Annual Report & Accounts 1997-98

8. Tangible assets

The revaluation of computer equipment represents a permanent diminution in value. The difference between the deficit on revaluation and the related backlog depreciation of £323,409 (1997 £284,407) has been charged to the income and expenditure account.

The Agency does not include in its balance sheet capital values for the freehold and long leasehold properties, or related land which it occupies. The income and expenditure account is instead charged a rental based on the equivalent market rent by means of the Property Repayment Services (PRS) System, managed by property advisors to the Civil Estate.

PRS rent will be abolished on 31 March 1998. Property values will subsequently be included in the Balance Sheet, where the Agency is the sole or major occupier, and a capital charge made for depreciation and the cost of capital. The fixed asset values and related capital charges which would have applied in 1997/98 if PRS rents were not payable are as follows:-

9. Current assets

No amount is included in current assets for cash at bank and in hand. This is because the Agency does not operate any bank accounts. See note I (h).

10. Debtors

Other debtors include £3,985,000 (1997: £9,505,000) for uninsured losses due from the DTI. See also note 18.

11. Creditors

Accruals include £5,000 (1997: £54,033) for costs in connection with the relocation of the Agency's headquarters (see also notes 7 and 16); and £3,495,000 (1997: £4,852,000) for costs in connection with disaster recovery. See also note 18.

12. General fund

13. Revaluation reserve

The movement on the revaluation reserve represents the increase in gross current replacement cost of fixed assets, less backlog depreciation. The surplus on revaluation includes £875,000 arising from a reassessment of the disaster recovery provision.

14. Operating leases

Rentals due within the next year under operating leases were as follows:

15. Capital commitments

16. Provisions for liabilities and charges

Relocation
The costs provided in 1994/95 have been carried forward to the extent needed to cover those that remain to be incurred following the Agency's return to London Docklands. See also notes 7 and 11.

Disaster recovery
The Agency has made full provision for all disaster recovery costs, whether recoverable or not. See also note 18.

17. Deferred income

The capital element of disaster recovery funding from the DTI has initially been treated as deferred income. It will be credited to income over the lives of the assets funded. See also note 1(k).

18. Disaster recovery

The Agency's headquarters operations were disrupted by the Docklands bombing in February 1996. All costs arising from the need to move the Agency's headquarters to temporary premises and then back to its refurbished Docklands offices (return planned for first half of 1999) have been treated as uninsured losses.

The total estimated cost of disaster recovery can be analysed as follows:

£3,985,000 (1997: £9,505,000) of the DTI funding still due at the year end has been accrued within debtors. See also note 1(k) for the Agency's accounting policy on insurance and notes 2, 5, 7, 10, 11, 12, 16 and 17 for the impact on these accounts.

19. Related party transactions

The Radiocommunications Agency is an executive agency of the Department of Trade and Industry.
The Department is regarded as a related party.
The Agency had various material transactions with the Department during the year.
In addition the Agency had various material transactions with other Government Departments, namely The Ministry of Defence, PPARC, The Home Office and The Foreign & Commonwealth Office. None of the board members, key managerial staff or other related parties has undertaken any material transactions with the Agency during the year.

20. Post balance sheet event

The Agency entered into a joint venture agreement with CMG UK Ltd on 8 June 1998. The agreement has an initial term of seven years, with the objectives of supplying IT services to the Agency, and developing an international spectrum management consultancy, through a joint venture company. Radio Spectrum International Consulting Ltd was incorporated with 30% of its share capital allocated to the Agency, who appointed two directors, and 70% allocated to CMG, who appointed four directors.

 

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