Report
Annual report and Accounts 2019 to 2020
Making gambling fairer and safer
Right-of-use assets
Following the adoption of IFRS 16 in 2019-20 financial accounts, the Commission has categorised all leases are on recognised as lease liabilities, with the exception of those leases which are exempt either by having less than 12 months to run from 31st March 2020 or are considered low value (less than £5,000).
The finance lease is recognised as an asset and a corresponding lease liability at the net present value (NPV) of future lease payments. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability.
Costs in the statement of comprehensive net expenditure have increased by £255k net of operating lease rental as a result of adopting IFRS 16 during 2019-20.
A discount rate of 1.99% has been applied in the calculations of interest on lease liabilities. As at 31st March 2020 the Commission was committed to making the following payments in respect of finance leases:
a) Right-of-use asset
| Victoria Square House Land and Buildings £'000s |
Bloomsbury Street Land and Buildings £'000s |
Plant & equipment £'000s |
Total £'000s |
Cost/valuation |
|---|---|---|---|---|
| At 1 April 2019† | 1,112 | 611 | 6 | 1,729 |
| Additions to right-of-use assets | 3,981 | - | - | 3,981 |
| Depreciation charge for the year | (736) | (85) | 2 | (823) |
| Balance as at 31 March 2020 | 4,357 | 526 | 4 | 4,887 |
| No later than one year | 736 | 204 | 2 | 942 |
| Later than one year and not later than five years | 3,621 | 322 | 2 | 3,945 |
| Later than five years | - | - | - | - |
| Balance as at 31 March 2020 | 4,357 | 526 | 4 | 4,887 |
b) b) Lease liability
| Victoria Square House Land and Buildings £'000s |
Bloomsbury Street Land and Buildings £'000s |
Plant & equipment £'000s |
Total £'000s |
2019 – Leases under IFRS 16 |
|---|---|---|---|---|
| Additions to lease liabilities†† | (1,470) | (611) | (6) | (2,078) |
| Interest on lease liabilities @ 1.99%††† | (3,981) | - | - | (3,981) |
| Cash payment†††† | 973 | 27 | 2 | 1,002 |
| Balance as at 31 March 2020 | (4,587) | (589) | (4) | (5,180) | Total future lease payments under leases are given in the table below for each of the following periods: |
| No later than one year | (518) | (262) | (2) | (782) |
| Later than one year and not later than five years | (4,069) | (327) | (2) | (4,398) |
| Later than five years | - | - | - | - |
| Balance as at 31 March 2020 | (4,587) | (589) | (4) | (5,180) |
Victoria Square House: Following a successful application to the Government Property Unit, the Commission signed a lease for its existing premises in central Birmingham. The lease was signed in May 2015. The lease is for a period of 10 years (with a 5 year break clause) and commenced with effect from February 2016 when the previous lease expired.
As at 31 March 2020, the lease at Victoria Square House will continue for an additional 5 years to February 2026.
Bloomsbury Street: As part of the National Lottery Competition, the Commission have entered into an Intra- UK government agreement for premises in Bloomsbury Street London. The lease is currently unsigned as at 31 March 2020. The lease is for a period of 3 years and commenced with effect from 8 November 2019.
References
† Right-of-use asset value for Victoria Square House as at 1 April 2019 includes an adjustment of £358k relating to a brought forward deferred rent release provision. The Commission received a rent-free period during 2015/2016, during this time rental charges were accrued and the cost benefit is being released over the life of the lease.
†† Lease at Victoria Square House will continue for an additional 5 years to February 2026
††† Interest on lease liabilities – Finance Cost - amounts recognised in SoCNE.
†††† Amount recognised in the statement of cash flow – total cash outflow for leases.
Capital commitments Next section
Commitments under operating leases
Last updated: 18 September 2024
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