when it can be demonstrated that there is an irreversible agreement to terminate the employment of employee(s) before the schemes’ retirement date or as a result of an offer to encourage voluntary redundancy.

1.7 Pensions

HM Land Registry employees are civil servants who are entitled to be members of the Principal Civil Service Pension Scheme (PCSPS) or the Civil Servant and Other Pension Scheme (CSOPS) - known as ‘alpha’. These are unfunded multi-employer defined benefit schemes, but HM Land Registry is unable to identify its share of the underlying assets and liabilities on a reasonable and consistent basis. HM Land Registry has therefore accounted for contributions and payments to these schemes under International Accounting Standards (IAS) 19 as if they were defined contribution schemes. Liability for the payment of future benefits is a charge on the PCSPS or alpha scheme.

1.8 Property, plant and equipment

Freehold and leasehold land and buildings are professionally valued by external, independent property valuers having appropriate recognised professional qualifications and recent experience in the location and category of the properties being valued. Cushman & Wakefield, RICS registered valuers, carried out a full valuation in March 2019.

HM Land Registry is required by the FReM to disclose non-current assets in the statement of financial position at fair value. For assets in use the FReM requires valuation at existing use as an asset’s fair value, rather than market value required by IFRS 13. Details of FReM adaptations which continue to apply for 2018/19 can be found on GOV.UK (search ‘Financial Reporting Manual 2018/19’).

For short-life non-property assets, historical cost is used as an approximation to the fair value of the asset. Freehold land and buildings and leasehold buildings are included at revaluation less accumulated depreciation and impairment losses. All other tangible non-current assets are included at historical cost less accumulated depreciation and impairment losses.

Assets in the course of construction are not depreciated. For other assets the depreciation charge is calculated so as to allocate the cost or revalued amount, less the estimated residual value, of non-current assets systematically over their remaining useful lives using the straight-line method.

Other property, plant and equipment includes IT and office equipment and machinery. HM Land Registry capitalises expenditure over £1,000 for an individual asset. Where appropriate, individual assets falling below the minimum value for capitalisation are grouped. It is HM Land Registry’s policy not to capitalise expenditure on fixtures and fittings, principally office furniture, as they are not considered material.

Asset lives are reviewed at the end of each financial year. The following asset depreciation rates are used.

Freehold land	nil
Freehold buildings	Estimated useful life
Leasehold buildings	Period of the lease or estimated useful life
Telecommunications equipment	5 years
Office equipment	5 years
Computers: mainframe	5 years
Computers: PCs	5 years
Structured cabling	10 years
Plant and heavy machinery	10 years

Non-current assets classified as held for sale are carried at fair value less costs to sell and are not depreciated. HM Land Registry classifies a non-current asset as held for sale if its carrying amount will be recovered principally through a sales transaction rather than through continuing use. To qualify, the asset must be available for immediate sale in its present condition and the sale must be highly probable.

1.9 Impairment of non-current assets

Impairment reviews are undertaken at each year end and if there are indications that the asset has suffered an impairment loss a charge is reflected in the statement of comprehensive income in the year in which it occurs. If the asset is carried at a revalued amount, the impairment loss is treated as a revaluation decrease, to the extent of the revaluation reserve that relates to the asset, with any excess in the statement of comprehensive income. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. The recoverable amount is the higher of fair value less costs to sell and value in use.

1.10 Intangible assets

Software licences

Separately acquired intangible assets are shown at historical cost. The costs incurred to acquire and bring these assets to use are capitalised. These include contractors’ charges, materials, directly attributable labour and directly attributable overhead costs. Software licences are included at cost less accumulated amortisation. They are amortised on a straight line basis at a rate of:

Mainframe	5 years
PCs	5 years

Software development costs

In accordance with IAS 38, expenditure incurred on developing new IT infrastructure (covering third-party costs and the direct costs of in-house staff effort) are capitalised. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by HM Land Registry are recognised as intangible assets when the following criteria are met:

• It is technically feasible to complete the software product so that it will be available for use;
• management intends to complete the software product and use or sell it;
• there is an ability to use or sell the software product;
• it can be demonstrated how the software product will generate probable future economic benefit;
• adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and
• the expenditure attributable to the software product during its development can be reliably measured

Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads. Other development expenditure that does not meet these criteria is recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. All research expenditure is written off as incurred.

Local Land Charges

HM Land Registry completed the building and development of a computerised register to hold the Local Land Charges data in July 2018.

As of 31 March 2019, the data relating to five local authorities has been added to the register and is in use.

Under IAS 38, development costs have been capitalised for two separate assets: a database to hold the information; and the data itself, which needs to be cleansed, digitised and migrated to this database. Following commencement of the register service, these components are amortised over their respective useful lives of:

1.11 Investment property

Investment property is measured at fair value. Any gain or loss on disposal (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss. When investment property that was previously classified as property, plant and equipment is sold, any related amount included in the revaluation reserve is transferred to retained earnings (see note 1.8 for details of valuers).

1.12 Contract assets

Contract assets relate to incomplete applications that have been partially processed and have incurred costs - internal costs of staff and directly attributable overheads. The costs associated with the contract assets are derived from the average costs for producing the relevant service. These estimates, and the underlying assumptions, are reviewed on a regular basis.

1.13 Trade receivables

Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for irrecoverable amounts. These impairment provisions are recorded in administrative expenses within the statement of comprehensive income. The carrying amount of trade receivables is deemed to be an approximation of fair value.

If collection of amounts receivable is expected in one year or less they are classified as current assets.

1.14 Financial Instruments

National Loans Fund investments with a duration greater than three months are treated as financial instruments and measured at fair value.

1.15 Cash and cash equivalents

Cash represents cash-in-hand, cash held with the Government Banking Service (GBS), cash on deposit with the National Loans Fund for up to three months and in commercial bank accounts. The commercial bank and GBS deposits are immediately available funds.

1.16 Trade payables

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are stated at their nominal value. The carrying amount of trade payables is deemed to be an approximation of fair value.

1.17 Provisions

HM Land Registry provides for legal and constructive obligations that are of uncertain timing or amount at the statement of financial position date, on the basis of management’s best estimate at that date of the expenditure required to settle the obligation. Provisions are discounted to the expected present value of their future cash flows using a risk-free discount rate. As the effect of discounting is immaterial, it is included as part of the revaluation to that provision in year, rather than disclosed on a separate line.

Provisions are charged to the statement of comprehensive income and recorded as liabilities in the statement of financial position. (Further details, including sensitivities, are given in note 16.)

1.18 Indemnity Fund

Schedule 8 to the Land Registration Act 2002 requires HM Land Registry to indemnify third parties against loss caused by mistakes in the register, mistakes in search results and loss of documents by HM Land Registry. Most of HM Land Registry’s indemnity claims arise as a result of mistakes in the register, and some of these mistakes are the result of forgery of documents such as charges. Indeed fraud/forgery usually accounts for the largest share of indemnity payments, and this year is no exception. Under Schedule 8 to the Act, HM Land Registry has statutory rights to recover these payments from third parties, where it is the case that third parties are at fault, either wholly or partly, for the loss.

As at the current accounting date, future claim payments are uncertain in timing and amount. The Indemnity Fund is established on the basis of the best estimate of the expenditure required to settle the obligation. The Indemnity Fund is determined after considering actuarial estimates of the cost of claims reported but not settled, as well as claims incurred but not reported. The estimated cost of claims includes expenses incurred in settling these claims.

The carrying amount of the Indemnity Fund is derived from critical judgements, estimates and assumptions based upon historical experience and other factors which are considered to be relevant. These estimates and underlying assumptions are reviewed on a quarterly basis by Land Registry, supported by its independent actuaries, the Government Actuaries Department (GAD).

After the accounting date, a further review of claims received by HM Land Registry (up to the date the Accounting Officer approves the Annual Report and Accounts) is made to see if the indemnity fund is still appropriately valued. Provided in these accounts are the likely settlement values of current and future claims against the Indemnity Fund. Further details of the Indemnity Fund are shown in note 16.2 of this report.

1.19 Contingent liabilities

Where appropriate, liabilities that have only a possible chance of crystallising and do not meet the provisions criteria have been classified as contingent liabilities. This includes, but is not limited to, claims for losses arising from errors, or fraud in relation to HM Land Registry’s statutory responsibility as insurer of titles in England and Wales (see note 18).

1.20 Finance leases

Where HM Land Registry retains all the risks and rewards of ownership of an asset subject to a lease, the lease is treated as a finance lease. Future instalments payable under finance leases, net of finance charges, are included in liabilities with the corresponding asset values recorded in non-current assets and depreciated over the shorter of their estimated useful lives or their lease terms. Lease payments are apportioned between the finance element, which is charged to the statement of comprehensive income as interest, and the capital element, which reduces the outstanding obligation for future instalments.

1.21 VAT

HM Land Registry accounts for VAT on its statutory activities under HM Treasury’s Taxing and Contracting Out of Services Directions. For non-statutory activity – which is business activity – VAT is charged and recovered according to commercial VAT rules. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase costs of non-current assets. Where output tax is charged or input tax is recoverable the amounts are stated net of VAT.

1.22 Treasury dividend

HM Land Registry is required to pay the Treasury an annual dividend being 3.5% of the average capital employed during the financial year plus the latest inflation estimate for the year, provided by the Office for National Statistics (ONS). HM Land Registry considers it sufficient to calculate this figure using an annual average. There is no material impact of calculating this figure using an alternative method, such as monthly average.

2. Business segments

International Financial Reporting Standard 8 (IFRS 8) – Operating Segments requires analysis of income and expenditure by principal business activities. There are three separate areas for statutory services carried out by HM Land Registry: registration of title, registration of Land Charges and registration of mortgages made under the Agricultural Credits Act 1928. For operational purposes, HM Land Registry combines delivery of these latter two services and this is reflected in this segmental analysis.

HM Land Registry also provides a range of commercial services which is shown separately as a business segment.

Detailed in the table below is the income from statutory fees and commercial charges, the cost of service and the net surplus for each of the business segments. The cost of service and administrative expenses are allocated and apportioned on an appropriate basis for the service.

	Statutory		Non- statutory	2018/19	Statutory		Non- statutory	2017/18
	Registration of title	Land Charges and Agricultural Credits	Commercial income	Total	Registration of title	Land Charges and Agricultural Credits	Commercial income	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Income	308,745	7,004	4,504	320,253	304,550	6,875	5,760	317,185
Cost of service	(267,318)	(958)	(2,138)	(270,414)	(228,944)	(867)	(2,336)	(232,147)
Administrative expenses	(21,405)	(30)	(330)	(21,765)	(24,980)	(29)	(267)	(25,276)
Operating surplus	20,022	6,016	2,036	28,074	50,626	5,979	3,157	59,762

The surplus for registration of title has decreased by £31.2m compared with the prior year. This is due in part to staff costs including overtime to reduce backlog and planned recruitment.

Local Land Charges resource costs are currently shown in Note 3.3. Currently, the onboarding of Local Land Charges data is at an early stage and the quantitative criteria for separate reporting under IFRS 8 have not yet been met. As soon as any of the standard’s criteria are met, this will be reported as a separate operating segment.

The policy for operating segments is contained within note 1.5.

2.1 Reconciliation between operating segments and Statement of Comprehensive Income

The table below shows the difference between our operating surplus in Note 2 and our operating surplus in our Statement of Comprehensive Income.

	Note	2018/19	2017/18
		£’000	£’000
Total operating surplus reported for operating segments	2	28,074	59,762
Reconciling items
Miscellaneous income		2,967	–
Total operating surplus per Statement of Comprehensive Income	SoCI	31,041	59,762

Miscellaneous income was netted off expenditure prior to 2018/19. It includes rental income, refunds and other small value receipts that do not relate to the core business activities of HM Land Registry, and which are therefore not included within note 2.

3. Operating surplus

3.1 Operating surplus is stated after charging

	2018/19	2017/18
	£’000	£’000
Staff costs (see note 4.1)	209,166	190,510
Provision for indemnity costs (see note 16.2)	4,400	5,900
IT services	14,835	14,703
Hire of machinery	5,628	5,328
Auditor’s remuneration – audit fee	98	65
Depreciation of tangible non-current assets – owned	4,109	3,801
Depreciation of tangible non-current assets – leased	241	361
Amortisation of intangible assets	2,972	610
Impairment in value of non-current assets	443	264
Charge for operating leases – buildings (see note 15.2)	1,570	1,669

3.2 Restructure and reorganisation costs

			2018/19			2017/18
	Early retirement	Early severance	Total	Early retirement	Early severance	Total
	£’000	£’000	£’000	£’000	£’000	£’000
Costs incurred in year	(3,494)	–	(3,494)	5,242	459	5,701
	(3,494)	–	(3,494)	5,242	459	5,701

HM Land Registry received a refund from MyCSP for £3.4m included in the 2018/19 accounts in respect of costs for early retirement, which were charged in error.

3.3 Local Land Charges

	2018/19	2017/18
	£’000	£’000
Revenue costs incurred in year	4,731	1,298
Local Land Charges fees	-50	–
	4,681	1,29

The Infrastructure Act 2015 passed to HM Land Registry the responsibility for maintaining a register of Local Land Charges. Approval was given for a phased delivery of LLC and the phase 1 service went live in July 2018.

Revenue costs related to the development of this service are recorded separately and shown in the table above.

Capital costs are shown in Note 9.

4. Employee information

4.1 Staff costs

				2018/19				2017/18
	Permanent staff	Apprentices	Others	Total	Permanent staff	Apprentices	Others	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Salaries	158,851	3,844	1,416	164,111	134,260	7,481	7,579	149,320
Social security costs	15,415	171	117	15,703	13,304	186	618	14,108
Other pension costs	28,476	670	206	29,352	24,528	1,317	1,237	27,082
	202,742	4,685	1,739	209,166	172,092	8,984	9,434	190,510

4.2 Staff numbers

Average number of persons employed (full-time equivalent) by HM Land Registry during the year was made up as follows.

				2018/19				2017/18
	Permanent staff	Apprentices	Others	Total	Permanent staff	Apprentices	Others	Total
Senior management	9	–	1	10	6	–	1	7
Operational	3,796	62	39	3,897	3,001	336	267	3,604
Administration	466	3	4	473	514	5	11	530
IT	467	18	8	493	398	15	6	419
	4,738	83	52	4,873	3,919	356	285	4,560

4.3 The salary and pension entitlements of the Chief Executive and the directors of HM Land Registry are included in the Remuneration and Staff report on pages 66 to 78.

4.4 Pensions

The Principal Civil Service Pension Scheme (PCSPS) and the Civil Servant and Other Pension Scheme (CSOPS) – known as “Alpha” – are unfunded multi-employer defined benefit schemes but HM Land Registry is unable to identify its share of the underlying assets and liabilities. The scheme actuary valued the PCSPS as at 31 March 2012. You can find details in the resource accounts of the Cabinet Office: Civil Superannuation.

For 2018/19, employers’ contributions of £29.0m were payable to the PCSPS (2017/18 £26.9m) at one of four rates in the range 20.0% to 24.5% of pensionable earnings, based on salary bands.

The Scheme Actuary reviews employer contributions usually every four years following a full scheme valuation. The contribution rates are set to meet the cost of the benefits accruing during 2018/19 to be paid when the member retires and not the benefits paid during this period to existing pensioners.

Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employers’ contributions of £84,869 were paid to one or more of the panel of three appointed stakeholder pension providers. Employer contributions are age-related and ranged from 8% to 14.75%.

Employers also match employee contributions up to 3% of pensionable earnings. In addition, employer contributions of £6,266, 0.5% of pensionable pay, were payable to the PCSPS to cover the cost of the future provision of lump sum benefits on death in service or ill health retirement of these employees.

Contributions due to the partnership pension providers at the balance sheet date were £26,199. Contributions prepaid at that date were £0.

Nine individuals retired early on ill-health grounds; the total additional accrued pension liabilities in the year amounted to £28,395 (2017/18: £30,575).

Further information relating to pension arrangements can be found in the Remuneration and staff report on pages 66 to 78 and note 1.7.

5. Investment income

	2018/19	2017/18
	£’000	£’000
Interest on bank deposits	3,068	1,462

6. Finance costs

	2018/19	2017/18
	£’000	£’000
Interest on obligations under finance leases	633	658

7. Dividend payable

	2018/19	2017/18
	£’000	£’000
Dividend payable	27,264	28,706

See note 1.22 for the accounting policy relating to dividend payments.

8 Property, plant and equipment

8.1 Cost or valuation

	Property			Plant and equipment
	Freehold		Leasehold
	Land	Buildings	Buildings	Assets under construction	IT-related assets	Other plant and equipment	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
At 1 April 2018	9,025	49,643	13,021	737	65,922	4,967	143,315
Additions	–	–	–	–	2,668	372	3,040
Assets brought into use	–	–	–	(723)	723	–	–
Revaluation in year	300	1,496	487	–	–	–	2,283
Reclassification of assets	–	–	(300)	–	2,649	–	2,349
Impairment	–	(333)	(10)	–	–	–	(343)
Disposals	(80)	(4)	(35)	–	(547)	–	(666)
Tfr from asset held for sale	550	1,550	–	–	–	–	2,100
At 31 March 2019	9,795	52,352	13,163	14	71,415	5,339	152,078

Accumulated depreciation

	Property			Plant and equipment
	Freehold		Leasehold
	Land	Buildings	Buildings	Assets under construction	IT-related assets	Other plant and equipment	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
At 1 April 2017	–	17,280	5,453	–	64,617	3,509	90,859
Provided during the year	–	1,450	637	–	2,778	167	5,032
Current cost revaluation	–	(594)	(389)	–	–	–	(983)
Reclassification of assets	–	–	–	–	112	–	112
Disposals	–	–	–	–	(7,374)	(73)	(7,447)
Tfr from asset held for sale	–	–	–	–	–	–	–
At 31 March 2018	–	18,136	5,701	–	60,133	3,602	87,573
Carrying amount at 31 March 2018	9,025	31,507	7,320	737	5,789	1,365	55,742

See note 1.8 for details of the property, plant and equipment accounting policy.
See note 1.9 for details of the impairment accounting policy.
See note 8.4 for details of investment property.

The carrying amount of land and buildings including investment property at market value is £42.6m.

At the end of the year, the net amount relating to finance leases within the leasehold carrying amount above was £0.0m, based on external valuation (2017/18: £0.0m). However, there remains a finance lease obligation at 31 March 2019 of £4.5m (see note 15.1).

8.3 Non-current assets classified as held for sale

	2018/19	2017/18
	£’000	£’000
At 1 April	2,100	6,982
Transfers to non-current assets	(2,100)	(250)
Impairment on assets sold	–	(31)
Revaluation Reserve Movement	–	(3,439)
Reversal of impairment	–	–
Disposals	–	(1,162)
At 31 March	–	2,100

The purchaser for Parkside Court, Telford, withdrew their offer to buy the site and, after a review showed that the likelihood of a sale within the next 12 months was unlikely, the land and property has been transferred back to non-current assets and revalued to an existing use valuation.

HM Land Registry has no non-current assets held for sale as at 31 March 2019.

8.4 Investment property

	2018/19	2017/18
	£’000	£’000
At 1 April	2,750	4,920
Revaluation in year	–	(70)
Reclassification of assets	300	–
Disposals	(100)	(2,100)
At 31 March	2,950	2,750

Investment property comprises a number of properties that are leased to third parties either in part or whole. The leases have different non-cancellable periods with current break option points ranging from six months to eight years. One lease has an annual rent review period, two are five yearly and one has none. Increases are linked to market rent based on comparables. None have an automatic right of renewal. Further information about these leases is included in note 15.2.

The fair value of investment property was determined by external, independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued. The independent valuers provide the fair value of HM Land Registry’s investment properties annually (see note 1.8 for details of valuers).

The fair value of investment properties are all Level 3 on the fair value hierarchy, because they are valued by reference to valuation techniques using inputs that are not based on observable market data.

There were no transfers between Level 2 and Level 3 fair value disclosures during the year. Each investment property is measured based upon active market prices adjusted where necessary for any difference in nature, location or condition of each specific property. The active market price is the market rent taking into account any expected or anticipated periods of non-occupancy by a future tenant.

9. Intangible assets

9.1 Cost or valuation

	E-security	Portal	Business Gateway	Assets under development	Local Land Charges	Software licences	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
At 1 April 2018	9,691	15,967	1,766	14,995	–	43,049	85,468
Additions	–	–	–	10,007	–	3,809	13,816
Assets brought into use	–	–	–	(19,113)	19,113	–	–
Reclassification	–	–	–	–	–	(2,649)	(2,649)
Disposals	–	–	–	–	–	–	–
At 31 March 2019	9,691	15,967	1,766	5,889	19,113	44,209	96,635
Amortisation
At 1 April 2018	9,691	15,967	1,766	–	–	41,012	68,436
Charge for the year	–	–	–	–	2,091	793	2,884
Reclassification of assets	–	–	–	–	–	88	88
Disposals	–	–	–	–	–	–	–
At 31 March 2019	9,691	15,967	1,766	–	2,091	41,893	71,408
Carrying amount at 31 March 2019	0	0	0	5,889	17,022	2,316	25,227

9.2 Cost or valuation

	E-security	Portal	Business Gateway	Assets under development	Local Land Charges	Software licences	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
At 1 April 2017	9,691	15,967	1,766	6,834	–	43,659	77,917
Additions	–	–	–	8,175	–	471	8,646
Assets brought into use	–	–	–	(14)	–	14	–
Reclassification	–	–	–	–	–	390	390
Disposals	–	–	–	–	–	(1,484)	(1,484)
At 31 March 2018	9,691	15,967	1,766	14,995	–	43,049	85,468
Amortisation
At 1 April 2017	9,691	15,967	1,766	–	–	41,886	69,310
Charge for the year	–	–	–	–	–	722	722
Reclassification of assets	–	–	–	–	–	(112)	(112)
Disposals	–	–	–	–	–	(1,484)	(1,484)
At 31 March 2018	9,691	15,967	1,766	–	–	41,012	68,436
Carrying amount at 31 March 2018	–	–	–	14,995	–	2,037	17,032

See note 1.10 for details of the intangible assets accounting policy.

The E-security, Portal and Business Gateway assets had all been fully depreciated by the start of the financial year, but are included in the accounts as they are still in use. Assets under development relate to the capitalisation of Local Land Charges costs during the year, case management improvements, mainframe to cloud-based migration and digital mortgage. More details about digital mortgage can be found on GOV. UK (search ‘HM Land Registry Digital Mortgage Service Contingent Liability’).

10. Financial instruments

	2018/19	2017/18
	£’000	£’000
Held-to-maturity investments	–	230,335

International Financial Reporting Standard 7 Financial instruments: disclosures requires disclosure of the role financial instruments have had during the period in creating or changing the risks an entity faces in undertaking its activities.

HM Land Registry has no borrowings and relies primarily on income from statutory activities and is therefore not exposed to liquidity risks.

As all material assets and liabilities are denominated in sterling, HM Land Registry is not exposed to currency risk.

11. Contract assets

	2018/19	2017/18
	£’000	£’000
Work-in-progress	5,670	6,648
	5,670	6,648

Contract assets relate to internal costs of staff and directly attributable overheads in preparing completion of registration for the customer.

As a result of IFRS 15, the basis for calculating contract assets has changed, resulting in a reduction in the asset value. HM Land Registry has applied the cumulative catch-up method in the statement of changes in reserves, as allowed by the Standard, to reflect the change in accounting policy. The 2018/19 I&E Reserve opening balance has been restated to show the effect of the reduction of £825,000.

12. Trade and other receivables

12.1 Current

	2018/19	2017/18
	£’000	£’000
Trade receivables	3,456	1,994
Other receivables	1,991	1,170
Prepayments and accrued income	4,832	6,201
	10,279	9,365

The average credit period taken on provision of services is 3.4 days. No interest is charged on the receivables. An allowance has been made for estimated irrecoverable amounts from the provision of services and this allowance has been determined by reference to past default experience.

12.2 Non-current

	2018/19	2017/18
	£’000	£’000
Trade receivables	3,456	1,994
Other receivables	1,991	1,170
Prepayments and accrued income	4,832	6,201
	10,279	9,365

The carrying amount of trade and other receivables is deemed to be an approximation of their fair value.

13. Cash at bank and in hand

	2018/19	2017/18
	£’000	£’000
Government Banking Service	504,081	100,098
Commercial banks and cash-in-hand	15,717	18,588
National Loans Fund	–	190,053
	519,798	308,739

HM Land Registry’s financial assets are investments, bank balances and cash and trade and other receivables, which represent the maximum exposure to credit risk in relation to financial assets. The credit risk is primarily attributable to trade and other receivables and is spread over a large number of customers. The amounts presented in the statement of financial position are net of allowances for doubtful receivables, estimated by management based on past experience and an assessment of the current economic climate. The credit risk on liquid funds is limited because HM Land Registry’s bank balances are in the main held with the Government Banking Service and the National Loans Fund.

14. Trade and other payables

14.1 Current

	2018/19	2017/18
	£’000	£’000
Trade payables	738	2,343
Taxation and social security	4,987	4,498
Other payables	3,635	3,329
Accruals	27,542	22,122
Net obligations under finance leases – buildings	241	213
Net obligations under finance leases – computer equipment	–	–
Contract liabilities	23,661	24,266
Dividend payable	6,810	28,706
	67,614	85,477

The average credit period taken for trade purchases is 7.6 days. The carrying amount of trade payables is deemed to be an approximation of their fair value.

14.2 Non-current

	2018/19	2017/18
	£’000	£’000
Net obligations under finance leases – buildings	4,282	4,523
Net obligations under finance leases – computer equipment	–	–
	4,282	4,523

15. Obligations under leases

15.1 Finance leases

	Minimum lease payments		Present value of minimum lease payments
	2018/19	2017/18	2018/19	2017/18
Amounts payable under finance leases	£’000	£’000	£’000	£’000
Within one year	846	846	241	213
In the second to fifth years inclusive	3,383	3,384	1,333	1,176
After five years	4,230	5,076	2,949	3,347
	8,459	9,306	4,523	4,736
Less future finance charges	(3,936)	(4,570)
Present value of lease obligations	4,523	4,736
Less amount due for settlement within 12 months (shown under current liabilities)			(241)	(213)
Amount due for settlement after 12 months			4,282	4,523

15.2 Operating leases

Leases as lessee

	2018/19	2017/18
	£’000	£’000
Minimum lease payments under operating leases recognised in the year	1,570	1,669
Income from tenants	–	–
	1,570	1,669

At the statement of financial position date HM Land Registry had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

	2018/19	2017/18
	£’000	£’000
Within one year	267	85
In the second to fifth years inclusive	951	1,076
After five years	409	409
Income due from tenants	–	–
	1,627	1,570

Operating lease payments represent rentals payable by HM Land Registry for land and buildings, including the Nottingham and Peterborough local offices.

Leases as lessor

HM Land Registry leases out investment properties (see note 8.4).

At 31 March 2018 the future minimum lease payments under non-cancellable leases are receivable as follows:

	2018/19	2017/18
	£’000	£’000
Within one year	–	29
In the second to fifth years inclusive	–	–
After five years	398	348
	398	377

During the year, investment property rental income of £0.4m was receivable. As in previous years, this was included within miscellaneous income (see note 2.1). However, whereas previously the properties were let under memorandum of terms of occupation (MOTO) to other public sector organisations, they are now let on commercial terms.

16. Provisions for liabilities and charges

16.1 Early release schemes and other

	Early retirement	Other	Total	Early retirement	Other	Total
			2018/19			2017/18
	£’000	£’000	£’000	£’000	£’000	£’000
At 1 April	7,105	445	7,550	9,987	715	10,702
Provided in year	–	721	721	1,864	–	1,864
Revaluation of provision	115	–	115	(351)	13	(338)
Provision utilised in the year	(2,309)	(205)	(2,514)	(4,279)	(217)	(4,496)
Provision written back unused	–	–	–	(116)	(66)	(182)
At 31 March	4,911	961	5,872	7,105	445	7,550
Included in current liabilities	3,984	961	4,945	4,981	445	5,426
Included in non-current liabilities	927	–	927	2,124	–	2,124
			5,872			7,550

The early retirement provision (ERP) gives retirement benefits to certain employees. These benefits conform to the rules of the Principal Civil Service Pension Scheme (PCSPS). HM Land Registry bears the cost of these benefits until the normal retirement age of the employees retired under the scheme. Total payments in the year amounted to £2.3m in 2018/19, of which £2.3m had been provided for within the ERP provision in the 2018/19 accounts. The total pension liability up to normal retiring age in respect of each employee is charged to the statement of comprehensive income in the year in which the employee takes early retirement and a provision for future pension payments is created. Pension and related benefit payments to the retired employee until normal retiring age are then charged annually against the provision.

Other provisions relate to property dilapidation costs.

16.2 Indemnity Fund

The Land Registration Act 2002 places a legal liability on HM Land Registry to indemnify for losses resulting from errors or omissions on the register of title. This includes errors resulting from frauds perpetrated by third parties. As a statutory insurer of titles in England and Wales, indemnity payments are not confined to mistakes made by HM Land Registry. HM Land Registry provides for these claims under its Indemnity Fund both for known claims and claims incurred but not reported (IBNR).

	Outstanding provision	IBNR provision	2018/19 Total	Outstanding provision	IBNR provision	2017/18 Total
	£’000	£’000	£’000	£’000	£’000	£’000
At 1 April	10,800	80,200	91,000	8,000	77,100	85,100
Provided in the year	2,620	–	2,620	5,025	–	5,025
Provisions utilised in the year	(2,620)	–	(2,620)	(5,025)	–	(5,025)
Claims revaluation	400	–	400	2,800	–	2,800
IBNR revaluation	–	4,000	4,000	–	3,100	3,100
At 31 March	11,200	84,200	95,400	10,800	80,200	91,000

Following the actuarial review by Government Actuary’s Department (GAD), the fund in respect of reported but not settled claims (Outstanding provision) has increased in 2018/19 by £0.4m (2017/18: £2.8m increase). The provision for claims incurred but not reported (IBNR provision) has increased in 2018/19 by £4.0m (2017/18: £3.1m increase).

The reason for the £0.4m increase in outstanding claims is due to an increase in the value of pending indemnity claims.

The £4.0m IBNR provision movement was as a result of a £5.0m increase in IBNR provision due to fraud and error claims having different settlement values and different settlement patterns and in the previous year these were treated as one settlement value and pattern, which is offset by a £1.0m decrease due to fewer claims being reported over the last year than expected which has resulted in a lower IBNR.

The Outstanding provision for claims received but not yet settled is an estimate and as it involves projecting future payments, the final amounts paid on these claims is uncertain. The main uncertainties are:

• the proportion of outstanding claims that will ultimately be paid
• the value of the payments made
• the effect of any legal judgements

The presence of large outstanding claims can add significantly to this uncertainty.

The IBNR provision is greater and inherently more uncertain than the Outstanding provision. Unlike the Outstanding provision, which is based on existing claims information, the IBNR provision covers potential claims that may be made as a result of errors that have already been introduced into the register as a result of day-to-day update activity (either through fraud and forgery or administrative error). The main uncertainties within the IBNR provision are:

• the number of unreported errors currently within the register is unknown
• at what point in the future these errors will be discovered and claims made
• how much the cost of the corresponding claims will be

Claims can take many years to be reported and subsequently settled.

In estimating the IBNR provision, the actuaries project the number and timing of future claim reports and average claim sizes, using assumptions about claims settlement patterns, the expected effects of any known legal judgements and claims inflation. The resulting projected future claims cash flows are then discounted to a net present value at the accounting date using HM Treasury prescribed discount rates.

The assumptions used in the projections are based on analysis of historical claims data, allowance for recent trends and consideration of the potential effects of underlying factors such as the volume of HM Land Registry activity and numbers of registered titles. We provide input to the actuaries on these assumptions, based on the knowledge of the legal team that handles the claims.

The value of the Indemnity Fund provisions are subject to future uncertain final settlement value, both for known claims and claims incurred but not reported (IBNR). The uncertainty in value of outstanding claims could lead to a variation in the proposed provision. A range of scenarios have been considered in respect of the assumptions on:

• the proportion of claims that settle for zero
• the average claim size
• the HM Treasury prescribed discount rate
• the number of claims that will be received
• the rate of inflation

These scenarios have been considered in isolation and combination as shown in the sensitivity analysis table below.

On the basis of this analysis work it is reasonably foreseeable that the value of liabilities could be about £11.2m (outstanding provision) or £84.2m (IBNR provision).

It is possible that in extreme favourable scenarios the value of liabilities could be as little as £10.4m (outstanding provision) and £60.6m (IBNR provision).

We have also considered extreme adverse scenarios, where the value of liabilities is as much as £12.0m (outstanding provision) and £107.8m (IBNR provision). The long-term open-ended nature of statutory indemnity means that these figures do not represent the maximum possible liability. However, we believe the likelihood of such scenarios to be small.

The degree of uncertainty at future accounting dates may be different from that illustrated here. This could be for a number of reasons, for example because the profile of claims has changed or because the outlook on future claim trends has changed.

At future accounting dates, it should be expected that:

• the outstanding provision will fluctuate depending on the volume of claims reported at the time, especially large claims
• all else being equal the IBNR provision will increase over time because of inflationary forces
• both the Outstanding provision and the IBNR provision will be particularly sensitive to the number and value of fraud and forgery claims as these are the most financially significant category of claims

The Indemnity Fund provision of £95.4m is our best estimate. However, the value of the Indemnity Fund provisions are subject to future uncertainty.

Sensitivity analysis

	Outstanding provision	Percentage movement 2018/19
	£m	%
Provided in these accounts (reasonably foreseeable value – see note 16.2)	11.2	0
Impact of scenarios
Discount rate
1. Increase Treasury prescribed discount rate by 0.5% pa	11.1	– 1
2. Decrease Treasury prescribed discount rate by 0.5% pa	11.3	1
Settlement costs
3. Increase settlement costs for the first development year by 5% for error claims	11.5	3
4. Decrease settlement costs for the first development year by 5% for error claims	10.9	– 3
5. Increase settlement costs for the first development year by 5% for fraud claims	11.5	3
6. Decrease settlement costs for the first development year by 5% for fraud claims	10.9	– 3
Extreme favourable scenarios
(1) + (4) + (6)	10.4	–
Extreme adverse scenarios
(2) + (3) + (5)	12

	IBNR provision		Percentage movement
	maximum £m	minimum %	increase %	decrease %
Provided in these accounts   (reasonably foreseeable value – see note 16.2)	84.2	84.2	0.0	0.0
Impact of scenarios
Favourable but foreseeable scenarios
Nil claims proportion
1. Change the nil claims proportion for attritional claims by +/- 5%	87.6	80.8	4	– 4
2. Change the nil claims proportion for large claims by +/- 5%	85.9	82.5	2	– 2
Average cost per claim
3. Change average cost per claim for attritional error claims by +/- 10%	85	83.4	1	– 1
4. Change average cost per claim for large error claims by +/- 10%	85	83.4	1	– 1
5. Change average cost per claim for attritional fraud claims by +/- 10%	88.4	80	5	– 5
6. Change average cost per claim for large fraud claims by +/- 10%	85.9	82.5	2	– 2
Discount rate
7. Increase Treasury prescribed discount rate by 0.5% pa		81.7		– 3
8. Decrease Treasury prescribed discount rate by 0.5% pa	86.7		3
Projected number of IBNR claims
9. Increase projected number of attritional IBNR claims by 10%   for incident years since 2013/14	85.9		2
10. Decrease projected number of attritional IBNR claims by 10% for incident years since 2013/14		82.5		– 2
11. Increase projected number of large IBNR claims by 10% for incident years since 2013/14	85.9		2
12. Decrease projected number of large IBNR claims by 10% for incident years since 2013/14		82.5		– 2
Future claims inflation
13. Increase assumed future claims inflation by 1%	89.3		6
14. Decrease assumed future claims inflation by 1%		79.1		– 6
Extreme favourable scenarios
(1)+(2)+(3)+(4)+(5)+(6)+(7)+(10)+(12)+(14)		60.6
Extreme adverse scenarios
(1)+(2)+(3)+(4)+(5)+(6)+(8)+(9)+(11)+(13)	107.8

17. Capital commitments

	2018/19	2017/18
	£’000	£’000
Capital expenditure	–	1,518
Contracted for but not provided in these accounts	–	1,518

18. Contingent liabilities

18.1 Indemnity

The Land Registration Act 2002 places a legal liability on HM Land Registry to indemnify for losses resulting from errors or omissions on the register of title. This includes errors resulting from frauds perpetrated by third parties. As a statutory insurer of titles in England and Wales, indemnity payments are not confined to mistakes made by HM Land Registry. HM Land Registry provides for these claims under its Indemnity Fund both for known claims and claims incurred but not reported (IBNR) (see note 16.2) based upon the assumed likelihood that claims will be successful.

As at 31 March 2019, the value of pending indemnity claims made to HM Land Registry is shown below. The estimated settlement value of these claims included within the Indemnity Fund provision is £11.2m (see note 16.2.

Errors or omissions

	2018/19	2017/18
	£’000	£’000
Mistakes	10,510	8,240
Fraud and forgery	18,967	13,825
	29,477	22,065

18.2 Employment tribunals

At 31 March, HM Land Registry had a small number of employment tribunal cases, which are considered contingent liabilities. However, at this time, it is not possible to estimate their likely outcome and timing. IAS 37 Provisions, Contingent Liabilities and Contingent Assets requires only the general nature of the dispute to be disclosed.

19. Notes to the cash flow statement

19.1 Reconciliation of operating surplus to net cash inflow from operating activities

	2018/19	2017/18
	£’000	£’000
Operating surplus	31,041	59,762
Impact of changes in accounting policy*	(825)	–
Restructure and reorganisation costs	3,494	(5,701)
Local Land Charges revenue costs	(4,681)	(1,298)
Depreciation of property, plant and equipment	4,351	4,161
Amortisation of intangible assets	2,972	610
Impairment in value of non-current assets	443	264
Increase/(decrease) in provisions	(4,709)	(3,153)
(Increase)/decrease in inventories	978	(2,598)
(Increase)/decrease in receivables	(485)	(137)
Increase/(decrease) in payables	6,569	7,822
Increase in Indemnity Fund	4,400	5,900
Net cash inflow from operating activities	43,547	65,632

*The movement in inventories has been restated to reflect the impact of IFRS 15

19.2 Reconciliation of net cash flow to movement in net cash

	2018/19	2017/18
	£’000	£’000
Net cash at start of period	308,739	489,926
Increase/(decrease) in cash in the period	211,059	-181,187
Net cash at end of period	519,798	308,739

20. Related party disclosures

In accordance with IAS 24 Related party disclosures, as interpreted by the FReM, the following information is provided on related party transactions.

HM Land Registry is an executive agency, trading fund and government department and BEIS is our parent department. During the year it has had a number of material transactions with other government departments and other central government bodies. Most of these transactions have been with Ordnance Survey and HM Courts & Tribunals Service.

None of the board members, or members of the key management staff or other related parties, have had influence over any material transactions undertaken by HM Land Registry.

21. Events after the reporting period

In accordance with the requirements of IAS 10 Events after the reporting period, events after the statement of financial position date are considered up to the date on which the accounts are authorised for issue. This is interpreted as the date of the certificate and report of the Comptroller and Auditor General.

Non-adjusting events after the reporting period

There are no non-adjusting events after the reporting period.