The directors present the strategic report for the year ended 31 March 2025.

The principal activities of the Group are housing maintenance, gas servicing and boiler repair, grounds maintenance, street cleaning and Capital works performed on behalf of Harlow District Council ("the Council") under a ten-year contract which commenced on 1st February 2017.

The Group has made a loss on ordinary activities before taxation of £651,504 for the year ended 31st March 2025 (2024: profit of £37,557).

Revenues were higher than expected at £32,926,125 (2024: £32,236,257). This was mainly due to additional funding from the Council to clear outstanding repairs and maintenance works.

The Group measures performance in several ways, including contract performance, quality reviews, debt reviews and regular re-forecasting and monitoring reviews.

The Group attaches great importance to its corporate responsibility as evidenced by the many community events and conferences supported and attended by the Group. This includes providing work experience to students and charitable fundraising events for St Clare Hospice and other local organisations.

The Group recognises the importance of our wider responsibility within the local community and have been involved with a number of local initiatives.

The Group maintain a detailed Risk Management and Internal Control system. This requires the group to:

• identify risks and record them in a risk register;

• diagnose and quantify the risks as to their likelihood and impact, record the controls established and monitor their effectiveness;

• develop a plan to mitigate the likelihood and impact of the identified risks;

• regularly review the risk registers and action plans; and

• report key issues upwards to Harlow District Council.

The Corporate Risk Register documents strategic risks pertinent to our strategic aspirations outlined in the new Business Plan, including environmental Impacts, supply chain, and cyber security. It serves as an agreed record of significant risks, current controls, mitigation efforts, and proposed actions to strengthen risk management.

HTS has identified a number of strategic risks on our Corporate Risk Register, each considered within the context of prevailing circumstances, strategic objectives, and risk severity. These risks ensure comprehensive coverage aligned with our Risk Management Framework. The Board continues to monitor these risks and uncertainties, ensuring that appropriate risk management strategies are in place.

Currently, the most significant business risks at the corporate level are:

Over the past year, HTS has successfully delivered on the strategic objectives set out in the previous reporting period. We have completed a full realignment of our vision, mission, and values with our long-term strategic plan, and are now operating with a more focused and efficient framework for financial performance and service delivery.

Key developments include the implementation of new technologies, optimisation of service agreements, and improvements to our governance and workforce planning processes. These efforts have reinforced HTS’s position as a trusted, high-performing partner with Harlow District Council, delivering housing, environmental, and capital investment services with transparency, accountability, and value for money.

Succeed by Working Together: We have strengthened collaboration across departments, embedding a culture of teamwork and open communication through regular feedback sessions and cross-functional initiatives. The ongoing rollout of two new field management systems has delivered measurable improvements in front-line productivity and service delivery. We remain committed to being a Living Wage employer, aligned with the priorities of Harlow District Council.

Take Responsibility and Ownership: Empowering employees remains a cornerstone of our approach. Change management programs across Repairs & Maintenance, Environmental Services, and Capital Works have been completed, embedding a proactive culture where teams take ownership of outcomes and resolve issues swiftly. Continued investment in training and resources has supported our workforce to perform confidently and effectively.

Always Put Safety First: For the year ended 31st March 2025, four reportable incidents were reported. This resulted in an Annual Incident Injury Rate (AIIR) of 705, which is higher than the current industry benchmark. We have been working hard to ensure that the appropriate mitigation measures and proactive safety strategies are in place. All incidents were thoroughly investigated, and control measures have been implemented to reduce future risk. The Company remains fully committed to maintaining a low Accident Incident Rate and promoting a safe and healthy working environment for employees.

Respect Our Customers: HTS strive to consistently meet high standards of customers, statutory and regulatory requirements. HTS is committed to enhancing customer satisfaction through open engagement with clients and continual improvement of systems.  The 2024/25 customer satisfaction surveys resulted in 97% satisfied with overall HTS customer service and over 99% reporting that they found it easy to contact HTS customer service centre. This places HTS in upper quartile of customer satisfaction performance in the sector.  HTS performance against contractual KPIs that govern the contract achieved 96% with gas compliance at 100% throughout the year.

Quality: Think Green: Sustainability remains a key priority. We have now fully deployed 12 electric fleet vehicles and transitioned to zero-emission tools across our operations. Environmental awareness initiatives for employees and residents are ongoing, and we continue to invest in green technologies and sustainable working practices to minimise our environmental impact.

On behalf of the board

The directors are responsible for preparing the annual 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 group and parent company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. 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.

In preparing these financial statements, International Accounting Standard 1 requires that directors:

• properly select and apply accounting policies;

• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

• provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

• make an assessment of the company's ability to continue as a going concern.

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 2006. 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.

The directors present their annual report and financial statements for the year ended 31 March 2025.

The principal activities of the Group are housing maintenance, gas servicing and repair, grounds maintenance, street cleaning and Capital works performed on behalf of Harlow District Council ("the Council") under a ten-year contract which commenced on 1st February 2017.

The directors of HTS (Housing and Regeneration) Ltd made the decision before the year end to sell the investment properties held by that company. Therefore, these are now shown within current assets as “Assets held for sale”. Loans related to those investment properties have also been shown as current liabilities as these are repayable once the investment properties are sold.

The Group made a loss after tax of £651,504 (2024: profit of £18,793) for the year which has been included within reserves.

Ordinary dividends were paid amounting to £800,000. The directors do not recommend payment of a final dividend.

During the year, the company adopted new Articles of Association on 29 April 2025. This formed part of a planned governance review aimed at aligning Board structure with the scale and strategic direction of the business, while also delivering cost efficiencies.

As part of this transition, all existing Non-Executive Directors stood down at the end of April 2025. A newly constituted Board was approved, comprising two Council-appointed directors and one independent non-executive director. The revised Articles of Association for HTS (Property & Environment) Limited were updated to reflect this new governance structure.

These changes are designed to simplify decision-making, ensure appropriate oversight, and create a more proportionate governance model that aligns with the company’s operational scale and turnover. The updated Board structure also allows for improved accountability and responsiveness to the needs of the Shareholder. These changes have contributed to the higher turnover of directors during this period.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Ms C Stevens resigned as a director on 2 May 2025 and was reappointed on 28 July 2025

The Group operates a treasury function which is, responsible for managing the liquidity, interest and credit risks associated with the company’s activities.

The Group's principal financial instruments include loans (the main purpose of which is to raise finance for the Group's operations). In addition, the Group has various other financial assets and liabilities such as other receivables, amounts due from the Council and trade creditors arising directly from its operations. The Group does not have any ‘derivative' instruments.

The Group maintains bank balances to meet the ongoing needs of the business.

All loans, lease and hire purchase agreements are on a fixed interest rate and therefore the Group reduces any exposure to changes in interest rates.

Harlow Council is the ultimate shareholder of the Group and also the main customer. As such the credit risk to the Group is very low.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the Group continues and that the appropriate training is arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees. To this end the Group is recognised as a Disability Confident Employer.

The Group's policy is to consult and discuss with employees, through its recognition of trade unions, staff councils and at meetings, matters likely to affect employees' interests.

Information of matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the Group’s performance.

The Group was established to deliver the repairs and maintenance of Harlow District Council’s 9000 Social Housing and 220 public buildings together with the cleaning and grounds environmental works within the Town.

In the coming period, HTS will continue to focus on delivering high-quality frontline services across housing repairs, maintenance, environmental services, and capital works for Harlow District Council.

Our recent organisational changes, including the streamlining of leadership and support functions, have been implemented to ensure the business is better positioned to respond to future challenges. The priority now is to strengthen our capacity where it matters most — on the front line. This means actively identifying and addressing staffing gaps, investing in recruitment and onboarding, and ensuring our teams have the tools, technology, and support they need to deliver services efficiently and to a high standard.

These changes are central to supporting the Shareholder’s strategic vision of “Building Harlow’s Future.” By creating a leaner, more agile, and better-integrated organisation, we are aligning our operations with the Council’s long-term objectives — driving greater efficiency, enhancing service quality, and delivering meaningful outcomes for residents.

As part of this ongoing transformation, HTS will continue to advance its digital capabilities, including the roll-out of new field service management software to improve operational visibility and enhance service delivery.

We are committed to continuous improvement and innovation and will build on the strong foundations of our first seven years of trading. Working in closer collaboration with our Shareholder, we aim to support the long-term success and sustainability of Harlow, ensuring our services play a key role in improving the lives of those who live and work in the town.

HTS (Property & Environment) Limited remains committed to maintaining high standards of corporate governance. During the reporting period, a significant update to the company’s governance framework was implemented, including the adoption of new Articles of Association on 29 April 2025 and the reconstitution of the HTS Group Board.

These changes were introduced to better align the governance structure with the scale and complexity of the business, supporting more agile decision-making while maintaining robust oversight. The revised governance model reduces the size of the Board to a streamlined structure comprising two Council-appointed directors and one independent non-executive director.

This new framework is designed to enhance efficiency and accountability, with the independent director role ensuring continued external challenge and scrutiny. The updated Memorandum and Articles of Association of HTS (Property & Environment) Limited provide the formal basis for this revised structure.

The Board continues to be responsible for setting strategic direction, monitoring performance, and ensuring that effective governance and control systems are in place. Regular meetings are held to oversee the company’s operations, address key risks and opportunities, and support the long-term sustainability of the business.

The company maintains regular reporting to the Council’s Shareholder Subcommittee at its quarterly meetings, ensuring transparency and alignment with shareholder priorities.

Each director in office at the date of approval of this annual report confirms that:

• so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and

• the director has taken all the steps that he / she ought to have taken as a director in order to make himself / herself aware of any relevant audit information and to establish that the company's auditor is aware of that information.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

We have audited the financial statements of HTS Group Limited (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 31 March 2025 which comprise the group statement of comprehensive income, the group and parent company statement of financial position, the group and parent company statement of changes in equity, the group statement of cash flows and the group and parent company notes to the financial statements, including significant accounting policies.

The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards.

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 March 2025 and of its loss for the year then ended;

• have been properly prepared in accordance with IFRSs as adopted by the European Union; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, 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. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have given consideration to the control environment (including management's own process for identifying and assessing risks) as well as the nature of the entity, the industry in which it operates and the underlying performance. Consideration was also given to the attitudes and incentives of management to commit fraud. We determined that the greatest potential for fraud existed in the following areas: timing of recognition of income, posting of unusual journals and complex transactions. In line with all audits performed under ISAs (UK), we planned and performed specific procedures to respond to the risk of management override of controls.

We also obtained an understanding of the applicable laws and regulations that the parent company and the group has to abide by, through discussions with management and those charged with governance, as well as commercial knowledge of the sector and statutory legislation. We paid particular focus to those laws and regulations that had the potential to materially impact the amounts and disclosures within the financial statements. The key laws and regulations we identified were the UK Companies Act, employment law, health and safety, tax legislation and landlord regulations.

After our initial risk assessment, we performed the following procedures to detect material misstatements in respect of irregularities arising due to fraud or error:

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness

- Reviewing financial statement disclosures and testing these against supporting documentation to assess compliance with applicable laws and regulations

- Assessing of key accounting estimates within the financial statements in order to assess their reasonableness and determining whether there were any indications of management bias in the estimates

- Reviewing minutes of meetings of those charged with governance

- Enquiring of management as to whether they are aware of any alleged, suspected or actual fraud during the year

We also performed procedures to satisfy ourselves regarding compliance with applicable laws and regulations, including:

- Enquiring of management and those charged with governance if there were any actual and potential litigation and claims

- Reviewing minutes of meetings of those charged with governance

- Reviewing legal expenses for any indicators of litigation or claims against the company

All audit team members were made aware of the applicable laws and regulations, as well as potential fraud risks during the planning stage of the audit and this was discussed at the audit team planning meeting. It was therefore determined that team members all had the relevant awareness and competence to identify any instances of non-compliance with relevant laws and regulations or fraud.

There are, however, inherent limitations to our above audit procedures. Auditing standards only require us to enquire of the directors and management regarding non-compliance with laws and regulations, as well as review regulatory and legal correspondence (if there is any). It is therefore possible that instances of non-compliance could be missed, particularly where the law in itself is far removed from any financial transactions.

A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report 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 members as a body, for our audit work, for this report, or for the opinions we have formed.

HTS Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Civic Centre, The Water Gardens, College Square, Harlow, CM20 1WG. The company's principal activities and nature of its operations are disclosed in the directors' report.

The group consists of HTS Group Limited and all of its subsidiaries.

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

The financial statements are prepared in sterling, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, except for the revaluation of . The principal accounting policies adopted are set out below.

The consolidated group financial statements consist of the financial statements of the parent company HTS Group Limited together with all entities controlled by the parent company (its subsidiaries).

All financial statements are made up to 31 March 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

The directors have at the time of approving the financial statements, a reasonable expectation that the truegroup has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

The directors have considered the factors that impact the company’s future financial performance, cash flows and financial position, along with the company’s current liquidity in forming their conclusion on the applicability of the going concern basis.

As the company's current liabilities exceed its current assets the company is reliant upon the support of its parent undertaking. The parent undertaking has provided a formal letter of support to the company.

Revenue arises from the provisions of goods and services provided in line with the principal activities set out in the Directors' report and excludes value added tax.

Revenue is measured based on the consideration specified in a contract with a customer and excludes

amounts collected on behalf of third parties. The company recognises revenue when it transfers control of a product or service to a customer.

In the case of the annual service charge (building maintenance, street cleaning and environmental services) which is a fixed-price contract, governed by KPI's the customer pays the fixed amount based on a payment schedule, normally paid in the same month as the service is rendered.

In the case of capital and planned works performed for customers amounts are invoiced monthly based on certified valuations. Payment is due within 31 days from the date of the invoice.

Rental income is recognised in line with tenancy agreements set in place for investment properties. It is accounted for on a monthly basis at the rate dictated in the tenancy agreement.

Costs arising on the acquisition of the contract with Harlow District Council were capitalised as intangible assets and were charged over the life of the initial term of the contract with Harlow District Council. The rates of amortisation are as follows:-

Purchased computer software - 20% per annum.

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

In relation to small tools it is the company's policy to expense tools with an individual of less than £1,000 as consumables as these are likely to have an estimated useful life of less that 12 months.

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

At each reporting end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets do not have indefinite useful lives so are tested for impairment annually, unless there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Inventories are stated at cost and relate to fuel and vehicle parts being used in the business.

Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.

Investment property held for sale are shown within current assets.

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, bank deposits with original maturities of over three months are shown in current investments.

Financial assets are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Fair value is defined in terms of a price agreed by a willing buyer and a willing seller in an arm’s length transaction. The objective of determining fair value for a financial instrument that is traded in an active market is to arrive at the price at which a transaction would occur at the end of the reporting period in that instrument (i.e; without modifying or repackaging the instrument) in the most advantageous active market to which the entity has immediate access. The existence of published price quotations in an active market is the best evidence of fair value and when they exist they are used to measure the financial asset or financial liability.

If the market for a financial instrument is not active, an entity establishes fair value by using a valuation technique. Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same.

Inputs to the valuation techniques in respect of assets and liabilities for which fair value is measured or disclosed in the Group’s financial statements are categorised within the fair value hierarchy, as follows:

•    Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities that the authority can access at the measurement date.

•    Level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.

•    Level 3 – unobservable inputs for the asset or liability.

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognised initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the group’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.

Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

The group recognises financial debt when the group becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'. The group only has 'other financial liabilities'

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Financial liabilities are derecognised when, and only when, the group’s obligations are discharged, cancelled, or they expire.

Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

The Group’s employees are members the Essex pension fund which is a defined benefit pension plan and a part of the Local Government Pension Fund.

The assets of the scheme are held separately from those of the company in an independently administered fund. Pension scheme assets are measured using fair values. Pension scheme liabilities are measured using a projected unit method and discounted at the current rate of return on a high quality corporate bond of equivalent term and currency to the liability.

It has been agreed with Harlow District Council that contributions payable by the Group will be capped at either 10.6% or 14.1%.

To the extent that the Group has a liability to pay any additional amounts to the scheme such liabilities are negated by an equal contingent asset arising from the capping agreement with Harlow District Council.

Accordingly, the contributions paid by the Group are set in relation to the current service period only and as such the company has accounted for the contributions to this scheme as if they were a defined contribution scheme.

Harlow District Councils’ Indemnity of the pension deficits supports the preparation of the financial statements on a going concern basis.

At inception, the group assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the group recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the group is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the group's estimate of the amount expected to be payable under a residual value guarantee; or the group's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

When the group acts as a lessor, leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees, over the major part of the economic life of the asset. All other leases are classified as operating leases. If an arrangement contains lease and non-lease components, the group applies IFRS 15 to allocate the consideration in the contract. When the group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately, classifying the sub-lease with reference to the right-of-use asset arising from the head lease instead of the underlying asset. There was consideration, but this was agreed for a 12 month period only and no formal lease was in place, therefore the group has elected not to recognise short term right to use assets, therefore sub-leases are classified for as operating leases. Rental income from sub-leases is credited to the profit and loss account on a straight line basis over the period of the lease.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

There has been significant judgement involved when reviewing the agreement with the Harlow District Council and concluding that all the actuarial risks associated with the scheme remain with Harlow District Council and therefore the deficit of the scheme relating to the Group has not been accounted for within these accounts.

There has been significant judgement made on whether the head lease between the company and Harlow District Council in relation to Mead Park should be accounted for as a right to use asset. Before 1 April 2024, there was no consideration for the company’s right to use Mead Park, this is therefore outside the scope of IFRS 16 and no accounting is required. From 1 April 2024 there was consideration, but this was agreed for a 12 month period only and no formal lease was in place, therefore the company has elected not recognise short term right to use assets.

The Investment Properties held by the Group have been revalued to reflect the significant change in value during the year, the movement being recognised in the Income Statement.

The Group engaged independent valuation specialists to determine the fair value of Investment Properties as at 31 March 2024, with this valuation subsequently updated by the directors. The carrying amount of Investment Properties at the 31 March 2025 was £307,200. As investment properties are few in number, the valuation specialists valued each one individually in arriving at their fair value, this being defined as the existing use value. They also referred to comparable market data to support the valuation of each property.

All revenue was from the UK market. All of the rental income included within revenue is from investment property.

The average monthly number of persons (including directors) employed by the group during the year was:

Their aggregate remuneration comprised:

Borrowing costs excluded from interest payable and included in the cost of assets during the year are as follows:

The charge for the year can be reconciled to the loss per the income statement as follows:

Property, plant and equipment includes right-of-use assets, as follows:

The directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.

Details of the company's subsidiaries at 31 March 2025 are as follows:

Registered office addresses (all UK unless otherwise indicated):

Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.

Non-current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

The fair value of the investment properties has been arrived at on the basis of a valuation carried out by Phillip Smith BSc (Hons) MRICS, a RICS Registered Valuer of Wilks Head and Eve LLP, who are not connected with the group.

The valuation was made on an open market value and in accordance with RICS standards. It was arrived at by reference to market evidence of transactions for similar properties. The valuation performed by the valuer was reviewed internally by Senior Management and other relevant people within the business. This process included discussions of the assumptions used by the valuer, as well as a review of the resulting valuations.

Rental income of £29,934 (2024: £57,403) has been generated by Investment Properties and has been recognised in the Income Statement, along with direct operating expenses of £4,070 (2024: £4,238) arising from properties that generated or did not generate rental income in the period.

The group is not aware of any events or circumstances which indicate that the amount stated in the Statement of Financial Position for Investment Properties may not be realisable, as at 31/03/2025.

During the year 2021, the group entered into a loan agreement with Harlow District Council. Harlow District Council made available, £1,050,000 to the group. The group was bound to use any funds drawn down:

(i) solely in pursuance of its objects (as described in the Articles of Association)

(ii) to finance the cost of acquisition of the Properties (subject to the terms set out in the loan agreement)

(iii) to pay any fees, costs and expenses, stamp registration and other Taxes incurred by the Company in connection with the acquisition of the Properties.

At the year end, the group had drawn down £1,011,000 (2024: £1,011,000) of the £1,050,000 (2024: £1,050,000) available.

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

No significant receivable balances are impaired at the reporting end date.

Customers purchasing goods and services are allocated individual credit limits assessed taking into account their financial position, past experience and other parameters set by the group and its respective departments.

The group's maximum exposure to credit risk in relation to its investments in banks cannot be assessed generally as the risk of any institution failing to make interest payments or repay the principal sum will be specific to the institution. Recent experience has shown that it is rare for such entities to be unable to meet their commitments. A risk of non recoverability applies to all of the group deposits, but there was no evidence at the 31 March 2025 that this was likely to arise.

Borrowings are secured on the Investment Properties of the group.

Borrowings include £187,632 (2024: £906,975) payable by instalments, which fall due in more than five years.

The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.

The following table details the remaining contractual maturity for the group's financial liabilities with agreed repayment periods. The contractual maturity is based on the earliest date on which the group may be required to pay.

Responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the company's funding and liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The interest rate on group borrowings is fixed and therefore it is unlikely the group will need to refinance.

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is less than 31 days. The company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

The directors consider that the carrying amount of trade payables approximates to their fair value.

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

The fair value of the company's lease obligations is approximately equal to their carrying amount.

The following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current and prior reporting period.

The group operates a defined contribution pension scheme for all qualifying employees with Smart pension. The assets of the scheme are held separately from those of the group in an independently administered fund.

The total costs charged to income in respect of defined contribution plans is £74,824 (2024: £50,276).

Defined benefit scheme

Qualifying employees belonged to the Local Government Pension Scheme (LGPS), which is managed by Essex County Council. This is a funded defined-benefit scheme, with the assets held in separate trustee-administered funds.

Harlow District Council entered into an agreement with the group which has the effect of capping the employer pension contributions payable by the group to the Essex Local Government Pension Scheme.

Due to the capping of the contributions the defined benefit scheme will be treated as a defined contribution scheme for the purposes of the preparation of the accounts and the contributions will be recognised as they fall due.

Included within the pension charge are contributions of £2,290,263(2024: 2,213,388) payable by the group to the fund less £949,107 (2024: £928,107) reimbursed by Harlow District Council under the capping contribution arrangement.

If there was a net pension liability it would be guaranteed by the Local Authority and not the company, therefore the net pension liability would treated as contingent liability which would have an equal contingent asset being the fair value of the guarantee. However this year there is a surplus, this can only be recognised to the extent that the group can recover that surplus, either through a reduction in future contributions or a refund to the company. The group is not able to determine that the future contributions will be reduced and it is unlikely the group will receive a refund. Therefore, the surplus is not recognised in the financial statements.

Liabilities have been assessed on an actuarial basis using the projected unit credit method, an estimate of the pensions that will be payable in future years dependent on assumptions about mortality rates, salary levels, etc. The pension scheme's assets/liabilities have been assessed by Barnett Waddingham, an independent firm of actuaries, estimates for the Company being based on the latest full valuation of the scheme as at 31 March 2025. The key assumptions (expressed as weighted averages) at the period end were as follows:

In valuing the liabilities of the pension fund at 31 March 2025, mortality assumptions have been made as indicated below.

The assumptions relating to longevity underlying the pension liabilities at the balance sheet date are based on standard actuarial mortality tables and include an allowance for future improvements in longevity. The assumptions are equivalent to expecting a 65 year old to live for a number of years as follows:

• Retiring today: Male 20.8 years (2024: 20.8 years), female 23.3 years (2024: 23.3 years)

• Retiring in 20 years: Male 22.1 years (2024: 22.0 years), female 24.8 years (2024: 24.7 years)

At the year end, there were 450,000 (2024: 450,000) shares issued which were fully paid and 1 (2024: 1) share issued which was not fully paid.

The group is not subject to any externally imposed capital requirements.

During the year including one-off contractual obligations the key management personnel received remuneration of £694,737 (2024: £545,253).

Parent undertaking and controlling party is Harlow District Council.

The consolidated financial statements of Harlow District Council are available from The Civic Centre, The Water Gardens, College Square, Harlow. Essex. CM20 1WG.

Non-cash transactions

The cash flow statement excludes purchases of property, plant and equipment purchased by means of lease or hire purchase contracts of £6,889 (2024: £352,192) as these are non-cash transactions.

As permitted by trues408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s profit for the year was £1,150,000 (2024 - £0 profit).

HTS Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Civic Centre, The Water Gardens, College Square, Harlow, CM20 1WG. The company's principal activities and nature of its operations are disclosed in the directors' report.

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The company applies accounting policies consistent with those applied by the group. To the extent that an accounting policy is relevant to both group and parent company financial statements, please refer to the group financial statements for disclosure of the relevant accounting policy.

The directors have at the time of approving the financial statements, a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

The average monthly number of persons (including directors) employed by the company during the year was:

The directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.

Details of the company's principal operating subsidiaries are included in note 14.