Issue - meetings

RESOLVED: The Shareholder Committee debated the performance of the Company for 2024/2025 following completion of the company audit and were encouraged by the progress achieved.

REASONS FOR RECOMMENDATIOINS:

To ensure the financial performance of the company is deemed appropriate, to assess the going concern of the company and to support its continued activity

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The Strategic Finance Business Partner reported that West Norfolk Property Limited saw an increase in gross profit margin from 13.8% to 16.3% and revenue growth from £748,000 to £858,000, despite no new properties being added. The improvements were attributed to higher rents, full occupancy, and the full-year effect of properties added in the prior year.

The company, operating on a leasing model, was required to account for properties under IFRS 16, recognising right-of-use assets were not owned by the company but were leased from the Council with  associated lease liabilities. This change affected the balance sheet and profit and loss statement, with depreciation and interest charges replacing traditional lease expense recognition.

The Strategic Finance Business Partner explained that deferred tax arose from the revaluation of right-of-use assets, which was not immediately payable unless assets were sold. The Committee discussed how to separate actual tax payable from accounting adjustments on note 8 included in the report, with the Strategic Finance Business Partner offering to provide a detailed breakdown following the meeting.

The Committee discussed the ease of consolidating Company accounts into the Council's group accounts due to aligned accounting standards.

Members of the Shareholder Committee debated the impact of Company versus Council borrowing on prudential limits, with the Assistant Director for Finance and Deputy Section 151 Officer noting that third-party borrowing by the Companies would not affect the Council's limits unless a parent company guarantee was involved

The Committee agreed on the need for clearer reporting, especially as the company portfolio grows and includes both owned and leased properties, which was to affect taxation and risk management. The Assistant Director for Finance and Deputy Section 151 Officer agreed to schedule a session to review borrowing models and the implications for Council finances.

RESOLVED: The Shareholder Committee noted the performance of the Company for 2024/2025 following completion of the company audit.

REASONS FOR RECOMMENDATIOINS:

To ensure the financial performance of the company is deemed appropriate, to assess the going concern of the company and to support its continued activity