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WYRE FOREST COMMUNITYHOUSING LIMITED

ANNUAL REPORT AND STATUTORY

FINANCIAL STATEMENTS

FOR THE 12 MONTHS ENDED

31ST MARCH 2016

WFCHA MEMBER OF THE COMMUNITY HOUSING GROUP

Wyre Forest Community Housing Limited

Annual Report and Statutory FinancialWFCH Statements for the Year Ended 31st March 2016

CONTENTS

Foreword from the Chair of the Board 2

The Board of Directors 4

The Group Membership 5

The Senior Directors and Principal Advisors 6

Strategic Report 7

The Report of the Chair of the Board 12

Independent Auditor’s Report to the Members of Wyre Forest CommunityHousing Limited 29

Statement of Comprehensive Income 32

Changes in Equity 33

Statement of Financial Position 34

Notes to the Financial Statements 35

HCA Registered Number LH 4264Wyre Forest Community Housing (a Member of The Community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No. 32351 R



Foreword from the Chair of the Board

I am pleased to present the 2015/16 Financial Statements for Wyre Forest Community Housing Limited(WFCH) which presents another very strong result for the Company with a surplus of £3.53m (2015:£2.48m)

This positive result reflects the approach taken by WFCH to manage its business in an efficient andeffective manner. The economic operating environment remains challenging but the need for new homesand local services continues to grow, driving us to innovate in service design, develop new partnerships,and identify funding streams to enable us to deliver our vision.

April 2015 saw the merging of our two charitable housing arms Wyre Forest Sheltered Housing and WyreForest Community Housing into one stock owning Company Wyre Forest Community Housing Limited(WFCH). The Company’s turnover for 2015/16 was £32.66m (2015:33.35m) with operating costs of£23.12m (201 5:24.76m).

The merger of the two companies was a key step in our efficiency and Value for Money Strategy, enablingus to use our combined financial strength and refinancing to further strengthen future surpluses within ourBusiness Plan. Our annual surplus plays a fundamental role in enabling us to fulfil our social purpose ofbeing a good landlord and providing new homes.

During 2015/16 we invested £3.45m on major works and improvements to our existing homes and inaddition to this our continued investment in new homes saw 56 completed and into management duringthe year.

In this time of decreasing public funding of new affordable rented housing the Company has sought to useits financial strength to enable us to continue to make plans for a medium term programme of newaffordable homes for rent which we will construct without recourse to public funds.

Combined with our affordable sales programme, this will see us invest £56.14m in new homes over thenext eight years of which only £2.89m is expected to be funded through government grant. The balancewill be met by our own resources supplemented by debt funding and a sales programme. There may alsobe a contribution from a modest sales programme of existing stock as identified through our AssetManagement Strategy.

Our medium and long term plan recognises the continuing need to invest in our estates to maintain theirquality and ensure we continue to maximise our return on assets. We also know that in the medium term anumber of estates will reach the end of their useful lives and will need to be redeveloped. The cost ofrenewal and regeneration programmes will have to be met entirely from our own resources, so our abilityto invest will depend on strong levels of reserves.

Our tenants are at the heart of our business. Together we have developed WFCH into one of the largestlocally based housing providers in Worcestershire and part of a Group which is a thriving social businesswith an expanding range of services, customers and partners.

The Group continues to help make real and sustainable changes to the lives of our tenants in a number ofaspects of their life including an accredited employment programme helping tenants into employment,early help contacts for families, apprenticeship opportunities, and our financial inclusion work inpartnership with a local credit union.

The value of this work and other social investments, to those who benefit, is much greater than just themoney invested and during the year we carried out research to evaluate different approaches to themeasurement of social value. This research enabled us to start to measure the transformational impactour work has on the lives of residents and the communities where we work, and complements our AssetManagement Strategic Review and Value for Money Strategy.

HCA Registered Number LH 4264Wyre Forest community Housing (a Member of The community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No. 32351 R

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Foreword from the Chair of the Board continued

It has been a challenging but successful year and I would like to thank all of the board members, tenantrepresentatives and staff who have worked hard during 2015/16 to achieve all that we have done this year.

Over the coming year we will continue to deliver a programme of new homes, services which meet thechanging needs and aspirations of all our customers, whilst challenging ourselves to be efficient in how wedeliver and demonstrate Value for Money in all that we do.

Since the completion of the 2015/16 year end the UK Government has conducted an EU referendum, on23td June 2016, the result of which was to exit the European Union. The Board of Management hasconducted early sensitivity testing to ascertain the possible impact on future business and financial resultsfrom the Brexit decision and further assessments will be conducted to ensure both WFCH and the Groupgenerally, continues to steer positively through changing times.

Ms. K. Law-FoxChair of Wyre Forest Community Housing


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Members that have resigned their office during the course

Name

Mrs. J. Greener Community

Mr. D. Morgan (Chair) Chair

Mrs. F. Oborski Community

Mr. E. Osborn Independent

Mr. S. Walker*l Tenant

Mrs. M. Worgan 1 Tenant

Indicates a Member that is also a tenant of the Group.

The other Companies within The Community Housing Group are:

• Oakleaf Commercial Services Limited (OCS)

• Worcestershire TeleCare Limited (WTC)

• Wyre Forest Land Company Limited (WFLC)

• Vestia Community Trust (VCT)

of the year are:

Date Resigned Duringthe Financial Year

22 September 20151st April 201515t April 201515t April 201530th September2015 (Appointed 1st April 2015)1st April 2015



Annual Report and Statutory FinancialStatements for the Year Ended 31St March 2016

aWFCH

The Board of Directors

Wyre Forest Community Housing Limited (WFCH) is a subsidiary of The Community Housing GroupLimited (TCHG).

As at 31st March 2016, the Board of Management consists of seven Members with each Member of theBoard having guaranteed a £1 share, which is cancelled on Cessation of membership.

The Members that held office at the end of the year are:

Name Status

_________________

Ms. K. Law-Fox Chair

Mrs. V. Browning Tenant

Mrs. E. Heaven Independent

Mr. T. Muir Community

Mr. N. Rowe Independent

Mr. P. Smith Independent

Miss Y. Leishman Managing Director

Date Appointed DcIriI1t1the Financial Year

i’ April 201517th November20151St April 2015

22 September 2015

1st April 201515t April 2015

4

Wyte Forest Community Housing Limited


The Group Membership

The Membership of The Community Housing Group comprises of three Independents, three tenants andthree District Councillors.

Name Status Date Appointed Duringthe Financial Year

Mr. P. Archer Independent

Mr. N. Chambers Independent

Mr. A. Fry Independent 9th July 2015

Vacant Tenant

Miss J. Gourley Tenant 22’ September 2015

Mr. G. Green Tenant

Mr. J. Hart Councillor

Mr. N. Knowles Councillor 22 September2015

Mrs. M. Rayner Councillor

Members that have resigned their office during the course of the year are:

Name Status Date Resigned Duringthe Financial Year

Mr. R. Eades Tenant 22 September2015

Mr. B. MacFarland Councillor 22nd September2015

Mr. G. Carter Independent 22nd September2015

Members that have passed away during the course of the year are:

Name Status Date

Ms. S. Gamble Tenant 22Iid March 2016

HCA Registered Number LH 4264Wyre Forest Community Housing (a Member of The Community Housing Group), an exempt charity andregistered society under the Co-operative and community Benefit Societies Act 2014Registered in England and Wales No. 32351R

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The Senior Directors and Principal Advisors

Name Position

Yvonne Leishman O.B.E. Managing Director

Ray Brookes TCHG Chief Executive

Marina Banner Executive Director (Vestia and TCHG Corporate Services)

Ian Hancock Managing Director (OCS)

David Knowlton TCHG Deputy Chief Executive/Finance Director andCompany Secretary

3 Foley Grove

Foley Business ParkRegistered Address Kidderminster

WorcsDY11 7PT

Registrations: Co-operative and Community Benefit Societies Act 2014Number: 32351 R

Homes and Communities Agency: LH 4264

VAT Number: 860 2029 54

Advisors

PricewaterhouseCoopers LLP(Chartered Accountants and Statutory Auditors)

Independent Auditors 2 Glass Wharf

BristolBS2 OFR

Mazars LLPLancaster HouseInternal Auditors67 Newhall StreetBirminghamB3 1NG

Barclays Bank plc

Principal Bankers and Funders 15 Colmore RowBirminghamB3 2EP

Anthony Collins Solicitors LLP

Legal Advisors 134 Edmund StreetBirminghamB3 2ES

HCA Registered Number LH 4264Wyre Forest community Housing (a Member of The Community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No, 32351 R

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Annual Report and Statutory FinancialWECH Statements for the Year Ended 31st Match 2016

Strategic Report

Statement of Business

WFCH is a Reistered Provider. On 1st April 2014, WFCH became a Co-operative and Community BenefitSociety. On is April 2015, Wyre Forest Sheltered Housing Limited (WFSH) was consolidated into WFCHto create a single stock owning Landlord. We work in a variety of ways to improve the lives of people inthe Wyre Forest District. We do this by responding to housing need and, by working with statutoryagencies, anticipating future housing need.

Our main business activities are:

• Providing and managing General needs housing accommodation• Management of Leasehold, Shared Ownership and Commercial properties• Providing and managing supported, sheltered and Extra Care accommodation, support services and

domiciliary care for older and vulnerable people.

Principal Risks and Opportunities

Our annual review of risk management activity included consideration of the completeness of the principalrisks within the risk register, the relative significance of those risks and the risk management techniquesthat have been applied to mitigate identified risks. The key risks identified have been regularly reviewedand updated and those that were considered to be the highest priority at the year end are set out below.

Delivering the Company’s long term plans while ensuring that compliance with developments inGovernment Legislation; Regulatory reviews and changes to the Rent Guidance and funding regimecontinues to challenge the organisation to be more efficient and effective in its use of limited resources andfuture service deliverability. During the year, WFCH have implemented the requirements of the WelfareReform Act and Work Act. Income collection levels remain at an excellent high level however these willcontinue to be carefully monitored with the role out of Universal Credit.

The Company recognised that the diversification, growth and extended reach of its services is necessarybut presents management challenges. WFCH is continuing to look to expand and diversify in line withbusiness plans through partnership and opportunities, while taking into account the potential impact of newRegulatory Regime on commercial services.

Compliance with the National Housing Federation’s Excellence in Governance (2015) has been a majorexercise for the Company during 2015/16 and a detailed evidence based self-assessment ‘Meeting theStandards’ is available on our website in ‘Our Published Documents’ and demonstrates full compliancewith the Code.

WFCH is committed to its Value for Money Strategy as we aim to drive down costs, maximise the use andreturn on our assets, improve services and drive up customer satisfaction. Full details of our work in thisarea can be seen in our Value for Money section on our website www.communityhg.com. Our businessplanning and performance management framework ensures a value for money golden thread runs throughour business and the whole organisation is focused on delivering value for money for customers and thetax payer.

Since the completion of the 20i5/16 year end the UK’s decision to exit the European Union has led to theBoard of Management conducting sensitivity testing to ascertain the possible impact on future business.Further assessments will be conducted to ensure WFCH continues to steer positively through changingtimes.

Our strategic objectives

Our four strategic objectives are set out in our Business Plan and form the pillars for delivery of our visionand value for money goals. These objectives are:

HCA Registered Number LH 4264Wyre Forest community Housing (a Member of The community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No. 32351R

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Strategic Report (continued)

• Deliver homes and services.

• Support individuals, families and communities to achieve their potential.

• Ensure the strength, stability and sustainability of our business.

• Grow and diversify our business.

• Deliver Value for Money

Our value for money goals

The delivery of our strategic objectives is driven by four value for money goals:

• Deliver cost effective services.

• Maxim ise the use and return on assets.

• Satisfied Customers.

• Social and environmental gains.

These are set out in the WFCH Business Plan which details our priorities, plans and targets.

Corporate Social Responsibility (CSR)

We are in a unique position to embrace, support and enhance the quality of life in out communities. Weplay a vital role in promoting community cohesion. We have a sound foundation to move forward and areable to demonstrate numerous areas where the Group is having a positive impact in our communities.

We make long term decisions about how we run our operations and support our local communities for thebest interest of all our stakeholders and the environment. We do all these things, and much mote besides,because they are the right things to do, they make good business sense and enable us to fulfil out socialpurpose.

WFCH provides over 5,800 homes (15% of all homes in Wyre Forest) and we employ approximately 600members of staff, consisting of paid workers and volunteers with the majority residing in the local area.

As such, we are one of the largest businesses in Wyre Forest and we use our CSR strategy to enhancethe lives of some of the neediest in Wyre Forest, minimise our impact in the environment and promote thewellbeing of staff. We are committed to developing staff, investing in training programmes to maximiseindividual’s potential and continually improving services delivered.

We continue to invest in local services and businesses as part of our growth plan. Through a corporatepurchasing policy we ensure that our investments and purchases meet the needs of the business and areethical, moral and environmentally sensitive. Currently we invest over £250,000 in Community andCharitable causes which support non-core activities that seek to improve the lives of the communities weserve. In addition to the funds generated and invested by the Group, employees dedicate time to voluntaryactivities.

Our CSR strategy consists of three target areas:

• Economic

• Social

• Environmental

HCA Registered Number LH 4264Wyre Forest community Housing (a Member of The Community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No. 32351 R

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Strategic Report (continuecfl

Each area has specific targets and action plans which are measured and monitored by appropriate TenantScrutiny Panels, Company Working Groups and Board. We are also committed to keeping our staff,customers and partners informed about our CSR activities and plans and encourage their input andfeedback to help us develop future strategies.

We participate in the global effort to avoid dangerous climate change. To meet these responsibilities wehave implemented an effective environmental management system (EMS). This applies energy efficiencymeasures for our buildings and premises as well as developing effective responsible waste management.Schemes implemented throughout the Group are promoted to stakeholders and we work with localpartners to encourage CSR activities and investment in our communities.

We will continue to allocate funds to support community projects and where possible secure funding tosustain and increase community project involvement. Where they do not exist we will endeavour toestablish partnerships to deliver the aims in this strategy.

Modern Slavery

We are committed to ensuring there is transparency in our approach to tackling modern slavery throughoutour supply chains, consistent with our disclosure obligations under the Modern Slavery and HumanTrafficking Act 2015. We expect the same high standards from all of our contractors, suppliers and otherbusiness partners, and as part of our contracting and procurement processes, we include specificprohibitions against the use of forced, compulsory or trafficked labour, or anyone held in slavery orservitude, whether adults or children, and we expect that our suppliers will hold their own suppliers to thesame high standards. Our 201 5/16 statement and future action plan is available on the homepage of allGroup company websites together with an information video for stakeholders designed to raise awarenessour expectations.

Financial Review of the Year

WFCH has completed a successful 2015/16 with a surplus of £3.53m (2014/15: £3.24m) which showsanother strong financial performance particularly within such a challenging economic environment for thehousing sector. In accordance with the Regulators, Vi Assessment of the Group’s Viability Standing,WFCH’s 2015/16 results presents a positive outturn which contributes to the Group’s ability to fully meetthe Lenders covenant requirements.

The Company’s Statement of Financial Position shows fixed assets up to £195.49m, an increase of 6.6%and a positive net current assets position of £3.89m (2014/15: £3.38m). Revenue reserve is up to£25.80m from £21.05m. These 2015/16 results for the newly amalgamated WFCH shows a veryfavourable outturn against the combined WFCH and WFSH restated prior year result.

Future Prospects

WFCH continues to secure Homes and Communities Agency (HCA) and Local Authority grant allocationsand identify Section 106 development opportunities to support an ever growing new build developmentprogramme.

Capital Structure

Following the introduction of FRS1O2 in 2015/16, WFCH reports a net asset position of2.55m at the yearend which is considerably stronger than the restated 2015 deficit of £2.79m twelve months earlier. TheCompany’s stronger cashflow position, ensures that WFCH remains in a good financial position. The detailof the FRS1O2 changes appear in note 30 on page 62.

HCA Registered Number LH 4264Wyre Forest community Housing (a Member of The community Housing Group), an exempt charity andregistered society under the cooperative and community Benefit Societies Act 2014Registered in England and Wales No. 32351 R

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Pensions

WFCH financial statements are subject to FRS 102 in order to aid clear understanding of the position ofthe pension funds we participate in, both of which are currently in deficit. The pension charge is influencedby the corporate bond rates which exist at the start of the financial year and therefore lead to somevolatility in earnings. The figures as at 31st March 2016 are:-

• Defined benefit charge to operating surplus = £439k (2015: Credit of £1 23K)

• Net Interest charge = £753k (2015: Charge of £698k)

• Administration expenses = £35k (2015: £35k)

• Net charge against surplus for the year = £1 ,227k (2015: Charge of £61 Ok)

WFCH has been notified of the results of the latest report on the Social Housing Pension Scheme carriedout on 30th September 2013. This indicates a total scheme deficit of £1 ,035m.

WFCH began participation in the Social Housing Defined Contribution Scheme during 201 3/14.

The latest full valuation of the Worcestershire County Council (WCC) Local Government Pension Schemewas carried out in March 2011 and the Company’s share of the deficit for the year ended 31st March 2015was £23.26m (2015: £23.84m).

The calculations underpinning the pensions disclosure are assessed in accordance with the advice of anactuary on the basis of the costs of providing pensions over the long term. The Directors do not envisagethat the liability will crystallise in the short to medium term. In order to address the current scheme deficits,employer contributions are being increased to ensure the continuing viability of the schemes.

WFCH is engaged in a review of its pension schemes, utilising the services of PwC to advise the Board onfuture options. This will be completed during 2016/17 following the releases of the WCC’s 2016revaluation.

Treasury Management

Treasury activities are controlled and monitored by the Deputy Group Chief Executive/Finance Directorwith the assistance of external consultants, as required, and are carried out in accordance with policiesapproved by the Board. In 2011 the Company adopted, and is compliant with, the CIPFA 2011 Code ofPractice for Treasury Management in the public sector. The purpose of the treasury management functionat WFCH is to ensure that adequate cost-effective funding is available at all times and that exposure tofinancial risk is minimised. The key risks managed by the treasury function are interest rate risk, liquidityrisk, counterparty risk and refinancing risk. Treasury management activity is subject to review by bothinternal and external auditors on a regular basis. Board of Management have updated their skillsknowledge and understanding of Treasury Management.

Liquidity Risk

Cash flow requirements are monitored through the Group’s ongoing forecasting process. It is our policy tocovet investment plans. This is achieved by the use of detailed cash flow forecasts coveting short,medium and long term, together with a program of short-term cash investment and use of revolving creditfacilities. We manage cash investments in-house and out policy is first to minimise counter-party risk andthen to maximise return.


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Annual Report and Statutory FinancialWFCH Statements for the Year Ended 31St March 2016


Interest Rate Risk

Interest rate exposure is managed by the use of interest rate fixings. WFCH aims to have approximately60% of its total borrowings at fixed rates of interest. At year end 82% (2015: 51%) of borrowings were atlong term fixed rates of interest. WFCH does not currently use derivative tinancial instruments to manageits interest rate exposure.

Counterparty Risk

In order to protect the sums invested, the Group monitors the ratings of the counterparties used for theplacement of surplus funds against minimum ratings criteria. A list of currently approved counterparties ismaintained and funds are placed for very short periods.

Refinancing Risk

Continuity of funding is ensured by arranging for short-term borrowings via a bank overdraft and byensuring sufficient committed facilities are available. A mix of maturity dates on the fixed rate debt spreadthe refinancing risk.

WFCH currently has one main lender, Barclays Bank Plc.

Trade Creditors

The Company has a policy of paying suppliers within agreed payment terms. Subject to resolution of anyqueries or discrepancies on specific invoices, payment terms within the year were approximately 30 days(2015: 30 days).

Date

2o S1eMb5 Zo GMr. D. P. KnowltonCompany SecretaryWyre Forest Community Housing

HCA Registered Number LH 4264Wyre Forest community Housing (a Member of The community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No. 32351R

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Annual Report and Statutory FinancialWECH Statements for the Year Ended 31st March 2016

The Report of the Chair of the Board

I am pleased to present this 2015/16 report which accompanies the Audited Financial Statements for theyear.

Principal Activities

The Company owns and manages over 5,800 homes in Worcestershire and Shropshire. Our Carebusiness activity is the provision, management and maintenance of quality homes for rent and saletogether with appropriate support services for people living within the local communities.

The Company provides a range of housing including general needs, housing for older people andsupported housing schemes for younger people and adults with learning disabilities, and shared ownershiphomes for sale.

Vision, Mission and Values

Our VisionTCHG and all its subsidiaries share one vision:

‘Improving Lives’WFCH’s contribution to achieving this is by being a good provider of housing and support services, willingto innovate and develop services which improve people’s lives.

Our MissionThe vision is delivered through the following shared mission:

‘We will improve lives by supporting individuals to achieve their potential and working together todeliver sustainable homes, sen/ices and communities’

In the Business Plan we set out our actions to deliver this mission and vision.

Our ValuesThe values below have been agreed and adopted by all subsidiaries within the Group and are the guidingprinciples for our work:

• Our tenants, customers and communities are at the heart of everything we do.

• Our tenants, people and partners are our strength.

• Our business is fair, responsible, ethical and sustainable.

• We are a learning organ isation.

• We will help our staff, customers and communities to achieve their potential by building on theirstrengths.

• We will strive to get things right first time, every time.

• We will create employment and prosperity in the communities we work in.

• We will generate income to invest in homes, services and communities.

• We will provide value for money and added value in everything we do.

• We will enable individuals and families to be independent, achieve their aspirations and have agood quality of life.

• We will manage risk, change and growth effectively.

• We will help individuals, families and communities to improve their health and wellbeing.

HCA Registered Number LH 4264Wyre Forest Community Housing (a Member of The Community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No. 32351R

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I.’Wyre Forest Community Housing Limited


The Report of the Chairman of the Board (continued)

Group Structure and Corporate Governance

TCHG group structure was formed on 1st April 2005. TCHG is the non asset holding Parent Company,which is responsible for the provision of support services to its subsidiary companies (OCS, WFCH,WFLC, WTC and VCT) and for ensuring that business plan targets are met by monitoring and controllingactual spend against budget.

The Board of Management utilises a number of Committees and subsidiary Boards to provide strategicsupport services to the Group and its subsidiaries. Each Committee has specific roles and responsibilities.

The Board of Management has delegated responsibility for assurance to the Group Audit Committee,although it recognises that the responsibility for effective Governance remains with the Board.

Day to day management of the Group is delegated to the Executive Team made up of the Group ChiefExecutive and Directors, and in respect of its subsidiary Companies to the Managing Director andCorporate Directors.

Code of Governance

The Group has adopted the National Housing Federation’s Code of Governance 2015 (“the Code”). Inaccordance with the Code, the Group is pleased to report full compliance with all aspects of the Code at31st March 2016.

HCA Regulatory Standards

In accordance with HCA requirements a comprehensive and robust annual self-assessment against theRegulatory Standards detailed below was carried out at year end to which all Subsidiaries contributed:

• Governance and Financial Viability

• Value for Money

• Rent (updated)

• Tenant Involvement and Empowerment

• Home

• Tenancy

• Neighbourhood and Community

A new requirement of the Governance and Viability Standard for 2015/16 is for Board to take allreasonable steps to assure themselves of compliance with all relevant Law.

A detailed Group wide exercise was carried out during the year with the support of out Legal Advisors andthe Board is able to confirm compliance across the Group.

The Board of Management confirms full compliance with the standards. Further detail is available in theevidence based document called ‘Meeting the Standards’, available on our website via Our PublishedDocuments’.

WFCH, along with all the other companies within The Community Housing Group, is fully committed tosupporting the work requited to meet the HCA regulatory standards and the group’s work on Value forMoney is detailed on our website www.communityhg.com.

HCA Registered Number LH 4264Wyre Forest community Housing (a Member of The community Housing Group), an exempt charity andregistered society under the Co-operative and community Benefit Societies Act 2014Registered in England and Wales No. 32351 R

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The Report of the Chair of the Board (continued)

Financial Results

WFCH has made a healthy final surplus of £3.53m (2015: £2.48m) in the year and the details are reportedin the Strategic Report by the Group’s Deputy Group Chief Executive. WFCH has, yet again,outperformed against its adjusted budgeted target (adjusted for FRS1O2 changes) and has fully met all ofthe lenders covenant requirements. The 2015/16 result provides a further positive indicator as to how wellthe Group and all of its subsidiaries is managed, financially, and our Vi viability rating from the HousingRegulator endorses our strength.

The Directors do not propose a dividend (2015: Nil).

Health and Safety

The Board of Management is fully aware of its responsibilities for Health and Safety across all the Group’sactivities and operates both a Health and Safety Monitoring Group and a Fire Safety Group in addition to arange of approved policies and procedures. The Fire Safety Group ensures compliance with theRegulatory Reform (Fire Safety) Order 2005.Insurance

Insurance policies indemnify Board Members and Officers against liabilities arising whilst acting for theGroup.

Employees

In order to achieve our Group Vision, Mission and Values, WFCH seeks to develop an organisationalculture where employees are motivated to work with enthusiasm and commitment and deliver highperformance through appropriate actions and behaviours; this is achieved through effective employeeengagement.

We aim to maximise the performance, quality and effectiveness of our services and the employees whodeliver them through effective training and development practices and to reward people fairly andappropriately for their contributions and achievements and to be an employer which attracts highperforming individuals and works to retain them.

The Company is committed to promoting equality of opportunity and diversity in its employment practices.Applications for employment from people with Protected Characteristics (Equality Act 2010) are given fulland fair consideration for all vacancies, having regard to their particular skills, experiences and abilities.

In the event of an employee becoming disabled, every effort is made to retain them in order that theiremployment within the Group may continue. The Positive About Disability Award recognises thiscommitment.

We have developed policy and practice which underpins the ‘Investors in People’ Gold Standard (achieved2011) and which enables us to:

• Ensure our structures reflect business requirements and that workforce and succession planning arekept under review.

• Attract, successfully recruit and retain high caliber applicants for jobs, who share and can demonstratecommitment to our Vision and Values.

• Provide a wide range of opportunities for training and development

• Promote the development of the right management skills and to develop effective leaders

• Promote and develop a performance cultureHCA Registered Number LH 4264Wyre Forest community Housing (a Member of The community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No. 32351R

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• Develop excellence in Customer Care

• Provide an enabling environment (including a safe, healthy work place)

• Ensure effective employee communication and consultation

• Implement an Equality and Diversity Policy in line with the Equality Act 2010

• Ensure that we respond quickly to changes in legislation and regulation

Political Donations

The Group did not make any political donations during the financial year (2015: Nil).

Statement of the Responsibilities of the Board

The board is responsible for preparing the Annual Report and the financial statements in accordance withapplicable law and regulations.

The Co-operative and Community Benefit Societies Act 2014 and registered social housing legislationrequire the board to prepare financial statements for each financial year which give a true and fair view ofthe state of affairs of the Registered Provider (RP) and of the surplus or deficit for that period. Under thatlaw the board have prepared the financial statements in accordance with United Kingdom GenerallyAccepted Accounting Practice (United Kingdom Accounting Standards, comprising Financial ReportingStandard 102 The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102),and applicable law). In preparing these financial statements, the board is requited to:

• select suitable accounting policies and then apply them consistently;• make judgements and estimates that ate reasonable and prudent;• state whether applicable UK Accounting Standards comprising FRS 102 have been followed, subject

to any material departures disclosed and explained in the financial statements;• notify its shareholders in writing about the use of disclosure exemptions, if any, of FRS 102 used in

the preparation of financial statements; and• prepare the financial statements on the going concern basis unless it is inappropriate to presume that

the RP will continue in business.

The board is responsible for keeping proper accounting records that are sufficient to show and explainthe RP’s transactions and disclose with reasonable accuracy at any time the financial position of the RPand to enable it to ensure that the financial statements comply with the Co-operative and CommunityBenefit Societies Act 2014 and Regulations thereunder the Housing and Regeneration Act 2008 and theAccounting Direction for Social Housing in England 2015. It is also responsible for safeguarding theassets of the RP and hence for taking reasonable steps for the prevention and detection of fraud andother irregularities.

The Board is responsible for the maintenance and integrity of the society’s website. Legislation in theUnited Kingdom governing the preparation and dissemination of financial statements may differ fromlegislation in other jurisdictions.

Disclosure of Information to Auditors

So far as the Board is aware, there is no relevant information of which the Company’s Auditors areunaware. The Board has taken all reasonable steps that ought to have been taken in order to make itselfaware of any relevant audit information, and to establish that the Company’s Auditors are aware of thatinformation.

HCA Registered Number LH 4264Wyte Forest Community Housing (a Member of The Community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No. 32351 R

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Internal Control Assurance Statement

The Board of Management has overall responsibility for ensuring an adequate system of internal control isin place and for reviewing its effectiveness. The system of internal control is designed to manage risk, todemonstrate commitment to economy, efficiency and effectiveness through value for money exercises,and to provide reasonable assurance that key business objectives are achieved. It also providesreasonable assurance concerning the reliability of financial and operational controls and the safeguardingof assets against unauthorised use or disposal. This applies for all partnership arrangements andsubsidiaries within the Group.Risk management is embedded throughout the Group. Officers and Members ensure that all decisionmaking is carried out on a risk aware’ basis, ensuring that all opportunities and threats that could impacton achievement of business objectives are evaluated across all activities and action is put in place toreduce threats to an acceptable level, prior to finalising the decision making process.

This enables the organisation to mitigate any threats whilst maximising opportunities, hence protecting itsability to continue to provide existing services, allowing for expansion of service provision; and ensuringlong term viability of the Group.

Our ‘risk managed culture’ supports our drive for Excellence; Continuous Improvement; and Value forMoney in the provision of services.

During the year the Board has received reports to support the effectiveness of internal controls:

• Update from the Risk Management Group, including the risk register, as presented to every AuditCommittee. A six monthly risk report is submitted to the Board of Management.

• 43 internal audit areas were reviewed during 2015/16 with 10 substantial assurances, 1 adequateassurance and 32 compliant/compliant subject to outcomes. Implementation of recommendations isactively monitored through Audit Committee

• The internal audit annual report for 201 5/16 which confirmed that TCHG has in place an appropriateframework for identifying, evaluating and managing the significant risks faced by the Group and that inrespect of the areas of activity which were reviewed, and subject to the weaknesses identified andreported in internal audit reports, TCHG has an adequate, effective and reliable framework of internalcontrol and effective risk management and governance processes which provides reasonableassurance regarding the effective and efficient achievement of the Group’s objectives.

• Annual ‘in camera’ meeting with internal and independent auditors.

• Completion of Annual Control Risk Self-Assessment returns by senior management to supportDirectors annual assurance statements regarding the effectiveness of internal controls in theirdirectorates.

• Annual review of financial regulations and accounting requirements and a three year rolling review ofall policies, ensuring that all personnel are kept informed and trained.

• Confirmation from HCA that the Group meets the requirements on viability set out in the Governanceand Financial Viability Standard and has the capacity to mitigate its exposures effectively.

Value for Money (VFM)

Our 201 5-20 business plan set aspirational targets of delivering 514 new homes, of which 320 were fullyfunded with the remainder to be achieved through future value for money savings and treasurymanagement changes. We are proud to report that due to short and long term efficiency savings, we arenow able to extend our programme to deliver 578 by 2023, all fully funded within our latest business plan.


16




201 5/16 was a very challenging year for us all. Continued Welfare Reform, significant legislative changeand a 1% cut in rent income for all Housing Associations over the next 4 years were some of the keychangers that required us to work with our stakeholders to revisit and reset our business plans.

Despite the difficult operating environment, we have continued to make good progress with delivery of ourvalue for money strategy and achieved the majority of our targets.

Particular highlights of the year included:

• Overall savings against budget of £723k

• A saving of £204k from the review and restructure of our care and support services

• Reductions nvoid periods, generating additional rental income of over £1 02k

• A continued positive return on our assets and completion of planned option appraisals onunderperforming housing stock.

• Maintenance costs of £1 .2m less than our peer group.

• An improved approach to measuring social value which in the long term will help us identify and invest inprojects thatdeliverthe greatest benefitto communities.

• A clear public statement of our complete commitment to delivering value for money for customers andservice by including it in our listof key strategic priorities.

• Improved value for money reporting and the launch of a new dedicated area on all our websites, wherestakeholders can access the details of our journey in one place and tract our progress over time.

The Homes and Communities Agency have published a summary report to help Housing Providersunderstand the differences in their unit costs. This confirmed our understanding of our operating costs andhas been useful in helping us set our future direction of travel.

You can find our latest Value for Money Statement and follow our progress throughout the year by loggingonto the Value for Money area of our website — www.communityhg.com — which is updated at the end ofeach quarter.

We also agreed to make a clear public statement of our complete commitment to delivering value formoney for customers and service users by including it in our list of key strategic priorities.

Our strategic approach to Value for Money is to drive down costs, maximise the use and return on ourassets, improve services and drive up customer satisfaction. Our business planning and performancemanagement framework led by the Parent board, ensures a value for money golden thread runs throughour business and the whole organisation is focused on delivering value for money for customers and thetax payer.

Our value for money goals

The five strategic objectives set out in our business plan form the pillar for delivery of our vision and valuefor money goals:

• Deliver cost effective services.

• Maximise the use and return on assets.

• Satisfied Customers.


17




• Social and environmental gains.

Set out in the business plans of each company within the Group are the details of our priorities, plans andtargets. They are available from our offices and the Our Published documents’ area of our websitereferenced on page 17.

To increase cost effectiveness we focus our activities in the following ways:• Priorities: we make sure our programmes deliver our corporate business plan and are focused on

outcomes that give the greatest protection of our assets, satisfy the greatest customer needs.

• Impact: we make sure our programmes are really focused on the best outcomes. We use evaluationand techniques such as social return on investment to establish the full impact of a programme and itslifetime worth.

• Take a long-term view: we make sure we use the optimal combination of whole life cost and control ofcurrent costs.

• Use competition: our commitment to our procurement strategy ensures that we use competitiveprocesses in all markets.

The role of tenants and residents in delivering value for money

“Recession and Welfare Reform are biting hard in our communities so getting the maximum value forevery pound spent has never been more important to us. The Central Tenants Forum is working hard withthe Company to get the best value for tenants and residents and have made value for money a priority inour workplan” — Richard Collins, Chair of Central Tenants Forum.

Our commitment to co-regulation means we work closely with tenants and residents to involve them indecisions about their homes and services.

The Central Tenants Forum (CTF) sits within our governance structure and is responsible for reviewingand monitoring the performance of our core housing services and holding us to account whereperformance falls below target.

Value for money remains a priority in the CTF annual plan and tenants sit on our Value for Money Group.

The Tenant Scrutiny Committee completes an annual programme of scrutiny reviews of frontline servicesfocused on delivering quality, satisfaction and value for money for customers.

How we demonstrate value for money

To demonstrate our commitment to providing Value for Money to all of our stakeholders, we:

• Publish our self-assessment in ways that are transparent and accessible.

• Enable our stakeholders to understand the return we achieve on our assets, in relation to ourobjectives.

• Set out the absolute and comparative costs of delivering services.

• Evidence what value for money gains we have made and what we will achieve in the future.


18




How we assess value for money

We usethefollowing criteriatoassessthevaluefor money ofourspending:

• Economy: minimising the costs while having regardto quality - means we spend bss.

- Efficiency: the rationsh ip between the output from goods or services and the resources ndedto produce them — meanswe spend well.

- Effectiveness: the relationship between the intended and actual resultof spending -meanswespend wisely.

• Equity: theextenttowh ich services areavaibbleto and reach all peoplethattheyare ntendedto —

meanswe spend fairly

Capturing social value

Creating and measuring social value is also an important part of our value for money approach. Wehave adopted the definition of social value created by ‘The Sustainable Procurement Task Force’,Social Value is ‘a process whereby organisations meet their need for goods, services, works andactivities in a way that achieves value for money on a whole life basis in terms of generating benefitsto society and the economy, whilst minimising damage to the environment’.

Thinking ‘social value’ shifts our focus from bottom line cost of a service towards the overall value tothe community (society) of the goods and services we deliver. How we deliver a service is asimportant us as what we deliver.

We are developing our approach to measuring social value and currently use financial proxiesdeveloped by Housing Association’s Charitable Trust. (Further detail is available at www.hact.org.uk).

Cost ettectve serstcesRebim on Irweebrrent I assets

OuersattotactionSodM and on*omnenW gain

ProcessesResources Inputs Outputs

Seroces /Housing assets Rrance

// Economy Elficency Effectiveness

I Spendingtoss Spentingwet J Spendlngwisely

Vakie money

The bnst use of resources to achieve the ntonded otitoomes


OtherInfluences

eq. leglstlation;regulation

19

aWFCH



Annual Report and Statutory FinancialStatements for the Year Ended 31st March 2016

ASRresolution

100%

We use the benchmarking in our regular reports both to our Boards but also our CTF. This forms the basisof our performance target setting and monitoring the actual performance over the year, allowing both theBoard and tenants to challenge service delivery.

In 2015/16 we outperformed our peers in 3 additional areas (highlighted in red above) against a target of 1.Our 2016/20 target is to continue to do this.

We know that we have traditionally performed below our benchmarking peer group in the following areasand our 20 16-20 targets are as follows:

Management cost performance and targets for 2016—20

Operational improvements were made in 2014/15 and a reduction of £86.07 (15%) was achieved. In 2015/16 afurther reduction of 12% was achieved to £385 per home. This brings us into parity with our benchmarking peergroup, and our focus going forward will be to improve on this further.


Delivering cost effective services

We annually compare our performance against other housing organisations within our Housemark BenchingMarking Group to understand where we need to improve. The benchmarking group of 14 large scale voluntarytransfer housing providers was chosen as they reflected similar size, stock holdings, geographical spread, andbackground to us, (these are: WFCH, ACIS Group, Aragon HA,CHP,FreebridgeCommunityHousing, FuturesHomescape, Havebury Housing Partnership, Herefordshire Housing, Rooftop Housing Group, SevernsideHousing, South Staffordshire HA, Stafford and Rural Homes, Swan Housing Association and Trent and DoveHousing).

Rent % Repairsarrears C8tTied out

¾ cdleclion on first visit*

Appointmentskept

99.7%

SAPrating

77

MorwZ\cost £1 283 per

unit

13 of ourservices have been

J benchmarked in the topquartile (top 25%) of our

peer group.

Our target for 2016-17 is toincrease this number by 1.

Our target for 2020 is tomove all KPIs to the

upper quartile.Homes w[thgas safetycertificate

100%

Total Currentand former

arrears 1.3%

Rentcollection as %

rent due99.9100

Average rlettime

18.9 daysAverag\timeto

czmpleterepairs I49/

Vdd worksmanagement

£37.75

20




As noted in our Value for Money Strategy we have set ourselves a clear direction of travel to reduce Managementcosts which is reflected in the cost performance reported This has been achieved by:

• Targeted LEAN reviews in Care and Support, WTC, and Out of Hours! CCW.

• Management review of all vacancies to consider whether to fill, hold vacant, or refocus roles as part ofefficiency in service delivery giving one off savings in year for vacancy turnover, and savings on posts inResident Involvement, ASB/ Outof Hourswhich will bring on going savings.

• Efficiency and savingswithin overhead costsfrom central reviews, and wider Group efficiency.

• Some refocusing of staff resource to void management, which is showing in increased costs on this area

KPI Target Actual Peer Target Target Target TargetTCHG TCHG TCHG TCHG group TCHG TCHG TCHG TCHG2O

2013/142014/15 2015/16 2014/15 2015/16 2016/17 2017/18 2018/19 19/20

Management

costs per home 551 465 442 385 384 383 381 377 373(ft

Tenancy

management 170 104 100 81 79 80 79 78 77per home (f)

We are carrying out LEAN reviews of our housing management services during 2016/17 which will form a key partofourtargeted savingsfor2ol6!17 and 2017/18.

KPI Target Actual Peer Target Target Target TargetTCHG TCHG TCHG TCHG group TCHG TCHG TCHG TCHG

I 2013/14 2014/15 2015/16 Z015/16 2015/16 2016/17 2017/18 2018/19 2019/20

Anti-social

behaviour per 110 103 100 75 59 74 73 72 71home (f)

A review of the ASB service will form part of the overall housing services review in 2016/1 7.

Void performance and targets for 2016—20

In 2015/16 we achieved top quartile for our benchmarking peer group with average re-let times of 18.9 days andwill continue to seek to improve this over the 2016—20 business plan. By 2019/20 we will achieve and better our peergroup for rent loss from empty homes within our peer benchmarking group. We achieved our target in 2015/16 as aresultof the workwe have carried out in reviewing and streamlining our processes.

Thiswasachieved, however, by refocusing resourceswhich is reflected in highermanagementcosts in 2015/16.We will monitor cost and performance during 2016/17 and carry out a further LEAN review in 2017.


21




KPI Target Actual Peer Target Target Target TargetTCHG TCHG TCH TCHG group TCHG TCHG TCHG TCHG

2013/14 2014/15 2015/16 2015/1612015/16

2016/17 2017/18 2018/19 2019/20

Allocations andlettings per 50 66 60 76 65 75 70 65 60home (f)

Average re-lettime in days: 32 32 19 18.9 18.9 18 17 16 16all homes

Rent loss fromempty homes as 1.34 1.47 1.32 1.33 0.89 1.20 1.10 1.00 0.90% of rent due

Rent collection performance and targets for 2016—20

In 2016/17 we will continue to focus on debt advice and prevention for our tenants as a core part of our WelfareStrategy. We achieved top quartile for rent arrears as a percentage of rent due in 201 5/16 and will maintain thisperformance over the 4 years. We will also continue to maintain our better than peer group performance on rentarrears and collection costs. We will also continue to maintain our better than peer group performance on currentand total rent arrears as a ¾ of rent due.

KPI Taiget Actual A Peer Taiet Target Target TargetTCHG I TCHG ‘ TCHG TCHG group TCHG TCHG TCHG TCHG

2013/14 2014/15 2015/16 2015/16 2015/16 2016/17 2017/12 2018/19 2019/20

Rent arrears andcollection costs 134 111 111 86 130 86 86 86 86per home ()

Rent collected 99.7 98.9 99.6 99.91 99,8 99.9 99.9 99.9 99.9as a% of rent due

Current tenant 0,77 1.01 1.00 1.03 1.06 1.03 1.03 1.03 1.03rent arrearsas%of rent due

We made a number of operational savings in 2015/1 6, some against the budget set and some against thelevel of costs compared to the previous year.

However, all of these savings were against the Business Plan and therefore rolled forward, benefiting thelong term Plan.


22




The Group generated savings in 2015/16, against the budget set, of £723k in total with specific savingsmade in:

(000s)

Loan interest 253

Care24 restructure 204

Housing Management 171

Central Services restructure 150(including HR and Business Development)

Marketing and Tenant Participation 97

Vestia Services 63

Professional Services 36

Rents and Rates 28

IT running costs 21

Worcestershire TeleCare Services 10

Equipment and furniture 5

Clothing and uniforms 3

Energy costs 1

Cleaning costs 1

Accessing cost per unit data

The HCA have released a document to all Registered Providers headed Delivering better Value for Money:Understanding differences in unit costs’ and provided 2014/15 cost data analysis for WFCH.

In response, we have:-

1. Compared our costs to 7 other local Housing Associations

2. Looked back, and ahead, to assess our direction of travel.

The figures below have been extracted from the 2014/15 and 2015/16 accounts, and the existing BusinessPlan:-

Headline costs 4.30—3.19 4.26

Major Repairs

4.03

Range tcpu) £k Audfted Accounts Draft Accounts Business Plan Business Plan2014/15 (cpu) £k 2015/16 (cpu) £k 2016/17 (cpu) £k 2017/18 (cpu) £k

Management 127— 0.70 0.65 0.69 0.67

Services 0.61 — 0.23 0.29 0.30 0.31

Maintenance 1.18—0.81 1.53 0.86 0.81

1.13 —0.53

3.99

1.13

3.86

Other Social 0.41 — 0.08 0.66 0.72 0.76

1.46 1.44

Our direction of travel is moving our overall (headline) costs towards median targets as Value for Moneysavings within the Business Plan are crystallised.


23




We hake embarked upon a comprehensive review of the performance of our housing assets using Ark’sStrategic Asset Performance model — ASAP. This enabled us to assess the relative performance of ourassets, both qualitativelyand financially.

In order to secure best value for money, deliver our services efficiently and maximise capacity to developnew homes, we wanted to understand the true performance’ of the homes we own and manage. The tablebelow summarises the results of that assessment:

Annual Surplus!Outcome Schemes Units Surplus! (Deficit)

(Deficit) p.u.p.a.

Asset Class A 290 73.2% 3,767 67.5% £2,996,648 £1,326

Asset Class B 49 12.4% 847 15.2% £944,494 £1,115

Asset Class C 57 14.4% 967 17.3% £390,079 £403

TOTAL 396 100.0% 5,581 100.0% £6,331,221

The 57 Class C schemes, comprising of 967 homes (17.3% of our housing asset base) performedrelatively poorly, both qualitatively and financially. All were marginal in terms of their financial return;although on average they make a surplus. The group of assets includes a small number which make aloss.So for the next two financial years, we set ourselves a target (in our Asset Management Strategy —

February 2016), to carry out option appraisals on all of our Class C schemes.

When we looked at the locations of these Class C schemes we decided it was logical to group certainschemes together as their performance would be interrelated. We have increased the number to beappraised from 12 to 15. However, having completed the initial appraisals we further increased the numberof schemes considered to 17 (because Rifle Range Road and Avon Road were included as part of the SevernGrove appraisal).

The options appraisal process has involved site visits, detailed data review and local market analysis, followedby scrutiny in a multi-disciplinary workshop. The outcome as an agreement about what we need to be doneto improve future asset performance in the context of our overall performance and business objectives Therewerefourheadline outcomes:

1. Immediate Intervention — where quick action has or can be undertaken so the assets perform atnormallevels.

2. Disposal— ofschemes which are not considered viable for investment in the long term, but which couldcreate an income to provide some cross subsidy for (3).

3. Major Intervention —schemes where we need to undertake regeneration works, including some or all ofthe investment in the public realm, targeted disposals, a change in the local management andmaintenanceregimeand property reconfiguration/improvements.

4. Re-development— schemes to be vacated for demolition and then re-developed with new homes.

Based upon the 201 5/16 option appraisals, we now have plans for the 17 schemes assessed.

HCA Registered Number LH 4264Wyre Forest community Housing (a Member of The Community Housing Group), an exempt charity andregistered society under the co-operative and community Benefit Societies Act 2014Registered in England and Wales No. 32351 R

24




Investment in schemes to move them from Class C to Class A, will take time (5 yeats is assumed) and money.Each becomes a major project which will require resourcing, stakeholder consultation, a delivery plan andmust, above all, be able to show measureable improvements forourcustomers and financially.

Funding for major intervention will come from three potential sources:

(a) Cross subsidy from disposal capital receipts

(b) Planned maintenance investmentprovision (alreadyallowedforintheASAP model)

(C) Additional investment— and to justify this the schemes must be able to supportthe cost ofborrowing associated with such investment.

The option appraisal process predicts that over the next 5 years when we implement the interventions setout for these 17 schemes we will move them collectively from a loss of £24k to a surplus of £62k. We will alsoimprove the retained homes and estates, to improve customer satisfaction.

In 2016/17 we will complete the option appraisals for the remaining 45 Class C schemes. The outcomesfrom these can be expected to follow the themes from the initial schemes appraised and, collectively, toimprovethe long term valueformoney yielded bythe currentClass C schemes.

Wewillconsolidatealloptionappraisaloutcomesforall57Class C schemes into an Asset InvestmentManagement Plan (AIMP) a 5-10 year programme of interventionswhichwillseeassetperformanceandvalueformoney progressively improving.

This will be the key next stage in our Asset Management Strategy (AMS). It will be reviewed and approved bythe Board and will become a programme of major projects, which will be monitored alongside ourdevelopment program me.

The improving VFM, which the AMP is programmed to achieve, will be monitored through annual updates ofthe ASAP model, so that we can review progressive improvements.

Utilising VfM savings to increase our Development Programme by a further 225 units

Our 2015-20 Business Plan set an aspirational target of delivering 514 new homes/conversions by 2020.As a result of increased savings, we have added a further 225 fully funded new homes into ourprogramme. We are now able to extend our programme to deliver 634 units over the next seven yearswith all of them fully funded within the Group’s latest (June 2016) Business Plan. This number includesadditional units and conversions from rent to shared ownership.

With 56 units completed in 2015/16, we have an outstanding development programme of 578 units. Ourprogramme is funded as follows:

2015/16 2015/16 2016/17 2016/23Actual Target Target Business Plan

Shared ownership 1st tranche sale 30 46 36 351

No of Asset Sales -RTB/RTA 6 12 12 115

No of Asset Sales -Other 11 4 33 86

No of Assets BuiluAcquired* 56 73 115 448

Increase/Dçrease in Asset Numbers 39 57 70 247

Investment in New Homes 12,814 15,891 9,762 56,022

Investment in Existing Homes 13,720 12,420 12.310 63,352


25



2015/16 2015/16 2016/17 2016/23Actual Target Target Business Plan

Total Investment in Homes 26,534 28,311 22,072 139,374

Investment Funded By:

HCA Grant 945 898 52 2,887Shared Ownership Proceeds 2,039 3,468 2,405 25,171Asset Sales — RTB/RTA 286 540 232 3,483Asset Sales other 786 280 1,411 4,918Private Finance 6,000 9,665 4,692 18,006Group Rents, Income and Reserves 16,478 13,460 13,280 84,909Total 26,534 28,311 22,072 139,374

*The property numbers highlighted here do not match with the 578 total development programme due toa small number of units coming into management in 2023/24.

Social Value and Environmental GainWe create social value across the Group through the work we do housing people in housing need, the careservices provided to older people, and the contracts to help families and unemployed delivered through oursubsidiary, Vestia Community Trust. We are also working to create additional social value in the way weoperate and manage our business.

Our work with unemployed people is targeted as those furthest from the labour market, often withadditional barriers to finding work.

We use a key worker approach that looks at developing employment skills and ‘soft’ skills such as increaseconfidence, team working, motivation and personal presentation so the learners’ resilience is stronger to support theminto and retain employment.

With recently secured European Funding, Vestia will develop this approach with Key Workers able to invest time toprovide ‘end to end’ support to help long term unemployed on the whole journey into and retaining secureemployment.

With the increase in low level mental illnesses/depression, often notformally diagnosed, experienced by our learners,the challenges will be harder butthe impacton transforming lives greater.

Welfare ReformOne area of particular concern for the Group is welfare reform, with the introduction of Benefit Caps and HousingBenefit limited to Local Housing Allowances, this will create challenges for many of our Tenants who come to us inhousing need who are often unemployed or unable to work. To ensure we can continue to meet the needs ofhomeless and other vulnerable groups, we will identify unemployed tenants at risk of losing their tenancies andsupport them with advice, guidance and training to find work as this is the most effective way of improving lives,increasing wellbeing and being able to sustain their tenancies.

Employment and trainingThe targets for 2015/2016 were not achieved because of the significant change in profile of the people we areworking with. This includes an increase of unemployed who are in receipt of Employment Support Assistancewhere they are currently not fit for work, but could be in the near future. This is due to issues such as; mental healthissues or disability and these customers require a longer period of time to support them so they can progress intoemployment or return to training.


26



The Report of the Chairman of the Board (continued)

We are reviewing the way we provide these services and work with Job Centre’s to ensure we reach our challengingstretch targets in future.

Activity Target Actual Target Actual Target2014/15 2014/15 2015/16 2015/16 f016/17

People receiving employability services (All) 190 232 250 229 250

PeopleinTCHGhouseholds receivingemployment services 58(40%) 78(41%) 100 77 125(50%)

TCHG households progressing in to work within 6monthsofcompletingtraining(All) 25% 34% 25%* 23% 25%

Apprentices on target to complete program80% 96.08% 80%** 100% 80%

* The National benchmark for people progressing into employment from the UK Work Programme is 20%

** The National benchmark for Apprentices on target to complete their programmes is 70%.

Satisfied Customers

The majority of customers are satisfied with our services and we are proud to have retained our CustomerService Excellence accreditation in a period of major organ isational change.

We know what services our customers are most satisfied with because we ask them. Their feedback andactive involvement gives us the insight needed to help maximise the value of any investment and toachieve the level of quality of service delivery our customers expect.

Continuously improving data collection

The Housemark benchmarking service draws information through the STAR survey, a national frameworkwhich allows a range of survey types and methods to be collected on a three year basis. We have foundthat this does not provide the quality or level of data necessary to help inform our operational decisions orhelp shape our future products. This view was reinforced through the work of our CTF who sought morelocalised and detailed means of customer feedback to enable them to set mote challenging targets anddrive up satisfaction targets.

STAR Survey Data

TCHG Prey results KPI TCHG 2015/16 All Providers

86.5% Overall tenant satisfaction 86.6% 90.0%

90.6% Overall Quality of Home 86.6% 88.8% 88.7%

88.5% Satisfaction with your Neighbourhood 88.0% 88.0%

84.1% Satisfaction that your rent provides Value for Money 87.8% 87.6%

N/a SatisfactionthatyourServiceChargesprovideValueforMoney 77.38% 77.39%

86.6% Satisfaction in how we deal with Repairs and Maintenance 79.3% 86.25%

72.8% Satisfied that we listen to your views & acts on them 75.2% 76.1%


27




Fraud

The Board of Management is responsible for ensuring that arrangements are made to safeguard theassets of the Group and hence for taking reasonable steps for the prevention and detection of fraud andother irregularities.

The Group complies with the HCA requirements on fraud and the Board of Management confirms thatthere has been five attempted cases of fraud during the financial year. These have been investigated,reported to Board and subsequently closed in accordance with the Group’s existing procedure. No moneywas unaccounted for in the cases reported.

Statement of Compliance by Board of Management

The Board of Management therefore confirms that the system of internal controls is appropriate to thevarious business environments in which the Group operates; that suitable internal financial controls havebeen applied during the year ended 31st March 2016 and up to the date of signing these financialstatements to maintain adequate accounting records, safeguard the assets of the Group to prevent anddetect fraud and other irregularities; and that there is an ongoing process for identifying, evaluating andmanaging the significant risks faced by the Group.

Independent Auditors

It is proposed that the Group will retender for the role of Independent Auditors of the Group during2016/1 7.

On behalf of the Board:

Date:20

.Sf1€M2SMs. K. Law-FoxChair of Wyre Forest Community Housing


28



Independent Auditors’ Report to the Members of Wyre Forest Community Housing Limited

Report on the financial statements

Our opinion

In our opinion, Wyre Forest Community Housing Limited’s financial statements (the “financial statements”):

• give a true and fair view of the state of the registered provider’s affairs as at 31 March 2016 and of theregistered provider’s result and cash flows for the year then ended; and

• have been properly prepared in accordance with the Co-operative and Community Benefit SocietiesAct 2014, the Housing and Regeneration Act 2008 and the Accounting Direction for Private RegisteredProviders of Social Housing from April 2015.

What we have audited

The financial statements comprise:

• the registered provider statement of financial position as at3l March 2016;

• the registered provider statement of comprehensive income for the year then ended;

• the registered provider statement of changes in reserves for the year then ended; and

• the notes to the financial statements, which include a summary of significant accounting policiesand other explanatory information.

The financial reporting framework that has been applied in the preparation of the financial statements isUnited Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicablein the UK and Republic of Ireland”, and applicable law (United Kingdom Generally Accepted AccountingPractice).

In applying the financial reporting framework, the board has made a number of subjective judgements, forexample in respect of significant accounting estimates. In making such estimates, they have madeassumptions and considered future events.

Other matters on which we are required to report by exception

Adequacy of accounting records, system of internal control and information and explanationsreceived

Under the Co-operative and Community Benefit Societies Act 2014 we are required to report to you if, inour opinion:

• a satisfactory system of control over transactions has not been maintained; or

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

• proper accounting records have not been kept by the registered provider; or

• the registered provider financial statements are not in agreement with the accounting records.

We have no exceptions to report arising from this responsibility.

HCA Registered Number LH 4264Wyre Forest Community Housing (a Member of The Community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No, 32351 R

29



Responsibilities for the financial statements and the audit

Our responsibilities and those of the boardAs explained more fully in the Statement of Responsibilities of the Board set out on pageL5 the Board isresponsible for the preparation of the financial statements and for being satisfied that they give a true andfair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance withapplicable law and ISAs (UK & Ireland). Those standards require us to comply with the Auditing PracticesBoard’s Ethical Standards for Auditors.

This report, including the opinions, has been prepared for and only for the registered provider’s membersas a body in accordance with Section 87 (2) of the Co-operative and Community Benefit Societies Act2014 and the Housing and Regeneration Act 2008 and for no other purpose. We do not, in giving theseopinions, accept or assume responsibility for any other purpose or to any other person to whom this reportis shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What an audit of financial statements involves

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) (‘ISAs(UK & Ireland)”). An audit involves obtaining evidence about the amounts and disclosures in the financialstatements sufficient to give reasonable assurance that the financial statements are free from materialmisstatement, whether caused by fraud or error. This includes an assessment of:

• whether the accounting policies are appropriate to the registered provider’s circumstances andhave been consistently applied and adequately disclosed;

• the reasonableness of significant accounting estimates made by the board; and

• the overall presentation of the financial statements.

We primarily focus our work in these areas by assessing the board’s judgements against availableevidence, forming our own judgements, and evaluating the disclosures in the financial statements.

We test and examine information, using sampling and other auditing techniques, to the extent we considernecessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence throughtesting the effectiveness of controls, substantive procedures or a combination of both.

In addition, we read all the financial and non-financial information in the Annual Report and StatutoryFinancial Statements to identify material inconsistencies with the audited financial statements and toidentify any information that is apparently materially incorrect based on, or materially inconsistent with, theknowledge acquired by us in the course of performing the audit. If we become aware of any apparentmaterial misstatements or inconsistencies we consider the implications for our report.

1jJ

Lynne Baberfor and on behalf of PricewaterhouseCoopers LLPChartered Accountants and Registered AuditorsBristol


30



(a) The maintenance and integrity of the Wyre Forest Community Housing Limited website is theresponsibility of the - board; the work carried out by the auditors does not involve considerationof these matters and, accordingly, the auditors accept no responsibility for any changes thatmay have occurred to the financial statements since they were initially presented on thewebsite.

(b) Legislation in the United Kingdom governing the preparation and dissemination of financialstatements may differ from legislation in other jurisdictions.


31



Statement of Comprehensive Income

For the Year ended 31st March 2016

2016 2015(Restated)

Note £‘OOO £‘OOO

Turnover 3 32,657 33,350

Operating expenditure 3 (23,120) (24,764)

Operating surplus 6 9,537 8,586Gain on disposal of property, plant andequipment assets 409 746

Interest receivable and other income 7 130 147

Interest payable and similar charges 8 (6,564) (6,238)

Movement in fair value of investment property 13 15 -

Surplus before tax 3,527 3,241

Taxation 9 - -

Surplus for the year 3,527 3,241

Actuarial gain/(Ioss) in respect of pension24 1 806 (6 754)schemes

Total comprehensive incomel(expense)5,333 (3,513)for the year


32



Statement of Changes in Equity

2016 2015

Revenue Pension Revenue PensionReserve Reserve Reserve ReserveNote

£000 £‘OOO £‘OOO £‘OOO

Balance at 1st April (restated) 21 21,816 (23,837) 17,965 (16,473)

Surplus from Statement of Comprehensive3 527 - 3 241 -Income

Transfer from Pension Reserve 1,227 (1,227) 610 (610)

Actuarial gain in the year 24 - 1,806 - (6,754)

Adjustment to housing properties 30 (766) - - -

Balance at 31st March 21 25,804 (23,258) 21,816 (23,837)


33

‘aWFCH

Statement of Financial Position



As at 31St March 2016

2016 2015(Restated)

Note £‘OOO £‘OOOFixed assets

Housing fixed assets 10 186,778 176,552Otherfixed assets 14 7,116 5,987Investment properties 13 1,599 1,584Total fixed assets 195,493 184,123Current assets

Shared Ownership Properties held for sale 16 1,316 979Debtors 15 4,365 6,248Cash and cash equivalents 2,963 4,436Less: Creditors: amounts falling due within one

17 (4 749) (8 287)year

Net current assets 3,895 3,376

Total assets less current liabilities 199,388 187,499

Creditors: Amounts falling due after more

than one year 18 173,179 165,356Pension Liability 24 23,258 23,837Provision for other liabilities 24 405 327Total net assetslf liabilities) 2,546 (2,021)

Reserves

Revenue Reserve 21 25,804 21,816Pension Reserve 21 (23,258) (23,837)

Total reserves 2,546 (2,021)

The financial statements were approved by the Board of Management on Mondaysigned on its behalf by:

18th July 2016 and

C 4.Ms. K. Law-FoxChair of Wyre ForestCommunity Housing Limited

.HMrs. E. HeavenBoard Member

Mr. D. P. KnowltonCompany Secretary

The notes on pages 35 to 65 form part of these financial statements.


34



Notes to the Financial Statements

1. LegaistatusWyre Forest Community Housing Limited is a Co-operative and Community Benefit Societyincorporated in England under the Companies Act 2006 and is a registered housing provider.

2. Principal Accounting PoliciesThe following accounting policies have been applied consistently in dealing with items which areconsidered to be material in relation to the Company’s financial statements:

Basis of PreparationThe financial statements of the Association are prepared in accordance with Financial ReportingStandard 102 (FRS 102) and the Housing SORP 2014: Statement of Recommended Practice forRegistered Social Housing Providers (SORP) and comply with the Accounting Direction for PrivateRegistered Providers of Social Housing 2015.

The Association transitioned from previous UK GAAP to FRS1O2 as at 1st April 2014. An explanationof how the transition to FRSJO2 has affected the reported financial position and performance is givenin note 30 (page 62).

The Association has taken advantage of the following disclosure exemptions in preparing thesefinancial statements, as permitted by the FRS1O2 ‘The Financial Reporting Standard applicable in theUK and Republic of Ireland”:

• The requirements of Section 7 Statement of Cashflows and,• The requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of The Community Housing GroupLimited as at 31st March 2016 and these financial statements may be obtained from 3 Foley Grove,Foley Business Park, Kidderminster, Worcs., DY11 7PT.

Wyre Forest Community Housing Limited is a public benefit entity. April 2015 saw the merging of ourtwo charitable housing atms, Wyre Forest Sheltered Housing Limited and Wyre Forest CommunityHousing Limited, into one stock owning Association, Wyre Forest Community Housing Limited.

Going concernThe Association’s business activities, its current financial position and factors likely to affect its futuredevelopment are set out within the Strategic Report. The Association has in place long-term debtfacilities which provide adequate resources to finance committed reinvestment and developmentprogrammes, along with the Association’s day to day operations. The Association also has a long-term business plan which shows that it is able to service these debt facilities whilst continuing tocomply with lenders’ covenants.

On this basis, the board has a reasonable expectation that the Association has adequate resourcesto continue in operational existence for the foreseeable future, being a period of at least twelvemonths after the date on which the report and financial statements are signed. For this reason, itcontinues to adopt the going concern basis in the financial statements.

Significantjudgements and sources of estimation uncertaintyPreparation of the financial statements requires management to make significant judgements andestimates. The items in the financial statements where these judgements and estimates have beenmade include:


35



Notes to the Financial Statements (continued)

2. Principle accounting policies continued

Significant management fudgements

Capitalisation of property development costsDistinguishing the point at which a project is mote likely than not to continue, allowing capitalisationof associated development costs requires judgement. After capitalisation management monitors theasset and considers whether changes indicate that impairment is required.

ImpairmentManagement judgement is applied when considering whether impairment triggers apply to theimpairment of assets and the valuation of any subsequent impairment loss. No such triggers havebeen identified in 2016.

Capitalisation of housing propertiesThe Association has undertaken a detailed review of the intended use of all housing properties. Indetermining the intended use, the Association has considered if the asset is held for social benefit orto earn commercial rentals. The Association has determined that market rented properties areinvestment properties.

Estimation uncertaintyInformation about estimates and assumptions that have the most significant effect on recognition andmeasurement of assets, liabilities, income and expenses is provided below.

Useful lives of depreciable assetsManagement reviews its estimate of the useful lives of depreciable assets at each reporting datebased on the expected utility of the assets. Uncertainties in these estimates relate to technologicalobsolescence that may change the utility of certain software and IT equipment and changes to decenthomes standards which may require more frequent replacement of key components.

Defined benefit obligation (DBO)Management’s estimate of the DBO is based on a number of critical underlying assumptions such asstandard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variationin these assumptions may significantly impact the DBO amount and the annual defined benefitexpenses (as analysed in Note 24).

TurnoverTurnover comprises rental income receivable, grants from local authorities and the HCA, supportingpeople income, first tranche sales of shared ownership housing properties developed for sale andcommercial lettings.

Income is recognised as it falls due under contractual arrangements or on the delivery of goods andservices provided. Income is attributed to the period in respect of which it is due.

Supporting People income receivable from administering authorities is included in turnover; costsincurred in providing these services are included in operating costs. Charges for support servicesfunded under Supporting People are recognised as they fall due under the contractual arrangementswith Administering Authorities.


36




2. Principle accounting policies continued...

Government grantsGovernment grants include grants receivable from the HCA, local authorities, and other governmentorganisations. Government grants received for housing properties are recognised in income over theuseful life of the housing property structure and, where applicable, its individual components(excluding land) under the accrual model.

Grants relating to revenue are recognised in income and expenditure over the same period as theexpenditure to which they relate once reasonable assurance has been gained that the entity willcomply with the conditions and that the funds will be received.

Grants due from government organisations or received in advance are included as current assets orliabilities.

Government grants received for housing properties are subordinated to the repayment of loans byagreement with the HCA. Government grants released on sale of a property may be repayable but arenormally available to be recycled and are credited to a Recycled Capital Grant Fund and included inthe statement of financial position in creditors.

If there is no requirement to recycle or repay the grant on disposal of the asset, any unamortised grantremaining within creditors is released and recognised as income in income and expenditure.

Where individual components are disposed of and this does not create a relevant event for recyclingpurposes, any grant which has been allocated to the component is released to income andexpenditure. Upon disposal of the associated property, the Association is required to recycle theseproceeds and recognise them as a liability.

Other grantsGrants received from non-government sources are recognised using the performance model. A grantwhich does not impose specified future performance conditions is recognised as revenue when thegrant proceeds are received or receivable. A grant that imposes specified future performance-relatedconditions on the association is recognised only when these conditions are met. A grant receivedbefore the revenue recognition criteria are satisfied is recognised as a liability.

Tangible fixed AssetsHousing propertiesHousing properties are properties held for the provision of social housing or to otherwise providesocial benefit. Housing properties are principally properties available for rent and are stated at costless accumulated depreciation and impairment losses. Cost includes the cost of acquiring land andbuildings, development costs and interest charges incurred during the development period.

Works to existing properties which replace a component that has been treated separately fordepreciation purposes, along with those works that result in an increase in net rental income over thelives of the properties, thereby enhancing the economic benefits of the assets, are capitalised asimprovements.

Shared ownership properties are split proportionally between current and fixed assets based on theelement relating to expected first tranche sales. The first tranche proportion is classed as a currentasset and related sales proceeds included in turnover, and the remaining element is classed as fixedasset and included in housing properties at cost, less any provisions needed for depreciation orimpairment.


37




2. Principle accounting policies continued...

Donated land and other assetsLand and other assets donated by local authorities and other government sources is added tocost at the fair value of the land at the time of the donation. Where the land is not related to aspecific development and is donated by a public body an amount equivalent to the increase invalue between fair value and consideration paid is treated as a non-monetary grant andrecognised on the statement of financial position as a liability. The terms of the donation aredeemed to be performance related conditions. Where the donation is from a non-public source,the value of the donation is included as income.

Investment propertiesInvestment properties consist of commercial properties and other properties not held for thesocial benefit or for use in the business. Investment properties are measured at cost oninitial recognition and subsequently at fair value by an external valuer as at the year end,with changes in fair value recognised in income and expenditure.

Depreciation of housing propertiesThe group separately identifies the major components which comprise its housingproperties, and charges depreciation, so as to write-down the cost of each component to itsestimated residual value, on a straight line basis, over its expected useful life.

Where a development is evaluated as a single scheme but has more than one element,such that one or more of the elements is expected to generate a surplus, and one or moreof the other elements a shortfall, then it is not appropriate to recognise all of the surplus onthat scheme. The surplus should be reduced by the shortfall through the apportionment ofthe costs to each element of the scheme.

The group depreciates the major components of its housing properties over the followingexpected useful lives:

Component Expected Useful LifeStructure/Building 125 yearsCentral Heating 30 yearsBoilers 15 yearsWiring/Electrics 30 yearsBathrooms 30 yearsKitchens 30 yearsRoof 70 yearsDoors and Windows 40 years

Leasehold properties are amortised over the life of the lease or their expected usefullives in the business, if shorter.

Other tangible fixed assetsOther tangible fixed assets are stated at cost less accumulated depreciation.

Depreciation is provided evenly on the cost of other tangible fixed assets to write them downto their estimated residual values over their expected useful lives. The principal annual ratesused for other assets are:


38





Office furniture and equipment 20-25% per annumPlant and machinery 20-33% per annumMotor Vehicles 14 - 25% per annumComputer hardware and software 25% per annumService Assets 20% per annumOffice accommodation 2.5% per annum

No depreciation is provided on freehold land.

ImpairmentAnnually housing properties and other tangible fixed assets (identified as cash generating units)are assessed for impairment indicators. The Group has identified a cash generating unit forimpairment assessment purposes at a property level. Where indicators are identified anassessment for impairment is undertaken comparing the assets carrying amount to itsrecoverable amount. Where the carrying amount of an asset is deemed to exceed itsrecoverable amount, the asset is written down to its recoverable amount, this is likely to be thevalue in use of the asset based on its service potential. The resulting impairment loss isrecognized as expenditure in income and expenditure. Where an asset is currently deemed notto be providing service potential to the Association, its recoverable amount is its fair value lesscosts to sell.

Properties held for saleShared ownership first tranche sales, completed properties for outright sale and property underconstruction are valued at the lower of cost and estimated selling price less cost to complete andsell. Cost comprises materials, direct labour and direct development overheads. Estimated salesprice is stated after allowing for all further costs of completion and disposal.

Capitalisation of interest and development costsInterest is capitalised based on the average borrowing or directly attributable borrowing rateapplied to associated cashflows until the handover of properties. Costs of employees and legaland valuation fees are also capitalised where they are directly attributable to the organisation’sdevelopment programme.

Post Retirement BenefitsThe Company participates in the Worcestershire County Council Local Government PensionScheme (LGPS) and the Social Housing Pension Scheme (SHPS), which is administeredindependently by the Pensions Trust. The schemes are defined benefit schemes.

Social Housing Pension SchemeFor the SHPS, it has not been possible to identify the share of underlying assets and liabilitiesbelonging to individual participating employers. The charge to the income and expenditurerepresents the employer contribution payable to the scheme for the accounting period.

Contributions payable from the association to the SHPS under the terms of its funding agreementfor past deficits are recognised as a liability in the association’s financial statements.

Local Government Pension SchemeFor the LGPS, scheme assets are measured at fair value. Scheme liabilities are measured on anactuarial basis using the projected unit credit method and are discounted at appropriate highquality corporate bond rates. The net surplus or deficit is presented separately from other netassets on the statement of financial position. A net surplus is recognised only to the extent that itis recoverable by the group through reduced contributions or through refunds from the plan.


39





The current service cost and costs from settlements and curtailments are charged againstoperating surplus. Past service costs are recognised in the current reporting period. Interest iscalculated on the net defined benefit liability. Re-measurements are reported in othercomprehensive income.

Further details are set out in note 24.

Operating LeasesRentals payable under operating leases are charged to income and expenditure on a straight-linebasis over the lease term, unless the rental payments are structured to increase in line withexpected general inflation, in which case the group recognises annual rent expense equal toamounts owed to the lessor. The aggregate benefit of lease incentives are recognised as areduction to the expense recognised over the lease term on a straight line basis.

InventoriesThe value of inventories is shown at the lower of cost and estimated selling price less costs tocomplete and sell.

Disposal Proceeds FundSales proceeds from properties sold under the Right to Acquire (RTA) are held in a DisposalsProceeds Fund. The fund must be utilised within three years of the date of sale. Funds due to bespent within the next 12 months are held in the Statement of Financial Position as a creditor duewithin one year and funds due to be spent after 12 months are held as a creditor due after morethan one year.

The amount transferred to this creditor is calculated in accordance with HCA guidance whichspecifies how much of the Right to Acquire sale proceeds must be set aside in the creditor afterdeducting the administration costs of the sale. The creditor can only be used for re-investment insocial housing. The use of this fund will be subject to Board approval.

Value Added Tax (VAT)The Company charges Value Added Tax (VAT) on some of its income and is able to recover partof the VAT it incurs on expenditure. The financial statements include VAT to the extent that it issuffered by the group and not recoverable from HM Revenue and Customs. The balance of VATpayable or recoverable at the year-end is included as a current liability or asset.


40




2. Principle accounting policies continued..

Financial instrumentsFinancial instruments which meet the criteria of a basic financial instrument as defined in Section11 of FRS 102 are accounted for under an amortised historic cost model.

DebtorsShort term debtors are measured at transaction price, less any impairment.

Provision is made against rent arrears of current and former tenants as well as othermiscellaneous debts to the extent that they are considered irrecoverable. Debts are classed asuncollectable after an assessment of the legislative options available to recover and considerationof specific circumstances

CreditorsShort term trade creditors are measured at the transaction price. Other financial liabilities,including bank loans, are measured initially at fair value, net of transaction costs, and aremeasured subsequently at amortised cost using the effective interest method.

Provisions for liabilitiesProvisions are recognised when the group has a present obligation (legal or constructive) as aresult of a past event, it is probable that the group will be required to settle the obligation, and areliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settlethe present obligation at the end of the reporting period, taking into account the risks anduncertainties surrounding the obligation.

Where the effect of the time value of money is material, the amount expected to be required tosettle the obligation is recognised at present value using a pre-tax discount rate. The unwindingof the discount is recognised as a finance cost in profit or loss in the period it arises.

Cash flowThe Company has taken advantage of the exemption available in FRS1O2 from preparing a statementof cash flows, on the basis that it is a qualifying entity and the consolidated statement of cash flows,included in the financial statements of The Community Housing Group Limited, includes theCompany’s cash flows.

Exemption From Consolidation of SubsidiaryThe Company is a wholly owned Subsidiary of The Community Housing Group Limited and is includedin the financial statements which are publicly available. Consequently, the Company has takenadvantage of the exemption from preparing consolidated financial statements under the terms of S.400of the Companies Act 2006.

Group reconstructionFrom 1st April 2015, the two charitable housing arms of The Community Housing Group, Wyre ForestSheltered Housing and Wyre Forest Community Housing were combined into one stock owningCompany Wyre Forest Community Housing Limited (WFCH). This has been accounted for as agroup reconstruction and the figures disclosed in these accounts are the amalgamated results of thetwo entities.


41

Wyre

Fo

rest

Com

mun

ity

Ho

usin

gL

im

ited

Annual

Rep

ort

an

dS

tatu

to

ry

Finan

cial

WF

CH

Statem

en

ts

for

th

eY

ear

En

ded

31

st

March

2016

Notes

toth

eF

inancialS

tatemen

ts(co

ntin

ued

)

3.P

articulars

of

turn

ov

er,o

peratin

gex

pen

ditu

rean

doperatin

gsu

rplu

s/(deficit)

CO

MPA

NY

20162015

Trn

erO

peratin

gO

peratin

gO

peratin

gU

OV

expen

ditu

resu

rplu

sl(deficit)

surp

lusl(d

eficit)£‘O

OO

£‘OO

O£‘O

OO

£‘OO

O

Social

housin

glettings

(seenote

3a):

Housing

accomm

odation29,714

(19,708)10,006

8,261

Garages

andcom

mercial

leffings307

(366)(59)

71

30,021(20,074)

9,9478,332

Other

Social

Housing

Activities:

Com

munity

Alarm

s69

(555)(486)

(357)

Luncheon

Clubs

-(2)

(2)(2)

Waiting

Lists

328(328)

--

Sale

ofS

haredO

wnership

Properties

2,038(1,150)

888700

2,435(2,035)

400341

Activities

oth

erth

anso

cialhousin

gactivities:

Com

munity

Centres

15(145)

(130)(60)

Sundry

Income

andE

xpenditure186

(866)(680)

(27)

201(1,011)

(810)(87)

Su

rplu

sforth

eYear

32,657(23,120)

9,5378,586

HC

AR

egisteredN

umber

LH4264

Wyre

Forest

Com

munity

Housing

(aM

ember

ofT

heC

omm

unityH

ousingG

roup),an

exempt

charityand

registeredsociety

underthe

Co-operative

andcom

munity

Benefit

Societies

Act

2014R

egisteredin

England

andW

alesN

o.32351

R42

aWF

CH

Notes

tothe

Financial

Statem

ents(C

ontinued)

Wyre

Forest

Com

munity

Ho

usin

gL

imited

Annual

Rep

ort

and

Statu

tory

Fin

ancial

Statem

ents

for

the

Year

En

ded

31

stM

arch2016

3a.P

articulars

of

turn

ov

eran

do

peratin

gex

pen

ditu

refrom

social

housin

glettin

gs

20162015

.G

arages

and

Housing

Total

Total

Com

mercial

£‘OO

O£‘O

OO

£‘OO

O£‘O

OO

Income

fromlettings:

Rents

receivablenet

ofidentifiable

servicecharges

25,980307

26,28725,385

Charges

forS

upportS

ervices1,430

-1,430

1,542

Service

chargesreceivable:

Eligible

forH

ousingB

enefit2,304

-2,304

2,163

Turnover

fromso

cialhousin

glettings

29,714307

30,02129,090

Operating

expen

ditu

re

Managem

ent(3,716)

(232)(3,948)

(4,057)

Services

(1,749)(14)

(1,763)(1,697)

Routine

maintenance

(3,436)(90)

(3,526)(2,409)

Planned

maintenance

(1333)

(4)(1,337)

(6,421)

Major

repairsexpenditure

(3,389)-

(3,389)(235)

Bad

debts(188)

(1)(189)

(165)

Depreciation

ofhousing

properties(2,773)

(25)(2,798)

(2,637)

Impairm

entof

housingproperties

--

--

Care

andsupport

costs(3,124)

-(3,724)

(3,137)

Operating

expen

ditu

reon

social

housin

gleftings

(19,708)(366)

(20,074)(20,758)

Operating

surp

lusl(d

eficit)on

social

ho

usin

g10,006

(59)9,947

8,332

Void

loss*386

-386

428

“beingrental

income

lostas

aresult

ofproperty

notbeing

let,although

isavailable

forletting

HC

AR

egisteredN

umber

LH4264

Wyre

Forest

Com

munity

Housing

(aM

ember

ofT

heC

omm

unityH

ousingG

roup),an

exempt

charityand

registeredsociety

underthe

Co-operative

andcom

munity

Benefit

Societies

Act

2014R

egisteredin

England

andW

alesN

o.32351

R43




4. Directors’ and Board Members’ Emoluments

The Directors of the Company are defined as the Group Chief Executive and any other person who isa member of the Senior Management Team, or its equivalent, of the Registered Provider.

Details of remuneration are as follows: -

2016 2015£ £

Aggregate Emoluments paid to directors. 707 320 719 284

(Including pension contributions and benefits in kind)

Emoluments paid to the highest paid director (the Group Chief145 752 131 519

Executive) excluding pension contributions

Aggregate Emoluments paid to Board Members 147 234 111 944(Including pension contributions and benefits in kind)

The Group Chief Executive is an ordinary member of the Local Government Pension Scheme (seeNote 24). He is not subject to any enhanced or special terms nor does the Company make anycontribution to an individual pension on his behalf.

Benefits In Kind

2016 2015£ £

Total expenses reimbursed to the Board Members 8543 9,070

Number of Directors accruing benefits under the defined 5benefit scheme

Individual Board Member Emoluments and Expenses

2016 2015

Board Member Emoluments Expenses Emoluments Expenses

Mr. R. Marshall - - £3,836 £281

Mr. K. Schofield - £135 £3,836 £1,125

Mrs. J. Evans - £195 £14,116 £1,437

Mr. D. Morgan - £16 £7,672 £857

Mrs. M. Worgan - - £1,227 £171

Mr. G. Carter £4,347 £1,244 £7,672 £1,909

Mr. R. Wilson £5,473 £789 £7,672 £675

Mr. D. Fradgley - - £3,836 -

Mr. G. Yarranton £1,125 £38 £1,227 £38

HCA Registered Number LH 4264Wyre Forest Community Housing (a Member of The Community Housing Group), an exempt charity andregistered society under the Co-operative and community Benefit Societies Act 2014Registered in Engiand and Waies No. 32351 R

44




4. Directors’ and Board Members’ Emoluments —

Individual Board Member Emoluments and Exoenses (continued)

2016 2015


Mrs. J. Greener £1,125 £1,227

Mr. E. Osborn £5,310 - £1,227 -

Mr. G. Raymer £2,250 £289 £1,227 £203

Mrs. L. Jones £2,250 £100

Mrs. N Gale - £306

Mt. D. Godwin £1,125 - £1,227 -

Mt. S. Clee £2,250 £43 £1,227 £53

Mr.J.KelIy - £5,114

Mr. F. Mumford £2,250 £1,227

Mr. N. Chambers £8,695 £399 £5,753

Mr. N. Rowe £2,250 £1,227 -

Mr. A. Foster £2,250 £86 £1,227 -

Mrs. F. Oborski - - £1,227 -

Mr. A. Black £2,250 £77 £1,227 £80

Mrs. E. Heaven £8,695 £177 £1,227 £282

Mr. P. Smith £2,250 £518 £1,227 £324

Mr. I. Hughes £2,250 -

Mr. J. Coyne £2,250 - £1,227 £136

Mr. P. Archer £8,695 £310 £7,672

Mr. R. Collins £8,695 £94 £7,314 -

Mr. P. Roberts - - £2608 -

Mr. S. Walker £1,125 £15 £1,227 £216

Mr. D. Chaplin £563 - - -

Ms. G. Barnard - - £1,406 -

Mr. R. Haynes £2,250 -

Mr. A. Brace £2,250 £357 £1,125 £220

Mrs. R. Carter £2,250 £110

Mr. D. Chantler £8,695 £629 £5,753 £231

Mr. J. Mace £2,250 £288 £1,022


45

aWFCH


Wyre Forest Community Rousing Limited


4 Directors’ and Board Members’ Emoluments —

Individual Board Member Emoluments and Expenses (continued)

2016 2015


Mr. R. Davis £2,250 - - -

Mr. C. Rogers £2,250 - £716 -

Mc. M. Jukes £8,695 - £4,475 £173

Ms. K. Law-Fox £8,695 £1,237 £204 -

Mr. A. Ballard £15,140 £1,212 £204 £549

Mrs. V. Browning £937 - - -

Mr. M. Davies £1,688 - - -

Mr. T. Muir £1,500 - - -

Mrs. D. Smith £1,688 £52 - -

Mr.A.Fry £4,910 £243 - -

Ms. J. Smith £1,500 - - -

Mr. S. Pratley £1,688 - - -

Mrs. H. Dyke £1,125 - - -

Total £147,234 £8,543 £111,944 £9,070

RCA Registered Number LH 4264Wyre Forest Community Housing (a Member of The Community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No. 32351 R

46

aWFCH


Higher Paid Employees


Annual Report and Statutory FinancialStatements for the Year Ended 31St March 2016

At the year end the number of employees whose remuneration payable, including pensioncontributions and non-cash benefits, exceeded £60,000 was:

The 2014/15 figures includes a Worcestershire County Council pension payment to the Group ChiefExecutive.

5. Employee Information

2016 2015

Number Number

453

2016£‘OOO

2015£‘OOO

The average number of employees expressed as full timeequivalents (calculated based on a standard working week of40 hours)

Office and Scheme Based Staff

Staff costs for the above persons were:

Wages and Salaries

Social Security Costs

Other Pension Costs

12,951

956

2 246

16,153

442

12,626

951

2,084

15,661

HCA Registered Number LH 4264Wyre Forest Community Housing (a Member of The community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No. 32351 R

2016 2015

£190,000 -£200,000 - 1

£180,000 -£190,000 -

£150,001 -160,000 2 -

£140,001 -150,000 2 1

£130,001 -E140,000 1 1

£120,001 -E130,000 - 2

£90,001 -100,000 1

£80,001 -p90,000 7 7

£70,001 -£80,000 1 3

£60,001 -70,000 12 8

2016 2015

Number of Employees in Pension Schemes:

Worcester County Council Local Government Scheme 353 360

Social Housing Defined Contribution Scheme 36 39

Social Housing Pension Scheme 10 10

399 409

47

WFCH




6. Operating surplus/fdeficit)

The operating surplus/fdeficit) is stated after charging/crediting:

7.

8.

Capitalised interest was applied at the average rate being paid by the Company at the time theexpenditure was incurred. This varied between 4.85% and 4.86% (2015: 4.86% to 4.93%).


20162015

(restated)£‘OOO £‘OOO

Depreciation of housing properties 2,798 2,637

Depreciation of other fixed assets 486 453

Auditors remuneration (excluding VAT):

In their capacity as auditors 22 22

Other non-audit services 33 -

Operating leases - equipment 77 157

Interest Receivable and Other Income

,2016 2015

£‘OOO £‘OOO

Interest receivable from bank deposits and investments 130 147

Interest Payable and Similar Charges

2016 2015(restated)

£‘OOO £‘OOO

Loans and bank overdrafts 5,941 5,650

Net interest expense on post-employment benefits 753 698

6,694 6,348

Interest payable capitalised on housing properties under (130) (110)construction

6,564 6,238

48




9. Taxation

There is no tax charge or provision for deferred tax for the year as the Company operates undercharitable status and its activities are exempt from taxation under Section 505 of the Income andCorporate Taxes Act 1988 (2015: Nil).

Deferred tax

The Company has a deferred tax asset of £3.3m (2015: £3.3m) in respect of the pension fund deficit.The deferred tax asset has not been provided for as the Company does not anticipate sufficienttaxable surpluses in the foreseeable future to utilise the asset. From 1st April 2014 the Companyattained charitable status and as such is not subject to corporate tax.


49




10. Tangible fixed assets — housing properties

Housing Shared Housing TotalProperties held Ownership Properties Under

for letting Properties Construction£‘OOO £‘OOO £‘OOO £‘OOO

Cost

At lstApril2Ol5 (Restated) 177,542 11,055 6,083 194680

Additions 4,200 456 11,747 16,403

Transferred on Completion 8,688 953 (9,641) -

Disposals (900) (1,504) - (2404)

Shared Ownership transferred- (1 316) - (1 316)to Current assets

At 31st March 2016 189,530 9,644 8,189 207,363

Accumulated Depreciation

At 1st April 2015 (Restated) (17,663) (465) - (18,128)

Eliminated on Disposals 263 78 - 341

Charge for the Year (2,707) (91) - (2,798)

At 31st March 2016 (20,107) (478) - (20,585)

Net Book Value

At 31st March 2016 169,423 9,166 8,189 186,778

At3lst March 2015 (restated) 159,879 10,590 6,083 176,552

11. Net book value of housing properties

2016 2015

£‘OOO £‘OOO

Housing properties Net Book Value comprises:

Freehold 186,765 176,539

Long Leasehold 13 13

186,778 176,552


50


Annual Report and Statutory FinancialWFCH Statements for the Year Ended 31st Match 2016


12. Housing Accommodation in Management

2016 2015

Number Number

Owned:

General Housing 3,519 3,468

Sheltered Housing 2,128 2,112

Shared Equity 233 217

Housing in Development 120 197

Garages 746 746

Managed for Others:

General Housing 96 76

6,642 6,816

13. Investment properties

At 1 April 2015 (Restated) 1,584

Additions -

Revaluations 15

Disposals -

At31 March2016 1,599

Investment properties consist of properties held for market rent and commercial retail units.

Investment properties were valued as at 31 March 2016. The group’s investment properties havebeen valued by BNP Paribas Real Estate, professional external valuers. The full valuation ofproperties was undertaken in accordance with the RICS Valuation — Professional Standards, (‘TheRed Book”) of the Royal Institute of Chartered Surveyors as follows:

In valuing investment properties, the values have had regard to recent market transactions and takeninto account the investment attributes of the properties. For valuation of retail shops the valuationreflects a net initial yield of 11.28%, a nominal equivalent of 13.08% and a reversionary yield of14.13%.


51

Total

£‘OOO

Wyr

eF

ore

stC

om

mu

nit

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ousi

ng

Lim

ited

Annual

Rep

ort

and

Sta

tuto

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inan

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WF

CH

Sta

tem

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the

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31st

Mar

ch20

16

Note

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ts(c

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tinued

)

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ixed

Ass

ets

Off

ice

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mp

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rF

reeh

old

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orP

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ork

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ervic

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urn

iture

and

Har

dw

are

and

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TA

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ehic

les

Equip

men

tS

oft

war

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achin

ery

Pro

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ssA

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OO

£‘O

OO

£‘O

OO

£‘O

OO

£‘O

OO

£‘O

OO

£‘O

OO

£‘O

OO

Cost

At

1St

Apr

il20

155,

976

4132

93,

482

4779

482

411

,493

Tra

nsf

ers

794

--

-

-(7

94)

--

Add

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ns1,

250

--

293

-77

1,62

0

Dis

posa

ls-

-(5

)-

--

-(5

)

At

31st

Mar

ch20

168,

020

4132

43,

775

47-

901

13,1

08

Acc

um

ula

ted

Dep

reci

atio

n

At

1st

Apr

il20

15(1

,565

)(3

4)(2

25)

(2,8

50)

(12)

-(8

20)

(5,5

06)

Char

ge

for

the

yea

r(2

35)

(7)

(28)

(209

)(3

)-

(4)

(466

)

At

31st

Mar

ch20

16(1

,800

)(4

1)(2

53)

(3,0

59)

(15)

-(8

24)

(5,9

92)

Net

Bo

ok

Val

ue

At3

lstM

arc

h2O

l66,

220

-71

716

32-

777,

116

At3

lstM

arc

h2O

l54,

411

710

463

235

794

45,

987

HC

AR

egis

tere

dN

umbe

rLH

4264

Wyr

eF

ores

tC

omm

unit

yH

ousi

ng(a

Mem

ber

ofT

heC

omm

unit

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roup

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arit

yan

dre

gist

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soci

ety

unde

rth

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o-op

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ive

and

Com

mun

ity

Ben

efit

Soc

ieti

esA

ct20

14R

egis

tere

din

Eng

land

and

Wal

esN

o.32

351

R52

aWFCH


15. Debtors



20162015

(restated)

£‘OOO £‘OOO

Rental Debtors 270 332

Less Provision for Bad Debts (51) (69)

219 263

Trade Debtors 291 352

Less Provision for Bad Debts (20) -

271 352

Amounts owed by Group Undertakings 3387 4,141

Prepayments and accrued income 318 1,348

Other Debtors 140 83

Staff Loans 30 61

4,365 6,248

Shared Ownership Properties held for sale

2016 2015

£‘OOO £‘OOO

Shared Ownership Properties for Sale 1,316 979

HCA Registered Number LH 4264Wyte Forest Community Housing (a Member of The Community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No. 32351 R

16.

53




17. Creditors: Amounts falling due within one year

2016 2015(restated)

£‘OOO £‘OOO

Trade Creditors 61 20

Rent in Advance 208 250

Amounts owed to Group undertakings 2,630 2,429

Other Creditors 419 556

Taxation and Social Security 274 310

Disposals Proceed Fund 131 152

Accruals and Deferred Income 1,026 4,570

4,749 8,287

Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repaymentand are repayable on demand.

Disposal Proceeds Fund

2016 2015

£‘OOO £‘OOO

Opening balance at 1st April 2015 283 152

Inputs to DPF (source of funds):- Funds recycled 101 131

Uselallocation of funds:

Repayment of funds to the HCA - -

Closing balance at 31st March 2016 384 283

Amounts 3 years old or older where repayment may be152required -


54


Recycled Capital Grant Fund



The loan from Barclays Bank plc is secured by a fixed and floating charge on the Company’s housingproperties. The loan is repayable as follows at varying rates of interest between 2.16% and 6.23%(2015: 2.13% and 6.23%)


aWFCH

18.

2016 2015

£‘OOO £‘OOO

Opening balance at 1st April - -

Inputs to DPF (source of funds):

- Funds recycled 149 -

Repayment of funds to the HCA - -

Closing balance at 31st March 149 -

Amounts 3 years old or older where repayment may be -

req u i red

Creditors: Amounts falling due after more than one year

20162015

(Restated)

£‘OOO £‘OOO

Loans repayable between two and five years 25,01 1 22,031

Loans repayable after more than five years not by instalments 119,577 116,928

Grants 27,837 25,811

Disposal Proceeds Fund 253 131

Recycled Capital Grant Fund 149 -

Amounts owed to group undertakings 352

173,179 165,356

55




19. Financial assets and liabilities

Categories of financial assets and financial liabilities

212015

0 6 (restated)

£‘OOO £‘OOO

Financial assets that are debt instruments measured at amortisedcost:

- Rentaldebtors 219 263- Trade debtors 271 352- Amounts owed by group undertakings 3,387 4,141- Other debtors 140 83- Staff loans 30 61

Total 4,047 4,900

Financial liabilities measured at amortised cost:- Bank loans 144,588 138,959- Trade creditors 61 20- Rents received in advance 208 250- Amounts owed to group undertakings 2,630 2,429- Other creditors 419 556- Disposal Proceeds Fund 131 152

Total 148,037 142,366

Financial liabilities excluding trade creditors — interest rate risk profile

The group’s financial liabilities are sterling denominated. The interest rate profile of the Group’sfinancial liabilities at 31st March was:

12015

20 6(restated)

£‘OOO £‘OOO

Fixed rate 116,577 71,163

Variable rate 28,011 67,796

Total 144,588 138,959

The fixed rate financial liabilities have a weighted average interest rate of 5.04% (2015: 6.06%) andthe weighted average period for which it is fixed is 22 years (2015: 28 years).

The debt maturity profile is shown in note 18.

HCA Registered Number LH 4264Wyre Forest Community Housing (a Member of The community Housing Group). an exempt charity andregistered society under the co-operative and Community Benefit Societies Act 2014Registered in England and Wales No. 32351 R

56

aWFCH


19. Financial assets and liabilities

Borrowing facilities



The group has undrawn committed borrowing facilities. The facilities available at 31st March inrespect of which all conditions precedent had been met were as follows:

2016 2015£‘OOO £‘OOO

Expiring in more than two years 20,500 26,500

Total 20,500 26,500

20. Provisions for liabilities — other provisions

2016 2015

£‘OOO £‘OOO

As at 1st April 327 341

Unwinding of the discount factor 6 10

Deficit contribution made (40) (38)

Remeasurements — impact of any change in assumptions (2) 14

Remeasurements — amendments to the contribution schedule 114 -

As at 31st March 405 327

21. Reserves

2016

£‘OOO £‘OOORevenue Reserve Pension Reserve

As at 1st April 2015 (Restated) 21,816 (23,837)

Surplus/(deficit) for year 3,527 -

Transfer from Pension Reserve 1,227 (1,227)

Adjustment to housing properties (766) -

Actuarial Gain/(loss) on Pension Scheme - 1,806

As at 31st March 2016 25,804 (23,258)

HCA Registered Number LH 4264

Wyre Forest Community Housing (a Member of The community Housing Group), an exempt charity andregistered society under the co-operative and Community Benefit Societies Act 2014Registered in England and Wales No. 32351 R

57




22. Called Up Share Capital

The Company has no called up share capital, as it is a Company limited by guarantee. During thefinancial year there were 7 (2015: 7) Members who had guaranteed £1 each. The Company doesnot pay a dividend to Members. Each Member has one vote.

23. Capital Commitments

2016 2015

£‘OOO £‘OOO

Capital Expenditure authorised by the Board of Management 395 741 382 886as detailed in the Business Plan but not yet contracted for

Capital Expenditure that has been authorised by the Board of13 713 1 1 213Management and contracted for

All capital expenditure is financed through bank loans which the Company has arranged throughBarclays Bank Plc.

24. Pension obligations

Social Housing Pension Scheme (SHPS)WFCH participates in SHPS (the Scheme). The Scheme is funded and is contracted out of the StatePension Schemes.

It is not possible in the normal course of events to identify on a consistent and reasonable basis theshare of underlying assets and liabilities belonging to individual participating employers. This isbecause the Scheme is a multi-employer scheme where the Scheme assets are co-mingled forinvestment purposes, and benefits are paid from total Scheme assets. The amount recognised asan expense for the Group for this scheme was £191,000 (2015: £103,000).

WFCH participates in the Social Housing Defined Contribution Pension Scheme. The total cost forthe Company in the financial year in respect of the Scheme was £22,018 (2015: £25,541).

The Association has agreed to make additional deficit payments to SHPS at the rate of £54,841 peryear for 10 years. Using the discount rate based on an AA corporate rate bond for the same period aliability with a net present value of £405k is recognised within provisions for this contractualobligation.

2016 2015

£‘OOOs £‘OOOs

AsatlstApril 327 341

Unwinding of the discount factor 6 10

Deficit contribution made (40) (38)

Remeasurements — impact of any change in assumptions (2) 14

Remeasurements — amendments to the contribution schedule 1 14 -

As at3lst March 405 327

The discount rate applied was 2.06% (2015: 1.92%) which, when used to discount the futurerecovery plan contributions due, would give the same results as using a full AA corporate bond yieldcurve to discount the same recovery plan contributions.


58

aWFCH


24. Pension obligations (continued)



Worcestershire County Council Local Government Pension SchemeThe Company participates in the Worcestershire County Council Local Government Pension Scheme.It is a defined benefits final salary scheme.

The most recent formal actuarial valuation was completed as at 31 March 2013 and rolled forward,allowing for the different financial assumptions required under FRS 102, to 31 March 2016 by aqualified independent actuary.

The contributions payable by the Company during the financial year were equal to 21.4% (2015:22.5%) of total pensionable salaries for all employees. Member contributions were between 5.5% and12.5% (2015: 5.5% and 12.5%) depending on pensionable pay. The pensions charge recorded by theCompany during the financial year was equal to the contributions payable, taking into account benefitchanges subsequent to the valuation and the spreading of the deficit over future service lives of theemployees.

The valuation revealed a shortfall of assets compared with the value of liabilities of £23.3 million(2015: £23.8 million). The employer’s future service contribution rate, after allowing for changes inbenefits, will be 14.5% of pensionable salaries.

The main financial assumptions applied were:

2016 2015

% %

Rateof inflation 2.0% 2.0%

Salary scale increases per annum 3.5% 3.5%

Discount rate 3.6% 3.3%

Pension increases per annum 2.0% 2.0%

HCA Registered Number LH 4264Wyre Forest Community Housing (a Member of The Community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No, 32351R

The mortality assumptions used were as follows:

Longevity at age 65 for current pensioners

- Men

- Women

Longevity at age 65 for future pensioners

-Men

- Women

23.4

25.8

23.5

25.9

25.8

28.2

25.6

28.1

59

aWFCH


24. Pension obligations (continued)

Scheme portfolio mix



Analysis of amount charqed to operatinq surDius/(deficit)

2016

£‘OOO

The plan assets do not include any of the Company’s financial instruments nor is any propertyoccupied by the Company.


2015

£‘OOO

2016 2015£000 % £000 %

Equities 37,208 84.4% 40,831 92.6%

Other Bonds 2,733 6.2% 2,690 6.1%

Cash/Liquidity 485 1.1% 573 1.3%

Property 2,028 4.6% - -

Other 1,631 3.7% - -

Current service cost (2,258) (1,726)

Loss on settlements (178) (108)

Administration Expenses (35) (35)

Amounts charged to operating costs (2,471) (1,869)

Net interest (753) (698)

Amounts charged to other finance costs (753) (698)

Reconciliation of scheme assets and liabilities

Assets Liabilities Total

£‘OOO £‘OOO £‘OOO

At 1st April 2015 44,094 (67,931) (23,837)

Interest on Plan Assets 1,469 - 1,469

Re-measurement (Assets) (2,285) - (2,285)

Administration Expenses (35) - (35)

EmployerContribution 1,997 - 1,997

Member Contribution 586 (586) -

Benefits / Transfers Paid (1,741) 1,741 -

Current Service Costs - (2,258) (2,258)

Interest on Pension Liabilities - (2,222) (2,222)

Gain / (Loss) on Assumptions - 4,091 4,091

Curtailments - (178) (178)

At 31st March 2016 44,085 (67,343) (23,258)

60




25. Ultimate Parent Undertaking and Controlling Party

The immediate parent undertaking is The Community Housing Group Limited (TCHG).

The ultimate parent undertaking and controlling party is TCHG, a Company incorporated in England.

TCHG is the parent undertaking of the smallest and largest group of undertakings to consolidatethese financial statements at 31st March 2016. The consolidated financial statements of TCHG areavailable from 3 Foley Grove, Foley Business Park, Kidderminster, Worcs., DY11 7PT.

26. Operating lease commitments — equipment

The future minimum lease payments of leases are as set out below. Leases relate to office and otherequipment.

The Association’s future minimum operating lease payments are as follows:

2016 2015(restated)

£‘OOO £‘OOO

Not later than one year 84 3

Later than one year and not later than five years 102 77

Later than five years 16 -

27. Operating Lease commitments rents

The Group’s social housing properties are held by tenants under operating leases. and ate tenantedunder cancellable operating lease conditions. Typical tenant break clauses exist requiring a noticeperiod of 4 weeks.

Rents fluctuate in accordance with the Rent Standard and affected by the Welfare Reform and WorkAct 2016.

Shared Ownership properties may be purchased (staircased) by its leaseholder at any time at thepro-rata market rate. Ongoing lease payments will be adjusted according to the share of ownershipretained by the Group.

22. Financial assistance and other government grants receivable

£‘OOOAccumulated financial assistance and government

25 81 1grants at 1st April 2015

Received during the year 4,105

Recognised in the Statement of Comprehensive(2 079)Income

Retained as deferred income at 31 March 2016 27,837


61



29. Related Party TransactionsAll transactions during the year between WFCH and Wyre Forest District Council (WFDC) were madeon commercial terms and no Member used their position to their own advantage. Seven BoardMembers within the Group were also Councillors for WFDC in the year. WFCH received £356k fromWFDC to manage the waiting list Homelessness Service and Home Safety funding and paid £119k toWFDC relating to council tax, rates and benefit refunds.

WFCH received £943k from WCC including grant towards developments and payments for CareServices and paid paid £2,705k to WCC in relation to employee and employers pension contributions.WFCH paid £50 to Baxter College to sponsor a school award.£1 6k was paid by WFCH to Wyre Forest Citizens Advice Bureau to provide debt advice to tenants forwhom Board Members Jenny Greener and Gordon Yarranton are Directors.Louise Jones was Deputy Pro Vice Chancellor of Worcester University in the year. WFCH paid £13kto the University of Worcester for training services.

One Board Member was both a tenant and a Member of the Board of Management during 2015/1 6.The Member’s tenancy was on the Company’s normal tenancy terms and no Member could use theirposition to their advantage.

One Director had a loan with a balance of £2,366 (March 2015: £7,869) relating to a car purchase.The monthly repayments during the year totalled £5,739 and interest was charged of £236. Theremaining balance has been paid off via the monthly instalments in 20 15/16.

WFCH transacted with WFLC, VCT, OCS and WTC on a costs incurred basis for the followingamounts:-

Charges Made:

Service2015116 Overheads Level Interest

Agreements

WFLC - £2,000 £51,925

WTC £1,009,544 - £4,936

VCT £1,427,816 - -

OCS £7,092,306 £1,082,823 £66,435

Service2014/15 Overheads Level Interest

Agreements

WFLC - £2,000 £54,724

WTC £1,255,473 £66,989 £2,442

VCT £1,418,669 £90,811 -

OCS £6,881,226 £460,347 £75,719

Charges Incurred:

Service Level2015I16 Overheads Other Property

MaintenanceAgreements Construction

WTC £164,755 - - - -

VCT £530,238 £276,800 - - -

OCS £3,698 £1,387,390 - - £16,695,256

HCA Registered Number LH 4264Wyre Forest community Housing (a Member of The Community Housing Group), an exempt charity andregistered society under the Co-operative and Community Benefit Societies Act 2014Registered in England and Wales No. 32351R

62

,1




29. Related Party Transactions (continued)

Service Level2014115 Overheads Other

PropertyMaintenance

Agreements Construction

WTC £3,002 - - - -

VCT - £769,200 - - -

OCS £5,794 £38,136 £2,153,412 - £3,016,716

WFCH is a subsidiary of TCHG, as are WTC, VCT and OCS. WFLC is a subsidiary of WFCH.

30. Transition to FRSIO2

The Association transitioned to the Housing SORP 2014 and FRS1O2 from previously extant UKGAAP as at 1 April2014. The impact of the transition to FRS1O2 is as follows:

Note £‘OOO

Income and expenditure for the year ended 31 March 2015

WFCH 2,069

WFSH 1,542

Combined surplus for the year under former UK GAAP and3 611

Housing SORP

Recognition of net interest expense on pension liability b (752)

Adjustment to interest on financial liabilities c 408

Holiday pay accrual g (20)

Other adjustments (6)

Surplus for the year under FRSIO2 and Housing SORP 2014 3,241


63




30. Transition to FRSIO2 continued

Note £‘OOO

Reserves as at 31 March 2015

WFCH 3207

WFSH 21988

Combined Reserves under former UK GAAP and Housing25 195SORP

Grant amortisation a (2,497)

Liability for past service pension deficit b (327)

Loans at amortised cost C (1,554)

Recognition of investment properties d (38)

Adjustment to housing properties d 922

Write back depreciation on investment property d 139

Holiday pay accrual e (20)

Other adjustments (4)

Reserves under FRSIO2 and Housing SORP 2014 21,816

Note £‘OOO

Reserves as at 1 April 2014

WFCH 1,282

WFSH 20,446

Combined reserves under former UK GAAP and Housing21 728SORP

Grant amortisation a (2,497)

Liability for past service pension deficit b (327)

Loans at amortised cost C (1,962)

Recognition of investment properties d (38)

Adjustment to housing properties d 922

Write back depreciation on investment property d 139

Reserves under FRSIO2 and Housing SORP 2014 17,965


64




30. Transition to FRSIO2 continued

a) Housing grants

Previously capital grants received were netted off against the cost of housing properties. In line withthe Housing SORP 2014 and FRS1O2, grant received by the Group is now recognised as income inaccordance with the accrual model. Grants relating to revenue are recognised in income on asystematic basis over the period in which the related costs are recognised. Grants relating to assetsare recognised in income on a systematic basis over the expected useful life of the asset. Previouslyhousing grants were netted off the cost of housing properties prior to charging depreciation. Ontransition to FRS1Q2, housing grants have been re-classified as deferred income in creditors dueafter more than one year and accumulated depreciation and the accumulated amortised grant havebeen restated.

b) Pension liability

The Group participates in the Social Housing Pension Scheme (SHPS). In prior years, the cost of thescheme was accounted for on a defined contribution basis as it was not deemed possible at that timeto separately identify the underlying assets and liabilities of individual participating employers.

Under section 28 the group is now required to recognise the net present value of any contractualagreements to make additional payments for a past deficit. Using a discount rate of 2.06%, this hasresulted in a liability of £327k being recognised as a liability in the opening reserves.

Under previous UK GAAP the Group recognised an expected return on defined benefit plan assets inthe profit and loss account. Under FRS 102 a net interest expense, based on the net defined benefitliability, is recognised in the profit and loss account. There has been no change in the defined benefitliability at either 1st April 2014 or 31st March 2015.

The effect of the change has been to reduce the credit to the profit and loss account in the year to 31March 2015 by £752k and increase the credit in other comprehensive income by an equivalentamount.

c) Financial instruments

Under FRS1O2, financial instruments with a fixed principal repayment and a fixed rate of return aredisclosed at amortised cost using the market rate of similar debt instruments (the effective interest ratemethod).

d) Investment property and adjustment to housing properties

Properties previously held for market rent and commercial rent were previously held in housingproperties and other tangible fixed assets respectively. These have been reclassified as investmentproperties, since they predominantly have the characteristics of market rather than social rentedproperties. For market rental properties, this includes being let on short assured tenancies and arequirement for prospective tenants to be in employment when assessing tenancy applications. Theseproperties are therefore not depreciated but subject to annual revaluation with any gain or loss takenthrough income and expenditure in the Statement of Comprehensive Income. This increases the valueof investment properties and reduces the amount of depreciation charged to operating costs.

The depreciation previously written off these assets prior to them being treated as investment propertyhas been written back to reserves.

In assessing the housing property assets for prior periods it was identified that a correction to the netbook value was requited which does not relate to the FRS 102 adjustments.


65


Annual Report and Statutory FinancialWFCH Statements for the Year Ended 31st Match 2016


e) Holiday pay accrual

In order to fully comply with the requirements of the Housing SORP 2014, a review was undertaken toidentify any potential holiday entitlement liability at the year-end. An adjustment is included inoperating costs and creditors due within one year.

31. Group reconstruction

From 1st April 2015, the two charitable housing arms of The Community Housing Group, Wyre ForestSheltered Housing and Wyre Forest Community Housing were combined into one stock owningCompany Wyre Forest Community Housing Limited (WFCH). This has been accounted for as agroup reconstruction and the figures disclosed in these accounts are the amalgamated results of thetwo entities. The separate results of each entity in 2014/15, prior to FRS1O2 transitional adjustmentsis disclosed in the note above.

32. Post Year End Events

Since the completion of the 201 5/16 year end the UK Government has conducted an EU referendum,on 23 June 2016, the result of which was to exit the European Union. The Board of Managementhas conducted early sensitivity testing to ascertain the possible impact on future business andfinancial results from the Brexit decision and further assessments will be conducted to ensure bothWFCH and the Group continues to steer positively through changing times.


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