Badger BC Investments Ltd - Borough of Broxbourne Council · 2016-09-14 · Badger BC Investments Ltd Badger BC Investments Ltd 6 During the year the Company received rental income

Badger BC Investments Ltd

Badger BC Investments Ltd 3

Contents

Corporate Information 4

Strategic Report 5

Directors’ Report 7

Statement of Directors’ Responsibilities 9

Statement of Changes in Equity 10

Statement of Comprehensive Income 11

Balance Sheet 12

Notes to the Financial Statements 13

Report of the Auditors 25



Corporate Information

Badger BC Investments Ltd is a limited liability company domiciled in the United

Kingdom. Badger BC Investments Ltd is a wholly owned subsidiary of Broxbourne

Borough Council.

Directors

Jeff Stack (Chairman)

Ken Ayling

Sandra Beck

Gavin Miles

Mark Mills-Bishop

Company Secretary

Gavin Miles

Registered Address

Borough Offices

Bishop’s College

Churchgate

Cheshunt

Hertfordshire

EN8 9XJ

Auditors

Ernst & Young LLP

One Cambridge Business Park

Cowley Road

Cambridge

CB4 0DZ

Bankers

Lloyds Bank plc



Strategic Report

The Directors present the Strategic Report for the year ended 31 March 2016 as

approved at the board meeting held at the Borough Offices, Churchgate, Cheshunt,

on 27 June 2016.

Principal Activity

The principal activity during the year was to acquire, develop and refurbish homes to

provide rental properties to tenants wishing to live in the private sector, but with the

assurance that the accommodation is managed by a responsible landlord.

Business Review

During the year the Company completed further property acquisitions in addition to

the two properties purchased in the previous financial year.

The third property at 341-343 Green Lanes, Palmers Green was acquired in April

2015. This is a mixed use property comprising a shop, three long lease hold owner-

occupied flats and a studio flat let on an assured short hold tenancy. This property

will generate an annual income of £90,000 for the Company.

A fourth property at 33 Northbrook Street, Newbury, was acquired in July 2015. This

is another mixed use property comprising a shop and three residential flats, which

are currently let under assured short hold tenancy agreements. The property will

generate an annual income of £102,580.

Two further residential properties were purchased in August 2015, 151 High Road,

Broxbourne and 9 Rosedale Avenue, Cheshunt. 151 High Road is a 3 bedroom

semi-detached house and 9 Rosedale is a four bedroom semi-detached house. At

the time of the purchase both properties required refurbishment before they could be

let. The refurbishment work at both properties is now complete, 151 High Road has

been let under an assured short hold tenancy agreement from May 2016 and 9

Rosedale is currently being marketed. It is expected that both properties will

generate an annual income of £18,600 each.

A seventh property, 3 Picardy Close, Dobbs Weir, was purchased in September

2015. This is a new build, semi-detached four bedroom house, which is let under an

assured short hold tenancy agreement will generate an annual income of £25,800.

Two properties were purchased in November 2015 and December 2015, 46

Winnipeg Way, Turnford, a two bedroom maisonette and 10 Gilpin Crescent,

Edmonton, a two bedroom flat. Both properties are let on assured short hold tenancy

agreements and will generate annual income of £13,200 and £15,600 respectively.

The Company is also leasing a residential flat at Cheshunt Park Golf Centre, from

Broxbourne Borough Council. This is being let on an assured short hold tenancy

agreement and will generate an annual income of £10,800.



During the year the Company received rental income on its nine properties totalling

£199,927, generating a gross profit, after deducting management fees, of £189,125.

Trading expenses as identified in the Statement of Comprehensive Income were

£238,896, which included administrative and other expenses of £70,305,

amortisation of intangible assets of £2,400 and interest on the loan from Broxbourne

Borough Council of £166,191.

After charging all other associated costs the Company made a profit for its second

period of trading of £5,696.

The value of the Company’s investment properties at the balance sheet date was

£5,478,420 and the Company held £158,565 in its bank account.

All investment properties were revalued on 31 March 2016 when the fair value was

considered to be £5,478,420 which is £55,245 over the net book value (NBV) of

£5,423,175.

During the year the Company made a capital loan repayment of £60,000, in addition

to the annual payment which fell due, to its parent Broxbourne Borough Council, of

£7,453.

No political or charitable donations were made during the period and the Company

did not acquire any of its own shares nor did it acquire shares in another

organisation.

By order of the board

Sandra Beck FCCA

Director

18 July 2016



Directors’ Report

Registered No. 8767464

The directors present their report and financial statements for the year ended 31

March 2016.

Directors of the Company

The current directors are shown on page 4.

J Stack, G Miles and M Mills-Bishop were appointed on 8 November 2013.

S Beck was appointed on 7 April 2014 and K Ayling was appointed on 2 July 2014.

Dividends

The directors do not recommend the payment of any dividend.

Future Developments

The Company’s business plan which was published in April 2014 outlined the trading

objectives for the first four years of existence. In line with this plan, it is intended that

over this period the Company acquires or develops properties totalling £10 million in

acquisition cost.

In addition the Company is seeking to develop homes on three plots of land it is

acquiring from Broxbourne Borough Council. These works have been tendered and

negotiations are underway with the Council to secure the land. Work has started on

one of the sites, under a licence agreement, with an expected completion date of

December 2016. The anticipated build time for the other two developments is likely

to be in the region of 12 months.

Going Concern

The Company’s business activities, together with the factors likely to affect its future

development, performance and position are set out in the strategic report and

directors’ report on pages 5 to 8. The financial position of the Company is set out in

these financial statements. The Company has access to funding to meet its working

capital requirements by way of mortgages issued by Broxbourne Borough Council

and secured against the Company’s properties. As a consequence, the directors

believe that the Company is well placed to manage its business risks successfully.

The directors have a reasonable expectation that the Company has adequate

resources to continue in operational existence for the foreseeable future.

Accordingly, they continue to adopt the going concern basis of accounting in

preparing the annual financial statements.



Auditors

The directors will recommend the reappointment of Ernst & Young LLP as auditors at

the next board meeting.

Risk

The main risks facing the Company are as follows:

Risk Controls

Risk that interest rate rises affect the viability of the business model.

Broxbourne Borough Council is obliged to lend to the Company at a commercial rate. The company must maintain sufficient margin on its returns to discharge its obligation to repay at a commercial rate.

Risk that yield does not achieve the required rate of return.

The business case for each proposal is considered in depth prior to committing.

Directors’ Statement as to Disclosure of Information to Auditors

The directors who were members of the board at the time of approving the directors’

report are listed on page 4. Having made enquiries of fellow directors and of the

Company’s auditors, each of these directors confirms that:

To the best of each director’s knowledge and belief, there is no information

(that is, information needed by the Company’s auditors in connection with

preparing their report) of which the Company’s auditors are unaware; and

Each director has taken all the steps a director might reasonably be expected

to have taken to be aware of relevant audit information and to establish that

the Company’s auditors are aware of that information.

The Company has prepared the financial statements in accordance with Financial

Reporting Standard 101 “Reduced Disclosure Framework” (FRS101).

By order of the board

Sandra Beck FCCA

Director

18 July 2016



Statement of Directors’ Responsibilities

The directors are responsible for preparing the Strategic Report, Directors’ Report

and the financial statements in accordance with applicable UK 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 Practice (United Kingdom

Accounting Standards and applicable law) and in accordance with Financial

Reporting Standard 101 “Reduced Disclosure Framework” (FRS101). 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 for the period.

In preparing those financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgements and 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 financial statements on a going concern basis, unless they consider

that to be inappropriate.

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.



Statement of Changes in Equity for the year ended 31 March 2016

Equity Share

Capital

Retained Earnings

Total Equity

£ £ £

Shares issued 1 - 1

Changes in Equity during 2014/15 - - -

Loss for the period - (35,292) (35,292)

Total Comprehensive Expenditure for the period

- (35,292) (35,292)

Decrease in the period - (35,292) (35,292)

Balance at 31 March 2015 carried forward

1

(35,292)

(35,291)

Changes in Equity during 2015/16 -

-

-

Profit for the period -

5,696

5,696

Total Comprehensive Income for the period

-

5,696

5,696

Increase in the period - 5,696

5,696

Balance at 31 March 2016 1 (29,596) (29,595)



Statement of Comprehensive Income for the Year Ended

31 March 2016

2015/16 2014/15

Notes £ £

Turnover

3 199,927 4,584

Cost of sales

(10,802) (275)

Gross Profit

189,125 4,309

Administrative expenses

(27,019) -

Other expenses

(43,286) (32,411)

Other operating income 220 -

Amortisation of intangible assets 7 (2,400) -

Increase in fair value of investment properties 6 55,245 -

Operating profit/(loss)

171,885 (28,102)

Interest receivable 2 -

Interest payable

5 (166,191) (7,190)

Profit/(Loss) on ordinary activities before taxation 5,696 (35,292)

Taxation 16 - -

Profit/(Loss) on ordinary activities after taxation 5,696 (35,292)

Other comprehensive income - -

Total comprehensive income 5,696 (35,292)



Balance Sheet as at 31 March 2016

31 March 2016

31 March 2015

Notes £ £

ASSETS

Fixed Assets

Investment properties

6 5,478,420 493,526 Intangible assets

7 9,600 12,000

Total Fixed Assets

5,488,020 505,526

Current Assets

Trade debtors

8,12 5,556 145

Cash and cash equivalents

9,12 158,566 1,478,538

Total Current Assets

164,122 1,478,683 TOTAL ASSETS

5,652,142 1,984,209

LIABILITIES

Creditors: amounts falling due within one year

Trade creditors 10,12 160,848 14,198

Amounts owed to group undertakings 12, 13 211,932 48,452

Total Current Liabilities 372,780 62,650

Loans and mortgages 11,12 5,308,957 1,956,850

Total Long Term Liabilities 5,308,957 1,956,850

TOTAL LIABILITIES 5,681,737 2,019,500

NET LIABILITIES (29,595) (35,291)

Capital and Reserves

Called up share capital 1 1

Profit and loss account page 10 (29,596) (35,292)

TOTAL EQUITY (29,595) (35,291)

These statements were approved and authorised for issue by the board and signed

on its behalf on 18 July 2016.

Sandra Beck FCCA

Director

Notes to the Financial Statements


Note 1 – Authorisation of Financial Statements and Statement of

Compliance with FRS 101

The financial statements of Badger BC Investments Ltd for the year ended 31 March

2016 were authorised for issue by the Board of Directors on 18 July 2016 and the

Balance Sheet was signed on the Board’s behalf by Sandra Beck, Director. Badger

BC Investments Ltd is incorporated and domiciled in the United Kingdom.

These financial statements were prepared in accordance with Financial Reporting

Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with

applicable accounting standards.

The Company has taken advantage of the following disclosure exemptions under

FRS 101:

Paragraph 8(g): The Company is exempt from the requirements of the following

paragraphs of IAS 1 Presentation of Financial Statements:

Paragraph 10(d) and (f): The Company is exempt from preparing a Statement

of Cash Flows.

Paragraph 16: The Company shall not present a statement of compliance with

IFRS.

Paragraph 40(a), (b), (c) and (d): The Company is exempt from restating prior

period disclosure notes where they relate to the current period.

Paragraph 111: The Company is exempt from the presentation requirements

relating to the Statement of Cash Flows.

Paragraphs 134, 135 and 136: The Company is exempt from disclosing

information regarding its objectives, policies and processes for the

management of Capital.

Paragraph 8(h): The Company is exempt from the requirements of IAS 7 Statement

of Cash Flows. The Company is not required to present a Statement of Cash Flows

along with the related notes.

Paragraph 8(j): The Company is exempt from the requirements of paragraph 17 of

IAS Related Party Transactions. The Company is not required to provide information

about transactions with related parties, other than between two or more members of

the group.

The Company’s financial statements are presented in sterling and all values are

rounded to the nearest pound (£) except where otherwise indicated.



Note 2 – Accounting Policies

1 General Principles

The Statement of Accounts summarises the Company’s transactions for the year

from 1 April 2015 and its position at the year end of 31 March 2016.

The accounting policies, which follow, set out those policies which apply in preparing

the financial statements for the year ended 31 March 2016.There have been no

changes in accounting policies or disclosures.

2 Going Concern

The Company’s financial statements are prepared on a going concern basis, that is,

the financial statements have been prepared on the assumption that the Company

will continue in operational existence for the foreseeable future. This means in

particular that the Statement of Comprehensive Income and Balance Sheet assume

no intention to curtail significantly the scale of the operation.

3 Accounting Standards that have been issued but not yet adopted

The International Accounting Standards Board and the IFRS interpretations

committee have amended several accounting standards which will apply from 1 April

2016.

These minor changes relating to Annual Improvement to IFRSs cycles, IFRS11 Joint

arrangements, IAS 16 Property, Plant, Equipment and IAS 38 Intangible Assets and

IAS 19 Employee Benefits are not expected to have a material effect on the

Company’s Statement of Accounts.

4 Accruals of Income and Expenditure

Activity is accounted for in the year that it takes place, not simply when cash

payments are made or received. In particular:

Supplies are recorded as expenditure when they are consumed – where there

is a gap between the date supplies are received and their consumption they

are carried as inventories on the Balance Sheet.

Expenditure in relation to services received is recorded as expenditure when

the services are received rather than when payments are made.

Interest receivable on investments and payable on borrowings is accounted

for respectively as income and expenditure on the basis of the effective

interest rate of the relevant financial instrument rather than the cash flows

fixed or determined by the contract.



Where income and expenditure have been recognised but cash has not been

received or paid, a debtor or creditor for the relevant amount is recorded in

the Balance Sheet. Where it is doubtful that debts will be settled, the balance

of debtors is written down and a charge made to revenue for the income that

may not be collected.

5 Revenue Recognition

Rental income arising from operating leases on investment properties is accounted

for on a straight line basis over the lease term.

6 Cash and Cash Equivalents

Cash is represented by cash in hand and ‘callable’ deposits with financial institutions

repayable without penalty on notice of not more than 24 hours. Cash equivalents are

investments that mature on demand and are therefore readily convertible to known

amounts of cash with insignificant risk of change in value.

7 Events after the Balance Sheet Date

Events after the Balance Sheet date are those events, both favourable and

unfavourable, that occur between the end of the reporting period and the date when

the Statement of Accounts is authorised for issue. Two types of events can be

identified:

Those that provide evidence of conditions that existed at the end of the

reporting period – the Statement of Accounts is adjusted to reflect such

events.

Those that are indicative of conditions that arose after the reporting period –

the Statement of Accounts is not adjusted to reflect such events, but where a

category of events would have a material effect, disclosure is made in the

notes of the nature of the events and their estimated financial effect.

Events taking place after the date of authorisation for issue are not reflected in the

Statement of Accounts.

8 Intangible Assets

Expenditure on non cash assets that do not have physical substance but are

identifiable and controlled by the Company (e.g. software licences) are capitalised

when they will bring benefits to the Company for more than one financial year.

Intangible assets with finite lives are amortised over the useful economic life and

assessed for impairment whenever there is an indication that the intangible asset

may be impaired. Amortisation is not charged in the year of acquisition. Amortisation

is charged on a straight line basis, based on an assessment of the period that the



assets are expected to be of use to the Company. The useful life assigned to the

software suite used by the Company is 5 years. The amortisation period and the

amortisation method are reviewed at least at each financial year end. Changes in the

expected useful life or the expected pattern of consumption of future economic

benefits embodied in the asset is accounted for by changing the amortisation period

or method, as appropriate, and are treated as changes in accounting estimates.

Gains or losses arising from derecognition of an intangible asset are measured as

the difference between the net disposal proceeds and the carrying amount of the

asset and are recognised in the statement of comprehensive income when the asset

is derecognised.

9 Investment Property

Investment properties are measured initially at cost, including transaction costs.

Subsequent to initial recognition, investment properties are stated at fair value, which

reflects market conditions at the reporting date. Gains or losses arising from changes

in the fair values of investment properties are included in the statement of

comprehensive income in the period in which they arise.

Investment properties are derecognised when either they have been disposed of or

when the investment property is permanently withdrawn from use and no future

economic benefit is expected from it. Any gains or losses on the retirement or

disposal of investment property are recognised in the statement of comprehensive

income in the period of derecognition.

10 Leases

Company as a lessor

Where the Company grants an operating lease over a property the asset is retained

in the balance sheet. Rental income is credited to the turnover line in the Statement

of Comprehensive Income and is recognised on a straight line basis over the lease

term.

Operating leases are only granted on the Company’s commercial properties.

Residential properties are let on Assured Shorthold Tenancies (AST) and are not

classified as operating leases.

11 Debtors

Trade debtors, which generally have 30 day terms, are recognised at the lower of

their original invoiced value and recoverable amount.

12 VAT

VAT payable is included as an expense only to the extent that it is not recoverable

from Her Majesty’s Revenue and Customs. VAT receivable is excluded from income.



13 Significant Judgements in Applying Accounting Policies

Revaluation of investment properties

The Company carries its investment properties at fair value, with changes in fair

values recognised in profit or loss. The Company engaged independent valuation

specialists to determine fair value as at 31 March 2016.

The key assumptions used to determine the fair value of the investment properties

are explained in Note 6.

Note 3 – Turnover

Turnover recognised in the Statement of Comprehensive Income is analysed as

follows.

2015/16 2014/15

£ £

Rental Income from Investment Properties 199,927 4,584

Total 199,927 4,584

Note 4 – Auditors’ Remuneration

The Company incurred the following fees payable to Ernst and Young LLP relating to

external audit services.

2015/16 2014/15

£ £

Audit of the financial statements 15,300 12,000

Total 15,300 12,000

Note 5 – Interest Payable

The Company has outstanding loans to the value of £5,308,957 secured against its

properties with its parent organisation Broxbourne Borough Council. These loans are

repayable over a period of forty years with an interest rate of 4% with repayments

made annually.

2015/16 2014/15

£ £

Interest on loan 166,191 7,190

Total 166,191 7,190



Note 6 – Investment Properties

The following items of income and expenditure have been accounted for in the gross

profit in the Statement of Comprehensive Income.

2015/16 2014/15

£ £

Rental income from investment property * 199,927 4,584

Direct operating expenses arising from investment property

(10,802) (275)

Gross Profit 189,125 4,309

* included in ‘turnover’ in Note 3

There are no restrictions on the Company’s ability to realise the value of its

investment property or on its right to receive income from any proceeds of sale,

subject to the outstanding mortgage to the Broxbourne Borough Council being

satisfied.

The following table summarises the movement in the fair value of investment

property over the year.

2015/16 2014/15

£ £

Balance at 1 April 493,526 -

Purchases at cost 4,929,649 493,526

Fair value adjustments 55,245 -

Balance at 31 March 5,478,420 493,526

Capital commitments

The Company had contractual obligations to develop or enhance investment

property to the value of £763,621 at 31 March 2016 (31 March 2015 £1,456,000).

Fair value

The Company’s investment properties have been valued at 31st March 2016, by

independent valuers in accordance with the methodologies and bases for estimation

set out in the professional standards of the Royal Institute of Chartered Surveyors.

All the Company’s investment properties have been value assessed as level 2 on the

fair value hierarchy for valuation purposes. This takes into account quoted prices for

similar assets in active markets, exiting lease terms and rentals and market

knowledge.



Note 7 – Intangible Assets

The Company accounts for its software as intangible assets, if that software is not an

integral part of a particular IT system and as such accounted for as part of the

hardware item of property, plant and equipment.

2015/16 2014/15

£ £

Gross carrying amounts 12,000 - Accumulated amortisation - -

Net carrying amount at 1 April 12,000 -

Purchases during the period - 12,000

Amortisation for the period (2,400) -

Net carrying amount at 31 March 9,600 12,000

Comprising:

Gross carrying amounts 12,000 12,000

Accumulated amortisation (2,400) -

9,600 12,000

Note 8 – Trade debtors

The trade debtors represent refunds on utility payments and reclaimable VAT.

Note 9 – Cash and Cash Equivalents

The Company does not hold any cash investments. All liquid assets are held in the

Company’s bank account.

31 March 2016

31 March 2015

£ £

Cash at bank 158,565 1478,537

Cash in hand 1 1

Total 158,566 1,478,538

Note 10 – Creditors: amounts falling due within one year

Trade creditors are unsecured, non-interest bearing and are normally settled on 30

day terms. Amounts owed to group undertakings within one year, are non-interest

bearing.



Note 11 - Leases

Operating Leases

The Company leases out property, as a lessor, under operating leases for

commercial use.

The future minimum lease payments receivable under non-cancellable leases in

future years are:

2015/16 2014/15

£ £

Not later than one year 160,000 -

Later than one year and not later than five years

640,000 -

Later than five years 1,406,000 -

Total 2,206,000 -

The minimum lease payments receivable do not include rents that are contingent on

events taking place after the lease was entered into, such as adjustments following

rent reviews. In 2015/16 no material contingent rents were received by the

Company.

Note 12 – Financial Liabilities

The Company has received loans during the year totalling £3.42 million from its

parent organisation Broxbourne Borough Council.

These loans are secured with fixed and floating security over each and all property

owned by the Company.

The loans are repayable over 40 years bearing interest of 4%.

2015/16 2014/15

£ £

Loan Principal Falling Due Within 5 years - -

Loan Principal Falling Due After 5 Years 5,308,957 1,956,850

Total 5,308,957 1,956,850



Note 13 – Financial Instruments

a Categories of Financial Instruments

The following categories of financial instrument are carried in the Balance Sheet:

2015/16 2014/15

£ £

Cash and bank balances Cash at bank 158,565 1,478,537

Cash in hand 1 1

Total cash and bank balances 158,566 1,478,538

2015/16 2014/15

£ £

Creditors Financial liabilities at amortised cost 372,780 62,650

Loans and Mortgages 5,308,957 1,956,850

Total creditors 5,681,737 2,019,500

2015/16 2014/15

£ £

Debtors Loans and receivables 5,556 145

Total debtors 5,556 145

b Income, expense, gains and losses

2015/16 2014/15

£ £

Interest income 2 - Interest expense (166,191) (7,190)

Total interest Expense in Statement of Comprehensive Income

(166,189) (7,190)

c Fair values of assets and liabilities

Financial assets represented by loans and receivables are carried in the Balance

Sheet at amortised cost. Their fair value is assessed by calculating the present value

of the cash flows that will take place over the remaining term of the instruments,

using the following assumptions:



Where an instrument will mature in the next 12 months, carrying amount is

assumed to be approximate to fair value;

The loan from Broxbourne Borough Council is at a fixed rate of 4% for 40

years therefore the fair value is assumed to be the same as the carrying

amount;

The fair value of trade and other receivables and payables is taken to be the

invoiced or billed amount less appropriate provision made against the risk of

less than full payment.

The fair values calculated are as follows:

2015/16 2014/15

Carrying Amount

Fair value

Carrying Amount

Fair value

£ £ £ £

Financial liabilities 372,780 372,780 62,650 62,650

Loans and mortgages 5,308,957 5,308,957 1,956,850 1,956,850

Short term debtors 5,556 5,556 145 145

Short term debtors, creditors and loans are carried at cost as this is an

approximation of their fair value.

d Nature and extent of risks arising from financial instruments

The Company’s activities expose it to a variety of financial risks:

Credit risk – the possibility that other parties might fail to pay amounts due to

the Company;

Liquidity risk – the possibility that the Company might not have funds available

to meet its commitments to make payments;

Market risk – the possibility that financial loss might arise for the Company as

a result of changes in interest rates.

The Company does not extend credit to its customers, rent is payable on demand,

therefore the Company’s assessment of its potential maximum exposure to credit

risk in relation to customer debt is nil.

e Market risk

Liquidity risk - The Company has a comprehensive cash flow management

system that seeks to ensure that cash is available as needed. There is no

significant risk that the Company will be unable to raise finance to meet its

commitments under financial instruments.



Interest rate risk - The Company is not exposed to risk in terms of its

exposure to interest rate movements on its loan as the loan agreement is

fixed at 4% for the length of the loan.

Price risk - The Company does not generally invest in equity shares.

Foreign Exchange risk - The Company has no financial assets or liabilities

denominated in foreign currencies and thus has no exposure to loss arising

from movements in exchange rates.

Note 14 – Related Parties

The Company’s directors and secretary are all either senior officers or elected

members of Broxbourne Borough Council – the Company’s parent organisation.

Other than their roles at Broxbourne Borough Council, the directors do not hold any

posts that they are paid for.

As the Company’s sole shareholder, Broxbourne Borough Council exercises full

control of the Company.

2015/16 2015/16

Sales Purchases Amounts

owed to

related

parties

Amounts

owed by

related

parties

£ £ £ £

Parent entity (Broxbourne Borough Council)

- 204,479 5,520,889 -

Total - 204,479 5,520,889 -

Terms and Conditions of transactions with related parties:

Sales and Purchases are made on an arm’s length basis. Balances with entities that

are not subsidiaries are non-interest bearing, unsecured, and are expected to be

settled within 30 days of invoice date. Terms and conditions for transactions with

related parties have the same conditions. During the year ended 31 March 2016, the

Company has made no provision for doubtful debts relating to amounts owed by

related parties. Amounts owed to related parties include payments received in

advance.



Note 15 – Ultimate Group Undertaking

The Company’s immediate and ultimate parent undertaking is Broxbourne Borough

Council.

Note 16 – Taxation

The tax charge on the profit on ordinary activities for the period was as follows:

2015/16 2014/15

£ £

UK Corporation Tax

- -

Deferred Tax

- -

Tax on profit/(loss) on ordinary activities - -

The tax charge for the year can be reconciled to the profit per the income statement

as follows:

2015/16 2014/15 £ £

Profit/(Loss) for the period 5,696 (35,292)

Tax on profit at standard UK tax rate of 20% (21% 2014/15)

1,139 (7,411)

Effects of: Expenses not deductible 87 - Tax losses (recognised) / not recognised (1,226) 7,411

Tax charge for the period - -

Badger BC Investments


Report of the Auditors

Badger BC Investments



Borough Offices Bishops’ College

Churchgate Cheshunt

Hertfordshire EN8 9XJ

Badger BC Investments Ltd - Borough of Broxbourne Council · 2016-09-14 · Badger BC Investments Ltd Badger BC Investments Ltd 6 During the year the Company received rental income

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