Ordnance Survey Limited annual report and accounts 2016 to 2017

68 Pages·2017·1.99 MB·English

by  Ordnance Survey Limited

Ordnance Survey Limited
Annual Report & Accounts
2016−17

Ordnance  Survey Limited
Annual Report & Accounts
2016−17
Presented to Parliament
by the Secretary of State for
Business, Energy & Industrial Strategy
by Command of Her Majesty
July 2017
Cm 9458
© Crown copyright 2017
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2 | Ordnance Survey Limited Annual Report & Accounts 2016−17
Contents
Directors
5
Chairman’s statement
6
Chief Executive Officer’s statement
7
Strategic report
8
Financial review

12
Corporate and social responsibility

14
Employee information

16
Sustainability

18
Principal risks and uncertainties

22
Governance statement
23
Directors’ report
28
Directors’ responsibility statement
30
Directors’ remuneration
31
Audit report
35
Financial statements
36
Notes to the consolidated financial statements
43
Ordnance Survey Limited Annual Report & Accounts 2016−17 | 3
4 | Ordnance Survey Limited Annual Report & Accounts 2016−17
Directors
Executive Leadership team Non‑Executive Directors
and Member
Executive Statutory Directors
Kieran Murphy
Nigel Clifford Non‑Executive Chairman
Chief Executive Officer
Jacques Cadranel
Neil Ackroyd Non‑Executive Director
Chief Operations Officer and
Deputy Chief Executive Officer Mike Carr
Non‑Executive Director
Andrew Loveless
Commercial Director Michael Harrison
Non‑Executive Director
Clive Mosey
Chief Financial Officer Stephen Lake
Non‑Executive Director
Executive Directors Anne Jessopp
Non‑Executive Member
Will Davies
Director of Human Resources
Nick Giles External Auditors
Director of Marketing & The National Audit Office
Communications
Registered in England and Wales
David Henderson under number 09121572.
Director of Products &
Registered Office: Explorer House,
Innovation
Adanac Drive, Southampton, SO16 0AS.
[phone] (General enquiries)
[phone] (Textphone)
Company Secretary [email protected]
www.os.uk
Jon O’Meara
Ordnance Survey Limited Annual Report & Accounts 2016−17 | 5
Chairman’s statement
It was an honour to be appointed as applications on our smart phones and on customers to be able to access our data in
Chairman of Ordnance Survey (OS) in May many other map applications. OS data is more sophisticated ways than currently
2016, succeeding Sir Rob Margetts. I am used extensively in the commercial sector possible. We have also undertaken some
grateful to Sir Rob for his contribution to in applications such as land planning, wide‑ranging organisational changes,
the development of the organisation over building, asset management by utilities which Nigel discusses in more detail in
the last eight years and I extend my best and telecommunications groups and in his report, to focus the organisation more
wishes to him in his future endeavours. the financial services sector. The range effectively on its chosen customers and
Both my non‑executive colleagues on the of public sector applications is wider markets and to operate more effectively
Board of OS and the executive team led still, including land registration, flood with our Partners. Those Partners deserve
by Nigel Clifford have made great efforts management, public health, highways our continuing thanks for their role in
to welcome me into my new role. I am management, infrastructure development adding value to our data and promoting
grateful to them for all their hard work and emergency service provision. the use of geospatial information
over the last 12 months. throughout the economy. Finally, we have
These applications will evolve and done all this while continuing to deliver
For many people, OS produces the finest, continue. But there is much more a financial profit which is available to our
most detailed and up‑to‑date maps in scope for OS data to be used to support shareholder the Secretary of State for
the world. While that is true, and the Digital Britain. I am pleased that the Business, Energy and Industrial Strategy
organisation is rightly proud of it, OS organisation is putting itself forward to reinvest as it sees fit.
occupies a far more important position as an active member in a number
in the UK economy. The geospatial of projects to test the potential for 2016 marked two milestones for us. The
data which OS collects, processes and detailed geospatial data to power the first was the 225‑year anniversary of
distributes to its many users provides an technologies of the future, whether Ordnance Survey. Our history is traced
essential underpinning to a vast range Smart Cities, 5G telecommunications or back to 1791 when the Master‑General
of current economic and other activity. autonomous vehicles. of the Army’s Board of Ordnance
It will also be essential for the digital paid for a surveying instrument, and
economy of the future. I believe that OS Our Chief Executive, Nigel Clifford, appointed three men to undertake
data will come to be seen as essential to discusses these in more detail later in this national mapping. We also celebrated
the development of that future economy report. I would only say that they reflect 80 years of the trig pillar. In 1936 the first
in the way electricity has been to the the spirit of intellectual adventure and triangulation or trig pillar was built in
development of the industrial economy. enthusiasm to contribute to the future of Cold Ashby, Northamptonshire – the start
OS’s strategy is accordingly clear and the country which I have found to be so of a programme which would see some
ambitious: to build the capability to evident within the organisation. 6,500 pillars installed, most of which
provide the next generation of geospatial remain in existence. Only a relatively few
data, providing the essential foundation OS also has a role in the promotion of years ago, OS relied on these concrete
for a very wide range of public and Great Britain around the world. It is widely and stone triangulation stations to map
commercial services and facilitating recognised in the geospatial community the country. Even though technological
the development of a ‘smarter’ more to be a leader among national mapping developments have now overtaken them,
interconnected Great Britain. agencies, whose opinion is sought they remain as distinctive features of the
in many fora, providing the UK with British landscape.
During the course of the last year, the influence on the international stage, for
Government undertook a detailed example in the development of standards. In conclusion, I would like to thank
General Review of OS to examine its role The UK has recently been ranked second all OS employees for their hard work,
and value to the UK and how that value in the world in terms of its geospatial enthusiasm and commitment to the
can be optimised for the future. As part readiness, recognition both of the quality organisation during this last year.
of the Review, an independent economic of the data but also the uses to which it I have met many experts within the
study was commissioned to consider is put. business who take justified pride in
the contribution of OS activity to the their knowledge, in the work which they
economy of Great Britain. This concluded The scope for development in the range do and in the contribution which they
that, conservatively, OS could be expected of OS’s activities is very exciting. But as make both to the organisation and to the
to contribute some £6bn in value to the a Government‑owned body, we must country more widely. While the future will
UK economy in the next ten years, even also be sensitive to the need to spend undoubtedly present challenges to us all,
before account is taken of the benefits our resources wisely, to seek where we it will also clearly provide opportunities
which OS data might bring to developing can to improve the efficiency with which for us to continue to develop OS as a
markets such as autonomous vehicles. we operate and to improve the service thriving and valuable organisation.
which we offer. During the course of
I have been enormously impressed by the this year, we have continued to work on
sheer extent to which OS data is already developments to improve the efficiency
used in everyday life. OS OpenData, which of our remote sensing technology and to Kieran Murphy
is available to everyone free at the point use point cloud technology to improve Non‑Executive Chairman
of use through the Open Government our 3D imaging delivery. We have started 21 June 2017
Licence, underpins the mapping a number of projects to allow our
6 | Ordnance Survey Limited Annual Report & Accounts 2016−17
Chief Executive Officer’s statement
We have a vision to be the world’s most and faster decisions when it comes to Department for Business, Energy and
inspiring and trusted geospatial partner. understanding and delivering what our Industrial Strategy (BEIS) (formerly
By doing this we can make a real customers want and need. Business, Innovation and Skills) is
difference on a local, national and in discussion with OS regarding the
global scale to citizens, businesses and We are also tasked to run Ordnance Survey re‑negotiation of the PSMA contract.
governments. We have the potential and ever more efficiently so we have also made In the Consumer arena, as well as
opportunity to significantly improve the changes to reduce our costs. Ultimately, inspiring more people to ‘GetOutside’,
lives of millions, perhaps even billions, of we believe these are the right changes for we’re supporting the government health
people across the globe. Ordnance Survey to deliver the best for initiative which encourages the public to
Britain, grow revenues more widely and be exercise for 150 minutes a week.
However, to realise our vision and deliver fit for the future.
our strategy, we have to be closer to our I’m thrilled to report our OS Maps app has
customers and even more responsive We’re implementing these changes won two awards this year. The Outdoor
so we can thrive in a complex and following a year where OS has shown real Industry Awards named it Digital Product
changing landscape. To enable this value in supporting Great Britain. We’re of the Year; while it scooped the Avenza
greater closeness with our customers, helping Britain to be digitally Smart, for the Award for Electronic Mapping from the
and also operate within the commercial benefit of its government, entrepreneurs British Cartography Society. The awards
environment OS faces, we’re changing and citizens, and it’s great to see our are testimony to the hard work the entire
some of the ways in which we work. data recognised as a fundamental part of team have put in to make OS Maps such a
national projects and a vital contributor to great digital, mobile, product.
We are creating three business units, each many elements of the Industrial Strategy.
with a distinct customer responsibility. These are examples of the innovation at
The largest, OSGB, will be responsible These include Manchester’s CityVerve − the heart of OS. We have extended that
for our Public Task, working closely the UK’s demonstrator project for culture to a wider audience through our
with Government in terms of advice, the large‑scale roll out of Internet of ‘Geovation’ initiative. Geovation sets
specification and content delivery. It Things (IoT) technology. We’re part of a challenges and supports entrepreneurs
will also be responsible for serving and consortium of public and private sector through our Geovation Hub in
supporting our commercial Partners. This organisations who are designing and Clerkenwell − we also learn a great deal
team will ensure that Britain remains the delivering people‑focused solutions in about the nature of geo‑problems and
best served geospatial nation in the world areas such as transport, energy, health and how we can improve our support. This
and an example to others as we support culture. During the two‑year project, our initiative continues to prove both popular
developments in smart infrastructure, role is to provide the geospatial framework and productive with several companies
transport and mobile communications. and location expertise to support these now being formed from geospatial ideas
solutions. Arguably this is now the area of explored in the Hub.
The second, OS Ventures, will pursue Britain mapped to the most detail.
work that’s competitive in nature − Further external insight comes from our
nationally and internationally. For We’ve also been selected by the Partner Advisory Council, Geographic
example, it will manage our work in the Department for Culture, Media & Sport to Information Customer Group, PSMA Users
geospatial market for internet brands, help develop a ground‑breaking planning Representative Group and Scottish Spatial
energy and infrastructure sectors and mapping tool that we believe will be Information Board. They have been most
as critical consumers of our digital instrumental in the national roll out of 5G helpful at keeping us on our toes through
content. This group will be responsible technology. The tool will be used to plot the year and have my thanks.
for building on the excellence in GB to the prime locations to install the antennae
create new revenues for our long‑term necessary to enable a 5G mobile network. Finally, I’d like to thank the people of OS
future. We believe this clear separation It is being trialled in Bournemouth, and if for giving our organisation such a good
of ‘Public Task’ from competitive activity successful we hope it will be scaled up to heart and excellent spirit. There will be
will help our public sector customers cover the rest of the UK, and potentially to exciting times ahead, of course, as well
and partners be clear on which hat we other countries as they develop their own as challenging and uncertain ones. I’m
have on when in discussion: adviser or 5G networks. This year we’ve delivered a confident that the enthusiasm, dedication,
commercial provider. new Highways product for government. We skills, vision and tenacity of everyone who
believe it represents the next generation works for and with OS will see us continue
Thirdly, we have our excellent Consumer of road mapping and offers one single, to strengthen the essential support we
business − focused on making the authoritative, view of the whole road offer to Great Britain’s digital economy.
outdoors enjoyable, accessible and safe, network.
and promoting OS as an iconic leisure
brand. They will clearly be contributing to We’re clearly and passionately committed
our status as an exemplar as well. to our ‘Public Task’ and following the Nigel Clifford
When our new organisation is ‘live’ in collection of feedback from PSMA Chief Executive Officer
the summer of 2017 we’ll make better members at regional events, the 20 June 2017
Ordnance Survey Limited Annual Report & Accounts 2016−17 | 7
Strategic report
The principal activity of Ordnance Survey Strategy and future outlook our excellence as an Exemplar and
Limited is the collection, maintenance delivering a progressive Public Task.
and distribution of up to date Over the past decade, the importance 6. Enhance OS resilience in a changing
geographic information. of location data for businesses and market. Embed the business resilience
governments around the globe has grown framework (including business
These accounts are for the year ending
significantly, with latest estimates putting continuity, risk management & security)
31 March 2017.
global market for core geographical to support business operations to
information (GI) to exceed $13 billion by adapt and respond to changes with
Business model 2025 (Navigant, 2016). Today, OS data, limited impact to the business.
services and expertise are being used
Ordnance Survey Limited (OS) is Britain’s extensively across both public and private To achieve these objectives, OS is actively
mapping agency. It collects, maintains sectors to drive efficiencies, support evolving the OS culture and organisation,
and distributes the most accurate and up decision making and provide valuable built around a clear sense of purpose,
to date geographic information for Great insight and intelligence. informed by customer and market insight
Britain in accordance with its Public Task, and efficient and effective delivery.
and this data is used and relied upon by OS continues to increase the pace of
government, businesses and individuals. development of its new portfolio of
2015−16 commencement
It provides services to government and products, services and solutions to
businesses to enhance the value they benefit existing and new customers, of trading
derive from geographic information. partners and markets. To enable this
change, the organisation has reconfigured The 2015−16 year was the first year of
OS also provides geospatial services into three market‑facing units. trade for Ordnance Survey Limited. On
to other countries, helping them 1 April 2015, the entire functions, business,
realise the benefits of good location OSGB will perform its public task for the subsidiaries, operations and assets of
based information. Government and ensure that Great Britain the Ordnance Survey Trading Fund were
continues to have the best geospatial transferred to Ordnance Survey Limited,
Ordnance Survey Leisure is the Group’s infrastructure in the world. OS Ventures a limited company wholly owned by
vehicle for selling geospatial products will be our commercial arm, trading the Secretary of State for Business,
directly to consumers. GeoPlace® is our both at home and internationally, to Innovation & Skills, and the Company
joint venture with the Local Government provide partners and customers with a commenced trading from this date. The
Association that oversees the production suite of managed services in geospatial payment for the transfer was £170million,
and maintenance of the national address production, land and property and and was initially left outstanding via an
and street gazetteers. infrastructure. OS Consumer will continue interest‑free loan from the Secretary of
to place our brand at the forefront of State for Business, Innovation & Skills
The OS Board remains accountable the outdoor leisure and activity market. (now Secretary of State for Business
to the Secretary of State for Business, These new units are supported by a Energy and Industrial Strategy) to
Energy and Industrial Strategy (formerly number of internal business units that will Ordnance Survey Limited.
the Secretary of State for Business, provide resources, capability and product
Innovation and Skills) and the governance development functions. £34million of this loan was repaid via
arrangements for the Company are the issue of £34million shares and
set out in a Shareholder Framework With this new structure, OS is well placed the remaining balance of the loan of
Document signed on 31 March 2015 by to deliver on its key strategic objectives: £136million was subsequently released
the Directors of OS and for and on behalf for two additional shares, which
of the Secretary of State for Business, 1. Ensure GB remains a world created a share premium account in
Energy and Industrial Strategy (formerly showcase for the use of GI. equity of £136million. Subsequent to
Business, Innovation & Skills). 2. Diversify and generate recurring this the Company undertook a capital
revenue through focused commercial reduction which cancelled the share
The majority of revenue is generated offerings in the UK and internationally. premium reserve and transferred it to the
through licensing the intellectual 3. Work with partners to create a scalable, distributable retained earnings account of
property rights, held under Crown highly efficient managed service the Company.
copyright and data base rights, which able to support geospatial, land and
is inherent in the OS data. Since April infrastructure use cases, based on our
2010, free and unrestricted access global supply chain and configured
to a large range of mapping has using commercial off‑the‑shelf
been provided to any prospective technology wherever possible.
user via OS OpenData, a service that 4. Develop the high‑end skills, knowledge
underpins a range of applications, while and experience needed to fill our
promoting government transparency niche in the global ecosystem of the
and encouraging greater use of 21st century geospatial market.
geographic information. 5. Act as an inspiring and trusted adviser
to GB Government, demonstrating
8 | Ordnance Survey Limited Annual Report & Accounts 2016−17