Notes to the Balance Sheet

1.

Net fixed assets

1.1

The movements in the fixed assets during the year were as follows :

Dwellings

Other

Vehicles,

Non-

Work

Total

land and

plant and

operational

In

buildings

equipment

properties

Progress

£'000

£'000

£'000

£'000

£'000

£'000

Gross book value as

at 31 March 2004

2,228

51,652

11,239

730

804

66,653

Less accumulated

depreciation / impairment

34

2,076

6,217

0

0

8,327

Net book value as

at 31 March 2004

2,194

49,576

5,022

730

804

58,326

Movement in 2004/05:

Transfers between cats.

0

193

573

0

-766

0

Additions

0

13

803

0

608

1,424

Disposals of assets:

write-off accum dep'n

0

0

464

0

0

464

write-out GBV

0

0

-491

0

0

-491

Revaluation of assets:

write-off accum. dep'n

0

0

0

0

0

0

change in cert valuation

0

0

0

0

0

0

Depreciation for year

0

-529

-884

0

0

-1,413

Net book value as

at 31 March 2005

2,194

49,253

5,487

730

646

58,310

Gross book value as

2,228

52,322

12,588

730

1,110

68,050

at 31 March 2005

Accumulated dep'n/imp

34

3,069

7,101

0

464

9,740

Net book value as

at 31 March 2005

2,194

49,253

5,487

730

646

58,310

1.2

Fixed assets held at 31 March

2004

2005

Dwellings :

Number of houses

23

23

Other land and buildings :

Number of fire stations

52

53

Total floor area (sq m)

37,154

37,805

Vehicles :

Number of vehicles owned

106

114

1.3

Valuation bases and depreciation

Land and buildings assets are required to be revalued every five years, or sooner when there are

material changes. The last quinquennial revaluation was completed in 1999/00 and subsequent

revaluations have been done when major works have been completed. There were no material

changes in valuations apart from where major works were undertaken. The valuations were

carried out by qualified personnel from the Estates Practice, Hampshire County Council.

Notes to the Balance Sheet continued...

Financial Reporting Standard 15 requires most assets to be depreciated over their useful lives. The

requirement to depreciate all operational buildings was a new requirement in 2000/01 and useful

lives and residual values have been estimated on a provisional basis. A more precise basis has

been determined for implementation when buildings are next revalued.

Asset valuations are also required to reflect any impairment during the year but there was

none during the year.

Details of the policies applied to fixed assets and depreciation can be found in the Statement of

Accounting Policies.

1.4

Capital spending and financing

Capital spending on fixed assets was as follows:

Capital expenditure

2003/04

2004/05

£'000

£'000

Land

2

0

Construction work

106

17

Vehicles and equipment

1,431

1,501

Fees and salaries

0

56

1,539

1,574

Capital spending was financed as follows :

Capital financing

2003/04

2004/05

£'000

£'000

Capital receipts

547

0

Revenue contributions

19

0

BCA/Supported borrowing

973

1424

Capital contribution

0

10

Capital grant

0

140

1,539

1,574

1.5

Capital commitments

The Authority has authorised expenditure in future years under its capital programme of

£1,058,000 of which £699,000 is contracted.

Expenditure

Expenditure

approved and

approved but

contracted

not contracted

at 31 March

at 31 March

2005

2005

£'000

£'000

2004/05 Frontline appliances

566

181

Other schemes

133

178

699

359

These commitments are expected to be paid during 2005/06.

Notes to the Balance Sheet continued...

2.

Deferred charges

2.1

Movements in the value of deferred charges during the year were as follows :

2003/04

2004/05

£'000

£'000

Balance as at 1 April

10

5

Expenditure

0

140

Less : amounts written off to

capital financing reserve

-5

-145

Balance as at 31 March

5

0

2.2

Deferred charges represent expenditure which has been capitalised but which does not

add to the value of Authority owned assets. The balance as at 1 April relates to one-off expenditure in

creating the Authority. The expenditure during the year was the cost of the Home Fire Safety Checks.

3.

Long term debtors

31 March

31 March

2004

2005

£'000

£'000

Car loans to staff

31

34

Other

0

5

31

39

4.

Stocks

31 March

31 March

2004

2005

£'000

£'000

Uniforms

168

268

Equipment

90

72

Workshops

178

162

Fuel

26

28

Hydrants

6

6

Memorabilia

4

3

Foam

15

37

Stationery

13

17

First Aid

1

2

501

595

5.

Debtors

31 March

31 March

2004

2005

£'000

£'000

Government departments

19

13

Other local authorities

117

0

Sundry debtors

430

456

566

469

The balance to other local authorities on 31/03/04 related to transfer values expected

in relating to that year.

Notes to the Balance Sheet continued...

6.

Payments in advance

6.1

These mainly represent the annual payments on leasing arrangements of £666,000.

7.

Creditors

31 March

31 March

2004

2005

£'000

£'000

Government departments

483

609

Other local authorities

597

39

Sundry creditors

1,418

720

2,498

1,368

The Authority's policy is to pay business creditors 30 days after the date shown on the

invoice.

7.1

The balance to other local authorites on 31/03/04 related to levy refunds owed to the constituent

authorites.

The variance in sundry creditors between 31/03/04 and 31/03/05 mainly relates to large creditors

included in 2003/04 for backdated pay awards.

8.

Receipts in advance

8.1

The balance shown represents some leasing rebates received in advance and funding for some local

fire initiatives

9.

Temporary Borrowing and Lending

9.1

The balance represents the amount borrowed from or lent to Hampshire County Council.

10.

Long term borrowing

10.1

Range of interest Source of loan

31 March

31 March

rates payable

2004

2005

£'000

£'000

4.5 - 5.875% Public Works Loan Board

3,250

5,100

All loans mature between 2019 and 2034.

11.

Provisions

11.1

The Authority holds two provisions. The first is for the provision for bad debts, which

totals £793 This has been netted off the balance of debtors.

Notes to the Balance Sheet continued...

11.2

The second is for uninsurable and other claims. This covers costs which may arise as a result of

the Authority being uninsured for a period (one of the Authority's insurers went into liquidation),

possible tribunals (together with their associated costs) and other claims made against the

Authority. These cases may take a number of years to settle.

The movement on this provision can be summarised as follows:

2003/04

2004/05

£000

£000

Balance as at 1 April

617

1,482

Increase/decrease(-) made during year

865

-1,179

Balance as at 31 March

1,482

303

12.

Fixed asset restatement account

12.1

The fixed asset restatement account was created in order to allow assets to be

maintained in the accounts at current value. The account is written down by the net book

value of assets being disposed of. The account is also debited or credited with deficits

or surpluses when revaluations are made.

13.

Capital financing account

13.1

The capital financing account contains :

* the amount of capital expenditure financed from revenue and capital receipts

* the statutory amount required to provide for the repayment of external loans less

the amounts included for depreciation and writing down of deferred charges.

The change in the account is analysed below:

2003/04

2004/05

£'000

£'000

Balance as at 1 April

2,079

2,756

Revenue contributions

-19

0

Capital receipts applied

-547

0

Minimum revenue provision

-142

-176

Depreciation

1,380

1,414

Deferred charges

5

145

Deferred Gov grants applied

-140

Balance as at 31 March

2,756

3,999

14.

Usable capital receipts reserve

14.1

The balance on the usable capital receipts reserve is made up as follows :

2003/04

2004/05

£'000

£'000

Balance as at 1 April

-94

0

Receipts in the year

-453

-42

Less : used to finance capital expenditure

547

0

Balance as at 31 March

0

-42

15.

Contingent liabilities

15.1

There are no contingent liabilities that have been provided for in the accounts.

Notes to the Balance Sheet continued...

16.

Finance and operating leases

16.1

The Authority does not hold any assets under finance leases.

16.2

The Authority has operational leases for operational vehicles, employee leased cars and

photocopiers. The Authority is committed to make payments totalling £1,118,000

during 2005/06 for leases which expire over the following timescales:

2005/06

£'000

Within the year

78

Within the second to fifth year

638

Over five years

402

Total

1118

17.

Euro costs

The Authority does not have any commitments in respect of Euro costs.

18.

Earmarked reserves

31 March

2005

£'000

Transitional Grant reserve

787

Underspendings carried forward

500

Capital payments reserve

2514

Modernisation reserve

500

Total

4301

Notes to the Balance Sheet continued...

19.

Disclosure of net pensions asset/liability.

19.1

As part of the terms and conditions of employment of its officers and other employees,

the Authority offers retirement benefits. Although these will not actually be payable

until employees retire, the Authority has a commitment to make the payments that needs

to be disclosed at the time that employees earn their future entitlement.

19.2

The Authority participates in two pension schemes:

.

The Local Government Pension Scheme for non-uniformed employees,

administered by Hampshire County Council - this is a funded scheme, meaning

that the Authority and employees pay contributions into a fund, calculated at a

level estimated to balance the pensions liabilities with investment assets.

.

The Firefighters' Pension Scheme for firefighters - this is an unfunded scheme,

meaning that there are no investment assets built up to meet the pensions

liabilities, and cash has to be generated to meet actual pensions payments

as they eventually fall due.

19.3

An independent actuary, Hewitt, Bacon and Woodrow has calculated that the following

assets and liabilities for pensions should be included in the balance sheet.

It is based on a formal actuarial valuation as at 31 March 2001.

31 March 2004

Local Government

Firefighters'

Total

Pension Scheme

Pension Scheme

£m

£m

£m

Estimated Liabilities in Scheme

12.99

243.58

256.57

Estimated assets in scheme

7.96

0.00

7.96

Net liability

5.03

243.58

248.61

31 March 2005

Local Government

Firefighters'

Total

Pension Scheme

Pension Scheme

£m

£m

£m

Estimated Liabilities in Scheme

19.46

312.63

332.09

Estimated assets in scheme

11.63

0.00

11.63

Net liability

7.83

312.63

320.46

Notes to the Balance Sheet continued...

19.4

Liabilities have been assessed on an actuarial basis using the projected unit method, an

estimate of the pensions that will be payable in future years dependent on assumptions

about mortality rates, salary levels, etc.

The main assumptions are as follows :

2003/04

2004/05

%

%

Discount rate

6.4

5.3

Rate of inflation

2.9

2.9

Rate of increase in salaries

4.4

4.4

Rate of increase in pensions

2.9

2.9

Rate of increase on deferred pensions

2.9

2.9

Long - term expected rate of return on equities

7.7

7.7

Long - term expected rate of return on bonds

4.7

4.7

Long - term expected rate of return on property

6.7

6.7

Long - term expected rate of return on other assets

4.2

4.8

Average long - term expected rate of return

6.9

6.8

Assets in the County Council Pension Fund are valued at fair value, principally market

value for investments, and consist of the following categories, by proportion:

31 March

31 March

2004

2005

%

%

Equity investments

71

69

Bonds

21

22

Property

4

4

Other assets

4

5

100

100

The proportions of total assets held in each asset type, shown above, reflect the

proportions held by the Fund as a whole at 31 March.

19.5

The requirement to meet the liabilities of the firefighters' scheme falls on the Authority in

the year the firefighter retires. The liability for the deficit on the Local Government

scheme will be reflected in future employer's pension contributions made by the Authority.

Both costs will in turn be met by Council Taxpayers and Government Support Grant.

19.6

The movement in the net pension liability for the year to 31 March 2005 is as follows :

Local Government

Firefighters

Pension Scheme

Pension Scheme

£m

£m

Net deficit at the beginning of the year

-5.04

-243.58

Movement in year :

Current service cost

-0.92

-8.74

Contributions

0.70

7.31

Past service costs

-0.03

0.00

Expected return on pension fund asset

0.57

0.00

Interest on pension scheme liabilities

-0.86

-15.62

Actuarial gain / loss (-)

-2.26

-52.00

Net deficit at the end of the year

-7.84

-312.63