TOURISM SOUTH EAST ANNUAL REPORT AND FINANCIAL STATEMENTS Year Ended 31 March 2016

Transcription

1 TOURISM SOUTH EAST ANNUAL REPORT AND FINANCIAL STATEMENTS Year Ended 31 March 2016

2 TABLE OF CONTENTS Contents Chairman s Statement 1 Chief Executive s Statement 2 Working Better Together 3 Promoting to the World 4 Maximising our Expertise 6 Report of the Directors for the year ended 31 March Independent review report 11 Profit and loss account 13 Statement of total recognised gains and losses 14 Balance sheet 15 Notes forming part of the financial statements for the year ended 31 March

3 Chairman s Statement Thank you all for working with us to ensure that 2015/16 was yet another really successful year for our mutual Tourism South East. Annual Reports are not usually enticing reading, but spend a few minutes reading Nigel Smith s excellent summary of all the activities we have managed to undertake together. It covers the diversity of tourism and tourist, and spans our destinations large and small, and all areas of our footprint in the South East of England. Well done to all our staff team a great effort. In the tourism industry we have learned to be resilient. Tourism activity rarely stops. Visitors need our services every day, year round so we get used to working whatever the weather, at what are to others, unsocial hours. We have learned to take changes in our stride. Usually. But the past twelve months have brought exceptional, unexpected, and largely unforeseeable changes. We had high hopes for our new Secretary of State, John Whittingdale MP, who had a deep understanding of Tourism, having successfully chaired the All Party DCMS Committee and called on Government to properly back the tourism industry with a meaningful strategy and sufficient investment. Although he was in office only briefly, it was just long enough for him to completely countermand his long held beliefs and in an extreme series of unconsulted and unjustified changes, DCMS all but abolished England s independent national Tourist Board and to sweeten the change introduced a 40m Discover England Fund, to be spent over 3 financial years on the creation of innovative bookable product to encourage inbound visitors to venture beyond their usual destinations. We have yet to see what main programmes emerge but the first phase of quick wins schemes are a very curious selection of esoteric thematic topics. Then there is our future outside the EU. Brexit means Brexit as the saying goes, but nobody has much idea what the detailed outcome will be for tourism, with worries that in future much of UK tourism s immigrant workforce may no longer be available. The Referendum outcome has given us a short term boost, having weakened the pound, inbound tourism and staycations increased. But there seems little prospect of a meaningful strategy to capitalise on the opportunities that tourism can bring across the nation. What does the future hold? No point in gazing into the crystal ball we need to make our own success. So, as ever, our tourism prospects depend on our own efforts. My thanks are due not only to all our staff team but to your directors who serve on the Board of TSE. Special thanks are due to Deputy Chair and Chair of the Audit Panel, David Philip, whose stewardship has helped us weather the storms of recent years. It was pleasing to welcome new directors on to the Board both via the Tourism Council elections and by co-opting these were Kim Hallett, Cllr. Dan Humphries, Andrew Bateman and Louise Stewart. I must also thank some long term supporters who also left the Board in 15/16 Lyn Bibbings, Adam Bates and Chris White. TSE exists to help you work with each other, to enable our tourism businesses to thrive. We aim to provide cost effective support services to meet your needs. Our resources are slim, but the range of services our team manages to provide are diverse. Be sure you make best use of them. Ken Robinson CBE - Chairman Page 1

4 Chief Executive s Statement It was a real privilege to take over the reins from Peter Colling in April 2015 and my first 12 months has undoubtedly exceeded expectations. The Board s brave decision on restructuring in 2014/15 has come to fruition a lot earlier than anticipated with the operational deficits of the last few years practically wiped out in 2015/16. This has given us a renewed confidence in the future and an ability to invest in the organisation once again. We adopted a much more proactive communications policy this year with members and partners, not only utilising our CRM system more effectively but also ensuring that we maximised opportunities to meet members face to face. I believe this policy has worked extremely well as evidenced by the high renewal rates for both members and destination partners. Events such as the Tourism Conference and the Beautiful South Awards served to inspire, recognise and celebrate how valuable and great our industry is. In themselves, the respective contrasting but equally splendid venues - The Mill at Sonning and the Grand Hotel in Brighton reminded me how diverse the tourism sector is. One of our core strategies in recent years has been to explore opportunities across other sectors and geographies to generate funds to cover core costs and enable us to fulfil our tourism roles. Both Training and Research services have demonstrated this year how important it is to be able to transfer expertise and sound business principles beyond the tourism sector. After all, great customer care and customer feedback are vital to any industry. The renewed relationship with VisitEngland for the EVE course for tourist attractions and the Welcome Afloat courses for the leisure marine industry have also re-invigorated the Welcome to Excellence brand and once again demonstrated the core advantage it has over its competitors - its adaptability. One of the key priorities identified by the Government in 2015/16 was to continue to capitalise on the international markets through the GREAT campaign. TSE worked together with London & Partners to secure UK Challenge Fund support for a joint campaign in the Nordics and delivered a successful consumer and trade campaign on top of the normal activity. This also cemented a firm working relationship with London which will have longer term benefits. Excursions, our Group Trade flagship event, celebrated its 40 th anniversary and also went through some fundamental changes that resulted in a far better return for TSE. The AGM in 2015 also saw several changes at Board level bringing a fresh impetus and sets of skills that will be a real strength for us going forward. I would personally like to thank the Chairman for his wise advice and unwavering belief in TSE. Finally, my first year as head of TSE has told me that whilst we should continue to work hard to remain relevant to our members and partners, we should also continue to stretch the boundaries for mutual benefit. Being financially secure going forward will give us more confidence to do exactly that. Nigel Smith Chief Executive Page 2

5 Working Better Together Commercial Membership TSE has a base of a wide range of tourism, retail and leisure businesses and organisations, primarily from within the traditional south east region. In 2015/16 there was a conscious uplift in our member engagement activity including a doubling of member network meetings, monthly e-communications and news alerts, member surveys, one to one engagement and dedicated account management. We also continued to develop and negotiate more supplier benefits. As a result, the retention of members was one of the highest ever and we also welcomed lots of new members large and small. We continued to work in joint arrangements with other membership bodies such as Winchester & the Heart of Hampshire DMP and VisitKent although our shared agreement with ExperienceOxfordshire came to an end during the year so we now work directly for our members in that area. Destination Partnership TSE has successfully developed a Service Level Agreement (SLA) approach with destination partners over the past few years and this proved to be successful again in 15/16 with 31 destinations choosing to be formal partners. The most highly appreciated service within the agreements is PR support with millions of pounds of coverage generated both online and in traditional media. There was also another successful Annual Media Party in London in February TSE also ensured that the DPs were kept abreast of the changes following the General Election in 2015, including the launch of the Tourism 5 Point Plan, the UK Challenge Fund, a review of VisitEngland and VisitBritain and the announcement of the Discover England Fund. A Destination Managers Forum was held at the Runnymede Hotel in March where the new VisitEngland Director outlined the plans for the new Fund. A number of DPs also took advantage of our advice and support for digital activity. AGM and Tourism Conference This year s event Tourism the Southern Powerhouse was held at The Mill at Sonning in September 2015 with an inspiring key note speech from Ufi Ibrahim, the CEO of the British Hospitality Association. Members also heard from local businesses including the new British Airways i360 development and benefitted from Social Media and Googleanalytics Workshops. Beautiful South Awards The number of 2015/16 entries was on par with the previous year and culminated in another successful Awards evening at the Grand Hotel in Brighton with excellent feedback from attendees and lots of subsequent press and social media coverage for award winners. This was followed by a record nine award winners from the south east at the National England for Excellence Awards held in Blackpool in March Page 3

6 Promoting to the World International Marketing TSE continued to develop its campaigns in Nr Europe, China, North America and Scandinavia targeting the travel trade. The launch of the UK Challenge Fund during the year presented an opportunity to secure additional funding for this area and TSE made a successful joint bid with London & Partners for a campaign targeting Sweden and Norway. TSE led on the trade activity and London on the consumer marketing including websites in the indigenous language. The funding was only short-term but helped establish a firm working relationship which should have longer term benefits for TSE and its partners. TSE also returned to the 6 day Vakantiebeurs show in Holland with an expanded England s South Coast stand we were joined by the North, South West and East Anglia regions too, albeit they were funded through Government regional growth schemes. We also represented our partners at VisitBritain events such as China Mission (Beijing), Destination North America (Mexico), Destination Nordics (Stockholm), VIBE, Explore GB and Meet the Media. The number of overseas visitors to the region once again grew to record levels in Group Travel TSE is a recognised specialist in the domestic Group and Travel Trade markets and its flagship event, Excursions, went through a fundamental change behind the scenes in 2015 including a change in the long term media partner. However, on its 40 th anniversary, it once again proved to be a massive success attended by over 1,100 buyers. TSE continued to develop its digital marketing offers in the market but also saw the more traditional printed Group Travel Guide increase in size. A number of new relationships were created with the travel trade media providing increased opportunities in the year for exhibitions, fam trips, promotional activity and PR. Digital Services This year we strengthened our digital capabilities and services, to better support all internal activity but also make it available for the benefit of members and partners. Our own visitsoutheastengland website grew exponentially (+51%) again during the year primarily through regular analysis and monitoring and Search Engine Optimisation. The management and effective use of our databases also improved significantly Page 4

7 producing better returns for members and partners. Our Digital Manager was proactive in sharing his experience and knowledge with workshops and informal advice to members and partners. The team also continued to manage data on VisitThames and VisitHampshire websites as well as providing support to VisitBrighton on completing its new website. PR Our PR work during 15/16 was perhaps notable for the increase in interest from international media particularly through VisitBritain and also the exponential rise of social media influencers particularly bloggers. The Annual Media Party in February 2016 was held in London at the prestigious Royal College of Surgeons and attended by 69 media representatives including those from social media. We also gave support to Southampton Airport in organising press trips to promote new air routes to Europe. Although the PR support is mainly focused on working with destination partners, hundreds of members also benefitted through inclusion in the coverage generated for their locality. Great Country Pubs TSE s Great Country Pubs initiative saw a 12% growth in web traffic and averaging 40,000 users per month. The website continued to be linked to VisitBritain s Pubs are GREAT campaign prompting more interest from overseas. Great Country Pubs also became sponsor of the Pub category of this year s Beautiful South Awards and, indeed, a number of GCP members won awards at the event. There were lots of PR successes including the famous Dutch Chef Rene Pluijm filming at GCPs in Oxfordshire for his TV programme broadcast in Holland. Meet Beyond London A new initiative in 2015/16 saw TSE working with VisitEngland, conference bureaus in the south east and TSE members aiming at the Meetings Incentives Conference and Events (MICE) market. We organised a Meet Beyond London branded stand at the Meetings Show in July 2015 which was jointly manned by members and partners. We also invested in a MICE database of over 9000 buyers and made it available as a cost effective route to market via enews or postal mailings. Presentations and discussions also took place with Coast to Capital and Thames Valley LEPs about support for this particular marketplace. Page 5

8 Maximising our Expertise Training Services The training team continued to offer a range of training programmes to suit industry needs. During this year we developed a tiered package of social media training courses from basic through to advanced skills and all spaces were filled very quickly. A new partnership was formed with VisitEngland and in October 2015 we jointly launched a visitor attractions customer service course called Exceeding Visitor Expectations (EVE). The course was specifically aimed at front line staff working in attractions and promoted through the VisitEngland team of quality assessors. In February 2016, together with British Marine and VisitEngland, we launched Welcome Afloat which was aimed at small boat operators and others working in visitor businesses in the marine leisure sector. These sector specific customer service courses proved to be highly successful with strong participation levels which can be directly attributed to the additional marketing and promotional activity gained through working with our high profile external partners. Towards the end of the financial year we began work on an upgrade to our Welcome Host Gold programme so that we could strengthen content on social media and branding. Visitor Services In 2015/16 TSE managed 5 TIC contracts on behalf of local authorities. One of our managed centres, East Hampshire TIC gained recognition at the Beautiful South Awards being awarded Bronze in the Visitor Information category. However, a review of Aylesbury TIC took place during the year which resulted in closure of the centre together with staff redundancies. With ongoing local authority budget cuts, TSE works to raise the profile of the centres with councillors and local residents. This has been achieved by regular open days and events including participation in English Tourism Week. TSE continued to offer a Discount Purchasing service on books, maps and guides to TICs and tourism businesses. Although this has become more challenging, feedback received indicates customers value the excellent customer service given by TSE. During the year we offered support and advice to several TICs across the South East, delivered a TIC mystery shopping contract and coordinated two regional networking meetings which are highly valued by TICs. Page 6

9 Research Services The team s expertise in tourism economic impact appraisal was utilised to evaluate a number of major events in the region in Most notably, Matterley Estates commissioned an economic impact assessment of the British Motocross Grand Prix, BoomTown Fair and Tough Mudder events. The study was able to show supporters and stakeholders that the events generated in total an estimated 10.5 million for businesses in Winchester and the wider Hampshire area. We continued to provide the Cambridge Model for over 25 destinations to identify the volume and value of tourism to their respective local authority areas. In Bournemouth, the research team was commissioned by the Council to repeat the economic impact assessment of the Wheels Festival. Other major projects completed in 2015/16 include a comprehensive review of open/green spaces across Tandridge District commissioned by the Council to provide evidence on how these spaces are used recreationally, and to help set new local standards in open space play and recreational provision across the District. At the end of the year a number of contracts were secured across West and East Sussex for visitor surveys and destination audits. Bespoke Contracts TSE s expertise and ability to create economies of scale is available to help partners and members an increasingly attractive option when faced with limited resources Throughout the year TSE provided services for a number of annual contracts including organisational and administrative support for the New Forest Tourism Association, the Isle of Wight Exhibitions Group and the Best of Dorset Attractions Group. With the addition of Peter Colling, the previous MD, to TSE s team we have also been able to develop further training, research and development services, often working with associates and other external delivery partners. Page 7

10 Report of the Directors for the year ended 31 March 2016 The directors present their report together with the financial statements for the year ended 31 March For the year ended 31 March 2016 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies. Results The profit and loss account is set out on page 13 and shows the profit for the year. Principal activities Review of the company s activities and future developments The principal activity of the company is the promotion and development of tourism. The company seeks to provide the best possible range of support services to members and partners and has responded to changing needs and demands in both the commercial and local authority sectors. The range of services is constantly reviewed and increasingly offered outside the traditional South East boundary with a view to generating income streams that will help deliver core activities. Results Turnover for the year amounted to 1,654,405 (2015: 1,946,265), comprising income arising directly from the company's activities of 1,464,083 (2015: 1,747,790) and membership subscription income of 190,322 (2015: 198,475). The reduction in turnover is due to normal variations in demand for services together with the anticipated contraction following the closure of two TICs at the end of March Other operating income from rent and service charges was 60,606 (2015: 48,689). Administrative expenses have reduced to 244,970 (2015: 399,379). This figure includes restructuring costs of 550 (2015: 89,647). Once again, savings have been achieved in several areas but the most significant has been as a consequence of the last restructuring exercise. The profit on ordinary activities for the year after taxation amounted to 121,479 (2015: loss of 84,234). The main changes are savings brought about by restructuring, the absence of significant restructuring costs and a beneficial year-end actuarial adjustment. The Statement of total recognised gains and losses includes a pension scheme net actuarial gain of 242,000 (2015: loss of 756,000) giving total recognised gains for the year of 363,479 (2015: loss of 840,234). Page 8

11 Principal risks and uncertainties Ongoing reductions in central government funding for Local Authorities put pressure on the availability of their budgets for activities and services provided by the company. The Board manages risk by continually reviewing its priorities and activities, operational efficiencies and by ensuring that its commercial activities are as effective as possible. Going concern The company has been striving to return to break even and the deficit for the year, before year-end actuarial adjustments, was 6,521 (2015: 145,234). Although the balance sheet reflects net liabilities of 3,128,164 (2015: 3,491,643), this includes a provision for a pension deficit of 3,780,000 (2015: 4,150,000) which is not a current liability. The net position before pension deficit at 31 March 2016 is 651,836 (2015: 658,357) of which 381,936 (2015: 413,105) is held in cash and cash deposits. The directors have considered the forecasts for 2017 and 2018 and are confident that the company has the cash resources to cover their liabilities as they fall due over the 12 months from the date of this report and accordingly the accounts are prepared on the going concern basis. Reserves The company has the following reserves as at 31 March 2016: The special projects reserve of 50,120 (2015: 50,120) which has been created by decision of the board to be used at the discretion of the Chief Executive for local projects that support members and destination partners. The accumulated deficit of 3,178,284 (2015: 3,541,763) comprising: - the accumulated surplus (excluding pension liability) of 601,716 (2015: 608,237) - the pension liability of 3,780,000 (2015: 4,150,000). Further information about the company's reserves is provided within Note 10. Directors' responsibilities The directors are responsible for preparing the directors' report and the financial statements in accordance with applicable 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 Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 of the company for that period. Page 9

12 In preparing these financial statements, the directors are required to: select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. 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 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. Directors The directors of the company during the year were: Ken Robinson CBE (Chairman) Peter Colling (Managing Director) (resigned 4 May 2015) Nigel Smith (Chief Executive) (appointed 5 May 2015) Sandra Barnes-Keywood Andrew Bateman (appointed 22 October 2015) Adam Bates (resigned 17 September 2015*) Lyn Bibbings (resigned 24 October 2015*) Terry Boswell Kim Hallett (appointed 17 September 2015) Daniel Humpheys (appointed 17 September 2015) Alan Mellins Stephen Munn David Philip FCA Mark Smith Louise Stewart (appointed 22 October 2015) Christopher White (resigned 19 September 2015*) *resigned on completion of term of office In preparing this directors report advantage has been taken of the small companies exemption. By order of the Board P Oliver Secretary 20 September 2016 Page 10

13 Independent review report On the unaudited financial statements of The Southern & South East England Tourist Board To the Board of Directors of The Southern & South East England Tourist Board We have reviewed the financial statements of The Southern & South East England Tourist Board ( the company ) for the year ended 31 March 2016 which comprise the Profit and Loss Account, the Balance Sheet, the Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards ('United Kingdom Generally Accepted Accounting Practice'). This report is made solely to the company's directors, as a body, in accordance with the terms of our engagement letter dated 27 May Our review has been undertaken so that we might state to the company's directors those matters we have agreed with them in our engagement letter and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's directors as a body, for our work, for this report, or for the conclusions we have formed. Directors Responsibilities for the Financial Statements As explained more fully in the Statement of Directors Responsibilities within the Directors Report, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Our Responsibility Our responsibility is to express an independent conclusion based on our review of the financial statements. We conducted our review in accordance with International Standard on Review Engagements 2400 (Revised), Engagements to review historical financial statements (ISRE 2400). ISRE 2400 also requires us to comply with the ICAEW Code of Ethics. Scope of the Assurance Review Our review was based primarily upon enquiry, analytical procedures and assessing whether accounting policies are in accordance with United Kingdom Generally Accepted Accounting Practice. The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that may be identified in an audit. Accordingly, we do not express an audit opinion on these financial statements. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the financial statements have not been prepared: so as to give a true and fair view of the state of the company s affairs as at 31 March 2016 and of its results for the year then ended; Page 11

14 in accordance with United Kingdom Generally Accepted Accounting Practice; and in accordance with the requirements of the Companies Act BDO LLP Chartered Accountants Southampton United Kingdom 29 September 2016 BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). Page 12

15 Profit and loss account For the year ended 31 March 2016 Note Turnover 2 1,654,405 1,946,265 Cost of sales 1,421,472 1,692,024 Gross profit 232, ,241 Administrative expenses 244, ,379 (12,037) (145,138) Other operating income 60,606 48,689 Operating profit/(loss) 3 48,569 (96,449) Other interest receivable and similar income 7,910 10,215 Other finance income/(charges) 65,000 2,000 Profit/(Loss) on ordinary activities before and after taxation for the financial year 121,479 (84,234) Page 13

16 Statement of total recognised gains and losses For the year ended 31 March 2016 Note Statement of total recognised gains and losses Profit/(Loss) for the financial year 121,479 (84,234) Pension scheme net actuarial gain/(loss) 242,000 (756,000) Total recognised gains and losses for the financial year 363,479 (840,234) Page 14

17 Balance sheet As at 31 March 2016 Company number Note Fixed assets Tangible assets 6 487, , , ,001 Current assets Stocks 35,726 36,413 Debtors 7 184, ,253 Short term deposits 86,491 85,113 Cash at bank and in hand 295, , , ,771 Creditors: amounts falling due within one year 8 438, ,415 Net current assets 164, ,356 Net assets excluding pension scheme liabilities 651, ,357 Pension scheme liabilities 9 (3,780,000) (4,150,000) Net liabilities including pension scheme liabilities (3,128,164) (3,491,643) Capital and reserves Special projects reserve 10 50,120 50,120 Profit and loss account 10 (3,178,284) (3,541,763) Shareholders' deficit (3,128,164) (3,491,643) Page 15

18 For the year ended 31 March 2016 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies. The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476. The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements. These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies' regime and the Financial Reporting Standard for Smaller Entities (effective January 2015). The financial statements were approved by the board of directors and authorised for issue on 20 September K G Robinson D R Philip Director Director The notes on pages form part of these financial statements Page 16

19 Notes forming part of the financial statements for the year ended 31 March Accounting policies The financial statements have been prepared under the historical cost convention, as modified to include the revaluation of freehold land and buildings. The following principal accounting policies have been applied: Revenue recognition In accordance with Statement of Standard Accounting Practice 4, Government and similar grants receivable are recognised in the profit and loss account of the period in respect of which the expenditure to which they relate is incurred. Any amounts received in excess of amounts earned are reflected in deferred income. Revenue from other projects is reflected in the period the provision of services to which the income relates is performed. Membership income is accounted for in the period in which the subscription relates. Taxation The charge for taxation is based on the results for the year and takes into account taxation deferred. Current tax is measured at amounts expected to be paid using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that the recognition of deferred tax assets is limited to the extent that the company anticipates making sufficient taxable surpluses in the future to absorb the reversal of the underlying timing differences. Deferred tax balances are not discounted. Depreciation Depreciation is provided on all tangible fixed assets with the exception of freehold land on a consistent basis at rates calculated to write off the cost or valuation of each asset evenly over its estimated useful economic life as follows: Freehold property - 50 years, with subsequent additions depreciated over the remaining life of the property Plant and equipment - 5 years Motor vehicles - 4 years Computer equipment - 3 years Assets with an individual cost of less than 1,000 are written off on purchase. Page 17

20 The transitional provisions of FRS 15, Tangible Fixed Assets, have been adopted. Under these provisions assets brought into account at valuation were retained at their book value and subsequently not revalued, valuations after March 2000 having been obtained for information only and not incorporated in the balance sheet. Details of the valuation in 1998 of the company's freehold property are given in note 6. Stocks Stocks of saleable publications are valued at the lower of cost and net realisable value. Stocks of non-saleable publications are, by decision of the Directors, not valued in the financial statements Pension costs The company operates two defined benefit schemes and one defined contribution scheme. The assets of the schemes are held and managed separately from those of the company. For the defined benefit schemes, the company has adopted in these financial statements the provisions of the FRSSE Accounting for Retirement Benefits in that the amounts charged to operating results are the current service costs and gains and losses on settlements and curtailments. They are included as part of staff costs. Past service costs are recognised immediately in the profit and loss if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until vesting occurs. The interest costs and the expected returns on assets are shown as a net amount of other finance costs or income. Actuarial gains and losses are recognised immediately in the statement of total recognised gains and losses. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projection unit method and discounted at a rate equivalent to the current rate of return on a high quality corporate bond of equivalent currency and term to scheme liabilities. The actuarial valuations are obtained triennially and are updated at the balance sheet date. The resulting defined benefit asset or liability is presented separately after other net assets on the face of the balance sheet. For the defined contribution schemes the amounts charged to the profit and loss account in respect of pension costs and other post-retirement benefits represent the contributions payable in the period. Differences between contributions payable in the period and contributions actually paid are shown as either accruals or prepayments in the balance sheet. Foreign currency Foreign currency transactions are translated into sterling at the rates ruling when they occurred. Foreign currency monetary assets and liabilities are translated at the rates ruling at the balance sheet date. Any differences are taken to the profit and loss account. Page 18

21 2 Turnover Turnover arises solely within the United Kingdom. Income from government grants totalled 4,000 for the year (2015: 3,300). 3 Operating profit/loss This is arrived at after charging: Depreciation of tangible fixed assets 15,038 10,988 Redundancy costs 13, ,386 4 Directors' remuneration Aggregate emoluments, pension contributions and amounts receivable under long term incentive schemes 59,626 74,757 Company contributions to money purchase pension schemes 1,495 10,447 Compensation for loss of office - 77,140 There was 1 director in the company's defined benefit pension scheme (2015-1) and 1 director in the company's defined contribution pension scheme (2015-0) during the year. 5 Other finance income/(charges) Expected return on pension scheme assets 467, ,000 Interest on pensions scheme liabilities (402,000) (484,000) 65,000 2,000 Page 19

22 6 Tangible fixed assets Land and buildings Plant and machinery etc Total Cost or valuation At 1 April , , ,756 Additions - 19,583 19,583 Disposals - (68,335) (68,335) At 31 March , , ,004 Depreciation At 1 April , , ,755 Provided for the year 8,567 6,471 15,038 Disposals - (68,335) (68,335) At 31 March , , ,458 Net book value At 31 March ,452 17, ,546 At 31 March ,019 3, ,001 The company's freehold land and buildings were valued in 1998 and reduced to 545,000. In this case there is no difference in net book value between accounting for fixed assets on a revalued or historical cost basis. Included within freehold land and buildings is 280,000 (2015: 280,000) for land upon which no depreciation has been provided. As referred to in note 1, under the provisions of FRS 15 adopted from March 2000, assets brought into account at the valuation detailed above were retained at their book value at that date and subsequently not revalued in the financial statements. If the company's property were sold at its 1998 valuation no corporation tax liability would arise (2015: Nil). Page 20

23 Debtors Trade debtors 129, ,375 Other debtors 55,665 44,878 All amounts shown under debtors fall due for payment within one year. 184, ,253 8 Creditors: amounts falling due within one year Trade creditors 154, ,434 Taxation and social security 15,048 19,331 Other creditors 268, , , ,415 Page 21

24 9 Pensions The company participates in the defined benefit schemes administered by Hampshire County Council and Kent County Council and also operates one defined contribution scheme. The Southern and South East England Tourist Board is not a trustee of any of the schemes and has no control over the investment decisions and assumptions made by their administrators. At 31 March 2016 company contributions of 9,459 were outstanding in respect of defined benefit schemes and included within creditors. (2015: 47,140). The last full actuarial assessments of both local authority funds were carried out by qualified independent actuaries at 31 March At 31 March 2013 the market value of the company's share of assets within the Hampshire County Council scheme was equivalent to a funding level of 80%. To spread this deficit over employees' expected remaining service lives the company, on actuarial advice, is paying a contribution rate of 15.6% plus 35,000 for the year ending 31 March 2016 and a contribution rate of 15.6% plus 42,000 for the year ending 31 March From 1 April 2014 the employees are paying between 5.5% and 12.5%. At 31 March 2013 the market value of the company's share of assets with the Kent County Council scheme was equivalent to a funding level of 83%. To spread this deficit over employees' expected remaining service lives the company, on actuarial advice, is paying a contribution rate of 30.3% plus 45,000 for the year ending 31 March 2016 and a contribution rate of 30.3% plus 47,000 for the year ending 31 March From 1 April 2014 the employees are paying between 5.5% and 12.5%. The next full actuarial assessments of both local authority funds are being carried out by qualified independent actuaries at 31 March The results will be available by 31 March The valuations have been updated by the actuaries to take account of the requirements of FRS 17 in order to assess the liabilities of the funds as at 31 March Liabilities are valued on an actuarial basis using the projected unit method which assesses the future liabilities discounted to their present value. Both County Council funds are closed to new members from The Southern and South East England Tourist Board and therefore use of the projected unit method to value liabilities will mean that the current service cost increases as the members approach retirement. Should the company cease to participate in the admission agreements a greater liability than that concluded for FRS 17 purposes might result. The following table refers to The Southern and South East England Tourist Board's portion of the scheme assets and liabilities. Page 22

25 Value of scheme assets and liabilities Market value of assets 8,401,000 8,614,000 Present value of scheme liabilities (12,181,000) (12,764,000) Pension scheme deficit (3,780,000) (4,150,000) Movements in the year Pension scheme deficit at the beginning of the year (4,150,000) (3,455,000) Current service cost (43,000) (52,000) Interest cost (402,000) (484,000) Cash contribution 154, ,000 Actuarial (losses)/gains 242,000 (756,000) Expected return on assets 467, ,000 Past service costs (48,000) 0 Pension scheme deficit at the end of the year (3,780,000) (4,150,000) The company made contributions of 3,841 (2015: 2,538) in respect of defined contribution pension schemes in the year. At the balance sheet date contributions of 469 (2015: 842) were outstanding in respect of the scheme and included within creditors Page 23

26 10 Reserves Special Projects reserve Profit and loss account At 1 April ,120 (3,541,763) Profit for the year Actuarial gain - 121, ,000 At 31 March ,120 (3,178,284) If the pension scheme liability was excluded from the financial statements, the accumulated deficit would change from 3,178,284 (2015: 3,541,763) to an accumulated surplus of 601,716 (2015: 608,237). 11 Related party disclosures In the normal course of its activities the company enters into commercial transactions with several of its non-executive directors and entities in which non-executive directors are interested. These transactions are carried out at arm s length and at normal commercial rates and with the exception of those with Welcome to Excellence Limited (WEL) are considered by the company to be immaterial for the purposes of disclosure requirements of the Companies Act and the relevant Financial Reporting Standard. TSE is a director of, and agent for, WEL whose principal activity is the promotion and development of tourism through the training system known as the Welcome to Excellence Programme. The directors consider that no one party has control over the company. The company received income from WEL totalling 7,361 during the year (2015: 8,760) and made purchases of 10,502 (2015: 6,436). At the balance sheet date the amount owed to the company by WEL was 7,361 (2015: 8,760) and the amount owed to WEL was 31,465 (2015: 29,843). 12 Capital The company is incorporated under the Companies Act 1948 as a company limited by guarantee and not having share capital. Page 24

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28 Tourism South East 40 Chamberlayne Road Eastleigh Hampshire SO50 5JH Tel Fax