annual report and statutory financial statements ti … · strengthen our business plan going...

~~._.

ANNUAL REPORT AND STATUTORYFINANCIAL STATEMENTS

ti -:~uxo ~,`\ = - ~

U •~r,

~ I / 1'

~~` • BARCIAYS .... __

6ARClAYS ~;s w~. + '. [v5~~

....n.~ ~.. ,.. ~ ~.. e~., r, e ,. a+...~ .,..

~~

N r rvere~i+e ~ •w a..~ u u,7.R s-35

~ ~~ ~ . ~ .~■ , !~

The Community Housing Group Limited Annual Report and Financial Statementsfor the year ended 315 March 2019

CONTENTS

Page

01 Statement from the Chair of the Board 2

02 The Group Board, Executive Officers and Principal Advisors 3

03 Strategic Report 4

• About The Community Housing Group Limited

• Summary of Financial Performance

• Group Structure and Corporate Governance

• Regulator of Social Housing (RSH) Regulatory Standards

• Value for Money

• Risk and Treasury Management

• Internal Control Assurance

• Going Concern

• Statement of Board's Responsibility

• Community Involvement and Corporate Social Responsibility

• Post Year End Event

04 Independent Auditors Report to the Members of The Community Housing Group 13Limited

05 Statement of Comprehensive Income 16

06 Statement of Change in Reserves 17

07 Statement of Financial Position 18

08 Group Statement of Cashflows 19

09 Notes to the Financial Statements 20

1

The Community Housing Group LimitedFinancial Statements 2018-19

01 I Statement from the Chair of the Board

"A year in which our three-year efficiency programme got underway which is allowing us to

strengthen our business plan going forward".

am delighted to present the Group's financial statements for 2018-19, a year in which we have made

enormous strides in both business efficiency and commercial progression.

It is particularly pleasing to see our Statement of Comprehensive Income, on page 16, report a £1.75m

improvement in our operating surplus from the previous year. Our operating surplus this year of

£11.22m has been achieved in no small way by an 8% reduction (£1.40m) in our operating costs for

the year.

The Group Board laid out the stepping stones for improved efficiency in the previous year and it is

hugely rewarding to see this first year, of the three-year efficiency plan offer such a positive outturn. As

a result, we are looking at improved financial performance numbers going forward, within our business

plan, with strengthening to the Group's EBITDA (MRI) position, per unit management costs, operating

margins and gearing ratio.

However, whilst we move positively forward with our improving business plan, we recognise that we

must do so with our focus very much on our current strategic risks.

Over the past six months, the Group Board have placed considerable attention to key issues such as

mitigating our risk exposure to growing pension deficit payments, the potential impact of a no deal Brexit

and, following the fire at Grenfell Tower in 2017, ensuring the safety of our tenants at all of our higher

rise properties across the region.

The Group Board have made key decisions on all three of these areas of business in recent months,

having taken independent advice wherever necessary. With regard to pension schemes and safety we

have sought to deal with both, for staff in the former and for tenants in the latter, as sensitively and

pragmatically as possible.

In looking forward, we have taken the opportunity to stress test our business plan against the possibility

of additional costs generated from all three of these risks and, where necessary, have made appropriate

allowances in future years of the business plan to ensure the Group is fully mitigated.

would like to thank my fellow Board Members for their contribution and commitment to further

strengthening our Group this year. We have faced all challenges with thoughtfulness and consideration

and, as a result, we have the Group in a very positive position.

...........................................

Andy BallardGroup Chair

2~

The Community Housing Group Limited

Financial Statements 2018-19

02 ~ The Group Board, Executive Officers and Principal Advisors

The Board

Andy Ballard

Andrew Fry

Elizabeth Heaven

Martin Jukes

Kaye Law-Fox

Colin Small

Andrew Foster

Tim Leslie

Jane Preece

Julie Robinson

Tony Tench

Executive Officers

Group Chair

Chair of Remuneration and Nominations Committee

Chair of Vestia Community Trust

Chair of Worcestershire Telecare Limited

Chair of Oakleaf Commercial Services Limited

Chair of Audit and Assurance Committee

Ray Brookes Group Chief Executive

David Knowlton Deputy Group Chief Executive /Group Secretary

Stephen Ball Director of Financial Services

Marina Banner Executive Director — Vestia and Corporate Services

Ian Hancock Managing Director— Oakleaf Commercial Services

Group Secretary and Registered Office

David Knowlton 3 Foley Grove, Foley Business Park, Kidderminster, Worcestershire DY11 7PT

Principal Advisors

External Auditor KPMG LLPOne Snowhill,Snow Hill Queensway,Birmingham B4 6GH

Banker Barclays Bank PLCOne Snowhill,Snow Hill Queensway,Birmingham B4 6GN

Solicitor Anthony Collins Solicitors LLP134 Edmund Street,Birmingham B3 2ES

Registrations

Cooperative and Community Benefit Societies Act 2014

Regulator of Social Housing:

VAT

Other members of the group:

• Oakleaf Commercial Services Limited (OCS)

• Vestia Community Trust (VCT)

• Worcestershire Telecare Limited (WTC)

• Wyre Forest Land Company Limited (WFLC)


Registered Number 32351 R

LH 4264

VAT Number 860 2029 54

3

03 ~ Strategic Report

About The Community Housing Group

The Community Housing Group provides landlord services for c.6000 properties in Worcestershire and

also provides a range of tenancy, care and support services to tenants and the wider community. The

group has a relatively tight geographic focus with a group structure established in 2005 comprising:

• The Community Housing Group (TCHG): the asset holding parent and registered provider,

providing corporate services for the group and is responsible for the overseeing and monitoring of

the work and performance of all the subsidiaries and committees. It manages the properties as well

as providing a range of care and support services. All the debt, staff and housing property assets

in the group sit within the parent.

TCHG is a diverse organisation working in a variety of ways to improve the lives of people in the

Wyre Forest and surrounding areas. We do this by responding to housing need across the district

and, by working with statutory agencies, anticipating future housing need.

• Oakleaf Commercial Services (OCS): principal provider of a range of building maintenance,

development, joinery, vehicle maintenance and grounds maintenance services for the group as well

as other customers across the West Midlands and surrounding counties.

• Worcestershire Telecare (WTC): a partnership involving Fortis Living and Rooftop Housing Group

which provides telecare and complementary care and support services across the region.

• Vestia Community Trust (VCT): provider of a range of community and family support services

and training.

• Wyre Forest Land Company (WFLC): anon-trading, property development company.

Summary of Financial Performance

The group's Statement of Comprehensive Income (page 16) shows a Group operating surplus of

£11.2m (2018: £9.5m). After tax and financing costs the surplus for the financial year was £3.9m (2018:

£2.1m). The actuarial adjustment required from the changes to the treatment of the Social Housing

Pension Scheme (SHPS) and the anticipated impact from the McCloud judgement (see post year end

event on page 12) has contributed to the reduction in reserves from £12.9m to £12.1 m at year end.

The Group's financial position (page 18) shows a pension liability up by £7.1 m to £31.8m (2018:

£24.7m) and an increase in fixed assets to £219.6m (2018: £211.9m), an increase of 3.7%.

The continuing financial pressure being applied from the increasing pension scheme deficits have

resulted in the Group Board closing the two existing defined benefit (DB) schemes to new entrants from

April 2019, agreeing to enter into affordability negotiations with the pension providers later in 2019/20

and notifying existing staff that the closing of the current DB schemes will be actioned at the earliest

opportunity. These decisions have been taken to ease the financial burden on the Group's financial

position in the coming years.

It should also be noted that there continues to be accounting adjustments being made on the Group's

Statement of Comprehensive Income and Statement of Financial Position for accounting treatment

changes generated by, previously, FRS102 and, more recently, the Social Housing Pension Scheme

(SHPS). These adjustments are shown separately to the Group's financial performance which, in 2018-

19, shows a £1.7m improvement from the previous year.

The financial statements for the year ended 31S' March 2019 reflect the emerging best practice from

across the housing sector in respect of the implementation of FRS102, the change in treatment of the

SHPS pension scheme from that of a Defined Contribution scheme to a Defined Benefit scheme as a

result of the information now available, and the Accounting Direction 2019.

4The Community Housing Group LimitedFinancial Statements 2018-19


The Social Housing Pension Scheme (SHPS) is amulti-employer scheme. For financial years ending

on or before 28t'' February 2019, it has not been possible for the company to obtain sufficient information

to enable it to account for the SHPS Defined Benefit Scheme as a defined benefit scheme, therefore

the Group has accounted for the Scheme as a defined contribution scheme. For financial years ending

on or after 31St March 2019, it is possible to obtain sufficient information to enable the Group to account

for the Scheme as a defined benefit scheme. The accounting treatment of the Scheme is therefore not

consistent between the two financial years but is in line with the guidance issued in FRED 71: Draft

amendments to FRS 102, The Financial Reporting Standard applicable in the UK and Republic of

Ireland -Multi-employer defined benefit plan. The net present value of the deficit reduction contributions

have been de-recognised as at 1S' April 2018 and the scheme liabilities have been recognised as a

pension provision as at 1St April 2018. The net impact of the change in accounting policy for the Group

amounts to £1 m (Company: £1 m) and is accounted for within Other Comprehensive Income.

Group Structure and Corporate Governance

The Group Board utilises a number of committees and subsidiary boards to provide strategic support

services to the group and its subsidiaries. Each committee has specific roles and responsibilities.

The Group Board delegates responsibility for assurance to the Audit and Assurance Committee and

matters of remuneration and board nomination to the Remuneration and Nominations Committee. The

Group Board continues to hold ultimate governance responsibility.

Day to day management of the group is delegated to the executive team made up of the Group Chief

Executive and Executive Directors, and in respect of its subsidiary companies to the appropriate director

and senior executives.

The group has adopted the National Housing Federation's Code of Governance 2015 ("the Code"). In

accordance with the Code, the group is pleased to report full compliance with all aspects of the Code

at 31St March 2019 but has relaxed the rules on Board size in respect of group member Vestia

Community Trust from a minimum of 5 to 3 members to align with the size of the Trusts business.

RSH Regulatory Standards

In accordance with RSH requirements a comprehensive and robust annual self-assessment against the

Regulatory 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

In addition, the Group Board is able to confirm that it has taken all reasonable steps to comply with:

• Self-Assessment of Compliance with all relevant Law

• Compliance with Modern Slavery and Human Trafficking Statement 2018-19

• Self-Assessment Against the NHF Code of Governance

TCHG has substantial compliance assurance and further detail is available in the evidence-based

document called 'Meeting the Standards', available on our website via 'Our Published Documents'.

TCHG, along with all the companies within the group, is fully committed to supporting the work required

to meet the RSH Regulatory Standards and the group's work on Value for Money is detailed below and

on our website www.communityhg.com.

5~



Value for Money

During 2018-19 we have continued our Value for Money [VfM] journey. A Value for Money Strategy

[2018-2021] was launched which details Groups methodology and approach, along with detailed plans

for achieving its targets. This has resulted in an increased awareness and understanding across the

Group of our VfM targets and how the delivery of each team's business plans supports the strategy.

Group Board has closely monitored performance against the Regulators VFM Metrics alongside

continuing our participation and involvement with the Housemark Value for Money Sector Scorecard.

They have also reviewed the Governance and operating structure to ensure it optimises potential

benefits and is appropriate for meeting the aims and objectives of Group.

The Regulators VfM Metrics, Sector Scorecard VfM Metrics and the targets detailed within our ̀together

we can' business plan form our VfM reporting framework and our performance against targets and

sector is detailed in the charts below. We have included our performance results from 2016-17 and

2017-18 alongside our current performance. Where possible we have set out our performance against

our peers using the median data available within the 2018 Global Accounts and the Sector Scorecard

analysis report 2018 to benchmark our performance and to provide context to our targets and intended

direction of travel.

The target figures detailed below are embedded within our business plan and performance framework

and are actively monitored by Group Board on a monthly basis.

Key Financial VfM Metrics

Effectively and responsibly managing approximately 6000 stock transfer properties, whilst delivering a

broad range of services presents unique business challenges during a time of sector and national

uncertainty due to the potential impact of Brexit and the changing property safety and compliance

landscape. We continue to drive forward the home safety agenda and have responded positively and

proactively to the challenges faced by the sector in order to ensure we continue to provide the right

homes, in the right locations, that are decent, safe, secure and meet the diverse housing needs of our

communities.

During the past year the Group Board has maintained a strong focus on the performance monitoring of

the key VfM metrics [Headline cost per unit, EBITDA MRI, Gearing, Operating Margin]. This alongside

the continued achievement of our 'together we can' business plan targets have enabled Group to

strengthen performance in many VfM areas whilst continuing to identify and actively address areas of

underperformance.

The successful delivery of our business plan has resulted in the direction of travel of our headline cost

per unit reducing over time although the 2018-19 performance has been adversely affected by the

impact of additional pension deficit charges in the year. Our cost currently remains above the sector

median. As we enter year 2 of our 3-year efficiency plan we profile the reduction in costs to continue.

During the year we have continued to deliver an ambitious and expanded development programme that

will provide new homes that match the needs of our communities and we are on target to achieve the

provision of 334 units between 2018-2021.

The efficiencies and business improvements detailed within our business plan remain central to our

additional VfM objectives. We will continue to achieve our targets by maintaining a balance between

reducing costs, effectively utilising resources and increasing the outcomes for stakeholders.

With the introduction of the FRS102 pension legislation requirements in 2017-18 and the required

accounting treatment changes to the Social housing Pension Scheme in 2018-19, our reported EBITDA

MRI, Operating Margin and Gearing actual reported figures have reduced. In order to clearly show our

actual performance over time we have included additional restated figures for 2016-17 and 2017-18

that include the FRS102 adjustment.

6~




Regulator of Social Housing VfM Metrics -The Community Housing Group

2016-17 2017-18 2018-19 2018-19 2018 2018 2019-20 2020-21

Measure Actual Actual Target Actual Global Sector Target ProjectionAccounts ScorecardMedian Median 4

0

Reinvestment Percentage 7.80°/a 6.96% 8.08% 5.87% 6.0% 580° 9.32°/a 8.36%6.6 /o

New supply delivered ~ 97% 0.42% 1.42% 0.77% 1.2% 1.0% 0.84% 1.52%

social housin units

New supply delivered 0% 0% 0% 0% ° °non-social housin units

0 /0 0 /0 0.13 /a 0.18 /o

Gearing 74.59% 71.48% 70.44% 69.25% 42.9% 35.10/0 68.21% 66.31%42.9 /o

EBITDA MRI Interest (1) 115.70°/a 112.16% --- 112.36% 206% 2~3.61~°/u 150.72°/u 152.63%194.1 /o

Historical pension adjusted figure 135.27% 132.94% 743.21% --- --- 150.72% 152.63%for comparison (2)

Headline social housing £3919 £3551 --- £3592 £3397 £3450 £3357 £3205

cost er unit 1 3 (£3546)

Historical pension adjusted figure __ £3451 £3501 £3359 --- --- £3357 £3205for comparison (2)

Operating Margin (1) 26.40% 23.40% --- 25.42% 28.9% 26 59~~0 29.28% 30.03%

Historical pension adjusted figure ___ 25.47% 27.74% 28.96% --- -- 29.28% 30.03%for com arison 2

Social Housing operating 31.40% 31.73% --- 34.12% 32.1% 30.43% 37.44% 40.29%

mar in 1 (28.7%)

Historical pension adjusted figure 34.53% 34.65% 38.9200 0 0

for comparison (2) """ --- --- 37.44 /0 40.29 /o

Return on Capital 5.05% 4.99% --- 5.03% 4.1% 3'72% 5.43% 5.48%

Em to ed ROCE 1 (3.8°/a)

Historical pension adjusted figure __ 5.41 % 5.25% 5.45% - --- 5.43% 5.48%for com arison 2

Actuals calculated as per definitions within the Regulator of Social Housing -Value for Money metrics Technical note guidance June 2019.

~ . The numbers have been adjusted for the FRS102 Pension Adjustment and the revised treatment for SHPS. Historical numbers have not been adjusted

for the revised treatment for SHPS.

2. Restated figures excluding FRS102 Pension Adjustment and the revised treatment for SHPS.

3. Numbers exclude cost of sales for support services.

4. Provisional 2019 data in brackets based on 41 res ondents at the date of roduction.

Sector Scorecard VfM Metrics

We are pleased that we have exceeded our business plan customer satisfaction target for 2018-19.

Performance against customer satisfaction targets are monitored monthly by Group Board and quarterly

by the Customer Voice and Assurance Group [CVAG] who use the information to set the customer

scrutiny timetable.

During the coming year we will continue to review the content and method of satisfaction surveying to

ensure we obtain the most accurate results and are able to use the data to inform business decisions.

We are profiled to complete the STAR customer satisfaction survey every 2 years therefore; it is

currently scheduled again for 2019. Prior to deciding on the best approach for Group we will review the

outcome of the HouseMark review of STAR when it is available.

In line with our business and social objectives we continue to invest within the communities we work

with. This have been through the traditional routes of maintaining quality housing provision, building

new housing, providing employment and apprenticeship opportunities and securing value through our

supply chain and procurement activities. Alongside this we have taken more innovative approaches

such as the provision of job coaches, IT training, financial and skills support for local voluntary sector

groups and charities serving our communities along with direct funding for community led groups. In

line with the 2019 revised definition we have collated some of this activity and translated it into a financial

`investment in communities' figure. This figure represents some of our activity and over the coming year

we will further formalise our methodology for measurement. Whilst we are supportive of this measure,

going forward we will provide it within the context of a definition of ̀ investment that is broader than

merely financial.

7



Sector scorecard Additional VfM Metrics

2016-17 2017-18 2018-19 2018-19 2018 sector 2019-20Measure Actual Actual Target Actual Mecan a Target

Customer satisfaction 86.6% 81.1% 90.0% 81.1% 87.5% 90.6%

Customer satisfaction [transactional] (1) 90.1% 88.4% 90.0% 92.6% NiA 90%

Investment in Communities (2) N/A N/A N/A £269,41 ~2~N/149) ~ ~2~

Occupancy 99.59% 99.31% 99.40% 99.77% 99'4% 99.50%(99.51 %)

Ratio of responsive repairs to planned maintenance o.a~% o.a3% o.as°io o.a3% 0.61% o.a5%s end

Rent collected 99.89°/a 99.30% 99.60% 101.02% 99 90~~° 98.5%(100.04%

Overheads as a % of adjusted turnover (3) s.as°io s.7a% s.sa°io 9.45% ~Z 03~~° ~o.so%(13.44%)

Actuals calculated as per definitions within the sector scorecard guide to the metrics for housing associations April 2019.

1. This is not a sector scorecard measure. We include and monitor our transactional satisfaction results as part of our suite of customer satisfaction

measures. This helps us understand the broader context of how satisfied our customers are.

2. The definition of this measure changed in April 2019. It was previously called '£s invested for every £generated from operations in communities'. As this

is a new measure, we are currently formalising our methodology for measuring this going forward. Once confirmed we will set a target for 2019-20.

3. May be subject to change following submission of final data to Housemark in September 2019.

4. Provisional 2019 data in brackets based on 41 res ondents at the date of rodudion.

`Together We Can 2018-21' Business Plan

The Group continues to deliver and achieve its business plan despite continued changes to the

regulatory and financial landscape and the prolonged uncertainty introduced by the Brexit negotiations.

Continued achievement of the business plan will support the long-term sustainability of the organisation

as an independent community-based housing provider whilst achieving defined VfM targets and

specifically efficiency savings of £5.3m over the 3 years of the plan.

The `Together We Can 2018-21' business plan identifies four new strategic priorities; Agile,

Accountable, Customer Orientated and Efficient, which provides the strategic framework for delivery.

Within the first year of the plan we progressed projects to help achieve our business plan objectives

including the housing management restructure and procurement of the Group Integrated Business

Solution [GIBS]. This project progressed into the design and build stage and the systems are on target

to go live during April 2020.

In creating the plan, we have set out clear strategic objectives and identified measurable targets for

underperforming VfM related metrics as detailed below:

'Together We Can' Business Plan Targets 2018-2021

2017-18 2018-19 2018-19 2019-20 2020-21Measure /Target Actual Target Actual Target Target

Efficiency savings of £5.3m £67k £1.15m £1.35m £1.80m £2.41 m

Maintain 90%customer satisfaction (1) 81.1% >90°/a 95.21% >90% >90°/o

80% Staff satisfaction (2) 75% 75% 75% 78% 80%

new units/conversions for rent/shared ownership (3) 41 65 59 79 74

Unit cost comparable to peers £3551 £3501 £3592 £3357 £3205

50% of customers transacting online 10% 12% 23% 25°/a 50%

22% increase in EBITDA MRI (4) 135.27% 132.94% 143.21% 150.72% 152.63%

25% increase in group operating margin (5) 25.47% 27.74% 28.96% 29.28°/a 30.03%

1. This customer satisfaction calculation is an internal measure that incorporates STAR, transactional and other types of customer

satisfaction feedback data.2. During 2018-19 we launched a dynamic new approach to gathering staff satisfaction data. This data will be reported for 2019-2

0.

3. The Development Programme targets have been reprofiled.

4. Our EBITDA MRI definition for our Business Plan target is based on the VfM definition excluding the FRS102 Pension Adjustments.

Baseline is a 2016-17 figure of 115.70%. 2018-19 performance represents a 23.78°/a increase.

5. Grou O eratin Mar in is rofiled to increase 13.8%. Social Housin O eratin Mar in is rofiled to increase b 28.3%.

8I



In addition to the above measures we also monitor and report on our banking covenant as set withinour loan agreements. This measure is monitored by the Group Board and reported to our funders.

2016-17 2017-18 2018-19 2018-19 2019-20 2020-21Measure Actual Actual Target Actuat Target Projection

Funders EBITDA MRI Covenant 128 3700 ~2s.~a% ~ao.00% 151.80% X63.00% 167.34%Calculation

Risk and Treasury Management

Our integrated risk management framework supports Group Board to effectively identify, manage andmitigate the strategic risks faced by Group. These risks are owned and monitored by the Group Boardwith all operational risks managed, on a day to day basis by the executive through a hierarchy ofmanagement. Group Board regularly review risk management performance and sets its risk appetitelevels in relation to the business plan.

Our principal strategic risks at year end were focussed on the continued financial viability andperformance of Group, ensuring our homes remain safe and complaint and our internal businesssystems support Group to work effectively and consistently to achieve the business plan.

Strategic risk performance is closely monitored by the Group Board via monthly dashboard updates.

Delivering the group's long-term plans while ensuring compliance with developments in governmentlegislation, regulatory reviews and changes to funding regime continues to challenge the organisationto be more efficient and effective in its use of limited resources and future service deliverability.

The group recognises that the diversification, growth and extended reach of its services is necessarybut presents management challenges. All companies within the group continue to pursue external grantfunding, commissions and contracts to extend the group's landlord activities within Wyre Forest andwider Worcestershire and ensure the long term sustainability of its economic and social inclusion work.The integrated risk management framework enables staff, at all responsibility levels to identify, manageand evidence mitigation of operational and strategic risks. The integrated framework allows real timemanagement and monitoring of risk and provides a consistent approach to risk management across theGroup. Officers and members ensure that all decision-making is carried out on a ̀ risk aware' basis,ensuring that all opportunities and threats that could impact on achievement of business objectives areevaluated across all activities and action is put in place to reduce threats to an acceptable level, priorto finalising the decision-making process.

This enables the organisation to control and mitigate any threats whilst maximising opportunities, henceprotecting its ability to continue to provide existing services, allowing for expansion of service provision;and ensuring long term viability of the group.

Treasury activities are controlled and monitored by the Director of Financial Services with the assistanceof external consultants as required and are carried out in accordance with policies approved by theGroup Board. The purpose of the treasury management function at TCHG is to ensure that adequatecost-effective funding is available at all times and that exposure to financial risk is minimised. The keyrisk managed by the treasury function is liquidity risk. Treasury management activity is subject to reviewby both internal and external auditors on a regular basis. The Group Board has upgraded its skills,knowledge and understanding of Treasury Management.

It is our policy to have adequate available facilities to cover our investment plans. This is achieved bythe use of detailed cashflow forecasts together with a programme of short-term cash investment anduse of revolving credit facilities.

Cashflow requirements are monitored through the group's ongoing forecasting process, covering short,medium and long term operational performance and the investment of available cash balances anddrawdown of required facilities is managed in-house.

It is our policy firstly to minimise counter-party risk and then to maximise return.

9~The Community Housing Group LimitedFinancial Statements 2018-19


Internal Control Assurance

Whilst the Group Board retains the overall responsibility for ensuring an adequate system of internalcontrol is in place the Audit and Assurance Committee conducts the necessary assurance andcompliance work, alongside Officers, to review effectiveness and provide assurance to the GroupBoard.

The system of internal control is designed to manage risk, to demonstrate commitment to economy,efficiency and effectiveness through value for money exercises, and to provide reasonable assurancethat key business objectives are achieved. It also provides reasonable assurance concerning thereliability of financial and operational controls and the safeguarding of assets against unauthorised useor disposal. This applies for ali partnership arrangements and subsidiaries within 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 Group Board has received reports to support the effectiveness of internal controls:-

• A monthly strategic risk management summary is presented to the Group Board on the dashboard.

• 50 internal audit areas were reviewed during 2018-19 with 9 substantial assurances, 7 adequate

assurance, 31 compliant/compliant subfect to outcomes and 3non-compliant. The 3non-compliant

areas were immediately resolved and 2 of these related to internal policy. Neither represented any

significant risk to the Group. Implementation of recommendations is actively monitored and reported

through Audit and Assurance Committee.

• The internal audit annual report for 2018-19 which confirmed that the group has in place an

appropriate framework for identifying, evaluating and managing the significant risks faced by the

group and that in respect of the areas of activity which were reviewed, and subject to the

weaknesses identified and reported in internal audit reports, the group has an adequate, effective

and reliable framework of internal control and effective risk management and governance

processes which provides reasonable assurance regarding the effective and efficient achievement

of the group's objectives.

• The internal audit report also stated that the auditors found no instances of actual or suspected

fraud during their audit work.

• Annual 'in camera' meeting with internal and external auditors.

• Completion of annual control risk self-assessment returns by senior management to support

Directors annual assurance statements regarding the effectiveness of internal controls within their

directorates.• Annual review of financial regulations and accounting requirements and a three year rolling review

of all policies, ensuring that all personnel are kept informed and trained.

• Self-assessment identifies the group meets the requirements on viability set out in the Governance

and Financial Viability Standard and has the capacity to mitigate its risk exposures effectively.

The Group Board is responsible for ensuring that arrangements are made to safeguard the assets ofthe group and for taking reasonable steps for the prevention and detection of fraud and otherirregularities. Maintenance of an accurate and functioning Assets &liabilities Register has supportedthis work.

The group complies with the RSH requirements on fraud and the Group Board confirms that there havebeen two attempted cases of fraud during the financial year. These cases were investigated, reportedto the appropriate board and subsequently closed in accordance with the group's existing procedure.No money was unaccounted for or any loss reported from the cases.



Going Concern

The group's business activities, its current financial position and factors likely to affect its futuredevelopment are set out within this report and the group has in place long-term debt facilities whichprovide adequate resources to finance committed reinvestment and development programmes, alongwith the group's day to day operations and has, supported by external funding advisors, successfullyrefinanced £25m of debt falling due for repayment in May 2018. The group also has along-termbusiness plan which shows that it is able to service these debt facilities whilst continuing to comply withlenders' covenants.

On this basis, the Group Board has a reasonable expectation that the group has adequate resourcesto continue in operational existence for the foreseeable future, being a period of at least twelve monthsafter the date on which the report and financial statements are signed. For this reason, it continues toadopt the going concern basis in the financial statements.

Statement of Board's responsibilities in respect of the Board's report and the financialstatements

The Board is responsible for preparing the Board's Report and the financial statements in accordancewith applicable law and regulations.

Co-operative and Community Benefit Society law requires the Board to prepare financial statements foreach financial year. Under those regulations the Board have elected to prepare the financial statementsin accordance with UK Accounting Standards, including FRS 102 The Financial Reporting Standardapplicable in the UK and Republic of Ireland.

The financial statements are required by law to give a true and fair view of the state of affairs of thegroup and the association and of the income and expenditure of the group and the association for thatperiod.

In preparing these financial statements, the Board is required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards and the Statement of Recommended Practicehave been followed, subject to any material departures disclosed and explained in the financialstatements; and

• assess the group and the association's ability to continue as a going concern, disclosing, asapplicable, matters related to going concern; and

• use the going concern basis of accounting unless it either intends to liquidate the group or theassociation or to cease operations or has no realistic alternative but to do so.

The Board is responsible for keeping proper books of account that disclose with reasonable accuracyat any time the financial position of the association and enable them to ensure that its financialstatements comply with the Co-operative and Community Benefit Societies Act 2014, the Housing andRegeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing2015.

It is responsible for such internal control as it determines is necessary to enable the preparation offinancial statements that are free from material misstatement, whether due to fraud or error, and hasgeneral responsibility for taking such steps as are reasonably open to it to safeguard the assets of theassociation and to prevent and detect fraud and other irregularities.

Health and Safety

The Group Board is aware of its responsibilities for Health and Safety, with approved policies andmonitoring groups in place.

The group continues to focus on all areas of health and safety and operate a strong risk managementapproach.



Insurance

Insurance policies indemnify board members and officers against liabilities when acting on behalf of the

group.

Modern Slavery

We are committed to ensuring there is transparency in our approach to tackling modern slavery

throughout our supply chains, consistent with our disclosure obligations under the Modern Slavery and

Human Trafficking Act 2015.

We expect the same high standards from all of our contractors, suppliers and other business partners,

and as part of our contracting and procurement processes, we include specific prohibitions against the

use of forced, compulsory or trafficked labour, or anyone held in slavery or servitude, whether adults or

children, and we expect that our suppliers will hold their own suppliers to the same high standards.

Our 2018-19 statement is available on the homepage of all group websites together with an information

video for stakeholders designed to raise awareness.

Community Involvement and Corporate Social Responsibility (CSR)

The group regularly consults its residents and customers to enable them to be actively involved in group

business planning and service development through public consultation/community events, panels and

tenant forums.

Under the framework of the Social Value Act, businesses around the UK are encouraged to work in

partnership with their community, and look for creative and innovative solutions in an effort to preserve

their environment and boost local economies. The group places this responsibility at the heart of their

business and plays a vital role in promoting health and wellbeing and community cohesion and are able

to demonstrate numerous areas where the group is having a positive impact.

CSR activities have delivered improved access to local employment training and social mobility,

extended our work with partners in areas of highest need, provided community support services and

extended work with troubled families. It also ensures direction and greater transparency of spend and

impact of group CSR activities.

The Group Board is responsible for ensuring that arrangements are made to safeguard the assets of

the group and hence for taking reasonable steps for the prevention and detection of fraud and other

irregularities.

Post Year End Event

In June 2019, the Supreme Court denied leave to appeal against a December 2018 ruling that pension

reforms relating to two cases, Sergeant v London Fire and Emergency Planning Authority and McCloud

v Ministry of Justice, discriminated against younger workers by protecting the retirement benefits of

older staff. This protection is claimed to be discriminatory on the grounds of age, race and equal pay

and has led to Local Government Pension Schemes providers needing to re-assess the impact of this

judgement across all of their Member bodies.

An indicative calculation relating to increased pension liabilities has been provided by Worcestershire

County Council for the Group and are incorporated within these statements.

........................................................... Date: 18th September 2019

David Knowlton

Deputy Group Chief Executive /Group Secretary


04 ~ Independent Auditor's Report to the Members of The Community

Housing Group

Opinion

We have audited the financial statements of The Community Housing Group Limited ("the association")

for the year ended 31St March 2019 which comprise the Statement of Comprehensive Income, Statement

of Financial Position, Statement of Changes in Reserves, Statement of Cash Flows and related notes,

including the accounting policies in note 2.

In our opinion the financial statements:

• give a true and fair view, in accordance with UK accounting standards, including FRS 102 The

Financial Reporting Standard applicable in the UK and Republic of Ireland, of the state of affairs of

the group and the association as at 31St March 2019 and of the income and expenditure of the

group and the association for the year then ended;

• comply with the requirements of the Co-operative and Community Benefit Societies Act 2014; and

• have been properly prepared in accordance with the Housing and Regeneration Act 2008 and the

Accounting Direction for Private Registered Providers of Social Housing 2015.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and

applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities

under and are independent of the group and the association in accordance with, UK ethical requirements

including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient

and appropriate basis for our opinion.

Brexit other matter paragraph

Uncertainties related to the effects of Brexit are relevant to understanding our audit of the financial

statements. All audits assess and challenge the reasonableness of estimates made by the directors and

related disclosures and the appropriateness of the going concern basis of preparation of the financial

statements. All of these depend on assessments of the future economic environment and the company's

future prospects and performance.

Brexit is one of the most significant economic events for the UK, and at the date of this report its effects

are subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effects

unknown. We applied a standardised firm-wide approach in response to that uncertainty when assessing

the company's future prospects and performance. However, no audit should be expected to predict the

unknowable factors or all possible future implications for a company and this is particularly the case in

relation to Brexit.

Going concern

The association's Board has prepared the financial statements on the going concern basis as they do

not intend to liquidate the group or the association or to cease their operations, and as they have

concluded that the group and the association's financial position means that this is realistic. They have

also concluded that there are no material uncertainties that could have cast significant doubt over their

ability to continue as a going concern for at least a year from the date of approval of the financial

statements ("the going concern period").

We are required to report to you if we have concluded that the use of the going concern basis of

accounting is inappropriate or there is an undisclosed material uncertainty that may cast significant doubt

over the use of that basis for a period of at least a year from the date of approval of the financial

statements. In our evaluation of the Board's conclusions, we considered the inherent risks to the group

business model, including the impact of Brexit, and analysed how those risks might affect the group and

association's financial resources or ability to continue operations over the going concern period. We

have nothing to report in these respects.

13



Housing Group

However, as we cannot predict all future events or conditions and as subsequent events may result in

outcomes that are inconsistent with judgements that were reasonable at the time they were made, the

absence. of reference to a material uncertainty in this auditor's report is not a guarantee that the group

or the association will continue in operation.

Other information

The association's Board is responsible for the other information, which comprises the Board's Annual

Report, the Statement on Internal Control and Value for Money Statement. Our opinion on the financial

statements does not cover the other information and, accordingly, we do not express an audit opinion

or any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether, based on our

financial statements audit work, the information therein is materially misstated or inconsistent with the

financial statements or our audit knowledge. Based solely on that work, we have not identified material

misstatements in the other information.

Matters on which we are required to report by exception

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

in our opinion:

• the association has not kept proper books of account; or

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

• the financial statements are not in agreement with the association's books of account; or

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

We have nothing to report in these respects.

Board's responsibilities

As more fully explained in their statement set out on page 12, the association's Board is responsible for

the preparation of financial statements which give a true and fair view; such internal control as it

determines is necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error; assessing the group and the association's ability to continue

as a going concern, disclosing, as applicable, matters related to going concern; and using the going

concern basis of accounting unless it either intends to liquidate the group or the association or to cease

operations, or has no realistic alternative but to do so.

Auditor's responsibilities

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue our opinion in an

auditor's report. Reasonable assurance is a high level of assurance but does not guarantee that an

audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,

they could reasonably be expected to influence the economic decisions of users taken on the basis of

the financial statements.

A fuller description of our responsibilities

www.frc.orq. uk/auditorsresponsibilities.is provided on the FRC's website at


14


Housing Group

The purpose of our audit work and to whom we owe our responsibilities

This report is made solely to the association in accordance with section 87 of the Co-operative and

Community Benefit Societies Act 2014 and section 128 of the Housing and Regeneration Act 2008. Our

audit work has been undertaken so that we might state to the association those matters we are required

to state to it in an auditor's report and for no other purpose. To the fullest extent permitted by law, we

do not accept or assume responsibility to anyone other than the association as a body, for our audit

work, for this report, or for the opinions we have formed.

~~,~_

.......................................................................Sarah Brown

for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants

One SnowhillSnow Hill QueenswayBirminghamB4 6GH

15~



05 ~ Statement of Comprehensive Incomefor the year ended 31St March 2019

Group Company

Note 2019 2018 2019 2018

£'000 £'000 £'000 £'000

Turnover

Cost of sales

Operating costs

Gain / (loss) on disposal of fixed assets

Operating surplus

Interest receivable and similar income

Interest payable and similar charges

3

3

3

8

8

9

10

39,189 39,067

(9,623) (9,537)

(19,611) (20,390)

1,265 334

11,220 9,474

9 4

(7,351) (7,308)

45,177 45,178

(15,768) (15,936)

(19,755) (20,720)

1,201 375

10,855 8, 897

83 88

(7,395) (7,349)

Surplus on ordinary activities before tax

Taxation

Surplus on ordinary activities after tax andsurplus for the year

Other comprehensive income (4,786) 4,432

3,543 1, 636

(65) -

3,478 1,636

(4,786) 4,432

Total comprehensive income for the year (1,079) 6,496 (1,308) 6,068

3,878 2,170

11 (171) (106)

3,707 2,064


06 ~ Statement of Changes in Reserves

for the year ended 31St March 2019

Group Company

Note 2019 2018 2019 2018

£'000 £'000 £'000 £'000

Balance at the start of the year 12,982 6,486 10,962 4,948

- Correction of SHPS Opening Position (458) - (458) -

Merger with Parent undertaking - - - (54)

12,524 6,486 10,504 4,894

Surplus on ordinary activities after tax and 3,707 2,064 3,478 1,636

surplus for the year

Actuarial gain / (loss) in the year (4,328) 4,432 (4,328) 4,432

Balance at the end of the year


11,903 12,982 9,654 10,962

17~

07 ~ Statement of Financial Position

as at 31St March 2019

Group Company

Note 2019 2018 2019 2018

£'000 £'000 £'000 £'000

Fixed assets

Intangible assets and goodwill 13 - 50 - -

Housing properties 12 210,768 203,289 210,981 203,427

Other tangible fixed assets 15 7,949 7,647 6,459 6,606

Investment properties 14 929 920 929 920

219,646 211,906 218,369 210,953

Current assets

Stock and work in progress 16 1,323 2,499 1,184 2,427

Debtors 17 2,296 1,860 3,534 3,569

Cash and cash equivalents 3,166 4,212 2,630 3,431

6,785 8,571 7,348 9,427

Less: Creditors: amounts falling due within 18 (3,586) (29,530) (4,781) (31,045)

one year

Net Current (liabilities) /assets 3,199 (20,959) 2,567 (21,618)

Total assets less current liabilities 222,845 190,947 220,936 189,335

Creditors: amounts falling due in more than 19 (179,090) (153,239) (179,430) (153,647)

one year

Pension liability 26 (31,852) (24,726) (31,852) (24,726)

Total net assets 11,903 12,982 9,654 10,962

Reserves

Income and expenditure reserve 11,903 12,982 9,654 10,962

Total reserves 11,903 12,982 9,654 10,962

The financial statements were approved by the Board of Management on Wednesday 24th July 2019 and signed

on its behalf by:

............ ~~~~i,/.. ~. ~' ..............................................'........................................................Andy Ballard ~' Colin Small David Knowlton

Group Chair Audit and Assurance Deputy Group Chief Executive /

Committee Chair Group Secretary

The notes on pages 20 to 51 form part of these financial statements.


08 ~ Group Statement of Cashflows

for the year ended 31St March 2019

GROUP (ONLY) 2019 2018

Note £'000 £'000

Net cash generated from operating activities 31 17,726 16,472

Less: Taxation paid - (15)

17,726 16,457

Cashflow from investing activities

Purchase of housing properties (11,532) (13,684)

Purchase of fixed assets (1,760) (865)

Grants received 1,081 2,089

Interest received 9 4

(12,202) (12,456)

Cashflow from financing activities

New loans drawn down 25,500 3,500

Bank overdraft - 5

Debt issue costs (46) (46)

Interest paid (7,024) (6,662)

Loans Repaid (25,000) -

(6,570) (3,203)

Net change in cash and cash equivalents (1,046) 798

Cash and cash equivalents at the start of the year 4,212 3,414

Cash and cash equivalents at the end of the year 3,166 4,212

19



09 ~ Notes to the Financial Statements

1. Legal status

The Community Housing Group Limited (TCHG) is a registered society under the Co-operative and Community

Benefit Societies Act 2014 and is regulated by the Regulator of Social Housing.

2. Principal accounting policies

The financial statements have been prepared in accordance with applicable United Kingdom accounting

standards, including FRS 102 The Financial Reporting Standard Applicable in the UK and Republic of Ireland

(March 2018) ("FRS 102"), the Housing SORP 2014: Statement of Recommended Practice for Social Housing

Providers ("the SORP"), the Accounting Direction for Private Registered Providers of Social Housing 2015 ("the

Accounting Direction") and the Co-operative and Community Benefit Societies Act 2014.

The Community Housing Group Limited is a public benefit entity.

The principal accounting policies adopted in the preparation of these financial statements are set out in the

relevant notes to these financial statements. Accounting policies not specifically attributed to a note are set out

below.

The following accounting policies have been applied consistently in dealing with items which are considered

material in relation to The Community Housing Group Limited's consolidated ("Group") and parent ("Company")

financial statements:

(a) Basis of preparation

The financial statements are prepared on an accruals basis and under the historical cost convention, with the

exception of investment properties and certain financial instruments (as specified elsewhere) which are held at

fair value.

The accounting related to the Social Housing Pension Fund has not been consistently applied (see page 41).

The consolidated financial statements have applied Financial Reporting Exposure Draft 71 'Draft amendments

to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland —Multi-employer

defined benefit plans'.

(b) Basis of consolidation

The consolidated financial statements incorporate the financial statements of all entities controlled by The

Community Housing Group Limited as at the reporting date, using aligned reporting periods and accounting

policies, and using merger or acquisition accounting where appropriate.

Intra-group balances and transactions, including unrealised profits arising from intra-group transactions, are

eliminated in full on consolidation.

(c) Significant judgments and sources of estimation uncertainty

Preparation of the financial statements requires management to make significant judgments and estimates and

assumptions that affect the amounts reported for assets and liabilities at the date of the statement of financial

position and the amounts reported for revenue and expenses during the year.

However, the nature of estimation means that actual outcomes could differ from those estimates. It also requires

management to exercise judgment in applying the group's accounting policies. The significant areas of

management judgment and estimation are outlined below and explained more fully within the accounting

policies.

• Useful lives of depreciable assets

• Impairments

• Defined benefit obligations

• Measurement of financial instruments

• Effective interest rates

• Provisions

• Work in progress

20




(d) Value Added Tax (VAT)

For the majority of the group's members VAT affairs are dealt with under a group registration in the name of The

Community Housing Group Limited. Turnover and other income are shown net of any VAT charged. As most

of the group's income comes from renting our residential property, which is exempt from VAT, the group only

recovers part of the input VAT it incurs, and expenditure is shown inclusive of irrecoverable VAT.

3. Particulars of turnover, operating expenditure and operating surplus

Accounting Po/icv

Turnover

Rent and service charge income is recognised on an accruals basis. Charges for support services funded under

Supporting People are recognised as they fall due under contractual arrangements with administering

authorities. Other income is recognised as receivable on the delivery of services provided.

Social housing property grant on social rent properties and shared ownership properties is amortised over 125

years in line with the group's policy for depreciating the structure of the housing properties. This period also

applies to grants relating to shared ownership properties, even though these properties are not depreciated.

Grant received for installing disabled facilities into housing properties is amortised over 30 years. Grants

receivable in relation to revenue are recognised in the same period as the expenditure to which they relate.

Turnover includes proceeds from first tranche sales of shared ownership housing properties developed.

Subsequent staircasing receipts and receipts from outright property sales and the disposal of investment

properties are included in the profit or loss on sale of fixed assets. Both first tranche and staircasing receipts

are calculated as the proportion of the property sold multiplied by the market value determined at the time. Sales

of properties are recognised on legal completion.

Cost of Sales

Cost of sales comprises cost of stock sold as a first trance and the direct costs attributable to support services

and non-social housing activities.

Operating Costs

Operating costs comprise the costs of delivering social housing lettings and overheads apportioned to the

generation of turnover from other social housing activities and non-social housing activities.

Depreciation and amortisation

Depreciation of fixed assets and amortisation of goodwill is accounted for on a straight-line basis, reducing the

asset to its residual value over its useful economic life, from the date the asset is available for use.

Sale of housing properties and other assets

The profit or loss on the disposal of housing properties comprises the proceeds from sale, the write-off of the

remaining cost of the asset or proportion of the asset sold and other costs relating to the disposal including an

apportionment of overheads.

21



3. Particulars of turnover, operating expenditure and operating surplus (continued)

2019 2018

Group Turnover Cost of Operating Operating Turnover Operating

sales costs surplus/ surplus/

(deficit) (deficit)

£'000 £'000 £'000 £'000 £'000 £'000

Social Housing lettings(Note 4) 28,938 - (19,063) 9,875 28,884 9,164

Other Social Housingactivities

Sale of shared ownership 2,208 (1,482) (154) 572 2,107 272

properties

Charges for support 1,481 (1,614) (222) (355) 1,392 (288)

services

Community services 21 - - 21 - (37)

Other activities 158 - (24) 134 142 129

Social Housing Activities 3,868 (3,096) (400) 372 3,641 76

Non-Social Housingactivities

Management services - (209) - (209) - (144)

Non-social housing lettings 179 - (23) 156 219 137

Personal care services 585 (830) (88) (333) 629 (352)

Other commercial activities 5,619 (5,488) (37) 94 5,694 259

Non-Social Housing 6,383 (6,527) (148) (292) 6,542 (100)

Activities

Total Social Housing 39,189 (9,623) (19,611) 9,955 39,067 9,140

Lettings

Sale of housing properties _ _ - 655 - 355

39,189 (9,623) (19,611) 10,610 39,067 9,495

Sale of other fixed assets _ _ - 610 - (21)

Gain on revaluation of _ _ _ _ _ _

investment properties

Operating surplus for the 39,189 (9,623) (19,611) 11,220 39,067 9,474

year

zz ~The Community Housing Group Limited



3. Particulars of turnover, operating expenditure and operating surplus (continued)

2019 2018

Company Turnover Cost of Operating Operating Turnover Operatingsales costs surplus/ surplus/

(deficit) (deficit)

£'000 £'000 £'000 £'000 £'000 £'000

Social Housing lettings(Note 4) 28,938 - (19,204) 9,734 28,884 8,834

Other Social Housingactivities

Sale of shared ownership 2,208 (1,482) (154) 572 2,107 272properties

Charges for support 1,481 (1,614) (222) (355) 1,392 (288)services

Community services 21 - - 21 - (37)

Other activities 158 - (24) 134 142 129

Social Housing Activities 3,868 (3,096) (400) 372 3,641 76

Non-Social Housingactivities

Management services 11,346 (11,555) - (209) 11,258 (144)

Non-social housing lettings 179 - (23) 156 219 137

Personal care services 585 (830) (88) (333) 629 (352)

Other commercial activities 261 (287) (40) (66) 547 (29)

Non-Social Housing 12,371 (12,672) (151) (452) 12,653 (388)Activities

Total Social Housing 45,177 (15,768) (19,755) 9,654 45,178 8,522Lettings

Sale of housing properties _ _ - 655 - 355

45,177 (15,768) (19,755) 10,309 45,178 8,877

Sale of other fixed assets _ _ - 546 - 20

Gain on revaluation ofinvestment properties

Operating surplus for the 45,177 (15,768) (19,755) 10,855 45,178 8,897year



4. Particulars of turnover and operating expenditure from social housing lettings

2019 2018

Group General Supported Low cost Other Total Total

needs &housing homefor the ownershipelderly

£'000 £'000 £'000 £'000 £'000 £'000

Rents receivable net of 16,278 9,251 665 131 26,325 26,311

identifiable service charges

Service Charges receivable 918 1,349 40 - 2,307 2,239

Net rents receivable 17,196 10,600 705 131 28,632 28,550

Amortised government 250 41 15 - 306 334grants

Turnover from social 17,446 10,641 720 131 28,938 28,884housing lettings

Operating expenditure

Management 5,704 2,133 104 44 7,985 6,737

Services 956 1,251 11 7 2,225 2,491

Routine maintenance 2,070 1,212 3 16 3,301 3,504

Planned maintenance 1,333 272 - - 1,605 2,324

Major repairs g5 43 - - 128 850

Bad debts 110 120 3 - 233 260

Depreciation of housing 3,028 557 - 1 3,586 3,554properties

Operating expenditure on 13,286 5,588 121 68 19,063 19,720social housing lettings

Operating surplus on 4,160 5,053 599 63 9,875 9,164social housing lettings

Void losses 123 68 9 - 200 348

24



4. Particulars of turnover and operating expenditure from social housing lettings

2019 2018

Company General Supported Low cost Other Total Totalneeds ~ housing home

for the ownershipelderly

£'000 £'000 £'000 £'000 £'000 £'000

Rents receivable net of 16,278 9,251 665 131 26,325 26,311

identifiable service charges

Service Charges receivable 918 1,349 40 - 2,307 2,239

Net rents receivable 17,196 10,600 705 131 28,632 28,550

Amortised government 250 41 15 - 306 334grants

Turnover from social 17,446 10,641 720 131 28,938 28,884housing lettings

Operating expenditure

Management 5,748 2,152 106 44 8,050 6,748

Services 966 1,264 11 7 2,248 2,519

Routine maintenance 2,110 1,236 3 16 3,365 3,860

Planned maintenance 1,318 269 - - 1,587 2,348

Major repairs 90 45 - - 135 761

Bad debts 110 120 3 - 233 260

Depreciation of housing 3,028 557 - 1 3,586 3,554properties

Operating expenditure on 13,370 5,643 123 68 19,204 20,050social housing lettings

Operating surplus on 4,076 4,998 597 63 9,734 8,834social housing lettings

Void losses 123 68 9 - 200 348



5. Housing Accommodation in Management

2019 2018

Number Number

Owned

Social Rent general needs 3,345 3,355

Affordable rent general needs 204 192

Social rent supported and housing 1,998 1,997

Affordable rent supported and housing for the elderly 115 115

Low cost home ownership 277 259

Other social housing 20 19

Total owned 5,959 5,937

Leasehold 80 77

Non-social housing 23 22

Total owned and managed 6,062 6,036

Units under construction 69 47

6. Employees

The average number of employees expressed as full time equivalents 2019 2018(based on a standard working week of 40 hours)

Number Number

Directors 6 7

Housing and Neighbourhoods 40 42

Independent Living Services 97 100

Telecare 33 33

Vestia 20 19

Oakleaf Commercial Services 205 208

Business Support Services 54 56

Total number of employees 455 465

Staff costs for the above persons were: 2019 2018

£'000 £'000

Wages and salaries 12,786 13,127

Salaries security costs 1,171 1,192

Pension costs 3,492 2,895

Total staff costs 17,449 17,214

26 ~The Community Housing Group LimitedFinancial Statements 2018-19


6. Employees (cont......)

Higher Paid EmployeesAt the year end the number of full-time equivalent employees whose remuneration payable, including pension

contributions and non-cash benefits, exceeded £60,000 was:

2019 2018

Number Number

£60,000 - £69,999 9 9

£70,000 - £79,999 3 2

£80,000 - £89,999 3 2

£90,000 - £99,999 1 3

£100,000 — £109,999 - -

£110,000 - £119,999 - -

£120,000 - £129,999 1 1

£130,000 - £139,999 - 1

£140,000 - £149,999 3 2

7. Remuneration of key management personnel

Directors and Board Members are considered to be the key management personnel for the purposes of

FRS102.

The Directors of the group are defined as the Group Chief Executive and any other person who served during

the year as a member of the Directors Management Team of the group.

Board Members are defined as non-executive members either of boards or management committees within

The Community Housing Group. All Board Members across the group are paid through TCHG. Board

Members do not participate in the group's pension arrangements.

Details of remuneration for the year are as follows:

2019 2018

£'000 £'000

Executive Directors

Salary and other benefits (including pension contributions) 734 841

Non-Executive Board Members

Salary and other benefits (") 110 92

Executive and non-executive salary and benefits 844 933

Remuneration of the Group Chief Executive, who is also the highest paid 149 148Director (including benefits in kind but excluding pension contributions)

The group participates in two defined benefit pension schemes, the Social Housing Pension Scheme and the

Worcestershire County Council Local Government Pension Scheme (see Note 26) and one defined

contribution scheme. The number of directors accruing benefits under these schemes during 2018-19 was 5

(2018: 6). The aggregate pension contributions paid during the year on behalf of directors who served during

the year was £69k (2018: £83k).

The Group Chief Executive is not a member of either defined benefit pension scheme and nor does the group

make any contribution to an individual pension on his behalf.

(*) Non-executive Board Members do not participate in the group's pension schemes

27




8. Operating Surplus

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

Group Company

2019 2018 2019 2018

£'000 £'000 £'000 £'000

Auditors remuneration

In their capacity as auditors 45 50 22 22

Other services 39 62 35 58

Depreciation of housing properties 3,586 3,554 3,586 3,554

Depreciation of other fixed assets 1,078 950 562 612

Amortisation of goodwill 50 100 - -

Operating leases —equipment 1 245 _ 156

Loss on disposal of tangible fixed assets (1,265) (334) (1,201) (375)

9. Interest receivable and other income

Group Company

2019 2018 2019 2018

£'000 £'000 £'000 £'000

Bank interest receivable 8 1 8 1

Other interest receivable 1 3 1 3

Interest on intra-group loans - - 74 84

Total Interest receivable 9 4 83 88

10. Interest payable and similar charges

Group Company

2019 2018 2019 2018

£'000 £'000 £'000 £'000

Loans and bank overdraft 6,816 6,742 6,816 6,742

Defined benefit pension charge 635 667 635 667

Other financing costs - - 44 41

Gross Interest payable 7,451 7,409 7,495 7,450

Capitalised interest (100) (101) (100) (101)

Net Interest payable 7,351 7,308 7,395 7,349

c;apita~iseq interest was app~ied at the average rate being paia by the group at the time the expenaiture was

incurred. This varied between 4.03% and 4.12% (2018: 4.03% and 4.12%).

2~



09 I Notes to the Financial Statements

11. Tax on surplus for the year

a) Analysis of Charge for the Financial Year

Group Company

Analysis of tax charge for the period 2019 2018 2019 2018

£'000 £'000 £'000 £'000

Current Tax:UK Corporation Tax at 19% (2018: 19%) 106 111 46 -

Adjustments in respect of prior periods 41 (16) 19 -

Total current tax charge 147 95 65 -

Deferred tax:Origination and reversal of timing differences 24 1 - -

Adjustments in respect of prior periods - 10 - -

Effect of tax rate change on opening balance - - - -

Total deferred tax 24 11

Tax on profit on ordinary activities 171 106 65 -

The tax assessed for the year is lower (2018: lower) than the standard rate of corporation tax in the UK of 19%

(2018: 19%).

b) Reconciliation of tax chargeGroup Company

Reconciliation of tax charge 2019 2018 2019 2018

£'000 £'000 £'000 £'000

Profit on ordinary activities before tax 3,878 2,170 3,543 1,636

Tax on profit on ordinary activities at the standard rate of

corporation tax of 19% (2018: 19%) 744 412 673 311

Effects of.'

Fixed asset difference (84) 19 - -

Losses carried back - - - -

Expenses not deductible for tax purposes 30 1 23 -

Income not taxable for tax purposes (2,078) - (2,078) -

Charitab/e gains / (losses) 39 - 39 -

Exemptions for charitable activities - (320) - (311)

- Current tax - (16) - -

- Deferred tax - 10 - -

Adjustment to brought forward values 94 - -

Adjustments to tax charge in respect of prior periods 41 - 19 -

Adjust closing deferred tax to average rate of 19% (2018: 19%) 190 (6) 200 -

Adjust opening deferred tax to average of 19% (48) 6 (54) -

Deferred tax not recognised 1,243 - 1,243 -

Tofa/ tax charge 171 106 65

12. Tangible fixed assets —housing properties

Accounting Policies

Social housing properties

Social housing properties are initially stated at their directly attributable cost: this includes the cost of land,

construction works and professional fees as well as capitalised interest and capitalised staff costs for those

employees attributable to the development activity. No interest or staff costs are capitalised on assets held

awaiting development.

Housing properties under construction are transferred to completed schemes once they are available for letting.

The cost of social housing properties is split between land, the structure of the property and its principal

components which require periodic replacement.

29 ~



12. Tangible fixed assets —housing properties (continued)

Depreciation

The cost of the existing components is depreciated on a straight-line basis, reducing the cost of each component

to its residual value, over its useful economic life from the date the housing property is available for use.

The components are depreciated over the following useful lives:

ComponentStructure/BuildingCentral HeatingBoilersWiring/ElectricsBathroomsKitchensRoofDoors and WindowsOther

Expected Useful Life125 years30 years15 years30 years30 years30 years70 years40 years5 — 25 years

"Other" components are primarily the various communal facilities at supported housing schemes.

When components are replaced the remaining book value is expensed as depreciation and the asset is

disposed of.

Where land has been acquired with the intention to develop as mixed tenure schemes but the precise mix is

yet to be finalised, the land is treated as a fixed asset until certainty of tenure mix is established at which point

the portion of land that relates to properties held for sale is transferred to stock and work in progress.

Shared ownership

Shared ownership, otherwise known as 'low cost home ownership' is where, initially, a long lease is granted

through a sale to the occupier, in return for an initial payment (the 'first tranche'). The occupier then has the

right, but not the obligation, to purchase further shares at current value (known as 'staircasing') until they own

100% of the property; they pay a subsidised rent on the portion of the property they do not own.

Until the first tranche sale is completed, the cost of the expected first tranche proportion of shared ownership

properties is shown as stock in current assets with the remainder included under shared ownership social

housing properties.

Improvements

Works to existing properties which replace a component that has been treated separately for depreciation

purposes, along with those works that result in an increase in the net rental income over the lives of the

properties, thereby enhancing the economic benefits of the assets, are capitalised as improvements. Examples

would be work that results in an increase in rental income, a reduction in future maintenance costs or a

significant extension of the useful economic life of the property.

Impairment

An impairment review is undertaken when there is an indication that an asset may be impaired. Impairment is

recognised when it is assessed that the carrying amount of that asset, or the cash-generating unit it belongs to,

is higher than the recoverable amount, which is the higher of fair value less costs to sell and value in use.

Where this is the case the higher of these two values is taken to be the new book value and the difference is

taken to the statement of comprehensive income as an impairment charge.

After an impairment loss has been recognised, the recoverable amount of an asset orcash-generating unit may

increase because of changes in economic conditions, the circumstances that previously caused the impairment,

or the expected use of the asset. As a result, the carrying amount is adjusted to the lower of the new recoverable

amount and the carrying amount that would have been determined had the original impairment not occurred.

30



12. Tangible fixed assets —housing properties (continued)

Completed Social Completed Shared Total

Group social housing shared ownership housing

housing properties ownership housing propertiesproperties for letting properties properties

held for under underletting construction construction

£'000 £`000 £'000 £'000 £'000

Cost

At 15t Apri12018 210,713 5,901 12,067 692 229,373

Additions

Development - 4,188 - 1, 749 5,937

Capitalised major repairs 5,950 - - - 5,950

Capitalised salaries 83 133 - 160 376

Capitalised interest - 52 - 48 100

Completions 3,395 (3,395) 2,621 (2,621) -

Transfer to investmentproperties - - - - -

Disposals (727) - (2,433) - (3,160)

Net transfer (to) /fromproperties held for sales (54) - 82 1,214 1,242

At 31St March 2019 219,360 6,879 12,337 1,242 239,818

Depreciation andimpairment

At 1St April 2018 (25,584) - (500) - (26,084)

Depreciation charged in year (3,586) - - - (3,586)

Transfer to investment - - - - -properties

Disposals 548 - 72 - 620

At 31St March 2019 (28,622) - (428) - (29,050)

Net Book Value

At 31St March 2019 190,738 6,879 11,909 1,242 210,768

At 1St April 2018 185,129 5,901 11,567 692 203,289



12. Tangible fixed assets -housing properties (continued)

Group Company

Net book value of housing properties2019 2018 2019 2018

£'000 £'000 £'000 £'000

Freehold 210,768 203,289 210,981 203,427

Long leasehold - - - -

210,768 203,289 210,981 203,427

Completed Social Completed Shared Total

Company social housing shared ownership housing

housing properties ownership housing propertiesproperties for letting properties properties

held for under underletting construction construction

£'000 £`000 £'000 £'000 £'000

Cost

At 1StApri12018 210,735 5,974 12,067 735 229,511

Additions

Development - 4,263 - 1,749 6,012

Capitalised major repairs 5,950 - - - 5,950

Capitalised salaries 83 133 - 160 376

Capitalised interest - 52 - 48 100

Completions 3,320 (3,320) 2,621 (2,621) -

Transfer to investproperties - - - - -

Disposals (727) - (2,433) - (3,160)

Net transfer (to) /fromproperties held for sales (54) - 82 1,214 1,242

At 31St March 2019 219,307 7,102 12,337 1,285 240,031

Depreciation andimpairment

At 1St April 2018 (25,584) - (500) - (26,084)

Depreciation charged in (3,586) - - - (3,586)

year

Transfer to investment - - - - -

properties

Disposals 548 - 72 - 620

At 31St March 2019 (28,622) - (428) - (29,050)

Net Book Value

At 315' March 2019 190,685 7,102 11,909 1,285 210,981

At15tApri12018 185,151 5,974 11,567 735 203,427



13. Intangible fixed assets and goodwill

Total

Group £'000

Goodwill

At 1St April 2018 495

Additions -

At 31St March 2019 495

Accumulated Amortisation

At 1St April 2018 (445)

Amortisation charge for the year (50)

At 31St March 2019 (495)

Net Book Value

At 31St March 2019 -


Goodwill arose on the acquisition of assets on the creation of Oakleaf. Goodwill is written down on a straight

line basis over its expected useful life which is 5 years. This is based on the maximum life of contracts at

the time.

14. Investment properties

Accounting Policy

Investment properties consist of housing properties let at market rents, commercial retail units and other

properties not held for social benefit or for use in the business.

Investment properties are measured at cost on initial recognition and subsequently at fair value by

appropriately qualified external valuers as at the year end, with changes in fair value recognised in the

statement of comprehensive income. No depreciation is charged on investment properties.

Total

Group and Company £'000

At 1St April 2018 920

Transfer from housing properties -

Capitalised works 9

Disposals -

Revaluations -


Investment properties were not revalued at 31S' March 2018. They were last valued as at 31St March 2017

by BNP Paribas Real Estate, professional external valuers in accordance with the RICS Valuation —

Professional Standards, ("The Red Book") of the Royal Institute of Chartered Surveyors. The significant

assumptions applied in that valuation were the estimated rental value and yield, both of which were based

on recent local transactions taking into account the investment attributes of the properties. For retail units the

valuations equated to net initial yields ranging from 7.35% to 13.02% and reversionary yields from 10.85% to

20.37%.

Directors do not consider there to be any triggers for an impairment review at 31St March 2019.

One property was transferred from housing properties and is recognised at its net book value on transfer,

which is considered to be lower than its net realisable value.

33



15. Other Fixed Assets

Accounting Policv

Other tangible fixed assets are stated at cost less accumulated depreciation. Depreciation is provided evenly

on the cost of the asset to write it down to its estimated residual values over its expected useful economic life.

Useful lives of depreciable assets

Management reviews its estimate of the useful lives of depreciable assets at each reporting date based on the

expected utility of the assets. Uncertainties in these estimates relate to technological obsolescence that may

change the utility of certain software and IT equipment.

The principal annual depreciation rates used are:

- Office accommodation 2.5% per annum

- Motor Vehicles 14 - 25% per annum

- Office furniture and equipment 20-25% per annum

- Computer hardware and software 25% per annum

- Plant and machinery 20-33% per annum

- Service Assets 20% per annum

Freehold Motor Office Computer Plant and Service Total

Group Office Vehicles Furniture & Hardware Machinery AssetsEquipment &Software

£'000 £'000 £'000 £'000 £'000 £'000 £'000

CostAt 151 Apri12018 7,879 1,530 664 4,204 890 1,715 16,882

Additions 291 973 15 322 26 190 1,817

Disposals (1,012) (391) (18) - (90) (38) (1,549)

At 31St March 2019 7,158 2,112 661 4,526 826 1,867 17,750

DepreciationAt 1ST April 2018 (2,252) (893) (486) (3,633) (475) (1,496) (9,235)

Depreciation charge (272) (303) (42) (229) (128) (104) (1,078)

Disposals 664 378 - - 70 - 1,112

At 315 March 2019 (1,860) (818) (528) (3,862) (533) (1,600) (9,201)

Net Book Value

At 315 March 2019 5,298 1,294 133 664 293 267 7,949

At 315' March 2018 5,627 637 178 571 415 219 7,647

Freehold Motor Office Computer Plant and Service Total

Company Office Vehicles Furniture & Hardware Machinery Assets

Equipment &Software

£'000 £'000 £'000 £'000 £'000 £'000 £'000

Cost

At 15i April 2018 8,100 41 488 4,204 47 934 13,814

Additions 429 - 6 322 - 24 781

Disposals (1,012) (28) (18) - - - (1,058)

At 31St March 2019 7,517 13 476 4,526 47 958 13,537

Depreciation

At 15i April 2018 (2,301) (41) (350) (3,633) (18) (865) (7,208)

Depreciation charge (272) - (35) (229) (2) (24) (562)

Disposals 664 28 - - - - 692

At 31St March 2019 (1,909) (13) (385) (3,862) (20) (889) (7,078)

Net Book Value

At 31St March 2019 5,608 - 91 664 27 69 6,459

At 31St March 2018 5,799 - 138 571 29 69 6,606

34 ~



16. Stock and Work in Progress -Properties held for sale

Accounting Policv

Stock represents raw materials and consumables held for contract work in Oakleaf Construction and work inprogress and completed shared ownership properties. The value of property stock is the estimated cost of theproportion of the property to be sold as a first tranche.

Stock is stated at the lower of cost and net realisable value. Only costs directly attributed to the developmentof the properties are included in stock. Net realisable value is based on estimated sales proceeds after allowingfor all further costs to completion and selling costs.

Group Company

2019 2018 2019 2018

£'000 £'000 £'000 £'000

Completed properties and properties under construction held 1,184 2,427 1,184 2,427

for sale

Stock of lifeline assets 104 42 - -

Raw materials and consumables 35 30 - -

Total Stock and Work in Progress 1,323 2,499 1,184 2,427

17. Debtors

Accounting Policv

Short term debtors are measured at transaction price, less any impairment. Tenant, trade and other debtorsare assessed for recoverability at each reporting date. The bad debts provisions are based on the experiencesof the company and a review of the historic collection rates and the class of debt.

Where deferral of payment terms have been agreed at below market rate and, where material, the balance isshown at the present value discounted at a market rate.

Group Company

2019 2018 2019 2018

£'000 £'000 £'000 £'000

Rent and service charges receivable 648 587 648 587

Less :Impairment (385) (259) (385) (259)

263 328 263 328

Trade debtors 916 671 235 168

Other debtors 151 187 161 181

Prepayment and accrued income 966 674 483 312

Amounts due from group companies - - 2,392 2,580

Total Debtors 2,296 1,860 3,534 3,569



18. Creditors: Amounts falling due within one year

Accounting Policy

Short term trade creditors

Short 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

are measured subsequently at amortised cost using the effective interest method.

Social housing property grants

These grants, which have been provided by central and local government to part-fund the construction of the

group's social housing properties and install disabled facilities, are treated as deferred income and amortised

as per the 'Turnover' policy. The amount estimated to be amortised in the following year is included within

creditors due within one year.

The original amount granted may become repayable if the conditions of the grant are not complied with: for

example, if the related properties cease to be used for the provision of affordable rented accommodation, or

are sold on the open market. If there is no obligation to repay the grant on disposal of the assets the remaining

unamortised grant is credited against the cost of the disposal. An amount equivalent to SHG taken to revenue

reserves is disclosed as a contingent liability reflecting the potential future obligation to repay SHG where

properties are disposed.

Grant received in respect of shared ownership properties is held as deferred income with none being taken

against the proportion of the cost matched against the first tranche sale proceeds.

Recycled Capital Grant (RCGF) and Disposal Proceeds Fund (DPF)

The group has the option to recycle social housing property grants, which would otherwise be repayable to

Homes England, to the RCGF. Likewise it has the opportunity to recycle proceeds from sales under the 'right

to acquire' scheme, a substantial amount of which would otherwise be repayable, to the DPF. If the amounts

set aside in this manner are not used to fund qualifying developments within athree-year period, they again

become repayable, with interest, unless a time extension or waiver is received.

The amounts held within the funds which are not anticipated to be used or repaid within one year are included

under ̀creditors due after more than one year'. The remainder is included under'creditorsdue within one year'.

As a result of changes made by the Housing and Planning Act 2016, from 6 April 2017 the group is not required

to recycle any further proceeds to the DPF.

Other grants

A grant received which does not impose specified future performance conditions is recognised as revenue when

the grant proceeds are received or receivable. A grant that imposes specified future performance-related

conditions on the group is recognised only when these conditions are met. A grant received before the revenue

recognition criteria are satisfied is recognised as a liability.

Amounts owed to group undertakings

Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are

repayable on demand.

Holiday Pay

Where material, the company recognises a provision for annual leave accrued by employees as a result of

services retendered in the current period and which employees are entitled to carry forward and use within the

next 12 months. The provision is measured at the salary cost payable for the period of absence.

36




18. Creditors: Amounts falling due within one year (continued)

Group Company

Note 2019 2018 2019 2018

£'000 £'000 £'000 £'000

Debt 23 - 25,004 - 25,004

Bank overdrafts 5 5 5 5

Trade creditors 914 1,346 38 124

Rent and service charges received in advance 269 379 269 379

Accruals and deferred income 819 861 463 355

Amounts owed to group companies - - 2,665 3,537

Corporate tax 240 160 60 -

Other taxes and social security costs 292 352 292 307

Deferred capital grant 20 306 334 306 334

Disposal proceeds fund 21 - - - -

Recycled capital grant fund 22 2 149 2 149

Other creditors 739 940 681 851

Total creditors due within one year 3,586 29,530 4,781 31,045

19. Creditors: Amounts falling due after more than one year

Group Company

Note 2019 2018 2019 2018

£'000 £'000 £'000 £'000

Debt 23 149,725 124, 509 149,725 124, 509

Provisions for liabilities 25 - 316 - 316

Amounts owed to group undertakings - - 340 408

Deferred capital grant 20 29,158 28,174 29,158 28,174

Disposal proceeds fund 21 - 71 - 71

Recycled capital grant fund 22 207 169 207 169

Total Creditors due after more than one year 179,090 153,239 179,430 153,647

20. Deferred Capital Grants

Group Company

2019 2018 2019 2018

£'000 £'000 £'000 £'000

At 1ST April 2018 28,508 26,501 28,508 26,501

Grants received during the year 1,081 2,088 1,081 2,088

Transfers from / (to) disposals proceeds fund 71 314 71 314

Transfers from / (to) recycled capital grant fund 109 (61) 109 (61)

Released to income during the year (306) (334) (306) (334)

Total deferred capital grants 29,463 28,508 29,463 28,508

37



21. Disposal Proceeds Fund

Group Company

2019 2018 2019 2018

£'000 £'000 £'000 £'000

At 1 S' April 2018 71 385 71 385

Net sales proceeds - - - -

Interest accrued - - - -

Transfers from / (to) deferred capital grant (71) (314) (71) (314)

Total disposal proceeds fund - 71 - 71

22. Recycled Capital Grant Fund

Group Company

2019 2018 2019 2018

£'000 £'000 £'000 £'000

At 15t April 2018 318 257 318 257

Net sales proceeds 38 61 38 61

Utilised during the year (147) - (147) -

Transfers from / (to) deferred capital grant - - - -

Total recycled capital grant fund 209 318 209 318

Amount of grant due for repayment (outstanding for 2 149 2 149more than 3 years)

23. Loans and borrowings

Accounting Policy

Financial instruments which meet the criteria of a basic financial instrument as defined in Section 11 of FRS102

are accounted for under an amortised historic cost model.

The group's financial liabilities are sterling denominated. The interest rate profile of the group's financial

liabilities at 31 March was:

Group Company

2019 2018 2019 2018

£'000 £'000 £'000 £'000

Fixed rate 115,871 115,554 115,871 115,554

Variable rate 33,854 30,959 33,854 33,959

Total loans and borrowings 149,725 149,513 149,725 149,513

The loans from Barclays Bank plc and Yorkshire Building Society are secured by a fixed and floating charge on

the group's housing properties. The loans are repayable at varying rates of interest between 1.35°/o and 6.23%

(2018: 1.90°/o and 6.23%).

The fixed rate financial liabilities have a weighted average interest rate of 5.05% (2018: 5.05%) and the

weighted average period for which they are fixed is 23 years (2018: 24 years).



23. Loans and borrowings (continued)

The repayment profile of the debt was:

Group Company

2019 2018 2019 2018

£'000 £'000 £'000 £'000

In more than one year but not more than two years - - - -

In more than two years but not more than five years 80,367 - 80,367 -

In more than five years 69,358 124,509 69,358 124,509

149,725 124, 509 149,725 124, 509

In one year or less or on demand - 25,004 - 25,004

At 315 March 2019 149,725 149,513 149,725 149,513

Borrowing facilities

The group has undrawn committed borrowing facilities. The facilities available at 31St March 2019 in respect of

which all conditions precedent had been met were as follows:

Group Company

2019 2018 2019 2018

£'000 £'000 £'000 £'000

At 31St March 2019 24,000 14,500 24,000 14,500

24. Financial assets and liabilities

Group Company

2019 2018 2019 2018

£'000 £'000 £'000 £'000

Financial assets that are measured at amortised cost:

Rental debtors 264 328 264 328

Trade debtors 916 671 235 168

Amounts owed by group undertakings - - 2,392 2,580

Other debtors 151 187 136 181

Cash and cash equivalents 3,166 4,212 2,630 3,431

At 31St March 2019 4,497 5,398 5,657 6,688

Financial liabilities that are measured at amortised cost:

Bank loans 149,725 149,513 149,725 149,513

Bank overdrafts 5 5 5 5

Trade creditors 914 1,346 38 124

Rents received in advance 269 379 269 379

Amounts owed by group undertakings - - 2,665 3,537

Other creditors 910 940 746 851

Other taxes and social security costs 292 352 292 307

Accruals and deferred income 819 861 463 355

At 31St March 2019 152,934 153,396 154,203 155,071

39




25. Provisions for Liabilities

Accounting Policy

Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past

event, it is probable that the group will be required to settle the obligation, and a reliable 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 settle the present

obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the

obligation.

Where the effect of the time value of money is material, the amount expected to be required to settle the

obligation is recognised at present value using apre-tax discount rate. The unwinding of the discount is

recognised as a finance cost in the statement of comprehensive income in the period it arises.

Social Housing Pension Scheme (the scheme)

The group participates in the Social Housing Pension Scheme, amulti-employer scheme which provides

benefits to some 500 non-associated employers. The scheme is a defined benefit scheme in the UK

The scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30

December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial

Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit

occupational pension schemes in the UK.

A full actuarial valuation for the scheme was carried out with an effective date of 30th September 2017. This

actuarial valuation was certified on 30th November 2018 and showed assets of £4,553m, liabilities of £6,075m

and a deficit of £1,522m. A Recovery Plan has been put in place with the aim of removing the deficit by 30

September 2026.

The scheme is classified as a'last-man standing arrangement'. Therefore the group is potentially liable for other

participating employers' obligations if those employers are unable to meet their share of the scheme deficit

following withdrawal from the scheme. Participating employers are legally required to meet their share of the

scheme deficit on an annuity purchase basis on withdrawal from the scheme.

For financial years ending on or before 28th February 2019, it has not been possible for the company to obtain

sufficient information to enable it to account for the Scheme as a defined benefit scheme, therefore the Group

has accounted for the Scheme as a defined contribution scheme.

For those years, where the scheme is in deficit and where the participating Association has agreed to a deficit

funding arrangement, the participating Association recognises a liability for this obligation. The amount

recognised is the net present value of the deficit reduction contributions payable under the agreement that

relates to the deficit. The present value is calculated using the discount rate detailed in these disclosures. The

unwinding of the discount rate is recognised as a finance cost.

For financial years ending on or after 31St March 2019, it is possible to obtain sufficient information to enable

the Group to account for the Scheme as a defined benefit scheme.

For accounting purposes, two actuarial valuations for the scheme were carried out with effective dates of 31

March 2018 and 30 September 2018. The liability figures from each valuation are rolled forward to the relevant

accounting dates, if applicable, and are used in conjunction with the company's fair share of the Scheme's total

assets to calculate the company's net deficit or surplus at the accounting period start and end dates.

In accordance with the guidance issued in FRED 71: Draft amendments to FRS 102, The Financial Reporting

Standard applicable in the UK and Republic of Ireland —Multi-employer defined benefit plan, the net present

value of the deficit reduction contributions have been de-recognised as at 1 April 2018 and the scheme liabilities

have been recognised as a pension provision as at 1 April 2018. The net impact of the change in accounting

policy for the Group amounts to £458k and is accounted for within Other Comprehensive Income (page 17).

40



25. Provisions for Liabilities (continued)

PRESENT VALUES OF PROVISION

Group and Company 2019 2018

£'000 £'000

Present value of provision - 316

RECONCILIATION OF OPENING AND CLOSING PROVISIONS


£'000 £'000

Provision at start of the year 316 370

De-recognition of deficit liability as at 1 April 2019 (316) 4

Unwinding of the discount rate (interest expense) - 4

Deficit contribution paid - (54)

Remeasurements —impact of any change in assumptions - (4)

Remeasurements —amendments to the contributions schedule - -

Provision at the end of the year - 316

INCOME AND EXPENDITURE IMPACT


£'000 £'000

Unwinding of the discount rate (interest expense) - 4

Remeasurements —impact of any change in assumptions _ ~4~

Remeasurements —amendments to the contributions schedule

ASSUMPTIONS


Rate of discount (% per annum) N/A 1.72%

The discount rates shown above are the equivalent single discount rates which, when used to discount the

future recovery plan contributions due, would give the same result as using a full AA corporate bond yield curve

to discount the same recovery plan contributions.

41



26. Pension Schemes

Accountina Polic

Where the underlying pension scheme assets and liabilities can be attributed to specific individual employersthe net asset or liability is recognised in the statement of financial position. Pension scheme assets aremeasured using market values and the liabilities at their fair value measured on an actuarial basis using aprojected unit method and discounted at the current rate of return on a high quality corporate bond of equivalentterm and currency to the liability.

In accordance with FRS 102 section 28, the pension scheme deficit or a surplus, to the extent that it isrecoverable either through reduced future contributions or through refunds from the scheme, is recognised infull.

The movement in the scheme surplus/deficit is split between operating charges, finance items and, in theStatement of Comprehensive Income, actuarial gains and losses.

Significant judgments and sources of estimation uncertainty

There are a number of critical underlying assumptions when measuring our defined benefit schemes, includingstandard rates of inflation, mortality, discount rates and anticipation of future salaries. Variation in theseassumptions may significantly impact the defined benefit obligation and annual expense.

Pension costs are assessed in accordance with the advice of independent qualified actuaries.

Defined contribution pension schemes

The group participates in a defined contribution scheme provided by the Social Housing Pension Scheme(SHPS). The assets of the scheme are also separate from those of the group and the scheme is administeredindependently by The Pensions Trust (TPT). Contributions by the group to the group's defined contributionpension scheme are charged to the statement of comprehensive income in the year in which the contributionsbecome payable.

Defined benefit pension schemes

The group participates in two defined benefit pension schemes which provide benefits based on finalpensionable pay. The assets of the schemes are held separately from those of the group, being invested inindependently managed superannuation funds. One scheme is provided by the Social Housing PensionScheme (SHPS), which is administered by The Pensions Trust (TPT), and the other by the WorcestershireCounty Council Local Government Pension Scheme (LGPS).

In October 2018 the High Court published its judgement on the case of Lloyds Banking Group and theequalisation of Guaranteed Minimum Pensions ('GMP'). This has consequently been assessed against theGroup's defined benefit schemes.

(a) Worcestershire County Council Local Government Pension SchemeThe group participates in the Worcestershire County Council Local Government Pension Scheme. It is adefined benefits final salary scheme. The most recent formal actuarial valuation was completed as at 31 S' March2019, allowing for the different financial assumptions required under FRS102, to 31St March 2019 by a qualifiedindependent actuary.

The contributions payable by the group during the financial year were equal to 22.3% (2018: 22.3%) of totalpensionable salaries for all employees. Member contributions were between 5.5% and 12.5% (2018: 5.5% and12.5%) depending on pensionable pay. The employer's future service contribution rate, after allowing forchanges in benefits, will be 15.7% of pensionable salaries (2018: 15.7%).

The valuation revealed a shortfall of assets compared with the value of liabilities of £30.9 million (2018: £24.7million).

The plan assets do not include any of the group's financial instruments nor is any property asset of the schemeoccupied by the group.

The Group has reviewed the impact of GMP Equalisation in respect of its Local Government PensionScheme. The Actuary's default approach has been to make no explicit allowance in the 31 March 2019accounting reports for the potential impact of GMP equalisation. No further adjustments have been made tothe present value of obligations with respect to GMP as the effect is not considered material.



26. Pension Schemes (continued)

In December 2018 the Court of Appeal ruled that 'transitional arrangements' protection in respect of benefitchanges to the Judicial and Fire Fighter Pension scheme amounted to unlawful discrimination ('McCloudcase'). This judgement was subsequently upheld by the Supreme Court. Due to similar pension reforms to theLGPS in benefits the judgement is expected to be applicable to the LGPS.

The Group has obtained an assessment from the Actuary's as the potential impact of this judgement. As aresult additional liability of £746,000 has been recognised within the Group and Association FinancialStatements as at 31 March 2019.


£'000 £'000

Change in benefit obligations Unfunded Funded Unfunded Funded

Benefit obligations at the start of the year (105) (85,203) (110) (85,279)

Current service cost (2,201) - (2,639)

Past Service Costs (746) - -

Interest on pension liabilities (3) (2,195) (2) (2,119)

Member contributions - (464) - (517)

Remeasurements (liabilities)

- Experience (gain) /loss - - - -

- (Gain) /loss on assumptions (4) (5,126) 2 3,714

Curtailments - - - -

Benefits /transfers paid 5 2,021 5 1,637

Benefit obligations at the end of the year (107) (93,914) (105) (85,203)

Change in plan assets

Fair value of plan assets at the start of the year - 60,582 - 57,707

Interest on plan assets - 1,585 - 1,459Actuarial gains / (losses)

- Return on assets excluding amounts included _ _ - 712in net interest

Remeasurement of Assets 875 - -Administration expenses - (27) - (30)

Employer contributions 5 1,708 5 1,854

Member contributions - 464 - 517

Benefits / transfers paid (5) (2,021) (5) (1,637)

Fair value of plan assets at the end of the year - 63,166 - 60,582

Asset Allocation

Equities 71.8% 45,417 86.4% 52,343

Government bonds 7.9% 5,116 0.0% -Other bonds 5.1% 3,095 4.8% 2,908Property 6.6% 3,979 4.2% 2,544Cash 2.5% 1,453 1.2% 727

Other 6.1% 4,106 3,4% 2,060

At 31St March 2019 100% 63,166 100% 60,582





£'000 £'000

Amounts recognised in the statement of financial position

Present value of funded benefit obligations (93,914) (85,203)

Present value of unfunded benefit obligations (107) (105)

Total present value of benefit obligations (94,021) (85,308)

Fair Value of plan assets 63,166 60,582

Total deficit (30,855) (24,726)

Components of pension cost for the year

Current service cost 2,201 2,639

Past Service Costs 746 -

Net interest cost 613 662

Administration expenses 27 30

Effect of curtailments - -

Total pension cost 3,587 3,331

Statement of other comprehensive income

Actuarial gains / (losses)

- Return on assets excluding amounts included in net interest - 712

Remeasurements (liabilities)

- Experience (gain) /loss - -

- (Gain) /loss on assumptions (4,255) 3,716

Net remeasurement of assets and liabilities included in the Statement of (4,255) 4,428Comprehensive Income

Principal actuarial assumptions and 2019 2018

tables used £'000 £'000

Financial assumptions

CPI inflation /CARE benefits revaluation

Increase in salaries

Increase in pensions in payment /deferment

Discount rate

Post Retirement mortality assumptions(normal health)

Non-retired members

Retired members

2.1

3.6%

2.2%

2.6%

S2PA CM 2015_[1.5%](99% males, 89% females)

S2PA CM 2015_[1.5%](99% males, 89 % females)

2.1

3.6%

2.2%

2.6%

S2PA CM 2015_[1.5%](99% males. 89% females)

S2PA CM 2015_[1.5%](99°/ males. 89% females)

Life expectancy (years)

Future pensioner (age 65 in 20 year's time)

- Male 25.1 24.9

- Female 28.2 28.0

Current pensioner (age 65)

- Male 22.7 22.7

- Female 25.7 25.7

44




(b) The Pensions Trust -Social Housing Pension Scheme —Defined Benefit Pension Scheme

As described in note 25 (Social Housing Pension Scheme (the scheme)), for the year ended 31 March 2019 ithas been possible to obtain sufficient information to enable the company to account for the Social HousingPension Scheme (SHPS) as a defined benefit scheme.

For accounting purposes, two actuarial valuations for the scheme were carried out with effective dates of 31March 2018 and 30 September 2018. The liability figures from each valuation are rolled forward to the relevantaccounting date, if applicable, and are used in conjunction with the company's fair share of the Scheme's totalassets to calculate the company's net deficit or surplus at the accounting period start and end dates. The groupparticipates in The Pensions Trust -Social Housing Pension Scheme. It is a defined benefit scheme. The mostrecent formal actuarial valuation was completed as at 31 March 2019 for the different financial assumptionsrequired under FRS102, to 31 March 2019 by a qualified independent actuary.

The valuation revealed a shortfall of assets compared with the value of liabilities of £1.0 million (2018: £0.8million).

The major assumptions used by the actuary are shown below.

Group and Company 2019 2018£'000 £'000

Present Values of Defined Benefit Obligation, Fair Value of assets and definedbenefit asset (Liability)

Fair value of plan assets 2,783 2,457Present value of defined benefit obligations 3,780 3,231Surplus (deficit) in plan (997) (774)Unrecognised surplus - -Defined benefit asset (liability) to be recognised (997) (774)Deferred tax - -Net defined benefit asset (liability) to be recognised (997) (774)

Reconciliation of the impact of the asset ceiling 2019 2018£'000 £'000

Impact of asset ceiling at the start of the year -Effect of the asset ceiling included in net interest cost - -Actuarial losses (gains) on asset ceiling - -Im~act of asset ceiling at the end of the vear - -

Reconciliation of opening and closing balances of the defined benefit obligation 2019£'000

Defined benefit obligation at the start of the year 3,231Current service cost 473Expenses 3Interest expense 86Contributions by plan participants 107Actuarial losses (gains) due to scheme experience 8Actuarial losses (gains) due to changes in demographic assumptions 9Actuarial losses (gains) due to changes in financial assumptions 255Benefits paid and expenses (392)Liabilities acquired in a business combination -Liabilities extinguished on settlements -Losses (gains) on curtailments -Losses (gains) due to benefit changes -Exchange rate changes -Defined benefit obligation at the end of the year 3,780

45 ~The Community Housing Group LimitedFinancial Statements 2018-19



Reconciliation of opening and closing balances of the fair value of plan assets 2019£ 000

Fair value of plan assets at the start of the year 2,457

Interest income 64

Experience on plan assets (excluding amounts included in interest income) —gain (loss) 199

Contributions by the employer 348

Contributions by plan participants 107

Benefits paid and expenses (392)

Assets acquired in a business combination -

Assets extinguished on settlements -

Exchange rate changes -

Fairvalue of plan assets at the end of the year 2,783

The actual return on the plan assets (including changes in share of assets) over the year ending 31St March

2019 was £263, 000

Defined benefit costs recognised in the Statement of Comprehensive Income 2019£ 000

Current service cost 473

Expenses 3

Net interest expense 22

Losses (gains) on business combination -

Losses (gains) on settlements -

Losses (gains) on curtailmentsLosses (gains) due to benefit changes -

Defined benefit costs recognised in the Statement of Comprehensive Income 498

Defined benefit costs recognised in other Comprehensive Income 2019£ 000

Experience on plan assets (excluding amounts included in net interest cost) —gain (loss) 199

Experience gains and losses on the plan liabilities —gain (loss) (8)

Effects of change in the demographic assumptions underlying the present value of the defined (9)

benefit obligation —gain (loss)Effects of changes in the financial assumptions underlying the present value of the defined (255)

benefit obligation —gain (loss)Total actuarial gains and losses (before restriction due to some of the surplus not being (73)

recognised) —gain (Loss)Effects of changes in the amount of surplus that is not recoverable (excluding amounts included -

in net interest cost) —gain (loss)Total amount recognised in other Comprehensive Income —gain (loss) (73)

Assets 2019 2018£'000 £'000

Global Equity 468 485

Absolute Return 241 300

Distressed Opportunities 51 24

Credit Relative Value 51 -

Alternative Risk Premia 160 93

Fund of Hedge Funds 13 81

Emerging Markets Debt 96 99

Risk Sharing 84 23

Insurance —Linked Securities 80 65

Property 63 113

Infrastructure 146 63

Private Debt 37 22

Corporate Bond Fund 130 101

Long Lease Property 41 -

Secured Income 100 91

Over 15 years Gilts - -

Liability Driven Investment 1,017 895

Net Current Assets 5 2

Total assets 2,783 2,457



26. Pension Schemes (continued)None of the fair values of the assets shown above include any direct investments in the employer's own

financial instruments or any property occupied by, or other assets used by, the employer.

Key assumptions 2019 2018per annum %per annum

Discount Rate 2.34% 2.59%

Inflation (RPI) 3.26% 3.16%

Inflation (CPI) 2.26% 2.16%

Salary Growth 3.26% 3.16%

Allowance for cumulation of pension for cash at retirement 75~ of maximum 75%of maximum

allowance allowance

The mortality assumptions adopted at 31 March 2019 imply the following life expectations:

Life expectancy atage 65 (Years)

Male retiring in 2019 21.8

Female retiring in 2019 23.5

Male retiring in 2039Female retiring in 2039

23.224.7

27. Called Up Share Capital

The company has 11 shares of £1 each, which carry no right to interest, dividend or bonus. The company's

rules permit the shareholders to be the independent members, a Council shareholder and a tenant shareholder.

Group and Company 2019 2018No. No.

Shares of £1 issued and full paid

At the start of the year 11 -

Movements during the year - 11

At the end of the year 11 11

28. Capital commitments

Accounting Policv

Capital commitments represent future expenditure on housing development schemes authorised by the Board

of Management, separated between amounts not yet contracted for and amounts already under contract.


Authorised by the Board but not yet contracted for 13,567 18,723

Contracted for but not provided for in the financial statements 17,033 2,705

At 31St March 2019 30,600 21,428


Social Housing Grant 5,012 3,583

Sale of Properties 7,377 9,619

Drawdown of loans 18,211 8,226

At 31St March 2019 30,600 21,428

47



29. Operating Lease Commitments

Accounting Policv

The group's social housing properties are held by tenants under operating leases and are tenanted under

cancellable operating lease conditions. Typical tenant break clauses exist requiring a four week notice period.

Shared ownership properties may be purchased (staircased) by its leaseholder at any time at the pro-rata

market rate. Ongoing lease payments will be adjusted according to the group's share of ownership retained.

Rentals payable under operating leases are charged to income and expenditure on a straight-line basis over

the term of the lease unless the rental payments are structured to increase in line with expected general

inflation, in which case the group recognises annual rent expense equal to amounts owed to the lessor. The

aggregate benefit of lease incentives are recognised as a reduction to the expense recognised over the lease

term on a straight-line basis.

Leases relate to office and other equipment. The future minimum lease payments of leases are:

Group Company

2019 2018 2019 2018

£'000 £'000 £'000 £'000

Not later than one year

Later than one year but not later than five years

37 210 - 119

- 3 - -

Later than 5 years

30. Subsidiary and associated undertakings

As required by statute, these financial statements consolidate the results of the following wholly owned

subsidiaries.

Subsidiary Legal status Issued share capital

The Community Housing Group Limited Co-operative and Community 11 x £1 shares

(TCHG) Benefit Society owned by Board Members

Oakleaf Commercial Services Limited Limited Company 1 x £1 share

(OCS) owned by TCHG

Worcestershire TeleCare Limited (WTC) Co-operative and Community No share capital

Benefit Society

Wyre Forest Land Company Limited 2 x £1 share

(WFLC) Limited Company owned by TCHG

Vestia Community Trust (VCT) Co-operative and Community No share capital

Benefit Society

The company exercises its functions as parent of the entities listed above through ownership of 100% of the

share capital in all companies limited by shares and through a controlling interest as a member of the companies

limited by guarantee.

OCS, WTC, WFLC and VCT are subsidiaries of TCHG. OCS, WTC, VCT and WFLC are not registered

providers of social housing.

48




31. Related Party Transactions

All transactions during the year between TCHG and its subsidiaries and Wyre Forest District Council (WFDC)

were made on commercial terms and no member used their position to their own advantage.

All other related party transactions between TCHG and other third parties are carried out at commercial rates

and no favourable terms were offered or received.

Intra-Group Transactions

Services are exchanged between group companies.

All members of staff across the group are employed by TCHG, which then provides the management and

operational teams to each of its subsidiaries for which a management charge is levied of the relevant proportion

of those employee costs plus a fee for overheads.

Oakleaf provides a repairs and maintenance service to TCHG including routine and planned maintenance,

major repairs and service chargeable costs as well as capital costs incurred in the development of new housing

properties and investment in replacing components in existing properties.

WTC charges TCHG for telecare services provided to its residents and lone worker and out of hours call

handling to TCHG and OCS.

Vestia provides training and other staff-related services to the group's employees.

TCHG receives interest at commercially agreed rates on its loans to OCS and WFLC.

WFLC entered into a deferred purchase agreement for the group's administrative head office at Foley Grove,

Kidderminster which included an annual inflationary uplift. The value of this inflationary uplift is treated as

financing income in WFLC and a financing charge in TCHG.

These intra-group transactions are shown in the table below:

Intra-Group Revenue / (Expenditure)

TCHG OCS VCT WFLC WTC

£'000 £'000 £'000 £'000 £'000

Operational Services

Management fee for provision of staff and 11,347 (9,143) (903) (1) (1,300)

sharing of overheads

Construction and other fixed asset additions (9,266) 9,266 - - -

Repairs and maintenance of housing (8,080) 8,080 - - -

properties and other revenue expenditure

Provision of telecare services (337) - - - 337

Training and other staff-related expenditure (636) - 636 - -

Financing arrangements

Loan interest receivable / (payable) 75 (38) - (37) -

RPI uplift on deferred purchase (44) - - 44 -

The Board and Executive Officers

Ray Brookes, Group Chief Executive, is a governor of Baxter College. Baxter College received grounds

maintenance services from Oakleaf Construction amounting to £44,953.

Ian Hancock, Managing Director of Oakleaf Commercial Services, received services from the company for

works done on his principal private residence amounting to £891.

49




31. Related Party Transactions (continued)

Andrew Foster, Board Member, is a senior employee of Midland Heart. This registered provider received

repairs and grounds maintenance service from OCS amounting to £1,952.

Andrew Fry, Board Member of TCHG, received repairs services from OCS amounting to £1,682.

Nicola Inchbold, Board Member, is Group Chair of Rooftop Housing, who as consortium members alongside

Worcestershire Telecare, received telecare services at commercial rates from that organisation amounting to

£56,775 (inc VAT).

Martin Jukes, Chair of WTC, worked with Chapelfields Associates, who provided training services to Vestia

amounting to £600.

Louise Lee is a representative of Fortis Housing on the Board of Worcestershire Telecare. Fortis are also

members of the consortium serviced by that organisation and received telecare and lone worker services

amounting to £137,872 (inc VAT). and Helen Southwell is a Co-optee to the WTC Board.

32. Reconciliation of Operating Surplus to Net Cash Inflow from Operating Activities

2019 2018

Group Group

£'000 £'000

Surplus for the year 3,707 2,064

Adjustments for non-operating items:

Tax charge 171 106

Interest payable and similar charges 7,351 7,308

Interest receivable and similar income (9) (4)

Adjustments for non-cash items:

Increase in fair value of investment properties - -

Depreciation of housing properties 3,586 3,554

Depreciation of other fixed assets 1,078 950

Carrying value of first tranche sales 1,242 1,466

Carrying value of other sold housing properties 1,298 942

Carrying value of investment property sold - 160

Write-off of other fixed asset disposals 380 110

Capitalised salaries (376) (355)

Remeasurement of pension backfunding liability - -

Amortisation of goodwill 50 100

Amortisation of grant (306) (334)

Recycling grant on disposal into disposal proceeds fund - -

Current service costs less employer pension contribution 1,389 810

Change in provision for bad debts (143) 127

Increase in stock and property held for sale (67) (49)

Movement in debtors (317) 196

Movement in creditors (1,308) (625)

Reducing liability for backfunding pension liability - (54)

Net cash generated from operating activities 17,726 16,472

50




33. Analysis of changes in net debt

Group and Company At the start Cash Non-Cash At the End

of the Year Flows Movements of the Year

£'000 £'000 £'000 £'000

Cash and Cash Equivalents 4,212 (1,046) - 3,166

Housing Loans Due in One Year 25,004 (25,004) - -

Housing Loans Due After One Year 124,509 25,216 - 149,725

Net Debt position 153.725 (8341 - 152.891

51
