Merseyside Integrated Transport Authority Statement Of Responsibilities For The Statement Of Accounts


Merseyside Integrated Transport Authority



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Merseyside Integrated Transport Authority


Cash Flow Statement



2007/08




2008/09

Notes

MITA

Group




MITA

Group




£000

£000




£000

£000










Revenue Activities


































Cash Outflows:








(11405)


(28843)

Employment Costs

(11587)

(29223)




(7417)

(216834)

Other Operating Costs

(8819)

(219766)




(179414)

-

Executive Grant (Including SRG and Concessionary Travel Grant)

(172626)

-




(198236)

(245677)




(193032)

(248989)










Cash Inflows:










105857

105857


Levy Income

110092

110092




35931

86424

Charges for Goods & Services

36363

101457




92014

92014

Special Railway and Concessionary Travel Grant

85126

85126




____-_

____-_

Other Grants

____-_

____-_






















35566

38618

Net Cash Inflow from Operating Activities

38549

47686





























Returns on Investments and Servicing of Finance


































Cash Outflows:










(23210)

(23210)

Interest Paid

(17889)

(17889)




-

-

Interest Element of Finance Lease Payments

-

-


























Cash Inflows:










3226

3228

Interest Received

3129

3130




-

-

Other

-

2793




























Taxation










-

-

Refund

-

-


























Capital Activities


































Cash Outflows:










(1551)

(29463)

Purchase of Fixed Assets

(2198)

(43235)




(37271)

-

Capital Grants to MPTE

(29144)

-




-

(4500)

Company Acquisitions

-

-





























Cash Inflows:










2

2

Sale of Fixed Assets

4

317




9824

9824

Capital Grants Received

21001

21429




-

-

Other Capital Cash Receipts

-

-




6534

9034

Contributions

216

216












































Management of Liquid Resources










2301

2301

Net Increase (decrease) in short-term deposits

(5086)

(5086)




10300

-

Net Increase (decrease) in PTE monies held

700

-




__-__

_ _-

Net Increase (decrease) in purchase monies for TBS

(234)

(234)




















5721

5834

Net Cash Inflow/(Outflow) before Financing

9048

9127




























Financing


































Cash Outflows:










(53826)

(53826)

Repayments of Amounts borrowed

(12674)


(12674)




-

-

Capital Element of Finance Lease Payments

-

-




























Cash Inflows:










48311

48311

New Loans Raised

5000

5000




-

-

Short-term Loans Raised

-

-




















_____


_____




_____

_____




206

319

Increase/(Decrease) in Cash

1374

1453

39

_____

_____




_____

_____























Merseyside Integrated Transport Authority
Notes To The Financial Statements
1. Remuneration of Senior Staff
Local Authorities are required to disclose details of the remuneration of senior staff earning in excess of £50,000 as follows:-



Numbers of Employees

2007/08


Total Annual Remunerations

Numbers of Employees

2008/09





£50,000 to £59,999







£60,000 to £69,999




1

£70,000 to £79,999

1




£80,000 to £89,999







£90,000 to £99.999




2

£100,000 to £11 0,999

2




£110,000 to £119,999







£120,000 to £129,999







£130,000 to £139,999




1

£140,000 to £149,999





£150,000 to £159,999


1




£160,000 to £169,999







£170,000 to £179,999



2. Mersey Tunnels


(a) The Mersey Tunnels Act 2004 permits any operating surplus to be utilised by the Authority to achieve public transport policies in its local transport plan. In 2008/09, £3.5m was transferred into the Authority’s General Fund and a Tunnels Reserve and Renewals Fund balance of £5.8m remained at 31 March 2009.
Prior to the Tunnel operations becoming self-balancing, the Tunnels deficit was funded by Authority Levy. Over several years levy funding reached £28m, which following legal advice is now being repaid by Tunnels over 21 years. The Authority has approved an annual repayment, including interest, of £3.7m.
(b) The Works Unit carries out all activities of a maintenance nature.
3. Interest/Investment Income
In accordance with the Authority's accounting policies, surplus MPTE monies were on-lent to the Authority, interest free, to permit bulk placements onto the money market.
4. Provision for Repayment of External Loans


2007/08




2008/09

£000





£000










12237

Minimum Revenue Provision based on the Capital Financing Requirement

12700

_____

(See accounting policy 24)

_____













Amount Charged as Depreciation




12205

Depreciation written off (vehicles below the deminimis value of £7.5k)

12147

32

Adjustment to Income and Expenditure Account

553

_____




_____










12237



12700

_____




_____












Merseyside Integrated Transport Authority
Notes To The Financial Statements (Cont’d)

5. RSG, Precepts & Levies


During 2008/09 the Authority received levies amounting to £110.1m compared to £105.9m in 2007/08.
6. Special Railway Grant & National Concessionary Travel Scheme Grant
Direct grant, in the form of Special Railway Grant, was received from the Department for Transport to ensure that the costs of Rail privatisation does not fall upon the Council Taxpayer. As from 2008/09, for three years, the Authority also receives a direct grant from the Department for Transport to cover additional costs relating to the National Concessionary Travel Scheme.
7. Reserves
The Authority operates a general reserve fund using current balances to finance future year deficits. Separate reserves have been created relating to accumulated Tunnels surpluses, Pensions, Capital and various other earmarked reserves.
8. Operations
FRS 3 requires income and expenditure to be split between Continuing, Acquired and Discontinued Operations. For this purpose all operations during the year ended 31 March 2009 are "Continuing" in nature.
9. Refinancing

FRS4 requires the recognition of gains and losses arising from the re-purchase or early settlement of borrowing in the consolidated revenue account. For the purpose of FRS4, the Authority had not re purchased and arranged early settlement any part of its debt during 2008/09.

10. Members Allowances
Total expenses/allowances paid in 2008/09 were £320k, compared to £321k paid in 2007/08.
The outturn for members’ allowances for 2008/09 were reported to the Authority’s Meeting on 19 March 2009. Changes to the scheme for 2009/10 were approved by the Authority at its AGM on 25 June 2009. Copies of these reports can be supplied on request by writing to Merseytravel’s Hatton Garden offices.


Merseyside Integrated Transport Authority


Notes To The Financial Statements (Cont’d)

11. Audit Fees


External audit fees paid in 2008/09 were as follows:-



2007/08




2008/09

MITA £000

Group £000







MITA £000

Group £000


























Audit Commission Fees in respect of:-

























91

181




Fees payable for external audit services carried out by the appointed auditor

91

181

40

40




Fees payable to the Audit Commission for certification of grant claims

20

20

223

223




Other fees payable to the Audit Commission for work on Merseytram carried out under Section 8 of the Audit Commission Act 1998.

-

-

-

7




Mersey Ferries Ltd

-

15

_____


_____







_____

_____



















354

451







111

216

_____

_____







_____

_____



















12. Late Payments of Commercial Debts (Interest) Act 1998


The Authority’s Performance Plan includes a target for paying 100% of undisputed invoices for 2008/09 within 30 days. Actual performance resulted in payments of invoices within 30 days of 96.3% and 97.7% for 2007/08 and 2008/09 respectively. For the period to 31 March 2009, there have not been any claims for late payment interest relating to either the Authority or its Group.

Merseyside Integrated Transport Authority

Notes To The Financial Statements (Cont’d)
13. Related Party Transactions
The objective of reporting these transactions is to ensure that financial statements contain the disclosures necessary to draw attention to the possibility that the reported financial position and results may have been affected by the existence of related parties and by material transactions with them. These transactions have been included elsewhere in these accounting statements are summarised as follows:-


Related Party

Transaction

References
(showing appropriate detail and values)

Internal
















Members

Members allowances including attendance of conferences, hospitality extended to visiting dignitaries and other approved duties (£321k and £320k for 2007/08 and 2008/09 respectively).

Included in “Democratic Representation and Mgt. Costs” on the Income & Expenditure Statement.










Directors

Emoluments

Notes to the Accounts (Note 1)










External
















District Councils

Levies

Notes to the Accounts (Note 5)










UK Government

Special Rail and National Concessionary Travel Scheme grants

Notes to the Accounts (Note 6). (Rail grant: £92.0m and £78.6m for 2007/08 and 2008/09 respectively; Concessionary Travel grant: £6.5m for 2008/09)










EU Government

ERDF Grants

Notes to the Accounts (Note 39(f))










Partners

Contributors towards capital projects

Notes to the Accounts (Note 39(f))








Passenger Transport Executive

Revenue grants, capital grants, support services and joint investments of surplus cashflow monies

Notes to the Accounts (Note 18), Statement of Accounting Policies (Notes 16 and 20)










Merseyside Pension Fund

Pensions

Notes to the Accounts (Note 22 & 23)










PWLB/DfT

Loans

Notes to the Accounts (Note 24)

The Authority’s chief officers have more than one role, being directors of the Authority, the Executive and the Executive’s subsidiary companies. All members have at least two roles under the Local Government Act 1985 in that they represent both the District Councils and the Integrated Transport Authority. Several members also represent certain other bodies including the Local Government Association, ITA Special Interest Group, Mersey Dee Alliance, North West LA’s Employers Organisation, North West Rail Forum, West Coast Rail Campaign, North of England Regional Consortium (including North West Regional Association, North West Partnership & North West Regional Chamber), Merseyside Strategic Transportation & Planning Committee, TravelSafe Board and Mersey Ferries Ltd. It is deemed that, in the spirit of FRS8, there is no conflict of interest.


Merseyside Integrated Transport Authority
Notes To The Financial Statements (Cont’d)

Other material transactions with the above external bodies will have a minor controlling influence upon the Authority in that certain procedural requirements will be imposed upon the organisation in order that grants or contributions can be claimed and received. The majority of these requirements follow statutory or other Government guidelines.


14. Publicity
The Local Government Act 1986 Section 5(1) requires the Authority to maintain a separate publicity account. An amount of £16.0k was incurred against this item during the year ended 31 March 2009. This compares to expenditure of £32.9k in the previous year. In addition, the Executive's spending on publicity is used largely in order to promote the services provided by Merseytravel. Although this expenditure by the Merseyside Passenger Transport Executive is not subjected to Local Government Act 1986 disclosure, the Authority will inevitably benefit by an undetermined proportion of the publicity provided.
The Authority's spending on publicity is analysed as follows:-


2007/08




2008/09

£000




£000










-

Recruitment Advertising


-

-

Other Advertising

-

20.9

Publicity relating to Tunnels Services

16.0

12.0

Website

-










32.9




16.0



Merseyside Integrated Transport Authority
Notes To The Financial Statements (Cont’d)
15. Tangible Fixed Assets
(a) A summary of the movements in fixed assets during the year is as follows:

MITA




Land and

Buildings



Operational

Infrastructure



Vehicles, Plant,

Furniture and

Equipment


Community Assets

Assets Under Construction

Non-Operational

Assets



Total




£000

£000

£000

£000

£000

£000


£000


Value as at 1 April 2008

2,182

387,222

2,506

506

-

61

392,477

Adjustments in respect of FRSII***

(112)

-

(58)

-

-

-

(170)

Additions

58

1,558

93

-

-

-

1,709

Revaluation during year


123

491,599

454

-

-

13

492,189

Disposals*

-

-

-

-

-

-

-

Write back accum/depreciation at 31/03/09

(531)

(123,792)

(1,967)

(56)

-

-

(126,346)

























Book Value at 31 March 2009

1,720

756,587

1,028

450


-

74

759,859

























Depreciation as at 1 April 2008

481

112,003

1,659

56

-

-

114,199

Adjustments

-

-

-

-

-

-

-

Depreciation for Year

50

11,789

308

-

-

-

12,147

Depreciation on Assets Sold*

-

-

-

-


-

-

-

Write back accum/depreciation at 31/03/09

(531)

(123,792)

(1,967)

(56)

-

-

(126,346)

























Total Depreciation at 31 March 2009

-

-

-

-

-

-

-

























Net Bk Value as at 31 March 2009

1,720

756,587


1,028

450

-

74

759,859



























Group




Intangible Assets

Land and

Buildings



Operational

Infrastructure



Vehicles, Plant,

Furniture and

Equipment


Community Assets

Assets Under Construction

Non-Operational

Assets



Total




£000

£000

£000

£000

£000

£000

£000

£000


Value as at 1 April 2008

5,553

88,559

387,222

39,779

506

6,028

678

528,325

Adjustments (Impairment)***

(2,750)

(13,206)

-

(13,060)

-

149

(21)

(28,888)

Assets brought into operation

-

6,167

-

10

-

(6,177)

-

-

Additions

-

7,726

1,558


7,269

-

1,639

44

18,236

Revaluation during year

-

13,286

491,599

7,254

-

-

16

512,155

Disposals*

-

-

-

-

-

-

(313)

(313)

Write back accum/ depreciation at 31/03/09

(140)

(12,589)

(123,792)

(21,926)

(56)

-

-

(158,503)


























Book Value at 31 March 2009

2,663

89,943

756,587

19,326

450

1,639

404

871,012




























Depreciation as at 1 April 2008

-

10,993

112,003

18,699

56

-

-

141,751

Adjustments (Impairment)

-

-


-

-

-

-

-

-

Depreciation for Year

140

1,596

11,789

3,227

-

-

-

16,752

Depreciation on Assets Sold*

-

-

-

-

-

-

-

-

Write back accum/ depreciation at 31/03/09

(140)

(12,589)

(123,792)

(21,926)

(56)

-

-

(158,503)


























Total Depreciation at 31 March 2009

-

-

-

-

-

-

-

-




























Net Bk Value as at 31 March 2009

2,663

89,943

756,587

19,326

450

1,639

404

871,012

























* Capital receipts received during 2008/09 totalled £4k and related to deminimis assets.

** Under “land and buildings: leasehold” is included the new Paradise Street Interchange. The Executive occupies the new Paradise Street Interchange under a licence under the same terms as the draft lease.
*** Adjustments for impairments of fixed assets on revaluation for 2008/09 (£28.145m) and other adjustments (£0.743m).
Merseyside Integrated Transport Authority
Notes To The Financial Statements (Cont'd)

(b) Capital Expenditure and MRP reborrowing (see Accounting Policy No. 24) amounting to £30.9m and £Nil respectively were financed as follows:











2008/09

2007/08




Capital Outlay

MRP Reborrowing

Total

£000




£000

£000

£000




Expenditure























2018

Tunnels

1709

-

1709

32771

Capital Grants made to the MPTE - Infrastructure etc

29144

-

29144

4500

Capital loan made to MPTE (TBS)

-

-

-

1281

Reborrowing Principal repaid in excess of MRP

-

(26)

(26)

_____




_____

_____

_____














40570





30853

(26)

30827

_____




_____

_____

_____



















Financing

























(559)

(Under)/overcover financed 1 April brought forward

(4500)

(80)

(4580)

12822

Loans

5000

-

5000

20853


Grants/Contributions

28644

-

28644

2

Capital Receipts Applied

4

-

4

-

Revenue Contributions

-

-

-

2016

Tunnels R & R Fund

1705

-

1705

856

Capital Reserves

-

-

-

_____




_____

_____

_____
















35990




30853

(80)

30773

















4580

(Over)under-financed at 31 March carried forward

-

54

54

_____




_____

_____

_____
















40,570




30853

(26)

30827















(c) Fixed assets of the Authority, as at 31 March 2009 are as follows:-


- Queensway and Kingsway Tunnels

- Six tunnels ventilation stations and associated plant

- Various approach roads to the Mersey Tunnels

All other transport related assets either belong to Merseyside Passenger Transport Executive, (having been sponsored and financed by the Authority) or, in the case of assets transferred to both Merseyside Transport Ltd and Liverpool Airport Ltd, written out of the accounts as a deferred charge.

(d) During 2008/09, the Group increased its stake in Global Smart Media (GSM) from 24.9% to 87.9%.
Method of Consolidation
The Group holds 87.9% of GSM’s share capital, consequently consolidation is line-by-line as required for accounting for majority owned subsidiaries, with a provision made for minority shareholders.

Merseyside Integrated Transport Authority
Notes To The Financial Statements (Cont'd)

Consideration
The consideration comprised of previous loans to the GSM Group being converted to preference shares, consequently no additional costs were incurred.

16. Leases


The Authority's policy is generally to acquire all items of furniture and equipment as revenue purchases. During 2008/09 the authority did not make any payments to leasing companies in respect of operating leases. This compares to £Nil payments made in 2007/08.
All past finance leases expired several years ago and the Authority has not entered into any new leasing arrangements. The Capital Value of leased assets at 31 March 2009 stood at zero.

17. Fixed Asset Valuation


The freehold and leasehold properties which comprise the Authority's property portfolio were valued in a quinquennial valuation as at 31 March 2009 by external independent valuers -
- Christopher Smith MRICS, District Valuer Service

- J Kent Tech RICS and J F Russell MRICS, Asset Value Team with the District Valuer Service

- J B Rossiter M Inst CES, Mott MacDonald

on the under-mentioned basis in accordance with the Statements of Asset Valuation Practice and Guidance Notes of the Royal Institution of Chartered Surveyors. Inspections were carried out during the course of the financial year.

- Plant and machinery is included in the valuation of the buildings

- Properties regarded by the Authority as operational were valued on the basis of depreciated replacement cost as market value could not be assessed.


As part of the valuation process only those assets with a value of £7.5k or more were included in the Authority's Asset Register and valued.




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