Corporate report

Financial statements

Published 19 July 2018

Applies to England and Wales

Financial statements

Statement of comprehensive income for the year ended 31 March 2018

		2017/18	2016/17
	Notes	£’000	£’000
Income – continuing operations	2	317,185	311,425
Cost of service	2	(232,147)	(226,959)
Gross surplus		85,038	84,466
Administrative expenses	2	(25,276)	(15,036)
Operating surplus	2	59,762	69,430
Loss on disposal of non-current assets		(22)	(4)
Investment income – interest receivable	5	1,462	1,336
Finance costs	6	(658)	(682)
Amortisation and depreciation of e-service systems	9.1	–	(3,427)
Restructure and reorganisation costs	3.2	(5,701)	(425)
Local Land Charges revenue costs	3.3	(1,298)	(1,592)
Surplus for the financial year		53,545	64,636
Dividend payable	7	(28,706)	(18,896)
Retained surplus/(loss) for the financial year		24,839	45,740
Gain/(Loss) on revaluation of property, plant and equipment		(726)	2,965
Comprehensive surplus/(loss) for the financial year		24,113	48,705

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

Statement of financial position as at 31 March 2018

		2017/18		2016/17
	Notes	£’000	£’000	£’000	£’000
Non-current assets
Property, plant and equipment	8.1	55,742		53,593
Investment property	8.4	2,750		4,920
Intangible assets	9	17,032		8,607
Other receivables	12.2	2,219		1,341
Total non-current assets			77,743		68,461
Current assets
Inventories	11	6,648		4,049
Trade and other receivables	12.1	9,365		9,597
Held-to-maturity investments	10	230,335		–
Cash and cash equivalents	13	308,739		489,926
Total current assets			555,087		503,572
Non-current assets classified as held for sale	8.3		2,100		6,982
Total assets			634,930		579,015
Current liabilities
Trade and other payables	14.1	85,264		56,016
Obligations under finance leases	14.1, 15.1	213		194
Short-term provisions	17.1	5,426		6,393
			90,903		62,603
Indemnity Fund	17.2		91,000		85,100
Total current liabilities			181,903		147,703
Non-current assets plus net current assets			453,027		431,312
Non-current liabilities
Obligations under finance leases	14.2, 15.1	4,523		4,736
Long-term provisions	17.1	2,124		4,309
Total non-current liabilities			6,647		9,045
Net assets			446,380		422,267
Capital and reserves
Public Dividend Capital			61,545		61,545
Revaluation reserve			18,096		19,200
Income and expenditure account			366,739		341,522
			446,380		422,267

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

Graham Farrant
Chief Executive and Chief Land Registrar
29 June 2018

Statement of changes in reserves for the year ended 31 March 2018

		Public Dividend Capital	Revaluation reserve	I&E reserve	Total reserves
		£’000	£’000	£’000	£’000
Balance at 31 March 2016		61,545	16,268	295,749	373,562
Changes in reserves 2016/17
Revaluation reserve
	Transfer to retained earnings	–	(33)	33	–
	Revaluation of non-current assets	–	–	–	–
Comprehensive surplus/(loss)		–	2,965	45,740	48,705
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	466,380

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

Cash flow statement for the year ended 31 March 2018

		2017/18	2016/17
	Notes	£’000	£’000
Net cash inflow from operating activities	20.1	65,632	71,066
Investing activities
Purchase of tangible assets		(4,519)	(2,595)
Purchase of intangible assets		(8,646)	(8,202)
Proceeds on disposal of tangible assets		3,479	–
Interest received		953	1,729
Increase in investments in National Loan Fund	10	(230,335)	–
Net cash inflow from investing activities		(239,068)	(9,068)
Financing activities
Dividends paid		(6,899)	(14,977)
Repayments of capital element of obligations under finance leases		(194)	(284)
Interest elements of obligations under finance leases		(658)	(682)
Net cash outflow from financing activities		(7,751)	(15,943)
Net increase/(decrease) in cash and cash equivalents	20.2	(181,187)	46,055
Cash and cash equivalents at beginning of year	20.2	489,926	443,871
Cash and cash equivalents at end of year	13	308,739	489,926

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) 2017/18 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 forwards.

Accounting standards issued but not yet effective

IFRS 9 Financial Instruments and IFRS 15 Revenue from contracts with customers are effective from 2018/19. These accounting standards are not expected to have a material impact on HM Land Registry.

IFRS 16 Leases has been issued but is not effective until periods commencing 1 January 2019. This is currently expected to affect a small number of property leases, although the actual effect will depend on HM Treasury’s interpretation of the standard for the public sector context.

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 have 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 17.1 – early retirement, early severance and other provisions; and
• Note 17.2 – estimated provision for indemnity claims.

1.4 Fee income

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 ‘fees received in advance’ and disclosed within current liabilities. Fees are recognised 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 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 Graham Farrant, Chief Executive and Chief Land Registrar.

Local Land Charges

Following the passing of the Infrastructure Act 2015, HM Land Registry has been given the responsibility for registering Local Land Charges. In preparing for the provision of service, related expenditure is either being expensed as incurred or capitalised if it meets the criteria for intangible assets under IAS 38.

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 desktop valuation in February 2018.

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 2017/18 can be found on GOV.UK (search ‘Financial Reporting Manual 2017/18’).

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) can be 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 expenditures that do not meet these criteria are 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 has commenced the building and development of a computerised register to hold the Local Land Charges data currently held by 326 local authorities. Two development costs have been identified, a database to hold the information, and the data itself which needs to be cleansed, digitised and migrated to this database. Under IAS 38, costs attributable to these two activities are treated as an Intangible asset, and on commencement of the register service these components will be amortised over their useful life.

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 Inventories

Work-in-progress is stated at the lower of cost and net realisable value. Cost includes internal costs of staff and directly attributable overheads in preparing completion of registration for the customer. Net realisable value is based on the fee that is charged to the customer less further costs expected to be incurred in completing the services. The costs associated with work-in-progress are derived from estimates and assumptions based on historical experience and other factors which are considered to be relevant. These estimates and 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 deposits over three months are classified as investments 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. National Loans Fund deposits are either short-term investments of three months or less, or investments of six months. Only short-term deposits are recognised as cash and cannot be repaid until maturity of the loan.

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 of the expenditure required to settle the obligation at the statement of financial position date. If the effect of discounting is material, provisions are discounted to the expected present value of their future cash flows using a risk-free discount rate. Where appropriate this is supported by independent professional advice. 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 17.

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 Lane, Clark & Peacock LLP.

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 17.2 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 19).

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 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, eg monthly average.

1.23 Prior period re-statements

Under IAS 8 Accounting policies changes in accounting estimates and errors, adjustments to prior periods are required for changes to accounting policies or to correct prior period errors, arising from omissions, or misstatements.

There have been no prior period re-statements in 2017/18.

2. Business segments

International Financial Reporting Standard 8 (IFRS 8) – Operating segments reporting requires analysis of income and expenditure by principal business activities and is evaluated regularly by the Chief Executive.

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	2017/18	Statutory		Non- statutory	2016/17
	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	304,550	6,875	5,760	317,185	299,591	6,267	5,567	311,425
Cost of service	(228,944)	(867)	(2,336)	(232,147)	(222,578)	(1,398)	(2,983)	(226,959)
Administrative expenses	(24,980)	(29)	(267)	(25,276)	(14,662)	(31)	(343)	(15,036)
Operating surplus	50,626	5,979	3,157	59,762	62,351	4,838	2,241	69,430

The surplus for registration of title has decreased by £11.7m compared with the prior year. This is due in part to a growth in our staff numbers, greater overtime costs associated with our focus on reducing backlog and an increase in the indemnity provision.

The surplus for the year on commercial income was £3.2m.

Local Land Charges resource costs are currently shown in note 3.3. Local Land Charges will become an operating segment once HM Land Registry runs a live service.

The policy for operating segments is contained within note 1.5.

3. Operating surplus

3.1 Operating surplus is stated after charging

	2017/18	2016/17
	£’000	£’000
Staff costs (see note 4.1)	190,510	179,485
Provision for indemnity costs (see note 17.2)	5,900	300
IT services	14,703	14,460
Hire of machinery	5,328	4,948
Auditor’s remuneration – audit fee	65	65
Depreciation of tangible non-current assets – owned	3,801	4,048
Depreciation of tangible non-current assets – leased	361	299
Amortisation of intangible assets	610	349
Impairment in value of non-current assets	264	(584)
Charge for operating leases – buildings	1,669	1,021
Miscellaneous income	(2,752)	(2,708)

3.2 Restructure and reorganisation costs

				2017/18				2016/17
	Early retirement	Early severance	Accelerated Transformation Programme (ATP)	Total	Early retirement	Early severance	ATP	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Costs incurred in year	5,242	459	–	5,701	270	154	1	425
	5,242	459	–	5,701	270	154	1	425

3.3 Local Land Charges

	2017/18	2016/17
	£’000	£’000
Revenue costs incurred in year	1,298	1,592
	1,298	1,592

The Infrastructure Act 2015 passed to HM Land Registry the responsibility for maintaining a register of Local Land Charges and we are in the process of developing this statutory service. Approval was given for a phased delivery of Local Land Charges. The anticipated go-live date for Phase 1 of the service is July 2018. When Local Land Charges is run as a live service it will be shown as a separate operating segment in note 2.

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 under Assets under development.

4. Employee information

4.1 Staff costs

				2017/18				2016/17
	Permanent staff	Apprentices	Others	Total	Permanent staff	Apprentices	Others	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Salaries	134,260	7,481	7,579	149,320	130,386	5,433	4,312	140,131
Social security costs	13,304	186	618	14,108	13,401	109	223	13,733
Other pension costs	24,528	1,317	1,237	27,082	24,285	949	387	25,621
Total staff costs	172,092	8,984	9,434	190,510	168,072	6,491	4,922	179,485

4.2 Staff numbers

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

				2017/18				2016/17
	Permanent staff	Apprentices	Others	Total	Permanentstaff	Apprentices	Others	Total
Senior management	6	–	1	7	7	–	–	7
Operational	3,001	336	267	3,604	3,239	256	83	3,578
Administration	514	5	11	530	257	6	12	275
IT	398	15	6	419	385	4	31	420
	3,919	356	285	4,560	3,888	266	126	4,280

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.

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.

For 2017/18, employers’ contributions of £26.9m were payable to the PCSPS (2016/17 £25.7m) 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 2017/18 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 £220,307 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 £5,221, 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 £20,202. 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 £30,575 (2016/17: £13,875).

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

5. Investment income

	2017/18	2016/17
	£’000	£’000
Interest on bank deposits	1,462	1,336

6. Finance costs

	2017/18	2016/17
	£’000	£’000
Interest on obligations under finance leases	658	682

7. Dividend payable

	2017/18	2016/17
	£’000	£’000
Dividend payable	28,706	18,896

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 Land	Buildings	Leasehold Buildings	Assets under construction	IT-related assets	Other plant and equipment	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
At 1 April 2017	8,705	47,805	12,463	–	71,066	4,413	144,452
Additions	–	–	–	979	2,468	691	4,138
Assets brought into use	–	–	–	(242)	242	–	–
Revaluation in year	320	2,071	558	–	–	–	2,949
Reclassification of assets	–	–	–	–	(389)	–	(389)
Impairment	–	(233)	–	–	–	–	(233)
Disposals	–	(250)	–	–	(7,465)	(137)	(7,852)
Tfr to asset held for sale	–	250	–	–	–	–	250
At 31 March 2018	9,025	49,643	13,021	737	65,922	4,967	143,315

Accumulated depreciation

	Property			Plant and equipment
	Freehold Land	Buildings	Leasehold Buildings	Assets under construction	IT-related assets	Other plant and equipment	Total
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 to 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

8.2 Cost or valuation

	Property			Plant and equipment
	Freehold Land	Buildings	Leasehold Buildings	Assets under construction	IT-related assets	Other plant and equipment	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
At 1 April 2016	9,085	48,968	12,172	468	68,444	4,413	143,550
Additions	–	–	–	464	2,200	–	2,664
Assets brought into use	–	–	–	(932)	841	–	(91)
Revaluation in year	170	(1,314)	480	–	–	–	(664)
Reclassification of assets	–	1,930	(50)	–	9	–	1,889
Impairment	–	(34)	(139)	–	–	–	(173)
Disposals	–	–	–	–	(428)	–	(428)
Tfr to asset held for sale	(550)	(1,745)	–	–	–	–	(2,295)
At 31 March 2017	8,705	47,805	12,463	–	71,066	4,413	144,452

Accumulated depreciation

	Property			Plant and equipment
	Freehold Land	Buildings	Leasehold Buildings	Assets under construction	IT-related assets	Other plant and equipment	Total
At 1 April 2016	–	16,208	5,215	–	62,140	3,312	86,875
Provided during the year	–	1,490	713	–	2,896	197	5,296
Current cost revaluation	–	(474)	(475)	–	–	–	(949)
Reclassification of assets	–	–	–	–	5	–	5
Disposals	–	–	–	–	(424)	–	(424)
Tfr to asset held for sale	–	56	–	–	–	–	56
At 31 March 2017	–	17,280	5,453	–	64,617	3,509	90,859
Carrying amount at 31 March 2017	8,705	30,525	7,010	–	6,449	904	53,593

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 £39.6m.

The net amount of finance leases at the end of the year was £0.0m (2016/17: £0.0m).

8.3 Non-current assets classified as held for sale

	2017/18	2016/17
	£’000	£’000
At 1 April	6,982	–
Transfers from non-current assets	(250)	2,351
Impairment on assets sold	(31)	–
Revaluation Reserve Movement	(3,439)	3,629
Reversal of impairment	–	1,002
Disposals	(1,162)	–
At 31 March	2,100	6,982

Leicester Nursery and Chalfont Drive southern plot, Nottingham, which were held for sale at the start of the year, have been sold within the year.

We are actively marketing Parkside Court, Telford, with HM Land Registry relocating its offices to an alternative location in the Telford area. Under IFRS 8, none of these assets held for sale represents a closure of an operating segment.

8.4 Investment property

	2017/18	2016/17
	£’000	£’000
At 1 April	4,920	6,800
Revaluation in year	(70)	–
Reclassification of assets	–	(1,880)
Disposals	(2,100)	–
At 31 March	2,750	4,920

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.

During the year, one of the investment properties, Old Market House, Birkenhead was sold.

9. Intangible assets

9.1 Cost or valuation

	E-security	Portal	Business Gateway	Assets under development	Software licences	Total
	£’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

9.2 Cost or valuation

	E-security	Portal	Business Gateway	Assets under development	Software licences	Total
	£’000	£’000	£’000	£’000	£’000	£’000
At 1 April 2016	9,691	15,967	1,766	–	42,647	70,071
Additions	–	–	–	6,834	1,091	7,925
Assets brought into use	–	–	–	–	92	92
Reclassification	–	–	–	–	(9)	9
Disposals	–	–	–	–	(162)	(162)
At 31 March 2017	9,691	15,967	1,766	6,834	43,659	77,917
Amortisation
At 1 April 2016	8,478	13,971	1,547	–	41,705	65,701
Charge for the year	1,213	1,996	219	–	349	3,777
Reclassification of assets	–	–	–	–	(6)	(6)
Disposals	–	–	–	–	(162)	(162)
At 31 March 2017	9,691	15,967	1,766	–	41,886	69,310
Carrying amount at 31 March 2017	–	–	–	6,834	1,773	8,607

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 of £8.2m with the remainder relating to 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

	2017/18	2016/17
	£’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. Material deposits are held with the Government Banking Service and the National Loans Fund.

As of 31st March 2018, HM Land Registry had £230m deposited within National Loan Funds for six month terms. As these balances are no longer readily available to the organisation, they are not recognised as cash equivalents and are instead recognised at investments. These held-to-maturity investments are not exposed to credit, liquidity and market risk.

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

11. Inventories

	2017/18	2016/17
	£’000	£’000
Work-in-progress	6,648	4,049
	6,648	4,049

12. Trade and other receivables

12.1 Current

	2017/18	2016/17
	£’000	£’000
Trade receivables	1,994	2,096
Other receivables	1,170	3,946
Prepayments and accrued income	6,201	3,555
	9,365	9,597

The average credit period taken on provision of services is two 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

	2017/18	2016/17
	£’000	£’000
Other receivables	222	281
Prepayments	1,997	1,060
	2,219	1,341

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

	2017/18	2016/17
	£’000	£’000
Government Banking Service	100,098	63,526
Commercial banks and cash-in-hand	18,588	16,488
National Loans Fund	190,053	409,912
	308,739	489,926

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

	2017/18	2016/17
	£’000	£’000
Trade payables	2,343	757
Taxation and social security	4,498	3,462
Other payables	3,329	2,891
Accruals	22,122	19,772
Net obligations under finance leases – buildings	213	188
Net obligations under finance leases – computer equipment	–	7
Deferred income – fees received in advance	24,266	22,234
Dividend payable	28,706	6,899
	85,477	56,210

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

14.2 Non-current

	2017/18	2016/17
	£’000	£’000
Net obligations under finance leases – buildings	4,523	4,736
Net obligations under finance leases – computer equipment	–	–
	4,523	4,736

15. Obligations under leases

15.1 Finance leases

	Minimum lease payments		Present value of minimum lease
	2017/18	2016/17	2017/18	2016/17
Amounts payable under finance leases	£’000	£’000	£’000	£’000
Within one year	846	853	213	194
In the second to fifth years inclusive	3,384	3,384	1,176	1,037
After five years	5,076	5,922	3,347	3,699
	9,306	10,159	4,736	4,930
Less future finance charges	(4,570)	(5,228)
Present value of lease obligations	4,736	4,931
Less amount due for settlement within 12 months (shown under current liabilities)			(213)	(194)
Amount due for settlement after 12 months			4,523	4,736

15.2 Operating leases

Leases as lessee

	2017/18	2016/17
	£’000	£’000
Minimum lease payments under operating leases recognised in the year	1,669	1,021
Income from tenants	–	–
	1,669	1,021

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:

	2017/18	2016/17
	£’000	£’000
Within one year	85	6
In the second to fifth years inclusive	1,076	283
After five years	409	1,380
Income due from tenants	–	–
	1,570	1,669

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:

	2017/18	2016/17
	£’000	£’000
Within one year	29	–
In the second to fifth years inclusive	–	28
After five years	348	353
	377	381

During the year investment property rental income of £0.38m was included within miscellaneous income (see note 3.1). This follows the treatment of previous years when the properties were let under memorandum of terms of occupation (MOTO) to other public sector organisations. The investment properties are now let on commercial terms. As this is not part of HM Land Registry’s core business, and the values are immaterial, the rental income continues to be treated as miscellaneous income and netted off expenditure.

16. Loans

HM Land Registry had no loans during the financial year ending 31 March 2018.

17. Provisions for liabilities and charges

17.1 Early release schemes and other

	Early retirement	Other	Total	Early retirement	Other	Total
			2017/18			2016/17
	£’000	£’000	£’000	£’000	£’000	£’000
At 1 April	9,987	715	10,702	13,683	1,849	15,532
Provided in year	1,864	–	1,864	–	–	–
Revaluation of provision	(351)	13	(338)	270	200	470
Provision utilised in the year	(4,279)	(217)	(4,496)	(3,966)	(607)	(4,573)
Provision written back unused	(116)	(66)	(182)	–	(727)	(727)
At 31 March	7,105	445	7,550	9,987	715	10,702
Included in current liabilities	4,981	445	5,426	5,678	715	6,393
Included in non-current liabilities	2,124	–	2,124	4,309	–	4,309
			7,550			10,702

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 £4.3m in 2017/18, of which £4.3m had been provided for within the ERP provision in the 2017/18 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.

IAS 37 Provisions, contingent liabilities and contingent assets requires that: “Where the time value of money is material, the amount of a provision should be the present value of the expenditures expected to be required to settle the obligation”. The discount factor applied to the early retirement provision is 2 per cent. The impact of unwinding of the discount in 2017/18 was less than £0.1m (2016/17: £0.2m).

17.2 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	2017/18 Total	Outstanding provision	IBNR provision	2016/17 Total
	£’000	£’000	£’000	£’000	£’000	£’000
At 1 April	8,000	77,100	85,100	10,500	74,300	84,800
Provided in the year	5,025	–	5,025	6,738	–	6,738
Provisions utilised in the year	(5,025)	–	(5,025)	(6,738)	–	(6,738)
Claims revaluation	2,800	–	2,800	(2,500)	–	(2,500)
IBNR revaluation	–	3,100	3,100	–	2,800	2,800
At 31 March	10,800	80,200	91,000	8,000	77,100	85,100

Following the actuarial review by Lane Clark & Peacock LLP (LCP), the fund in respect of reported but not settled claims (Outstanding provision) has increased in 2017/18 by £2.8m (2016/17: £2.5m decrease). The provision for claims incurred but not reported (IBNR provision) has increased in 2017/18 by £3.1m (2016/17: £2.8m increase).

The reason for the £2.8m increase in the outstanding claims provision was due to a movement in case estimates.

The main reasons for the £3.1m IBNR provision movement were: changes to underlying projection assumptions (£1.2m decrease) and changes to inflation and discount rates (£4.2m increase).

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; and
• 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; and
• 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 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.

Uncertainty in the provisions – sensitivity analysis

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 number of claims that will be received;
• the average claim size;
• the percentage of claim values paid on settlement (small and large);
• the proportion of claims that are ‘large’ (Outstanding and IBNR); and
• the rate of inflation and expected discount rates.

These scenarios have been considered in isolation and combination as shown in the tables on page 116.

On the basis of this analysis work and in respect of the adverse scenarios:

• it is reasonably foreseeable that the value of liabilities could be about £0.8m (outstanding provision) or £9.2m (IBNR provision) greater than expected; and
• it is unlikely, but possible, that the value of liabilities could be about £3.2m (outstanding provision) or £16.5m (IBNR provision) greater than expected.

In respect of the favourable scenarios:

• it is reasonably foreseeable that the true value of liabilities could be about £8m (IBNR provision) lower than expected.

By their nature, these figures are not precise and they can only illustrate the magnitude of uncertainty involved.

We have also considered extreme scenarios, where the value of liabilities is as much as £4.0m (outstanding provision) or £59m (IBNR provision) greater than expected. 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; and
• 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 £91m is our best estimate. However, the value of the Indemnity Fund provisions are subject to future uncertainty.

Sensitivity analysis

	Outstanding provision	2017/18 Percentage movement increase
	£m	%
Provided in these accounts	10.8	35.0
(1) Large claims assumed payment percentage increased from 60% to 70%	11.6	7.5
(2) Attritional future paid as a percentage of outstanding case estimates is 5% greater than expected	11.5	6.4
(3) Treasury prescribed real discount rate reduces further by 0.5% pa	10.9	0.7
Possible but unlikely scenarios
(2) + (3)	11.6	7.2
(4) Large claims assumed payment increased from 60% to 100%	14.0	30.0
Extreme scenarios
(2) + (3) + (4)	14.8	37.4
	IBNR provision	Percentage movement increase
	£m	%
Provided in these accounts	80.2	4.0
Impact of scenarios
Favourable but foreseeable scenarios
(1) Decrease in projected number of attritional IBNR claims (-10%)	75.7	– 5.5
(2) Decrease in assumed attritional average claim size (-10%)	75.7	– 5.5
(3) Decrease in assumed large average claim size (from £680k to £580k)	74.7	– 6.8
(4) Decrease in projected number of large claims (from 7.5 to 6.5 per incident year)	75.4	–5.9
(5) Decrease in assumed future claims inflation (-1% pa)	72.5	– 9.5
(6) Prescribed real discount rate on cashflows beyond 10 years increased by 1% pa	74.2	– 7.4
Adverse but foreseeable scenarios
(1) Increase in projected number of attritional IBNR claims (+10%)	84.6	5.5
(2) Increase in assumed attritional average claim size (+10%)	84.6	5.5
(3) Increase in assumed large average claim size (from £650k to £750k)	85.6	6.8
(4) Increase in projected number of large claims (from 7.5 to 8.5 per incident year)	84.9	5.9
(5) Increase in assumed future claims inflation (+1%)	89.3	11.4
(6) Prescribed real discount rate on cash flows beyond 10 years reduced by a 1% pa	87.9	9.6
Possible but unlikely scenarios
(1) + (2)	89.5	11.6
(1) + (5)	94.3	17.7
(7) Increase in assumed large average claim size (from £650k to £950k)	96.6	20.5
Extreme scenarios
(1) + (2) + (4) + (5) + (6) + (7)	139.5	74.1

18. Capital commitments

	2017/18	2016/17
	£’000	£’000
Capital expenditure*	1,518	2,670
Contracted for but not provided in these accounts	1,518	2,670

• £1.1m relates to commitments for Local Land Charges for HM Land Registry

19. Contingent liabilities

19.1 Indemnity

The Land Registration Act 2002 places a legal liability on HM Land Registry to indemnify for losses resulting from errors or omissions in 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 17.2) based upon the assumed likelihood that claims will be successful.

As at 31 March 2018, 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 £10.8m (see note 17.2).

Errors or omissions

	2017/18	2016/17
	£’000	£’000
Mistakes	8,240	7,290
Fraud and forgery	13,825	9,387
	22,065	16,677

19.2 Other contingent liabilities

HM Land Registry has a contingent liability as defined by IAS 37, which relates to costs for early retirement schemes taken in 2009 and 2010. HM Land Registry is disputing the validity of these costs and is challenging the amounts charged by MyCSP. The liability will become clearer as scheme participants reach retirement age in the next few years. The maximum liability is £7.0m as at 31 March 2018.

Note 3.2 of the accounts includes £3.8m in respect of costs for early retirement charged by MyCSP and paid by HM Land Registry during 2017/18. The validity of those payments is currently in dispute, and HM Land Registry is pursuing reimbursement of these costs.

20. Notes to the cash flow statement

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

	2017/18	2016/17
	£’000	£’000
Operating surplus	59,762	69,430
Restructure and reorganisation costs	(5,701)	(425)
Local Land Charges revenue costs	(1,298)	(1,592)
Depreciation of property, plant and equipment	4,161	4,347
Amortisation of intangible assets	610	349
Impairment in value of non-current assets	264	(584)
Increase/(decrease) in provisions	(3,153)	(4,831)
(Increase)/decrease in inventories	(2,598)	696
(Increase)/decrease in receivables	(137)	2,652
Increase in payables	7,822	724
Increase in Indemnity Fund	5,900	300
Net cash inflow from operating activities	65,632	71,066

20.2 Reconciliation of net cash flow to movement in net cash

	2017/18	2016/17
	£’000	£’000
Net cash at start of period	489,926	443,871
Increase/(decrease) in cash in the period	(181,187)	46,055
Net cash at end of period	308,739	489,926

21. 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. 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, HM Courts & Tribunals and the Ministry of Housing, Communities and Local Government.

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

22. 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 event after the reporting period

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